APPENDIX to the DRAFT Workshop Report: Improving the Assessment and Valuation of Climate Change Impacts for Policy and Regulatory Analysis – Part 1 Modeling Climate Change Impacts and Associated Economic Damages January 2011 Workshop Sponsored by: U.S. Environmental Protection Agency U.S. Department of Energy Workshop Report Prepared by: ICF International A-0 Appendix Contents Workshop Agenda with Charge Questions Participant List Extended Abstracts A-1 Workshop Agenda with Charge Questions MODELING CLIMATE CHANGE IMPACTS AND ASSOCIATED ECONOMIC DAMAGES Charge Questions: The following charge questions (appearing in boxes) were given to each of the workshop speakers. Each speaker was asked to write a short abstract (approximately 3-5 pages) and organize their presentations around these questions, though they also were encouraged to think more broadly and to consider other ideas as they see fit. The purpose of the papers and presentations was to briefly summarize the current state of the art in each area and to set the scene for a productive discussion at the workshop, not necessarily to provide complete answers to all charge questions. November 18, 2010 Workshop Introduction 8:30 – 8:35 Welcome and Introductions Elizabeth Kopits, U.S. Environmental Protection Agency 8:35 – 9:00 Opening Remarks Bob Perciasepe, Deputy Administrator, U.S. Environmental Protection Agency Steve Koonin, Under Secretary for Science, U.S. Department of Energy 9:00 – 9:25 Progress Toward a Social Cost of Carbon Michael Greenstone, Massachusetts Institute of Technology Session 1: Overview of Existing Integrated Assessment Models Moderator: Stephanie Waldhoff, U.S. Environmental Protection Agency Charge: Describe (1) the history of climate-economic integrated assessment modeling, (2) the major reduced-form and higher-complexity IAMs currently in use, (3) the main strengths and weaknesses of each model, (4) current areas of active research, and (5) how these areas of active research might inform policy and regulatory analysis. 9:25 – 9:50 Overview of Integrated Assessment Models Jae Edmonds, Pacific Northwest National Laboratory Models Used for the Development of Current USG SCC Values A-2 Charge for all model presenters: Describe the current state of your model and any recent, planned, or potential modifications. Specifically: (1) Describe the basic structure of your model. What are key exogenous and endogenous variables? (2) Discuss the physical impacts included in your model and how the corresponding market and non-market economic damages are calculated. What major impacts and damage categories are not included (e.g., ocean acidification and associated damages)? To what extent does the model incorporate the physical cycles for non-CO2 GHGs? (3) What assumptions does your model make about adaptation? (4) What assumptions does your model make about climate system “tipping points,” catastrophic impacts and the corresponding economic damages? (5) How does your model incorporate uncertainty in physical parameters such as climate sensitivity and economic parameters such as the discount rate? 9:50–10:15 DICE Steve Newbold, U.S. Environmental Protection Agency 10:15–10:40 PAGE Christopher Hope, University of Cambridge 10:40–10:55 Break 10:55–11:20 FUND David Anthoff, University of California, Berkeley Representation of Climate Impacts in other Integrated Assessment Models Charge for all model presenters: Describe the current state of your model and any recent, planned, or potential modifications. Specifically: (1) Describe the basic structure of your model. What are key exogenous and endogenous variables? (2) Discuss the physical impacts included in your model and how the corresponding market and non-market economic damages are calculated. What major impacts and damage categories are not included (e.g., ocean acidification and associated damages)? To what extent does the model incorporate the physical cycles for non- CO2 GHGs? (3) What assumptions does your model make about adaptation? (4) What assumptions does your model make about climate system “tipping points,” catastrophic impacts and the corresponding economic damages? (5) How does your model incorporate uncertainty in physical parameters such as climate sensitivity and economic parameters such as the discount rate? A-3 11:20–11:45 GCAM (JGCRI – UMD/PNNL) and Development of iESM (PNNL/LBNL/ORNL) Leon Clarke, Pacific Northwest National Laboratory 11:45–12:10 IGSM (MIT) John Reilly, Massachusetts Institute of Technology 12:10–12:40 Discussion 12:40 – 1:40 Lunch Session 2: Near-Term DOE and EPA Efforts Moderator: Ann Wolverton, U.S. Environmental Protection Agency 1:40 – 2:00 Proposed Impacts Knowledge Platform Bob Kopp, U.S. Department of Energy Nisha Krishnan, Resources for the Future 2:00 – 2:20 Proposed Generalized Modeling Framework Alex Marten, U.S. Environmental Protection Agency 2:20 – 2:40 Discussion Session 3A: Critical Modeling Issues in Assessment and Valuation of Climate Change Impacts Moderator: Ann Wolverton, U.S. Environmental Protection Agency 2:40 – 3:10 Sectoral and Regional Disaggregation and Interactions Ian Sue Wing, Boston University Charge: Review the sectoral and regional representation of economic damages in integrated assessment models. Specifically, discuss: (1) how damages in one category and one region may affect other categories and regions, (2) the relative magnitude/importance of these interactions, (3) how these relationships might be represented in an IAM, and (4) gaps in the way existing IAMs represent these relationships and major challenges in improving these representations. 3:10–3:20 Break A-4 3:20–3:50 Adaptation and Technological Change Ian Sue Wing, Boston University on behalf of Karen Fisher-Vanden, Pennsylvania State University Charge: Drawing from the recent literature, discuss how adaptation may influence the net social costs of climate change (adaptation costs plus residual climate damages). Specifically, discuss: (1) relevant studies on the observed or potential effectiveness of adaptive measures, and on private behaviors and public projects regarding adaptation; (2) relevant studies on how to forecast adaptive capacity; (3) how adaptation and technical change could be represented in an IAM (for at least one illustrative sector); (4) whether the information required to calibrate such a model is currently available, and, if not, what new research is needed; and (5) how well or poorly existing IAMs incorporate the existing body of evidence on adaptation. 3:50–4:20 Multi-century Scenario Development and Socio-Economic Uncertainty Brian O’Neill, National Center for Atmospheric Research Charge: Discuss the methods and difficulties associated with forecasting a baseline scenario for greenhouse gas emissions and socio-economic variables (e.g., population and GDP), including the particular challenges in extending these scenarios for multiple centuries. Specifically, discuss: (1) relevant studies on long-term demographic and economic scenarios and the assumptions used to develop these scenarios; (2) relevant studies on the evolution of energy systems and the assumptions used to develop these scenarios; (3) the range of plausible future scenarios extending to at least 2300, including the range incorporated into major IAMs; and (4) what are the main challenges in representing such multi-century forecasts in an IAM. 4:20–5:00 Discussion A-5 November 19, 2010 Day 2 Introduction 8:30–8:40 Welcome; Recap of Day 1; Overview of Day 2 Elizabeth Kopits, U.S. Environmental Protection Agency Session 3B: Critical Modeling Issues in Assessment and Valuation of Climate Change Impacts (cont.) Moderator: Bob Kopp, U.S. Department of Energy 8:40–9:10 Incorporation of Climate System Uncertainty into IAMs Gerard Roe, University of Washington Charge: Discuss: (1) the major sources of climate system uncertainty that could be represented in reduced-form integrated assessment models (such as DICE, PAGE, and FUND), (2) the difficulties/issues with representing the uncertainty surrounding these parameters in IAMs, and (3) relevant studies that estimate probability density functions for these parameters. 9:10–9:40 Extrapolation of Damage Estimates to High Temperatures: Damage Function Shapes Marty Weitzman, Harvard University Charge: Discuss: (1) how damage functions behave at high temperatures in the principal reduced-form IAMs, including DICE, PAGE, and FUND; (2) the reasoning underlying the selection of these functional forms and alternative formulations that have been proposed in the literature; (3) the relative strengths of these various functional forms in terms of extrapolating damage estimates to high temperatures; and (4) the difficulties/issues with incorporating uncertainty regarding such “out of sample forecasts.” 9:40–10:10 Earth System Tipping Points Tim Lenton, University of East Anglia Charge: Discuss: (1) evidence on potential Earth system tipping points, including the most recent estimates of these tipping points based on modeling studies, paleoclimatic data, expert elicitation, and other relevant sources; and (2) available estimates of their probabilities under different scenarios. A-6 10:10–10:30 Break 10:30–11:00 Potential Economic Catastrophes Michael Toman, World Bank Charge: Discuss: (1) the literature on the potential economic damages associated with catastrophic climate impacts, potentially related to Earth system tipping points; (2) how these damages might be incorporated into reduced-form and/or higher- complexity IAMs; and (3) the key challenges associated