Impact of uncertainty in economic projections for stabilization scenarios

Krakauer, N Y

Scenarios for the stabilization of greenhouse gas emissions and/or atmospheric concentrations typically take economic and technological growth, and thus the 'background', no-controls emissions trajectory, as essentially given, most commonly based on one or more of the IPCC SRES scenarios. One limitation of this set of scenarios is that they postulate a rather small range of future economic growth rates, based on extrapolation from recent experience as well as assumed tendencies such as international 'convergence'. Because there is no validated theoretical or empirical method to reliably predict long-term (decade to century) changes in the size and composition of the world economy, the uncertainty in economic path is large and likely understated by any measure derived from the ensemble of SRES scenarios. Considering a wider range of economic trajectories complicates stabilization scenarios. In particular, slow economic growth would imply that future generations will be relatively less able to invest in emissions controls or adapt to detrimental impacts of climate change. I show with a simple integrated assessment model that taking into consideration the possibility of economic slowdown generally heightens the urgency of reducing greenhouse gas emissions now, rather than in future decades, for stabilizing radiative forcing or welfare damage at a given target.