Podcast
Questions and Answers
Hotter days increase employee productivity.
Hotter days increase employee productivity.
False
Climate refers to the realization of weather outcomes.
Climate refers to the realization of weather outcomes.
False
Higher annual temperatures lower economic growth particularly in developing countries.
Higher annual temperatures lower economic growth particularly in developing countries.
True
Changes in weather may have permanent economic implications.
Changes in weather may have permanent economic implications.
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The aggregate climate damages curve shows total damage as a function of temperature increase.
The aggregate climate damages curve shows total damage as a function of temperature increase.
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Hurricanes and tropical storms have no impact on long-term economic output.
Hurricanes and tropical storms have no impact on long-term economic output.
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The rise in global temperature is attributed to an unprecedented increase in methane levels.
The rise in global temperature is attributed to an unprecedented increase in methane levels.
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The empirical strategy is used to estimate the costs of reducing climate change.
The empirical strategy is used to estimate the costs of reducing climate change.
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Economic output has a strong correlation with CO2 emissions per dollar of GDP across countries.
Economic output has a strong correlation with CO2 emissions per dollar of GDP across countries.
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Economists often confuse the terms climate and weather.
Economists often confuse the terms climate and weather.
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Climate change poses no interesting economic challenges.
Climate change poses no interesting economic challenges.
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The optimal global carbon price can be calculated using integrated assessment modeling.
The optimal global carbon price can be calculated using integrated assessment modeling.
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Assumptions such as valuing future events and coordinating with other countries are unrealistic in climate change economics.
Assumptions such as valuing future events and coordinating with other countries are unrealistic in climate change economics.
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Reducing climate change involves estimating only the damages caused by climate events.
Reducing climate change involves estimating only the damages caused by climate events.
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The economic value of carbon emissions is greater than the benefits of reducing global temperatures.
The economic value of carbon emissions is greater than the benefits of reducing global temperatures.
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International negotiation and cooperation are irrelevant when discussing climate change economics.
International negotiation and cooperation are irrelevant when discussing climate change economics.
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Economic damage from climate change can be accurately predicted.
Economic damage from climate change can be accurately predicted.
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The U.S. agricultural sector represents 0.6% of its GDP.
The U.S. agricultural sector represents 0.6% of its GDP.
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Agricultural yields in the U.S. have consistently increased with rising temperatures.
Agricultural yields in the U.S. have consistently increased with rising temperatures.
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The empirical strategy for estimating climate damages involves comparing crop yields across counties over various years.
The empirical strategy for estimating climate damages involves comparing crop yields across counties over various years.
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The U.S. is the world's largest agricultural producer, contributing to 41% of global corn production.
The U.S. is the world's largest agricultural producer, contributing to 41% of global corn production.
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Mapping CO2 to climate change is a straightforward process that does not require expert input.
Mapping CO2 to climate change is a straightforward process that does not require expert input.
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The research on agricultural yields and temperature only considers data from the 21st century.
The research on agricultural yields and temperature only considers data from the 21st century.
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The relationship between daily temperature and agricultural yields is represented by a linear function.
The relationship between daily temperature and agricultural yields is represented by a linear function.
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Lowering emissions has been a main focus for policymakers since the first UN assessment in 1990.
Lowering emissions has been a main focus for policymakers since the first UN assessment in 1990.
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Substituting away from fossil fuels means completely ceasing energy consumption.
Substituting away from fossil fuels means completely ceasing energy consumption.
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Better technology can improve the efficiency of carbon-based production.
Better technology can improve the efficiency of carbon-based production.
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The U.K. has completely eliminated the use of coal for electricity generation.
The U.K. has completely eliminated the use of coal for electricity generation.
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China's efforts to reduce emissions continue to rely heavily on coal.
China's efforts to reduce emissions continue to rely heavily on coal.
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Outsourcing emissions to other countries is not a strategy employed by the U.K.
Outsourcing emissions to other countries is not a strategy employed by the U.K.
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Economic theory suggests that distorting decisions to reduce emissions will not incur costs for individuals or firms.
Economic theory suggests that distorting decisions to reduce emissions will not incur costs for individuals or firms.
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China has significantly invested in renewable energy alongside improving coal plant efficiency.
China has significantly invested in renewable energy alongside improving coal plant efficiency.
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Total abatement costs can be calculated by considering the costs of switching to lower-carbon activities.
Total abatement costs can be calculated by considering the costs of switching to lower-carbon activities.
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Starting emissions reductions as soon as possible has huge net benefits for climate policy.
Starting emissions reductions as soon as possible has huge net benefits for climate policy.
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The DICE model is used to evaluate climate damages at the University of Sussex.
The DICE model is used to evaluate climate damages at the University of Sussex.
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More stringent climate targets always result in lower costs for firms.
More stringent climate targets always result in lower costs for firms.
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A technological breakthrough in zero-carbon technology is estimated to have a net value of around $17 trillion.
A technological breakthrough in zero-carbon technology is estimated to have a net value of around $17 trillion.
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The MERGE model is associated with the Electric Power Research Institute in Washington DC.
The MERGE model is associated with the Electric Power Research Institute in Washington DC.
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The evaluation of carbon pricing suggests that delaying action on emissions will ultimately benefit the economy.
The evaluation of carbon pricing suggests that delaying action on emissions will ultimately benefit the economy.
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Empirical strategy is not a component of estimating climate damages.
Empirical strategy is not a component of estimating climate damages.
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PISCES is a model used to analyze climate change impacts at the University of Maryland.
PISCES is a model used to analyze climate change impacts at the University of Maryland.
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To give firms time to adapt, emissions reductions should ramp up over time.
To give firms time to adapt, emissions reductions should ramp up over time.
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The optimal global carbon price does not impact long-term climate policy effectiveness.
The optimal global carbon price does not impact long-term climate policy effectiveness.
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Abatement costs will not be affected by technological innovations over time.
Abatement costs will not be affected by technological innovations over time.
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Three strategies are outlined for estimating the costs of reducing climate change.
Three strategies are outlined for estimating the costs of reducing climate change.
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Nordhaus estimates that a low-cost zero-carbon technology could help avoid most damages from climate change.
Nordhaus estimates that a low-cost zero-carbon technology could help avoid most damages from climate change.
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The evaluation presented shows no advantages to setting stricter climate targets in terms of net benefits.
The evaluation presented shows no advantages to setting stricter climate targets in terms of net benefits.
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What is the main focus of policymakers since the first UN assessment?
What is the main focus of policymakers since the first UN assessment?
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What are the three key economic issues that arise from climate change?
What are the three key economic issues that arise from climate change?
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The economics of climate change often require the analysis of specific industries and how their outcomes are affected by temperature changes.
The economics of climate change often require the analysis of specific industries and how their outcomes are affected by temperature changes.
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What is the main finding of Schlenker and Roberts' research on agricultural yields and temperature?
What is the main finding of Schlenker and Roberts' research on agricultural yields and temperature?
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What three strategies are broadly used to slow down climate change?
What three strategies are broadly used to slow down climate change?
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Geoengineering is a well-understood and risk-free approach to reducing climate change.
Geoengineering is a well-understood and risk-free approach to reducing climate change.
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What is the problem with carbon removal despite its attractiveness in principle?
What is the problem with carbon removal despite its attractiveness in principle?
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What two complementary strategies are used to reduce emissions?
What two complementary strategies are used to reduce emissions?
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The UK has largely phased out coal, significantly increased its share of renewables for electricity, and outsourced emissions to other countries with trade.
The UK has largely phased out coal, significantly increased its share of renewables for electricity, and outsourced emissions to other countries with trade.
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The UK and China have adopted only one of the two complementary strategies to reduce emissions.
The UK and China have adopted only one of the two complementary strategies to reduce emissions.
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Sweden is often considered a success story in terms of reducing CO2 emissions.
Sweden is often considered a success story in terms of reducing CO2 emissions.
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What is the purpose of constructing an aggregate damage function?
What is the purpose of constructing an aggregate damage function?
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What are the key contributions of Nordhaus' research to understand climate change?
What are the key contributions of Nordhaus' research to understand climate change?
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What is the social cost of carbon calculated as?
What is the social cost of carbon calculated as?
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Nordhaus' integrated assessment model is a static approach that does not consider climate physics.
Nordhaus' integrated assessment model is a static approach that does not consider climate physics.
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According to Nordhaus' research, there are huge net benefits to climate policy in comparison to inaction.
According to Nordhaus' research, there are huge net benefits to climate policy in comparison to inaction.
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Nordhaus' research suggests that ramp-up over time is not necessary for climate policies.
Nordhaus' research suggests that ramp-up over time is not necessary for climate policies.
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Nordhaus' research suggests that stricter climate targets are always associated with higher benefits.
Nordhaus' research suggests that stricter climate targets are always associated with higher benefits.
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The concept of a technological breakthrough suggests the possibility of a low-cost zero-carbon technology that could significantly reduce the costs of climate change mitigation.
The concept of a technological breakthrough suggests the possibility of a low-cost zero-carbon technology that could significantly reduce the costs of climate change mitigation.
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Study Notes
Economics 134 L7: Climate Change I
- The presentation is on climate change, focusing on economic issues.
- Climate change is one of the greatest challenges of our time.
- Studying climate change is important to balance energy use with decarbonization, understand environmental policy, acknowledge risk, uncertainty, and irreversibility, and recognize the importance of international negotiation and cooperation.
- Global surface temperatures have risen in an unprecedented way in over 2,000 years.
- The warmest multi-century period has occurred in over 100,000 years.
- Global emissions correlate strongly with economic output, measured in CO2 emissions per GDP.
- The course will investigate the economic damages of climate change and the economic value of carbon emissions.
- Climate change policies will be considered with the aim of reducing harmful outcomes.
- Approaches to estimating climate damages include an empirical strategy, aggregating damage functions, and examining specific sectors like agriculture.
Estimating Climate Damages
- Mapping CO2 to climate change is already fairly well established.
- Mapping climate change to economic damage (e.g., temperature effects) is an economist's key strength.
- Uncertainty regarding climate physics and various economic impacts poses a challenge.
- An example of studies examines agricultural yields and temperature, showing how high temperatures correlate to negative consequences across multiple crops (corn, soybeans, cotton) in the US.
- Research strategy combines detailed spatial data on daily temperatures during growing seasons and U.S. crop yields.
- This strategy compares crops grown in the same county in different years to control for state-specific effects.
- Studies found a threshold temperature above which crop yield significantly declines.
Implications of Global Warming
- Predicted changes in crop yields correlate negatively with temperature increases.
- Future climate change scenarios demonstrate implications for crop yields.
- Other studies find links between higher temperatures and negative economic outcomes including mortality, reduced worker productivity and higher workplace injuries.
Geoengineering
- Geoengineering is the conceptually straightforward but technically complex approach of directly altering climate.
- There are well-established, inexpensive links between volcanic eruptions and temperature reductions.
- Nonetheless, murkier details, including potential negative side-effects, exist.
- There is widespread agreement that adaptation is necessary but not sufficient.
Carbon Removal
- Reverse combustion is a theoretically attractive approach to carbon removal.
- Carbon removal is costly, both financially and energetically.
- Extensive efforts by engineers remain unsuccessful.
- Trees offer a natural solution.
Reducing Emissions (Abatement)
- Policymakers have made this their principal focus, considered the only realistic option.
- Policy changes include adopting alternative energy sources and improving efficiency of carbon-based production.
- Economic theory suggests that these changes will involve costs for individuals and firms, but that these costs are unlikely to outweigh the benefits.
- Reduction examples presented include phasing out coal and increasing renewables in the U.K.
Aggregate Damage Function
- The general idea is to aggregate a lot of small estimates to understand total sector-specific damages at the county level.
- These can be used to estimate total damages as a function of the temperature increase.
Aggregate Cost Function
- This idea is similar to the damage function, where costs of mitigating/reducing climate change are calculated.
- Calculations add up the costs related to adopting new technologies and lower-carbon activities, and integrate innovation & technical changes over time.
- Costs are calculated relative to a "business-as-usual" scenario.
- Models used to generate these costs include FUND, GCAM, DICE, and others.
Integrated Assessment Modeling
- Recall the solution to external effects where marginal profits and marginal damage equal zero.
- Marginal profits are dependent on output, and marginal damage is dependent on output, too.
- The approach assumes marginal abatement cost is dependent on emission reduction speed and marginal benefit is dependent on the total carbon stock.
Social Cost of Carbon
- The Social Cost of Carbon (SCC) is calculated as the marginal damage of an additional ton of carbon.
- The Social Cost of Carbon is often used as a metric by policy makers and businesses.
Policy Evaluation
- Net benefits across a range of climate policy scenarios were calculated.
- Policies are often evaluated by considering their net benefits.
- It was observed that a lower degree of emissions mitigation would entail lower costs.
- A technological breakthrough in low-cost zero-carbon technology would allow for higher net benefits compared to other options.
- A significant investment would be needed for strict climate targets.
Next Steps
- Further research by Nordhaus should be reviewed.
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Description
This quiz focuses on the economic implications of climate change, exploring its global impact and the urgent need for policies that address carbon emissions. By examining the relationship between economic output and climate damages, students will gain insight into effective strategies for balancing energy use with environmental sustainability.
