Social Costs of Climate Change

[Vipin Sharma]

Climate Change projections are based on specific models which have assessed future climate. They show consistent rise in temperature. However, the projections of rainfall vary across models. Impact studies begin with an inventory of the effects on multiple criteria -typically lives lost, the burden of disease on humans, species lost, crippling large infrastructures like dams, roads, bridges due to cyclones, heavy rains, floods etc. Negotiating global climate change targets has tended to recognize such multiple effects, corresponding to an informal multi-criteria approach. To maintain consistency in policy evaluation on climate change mitigation, a common metric is desirable and the most common of all metric is monetary. A monetary metric particularly well suited to measure market impacts. For example, the cost of sea level rise could be expressed as the capital cost of protection and the economic value of land and structures lost in the absence of protection, agriculture impact can be expressed as costs or benefits to producers and consumers, and changes in water runoff might be expressed in new flood damage estimates. There is a broad valuation theory and its application, including studies on the monetary value of lower mortality risk, eco-systems, quality of life, etc. However, economic valuation, especially in the area of climate change, is often particularly controversial, because of ecosystems and socially contingent effects, the potential magnitude of major impacts including irreversible climate shifts, and because of issues with intergenerational and international equity. Numerous studies have estimated the costs of climate change. The social cost in key areas is stated below.
Sea Level Rise
Sea level rise leads to costs of additional protection, or otherwise loss of dry land and wetland. The balance depends upon future decision about what protection is justified. Costs of protection are relatively well known, but other costs like rising sea levels increases the likelihood of storm surges, enforces landward intrusion of salt water and endangers coastal ecosystems and wetlands are more uncertain. They are often excluded or only partially captured in terms of valuation. Populations that inhabit small islands and/ or low-lying coastal areas are at particular risk of severe social and economic effects from sea-level rise and storm surges. This raises the issues of migration, the costs of which depend on diverse social and political factors. Energy Energy use impacts will depend on average temperatures and range, but there will be a combination of increases and decreases in demand for heating (both in terms of overall energy supplied, and to meet peak demands). Benefits from increased winter temperatures that reduce heating needs may be offset by increases in demand for summer air conditioning, as average summer temperatures increase.
Agriculture
Agricultural impacts depend upon regional changes in temperature and rainfall, as well as atmospheric carbon dioxide levels and fertilization. The key impacts will be to crops and changes in the cultivated area and yields. These effects depend on many factors and in some areas; the area suitable for cultivation and potential yields will increase. Climate variability, as well as mean climate change, is an important consideration. Adaptive responses will be important –choice of crop, development of new cultivars and other technical changes, especially irrigation. Most valuation studies capture the direct impacts, but it is important to note these do not fully determine damages-these will also depend on changes in demand and trade patterns driven by socio-economic factors-but also complex responses to climate changes variability, pests and diseases, etc.
Water Supply
Water supply impacts depends on changes in rates of precipitation and evapo-transpiration and demand changes including those driven by climate change. The water demand of biological systems is affected by various climatic factors including temperature and humidity. Water supply systems are usually optimized to meet extreme supply/demand conditions and the costs of shortage can be very high. Climate variability is therefore important in determining damages. There is the potential for water scarcity and severe socially contingent damages.
Health
Health impacts include both an increase in heat stress, longer and severe summer and a reduction in winter cold stress i.e. less cold and shorter period of winter, though as these are in opposite directions the net mortality impact (global) of direct temperature changes may be quite small. Direct health impacts form temperature changes are included and valued in many studies. The area amenable to parasitic and vector borne diseases, such as malaria, will expand and impacts could be large. The area inclusion of diseases burden has been advanced through specific studies. Socially contingent damages to health, via other impacts such as food production water resources and sea level rise, in vulnerable communities are difficult to estimate but could be very large. Increased threats to human health, particularly in lower income populations, predominantly within tropical/subtropical countries will be considerable.
Ecosystems
Ecosystems and biodiversity impacts are amongst the most complex and difficult to evaluate. Ecological productivity and biodiversity will be alerted by climate change and sea level rise, with an increased risk of extinction of some vulnerable species. Most of the major ecosystem types are likely to be affected, at least in parts of their range. Some isolated systems are particularly at risk, including unique and valuable systems, e.g. coral reefs. Recent evidence has also identified acidification of the oceans, which is an observable consequence of rising CO2 levels in the atmosphere. This will have potentially large impacts on marine ecosystems and fluxes of greenhouse gases between the ocean and the atmosphere. The analysis of ecosystem effects is one of the most problematic areas, in terms of a comprehensive or reliable assessment of the impacts of climate change on ecosystems and its valuations.
Extreme Weather
Extreme weather events are also likely to increase, with heat waves, drought, floods, and storms, tropical cyclones and even super-typhoons. However, the frequency and severity for extreme events may not be linearly dependent on average climate. Climate variability will also be important and there is no consensus on how this will change. Impacts damages will also depend on the location and timing and the hazard and adaptive responses. For example, cyclone damage to property will tend to rise with wealth but mortality effects may fall considerably.
Major Events
Major events, i.e. the risk of major effects – potentially catastrophic effects or major climate discontinuities are the most uncertain category. Loss of coral reefs and mangroves, melting of glaciers, cyclones, Indian monsoon transformation etc. are recent events. The major events include loss of the West Antarctic ice sheet; loss of the Greenland ice sheet; methane outbursts(including runway methane hydrates); instability or collapse of the Amazon Forests, changes in the thermo-haline circulation, loss or reversal of the gulf stream, changes in Atlantic deep water formation, changes in southern ocean upwelling, change in circumpolar deep water formation, change in stability of Saharan vegetation, reduced carbon sink capacity and other events.