WDP78 November 1990 World Bank Discussion Papers The Greenhouse Effect Implications for Economic Development Erik Arrhenius Thomas W. Waltz Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
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WDP78November 1990
World Bank Discussion Papers
The Greenhouse Effect
Implications for EconomicDevelopment
Erik ArrheniusThomas W. Waltz
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78 ~ World Bank Discussion Papers
The Greenhouse Effect
Implications for EconomicDevelopment
Erik ArrheniusThomas W. Waltz
The World BankWashington, D.C.
Copyright C 1990The World Bank1818 H Street, N.WWashington, D.C. 20433, U.S.A.
All rights reservedManufactured in the United States of AmericaFirst printing April 1990Second printing November 1990
Discussion Papers are not formal publications of the World Bank. They present preliminary andunpolished results of country analysis or research that is circulated to encourage discussion andcomment; citation and the use of such a paper should take account of its provisional character. Thefindings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) andshould not be attributed in any manner to the World Bank, to its affiliated organizations, or to membersof its Board of Executive Directors or the countries they represent. Any maps that accompany the texthave been prepared solely for the convenience of readers; the designations and presentation of materialin them do not imply the expression of any opinion whatsoever on the part of the World Bank, itsaffiliates, or its Board or mernber countries concerning the legal status of any country, territory, city, orarea or of the authorities thereof or concerning the delimitation of its boundaries or its nationalaffiliation.
Because of the informality and to present the results of research with the least possible delay, thetypescript has not been prepared in accordance with the procedures appropriate to formal printed texts,and the World Bank accepts no responsibility for errors.
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The complete backlist of publications from the World Bank is shown in the annual Index of Publications,which contains an alphabetical title list and indexes of subjects, authors, and countries and regions; it isof value principally to libraries and institutional purchasers. The latest edition is available free of chargefrom Publications Sales Unit, Department F, The World Bank, 1818 H Street, N.W, Washington, D.C.20433, U.S.A., or from Publications, The World Bank, 66, avenue d'Ilna, 75116 Paris, France.
Erik Arrhenius is principal adviser in science and technology in the Office of the Vice President forSector Policy and Research; Thomas W. Waltz is a consultant to this unit of the World Bank.
ISSN 0259-21OX
Library of Congress Cataloging-in-Publication Data
Arrhenius, Erik, 1931-The greenhouse effect : implications for economic tBevelopment /
Erik Arrhenius, Thomas W. Waltz.p. cm. -- (World Bank discusslon papers ; 78)
Includes bibliographical references.ISBN 0-8213-1520-X1. Economic development--Environmental aspects. 2. Greenhouse
effect, Atmospheric. 3. Climatic changes. I. Waltz, Thomas W.,1940- . II. Title. III. Series.HD75.6.A77 1990338.9--dc2O 90-12308
CIP
Preface
This paper presents a scientific perspective on the global climate change issue andestablishes a comprehensive framework for efficient response to the implications fornatural resource conservation and economic development. It has benefitted from extensivecomment and review within the international scientific community, as well as within theWorld Bank. It comprises an extensive summary and critique, from a development view-point, of the sometimes conflicting scientific literature and opinion on the greenhouseeffect, the related theoretical and empirical evidence, and prospects for global climatechange. Finally, it presents a set of conclusions which are worthy of serious considerationby everyone concerned with the enlightened stewardship of our global environment.
E. A. Arrhenius
Hii
La question des temperatures terrestres, l'une plus importantes et des plus difficilesde toute la philosophie naturelle, se compose d'elements assez divers qui doivent etreconsideres sous un point de vue general.
Jean-Baptiste Fourier 1827
iv
TABLE OF CONTENTS
Page
I. EXECUTIVE SIJMMARY ............................. I
II. THE THREAT OF CLIMATE CHANGE ..................... 2
A. Climate and the Greenhouse Effect ...................... 2
B. Industrial Contributions to the Greenhouse Gas Burden ... ........ 3
C. Patterns of Change in Climatic Risk ...................... 7
III. WHY THE DEVELOPMENT COMMUNITY SHOULD BECONCERNED ................................... 9
IV. OPPORTUNITIES IN ECONOMIC DEVELOPMENT .......... ... 10
A. Mitigation of Climatic Risks . . . 10
(a) Industry and Energy .......................... 11
(b) Carbon Dioxide Options ....................... 11
(c) Chlorofluorocarbon Options ..................... 13
(d) Agriculture and Rural Development ................. 13
B. Adjusting to Climatic Risk . . . 14
(a) Industry and Energy .......................... 14
(b) Infrastructure and Urban Development ............... 15
(c) Agricultural and Rural Development ................. 15
(d) Population and Human Resources .................. 16
V. CONCLUSIONS .................................. 16
VI. BIBLIOGRAPHY ................................. 17
V
I. EXECUTIVE SUMMARY
It has been known since late in the last century that an anthropogenic (manmade)warming of the earth's climate system was possible due to the atmospheric emissions andradiative properties of industrial and agricultural "greenhouse gases". Indeed, the theoryof the "greenhouse effect" was conceived over a century ago by the French mathematician,J-B. Fourier (Fourier, 1827), and given support by Tyndall's studies (Tyndall, 1861) on theabsorption of heat by gases. The first analysis of a possible climate change caused byindustrial emissions of radiatively active gases was published in 1896, by the Swedishphysical chemist, Svante Arrhenius, who calculated that there would be a global warmingof 3.2-4.0 degrees Celsius from a doubling of the earth's atmospheric carbon dioxideconcentration, a level which could be attained sometime in the next century (Arrhenius,1896). Since then, the theory of the greenhouse effect has passed from conception, tohypothesis, to the consensus view that it is both real and the probable driving force forglobal climate change in our day (Jaeger, et al., 1988).
The greenhouse effect is, in fact, normal to earth and essential to life. Without it,the earth would be more than 30 degrees Celsius (60 degrees Fahrenheit) cooler, and lifeas we know it would not exist. It is the additional greenhouse effect-underway since theindustrial revolution began-that poses the threat of climate change to society. An inevi-table legacy of the fossil fuel based industrial era will be future climate changes. The extentand character of such changes in the future, however, could be determined essentially byhuman choices.
The prospect of climate change is an issue which by its nature is potentiallydivisive. While a certain caution may be in the long term interest of us all, no single nationor region is likely to have an interest in bearing by itself possible mitigation and adjustmentcosts related to global warming. Therefore, international collaboration of some kind willbe essential. Nations and regions have conflicting interests in resolving the situation. Thepolitical obstacles to solid global collaboration on controlling greenhouse emissions in thepresent world are, therefore, substantial. The creation of an effective international rationingregime for curtailing greenhouse gas emissions would require considerable time. In themeantime, there exist many other opportunities for collaboration.
The development community needs to outline a policy and research program forsustainable economic development which addresses the implications of possible climateeffects of greenhouse gases. The greatest opportunities lie in the energy sector, whichshould be the primary focus of attention, notwithstanding that energy efficiency optionsare substantial in sectors such as agriculture and urban systems. Indeed, the opportunitiesfor public and private energy efficiency gains are compelling and suggest that the threat of
2 THE GREENHOUSE EFFECT:
global warming can be reduced primarily by concentrating present efforts on improvingthe energy efficiency of the global economy.
II. THE THREAT OF CLIMATE CHANGE
A. Climate and the Greenhouse Effect
The emission of greenhouse gases is expected to induce an increase in the globalmean temperature which, in terms of either magnitude or rate of change, would beunprecedented in mankind's entire history on earth. Present day global climate modelspredict a warming of 1.5 degrees to 4.5 degrees Celsius for a C02 doubling within the nextcentury. In contrast, the earth's temperature has risen only 0.5-0.7 degrees Celsius in thelast century, and probably has not varied more than 1-2 degrees Celsius in the last tenthousand years, or 6-7 degrees Celsius in the last million years. The development of thehuman social and cultural infrastructure over the last 7,000 years has taken place entirelywithin an average global climate neither I degree warmer nor colder than the climate oftoday (NAS, 1983).
Climate may be defined as the statistical description of the mean state of theatmosphere as well as the variability of the atmosphere, ocean, ice and land surface overa period of time. Consequently, climate is conventionally described in terms of historicmeans, variances, and probabilities (Rosenberg, 1986). Different climates characterizeeach place and season on earth and have been accurately measured instrumentally in somelocations for over a century.
The climatic events occurring before routine instrumental measurement becameestablished 100 years ago, and their relation to biogeochemical changes is by no meansunknown. Data obtained from specific climate-related patterns in biological and mineralmaterials, recovered at time-related positions in sediments and icecores have been themajor tools for measuring long-term climate conditions. These data are comparable to"fingerprints" from ecosystems specific for different climatic conditions and can be inter-preted as reasonably accurate descriptions of prehistoric climate variations. They arespecies-specific pollen; calcareous and siliceous structures from plants and microscopicanimals; climate-specific tree-ring patterns; crystal lattice structures in minerals reflectingtime of heat exposure; composition of air inclusions in glacial ice cores; and climate-in-duced changes in isotope distributions (Laut and Fenger, 1989).
Global climate warming is largely the result of the capacity of certain long-livedindustrially and agriculturally generated atmospheric trace gases -mainly carbon dioxide(C02), chlorofluorocarbons (CFCs), halons, methane (CH4), tropospheric (ground-level)ozone (03), and nitrous oxide (N20)-tO trap some of the radiant heat which the earthemits after receiving solar energy from the sun. Because this phenomenon is somewhatsimilar to the capacity of greenhouse glass enclosures to trap heat, it is commonly termedthe "greenhouse effect".
Anthropogenic (manmade) emissions of long-lived (having long atmosphericlifespans) radiatively active trace gases and their contributions to the greenhouse effect are
3
real, and are supported by physical evidence. The actual climatic impact of these gases hasnot yet been supported by scientific consensus. It is still not possible to say, for example,that the global warmning of 0.5-0.7 degrees Celsius which has been observed over landmasses during the past century or so is a definitive result of the greenhouse effect.Although globally averaged air temperature data do indicate that six of the warmest yearson record occurred during the 1980s, and some scientists have claimed statistical proof thatthe impact of the greenhouse effect is now being evidenced (Hansen, 1988), others stillquestion the possibility of ever being able to affirmatively answer the question, "Is this theyear the greenhouse effect began to bite?" (Maddox, 1988). Recent events are, however,illustrative of what could be expected if the greenhouse effect were presently underway.
B. Industrial Contributions to the Greenhouse Gas Burden
Greenhouse gases are accumulating rapidly and changing the chemical composi-tion of the earth's atmosphere. Human activities are increasing greenhouse gas concentra-tions on a global basis, thus intensifying the greenhouse effect. The most important of thesegases, in terms of its total cumulative contribution to the greenhouse effect, is carbondioxide-a fundamental product of burning fossil fuels (coal, oil, and natural gas)-thatreleases to the atmosphere carbon which had been buried in the earth for 100 million years.
Next in importance as greenhouse gases are methane, chlorofluorocarbons, andnitrous oxide. Large sources of methane are the anaerobic (in the absence of oxygen) decayof organic matter such as agricultural (rice paddy and livestock) emissions and urbanwastes. Other important sources of methane include leakage during the extraction andtransport of fossil fuels, a fact that should be considered when evaluating the relativegreenhouse contribution of different fossil fuels (Abrahamson, 1989). The level of methanein the atmosphere is influenced by the increase in its lifespan as a result of the emissionsof carbon monoxide by incomplete combustion of carbon-based fuels in industry, house-holds and transport. Large carbon monoxide emissions are also produced by the burningof savannahs and forests in land-clearing activities and slash and burn agriculture. Whilenot a greenhouse gas itself, carbon monoxide interferes with the atmosphere's self-cleans-ing capacity by destroying chemical scavengers such as OH radicals, which are present inthe atmosphere and otherwise would attack and break down air-borne methane, andthereby extends methane's atmospheric lifetime and its ultimate greenhouse warmingeffect. Chlorofluorocarbons, which are inert gases used as refrigerants, aerosols, foamingagents, and solvents, do not occur naturally but are industrially produced. Although thesources of nitrous oxide have not been fully characterized, it seems evident that almost halfof the emissions are from natural biosystems such as tropical forests and estuaries. Mostof the nitrous oxides emitted as a result of human activity are released by soil processes,accentuated by various agricultural practices, land clearing, and tropical deforestation.Other sources of nitrous oxide are combustion at low temperatures (i.e., fuel wood burning,fluidized bed combustion, and the combustion of automobile exhausts).
Not all greenhouse gases are equally efficient in terms of their capacity to absorbinfrared radiation. In fact, carbon dioxide is the least efficient of them all. This means thatthe relatively smaller amounts of the other gases are substantially multiplied in their netgreenhouse contributions by their higher absorptive capacities.
4 THE GREENHOUSE EFFECT:
Contributions of the most important radiatively absorptive trace gases, in terms oftheir net enhancements of the greenhouse effect, are shown in Table 1. Column 4 of thetable illustrates that not all greenhouse gases are equally efficient in terms of their capacityto absorb infrared radiation.
For example, using C02 as the baseline unit for absorptive capacity (letting CO2equal 1), it can be seen that a molecule of methane has a 32 times greater greenhouse effectthan C02; and the CFCs have an average effect 15,000 times greater. Column 5 presentsthe current level of cumulative past greenhouse contributions, by compound, relative to the
Table 1. NET ENHANCEMENTS OF GREENHOUSE EFFECT
(1) (2) (3) (4) (5) (6)Compound Atmos. Annual Atmos. Life Relative Past Present
Conc. (1985) Increase span (approx.) Greenhouse Cummulative Marginal(parts per (1985) (Years) Efficiency Greenhouse Greenhousemillion) (%) (C02=1) Contribution Contri-
(1985) bution(%) (1985)
(%)
Carbon
Dioxide (C02 ) 346** 0.4 100* 1 50 46
Chlorofluoro-
carbons (CFCs) 0.001 5.0 100*** 15000*** 17 24***
Methane (CH4) 1.7 1.0 10**** 32**** 19 18****
Tropospheric
Ozone (03) 0.02 0.5 0.1 2000 8 7
Nitrous
Oxide (N20) 0.3 0.3 150 150 4 5
* The estimated lifetime of atmospheric carbon dioxide assumes dynamic oceanic/atmospheric equilibriumconditions, unlike that of other greenhouse gases which is largely determined by chemical breakdown(Bach, 1988). The statistical lifespan calculated as the average atmospheric lifetime of a single carbondioxide molecule as a result of physical removal processes is 4 years (Laut, et al., 1989).
** Pre-industrial concentration: 260 parts per million.
*** For chlorofluorocarbons presently in use. These estimates may vary as discussed on page 6, below, withcompensating shifts in the percentage breakdown of Col. 6.
**** These estimates may vary as discussed on page 5, below, with compensating shifts in the percentagebreakdown of Col. 6.
Source: Cols. 1-5, Bach, 1988; Laut, etal., 1989. Col. 6, World Bank estimate, highlights the relative prior-ities for possible mitigation of trace gas emissions as a function of their greenhouse contributions at the mar-gin of increasing atmospheric loading.
Footnotes, World Bank.
5
pre-industrial background level. Column 6 of the table lists the present contributions, at themargin, of each of the greenhouse gases. Their future contributions to prospective in-creases in the greenhouse effect will be a function of their relative atmospheric concentra-tions, rates of annual increase, and radiative absorptive capacities. These figures areimportant indicators of where the opportunities for reducing greenhouse emissions lie andthereby for the evaluation of the most cost effective measures to be taken by the develop-ment community.
Carbon dioxide emission breakdowns by economic sector are not available on aglobal basis. However, in the U.S. in 1985, the breakdown was as shown in Table 2. Whilesectors are here treated as independent in their greenhouse effects, in fact, they may beinterdependent. For example, some industrial, transport, and residential building usersgenerate all or a portion of their own electric power. To that extent, the percentagedistributions in the table should be viewed as first-order estimates only.
Table 2. C02 Emissions by Sector in the U.S. in 1985
% of total
Electric Utilities 32.5 %
Transportation 31.0Industry 24.7Residential bldgs. 11.8
100.0 %
Source: Personal communication, G. Marland, Oak Ridge National Laboratory, U.S. Department of Energy.
The net greenhouse effect of methane relative to carbon dioxide depends upon theperiod of time-or decision horizon-over which their relative effects are compared. Oncemethane is released to the atmosphere it is vulnerable to the attack of chemical scavengerssuch as OH radicals. As a consequence, although methane's immediate greenhouse warm-ing effect is initially 32 times as great as carbon dioxide on a molecule per molecule basis,its present expected lifetime within the atmosphere is only 10 years and thus its netcumulative effect declines to only 4 or 5 over the longer lifespan of carbon dioxide. Thisintegration over such a long period is, however, not valid over a shorter decision horizon.Consequently, when policies are considered for periods which are shorter than the average100 year atmospheric lifespan of carbon dioxide, the relative weight given to the green-house warming contribution of methane and its byproducts will increase.
The fact that the breakdown of methane may involve a complex array of additionalgreenhouse gases implies that the gross warming effect induced by methane emissions andits byproducts could be substantially higher in reality than the figures above might suggest.
In addition, other synergisms occur in interactions among the various greenhousegas emissions themselves. Since methane per molecule is more radiatively effective as a
6 THE GREENHOUSE EFFECT:
greenhouse gas than is carbon dioxide, even small amounts of carbon monoxide wouldcontribute significantly to the greenhouse effect by its capacity to increase the lifespan ofmethane. CO is produced by inefficient combustion in automobiles, industrial and house-hold fumaces. It would be worthwhile to consider ways of reducing CO emissions, by interalia, the introduction of appropriate energy efficiency and process control technologies.Considering that CO is a combustible waste, finding more efficient ways of burning itcould also provide additional energy.
Recently, in situ measurements as well as remote sensing observations haveconfirmed that substantial carbon monoxide releases are occuring not only in industrializedurban areas due to fossil fuel combustion but are very prominent in developing countriesin South America and Africa due to extensive tropical and savannah burning for landclearing and agricultural purposes (Newell, et al., 1989). Consequently, the natural self-cleansing capacity of the atmosphere provided by OH radicals, is much more at risk thanhad originally been thought.
Table 3. World CFC Production and Use
1985 1985CFC ProductionI CFC Use2
USA 31 % 29 %W. Europe, 59 55Japan, Canada,Aus., New Zealand,E. Europe, SovietUnionDevel. Countries <3 16
l00%
Source: 1. Chemical Manufacturers Association.2. U.S. Environmental Protection Agency.
Table 3 above presents world CFC production and use for 1985. Although produc-tion and use of CFCs occur mainly in the industrialized world, developing countries arepotentially important producers and users of CFCs in the future. On the other hand, ifdeveloping countries could have easy access to affordable replacements or substitutes forCFCs, the harmful effects on the environment would be attenuated. Since some of the mostpromising near-term CFC substitutes such as HCFC-22 break down relatively rapidlywithin the troposphere, they also have comparatively short atmospheric lifetimes-in therange of 15 to 25 years-more comparable to that of methane than of contemporary CFCswhich have lifetimes of 100 years or more. For the same reason, however, estimates of therelative greenhouse warming effect of such "new" CFCs will-as is the case with meth-ane-vary as a function of the decision period considered. In this sense, there could be acountervailing tradeoff between the lessened ozone depletion threat of the new CFCs andtheir potential for global warming due to their shorter atmospheric lifespan.
7
The radiative impact of greenhouse emissions over time is, theievJre, the com-hined consequence of their radiative forc ings per molec ule, interactions with other- gasesand sinks, resultin(g atmospheric lifespans and the relevant decision period.
C. Patternls of Change in Climatic Risk
As emphasized earlier, at the present time, there is no generally agreed-uponparadigm for anticipating climate change. Some climate scientists believe that the climatesystem has a tendency for sudden shifts in equilibrium as boundary conditions change.Others contend that the climate system is linear, more deterministic than probabilistic innature. Consequently, all present-day long-term climate prediction scenarios should beseen more as conjectural than literal predictions.
Some oceanographers, such as Wallace S. Broecker, have expressed concern thatwe may have been "lulled into complacency" by model simulations suggesting a gradualwarming over the next century (Broecker, 1987). He argues that the fundamental architec-ture of the models denies the possibility of critical interactions which we know areprevalent in the real world. Unfortunately, while we are aware of the possibility of theseso-called climate system "flip-flops", we do not know yet how to incorporate suchinteractions into our models or our predictions.
The stability of any system is considered to be a function of both the size of itsdomain of stability and its resilience, or its ability to maintain its structure and patterns ofbehavior in the face of disturbance (Holling, 1986). Disturbances, in turn, may result frompositive feedbacks, as well as external shocks. In the case of the climate system, we do notknow where the thresholds along the boundary of the stability domain may lie, but we doknow that it might be possible by pursuing the right approach to mitigating greenhouseemissions, to avoid prospective climatic change altogether-which fact should not be lostsight of in policy formulation.
Long-tern paleoclimatic records indicate that the earth does not respond to atmo-spheric forcing (changes in its chemical composition) either smoothly or gradually. In-stead, the climate responds in sharp shifts which may involve large scale transformationsof the earth's climate system. These records also show that 6 degree Celsius changes in airtemperatures have been typical of the earth's climatic shifts-and that they have beenpositively correlated with changes in the concentration of carbon dioxide in the atmo-sphere. The distinction is that none of these events has occurred within the period ofrecorded human history.
There are other feedback effects which may be either positive or negative. Forexample, the feedback effects of a changing global cloud cover, depend upon the type ofcloud, and may either tend to be negative due to enhanced solar reflectivity, or be positiveby behaving as an insulating blanket, reflecting infrared radiation back to the earth'ssurface. A shift from one cloud type to another in the climate change process may thusinduce a "flip-flop". The ocean also manifests complex feedback interactions within theclimate system. Furthermore, the ocean is an important sink for CO2 not only by virtue of
8 THE GREENHOUSE EFFECT:
its inherent direct physical/chemical absorption 'processes, but also by its capacity forsustaining plankton-based bio-chemical and photosynthetic transformations of inorganiccarbon into deep sea detritus sediments. However, these cloud and ocean climate functionsare not well understood and will therefore require increased attention in the future.
Empirical evidence strongly suggests that the probabilities of certain extremeweather events are non-linearly correlated with mean temperatures. Experience has shownthat the probability of extreme temperature events critical to the economy (such as consec-utive daily temperatures exceeding 95 degrees F) increases as mean temperature rises.These observations also relate to an increased likelihood of natural disasters which cur-rently claim over $40 billion per year in global resources and result in at least 250,000deaths annually. Ninety-five percent of these deaths occur in the poorest countries of theworld, while seventy-five percent of economic losses occur in the wealthiest countries(Kates, et al., 1985).
Simulation studies have shown that there is a nonlinear relationship betweenprecipitation changes and runoff to supply irrigation within river drainage basins. In onesuch study a 10 percent decrease in precipitation resulted in a decrease in runoff of 25 to40 percent, depending upon the size and mean runoff of the watershed (Nemec, 1988). Inanother study, a 10 percent increase in average annual precipitation combined with a 2degree Celsius rise in average temperature, resulted in an 18 percent decrease in runoff. Infact, it was discovered that in order to completely counteract the effects of the 2 degreeCelsius warming, a 28 percent increase in precipitation would be necessary (Revelle andWaggoner, 1983).
Some computer simulations'with climate models suggest that with global warm-ing, the earth's hydrological cycle and resultant precipitation will not only become moreintense, but that many areas presently dependent upon rain-fed agriculture will becomehotter and drier. In particular, they suggest that mid-continent, mid-latitude areas whichnow yield substantial grain production may experience decreased summer soil moistureand an increased risk of drought. In some scenarios, grain crop failures could occursimultaneously in all the earth's bread baskets.
Likewise, some areas which have been dry, may receive increased precipitation ina warmer world. It should also be kept in mind that changes which by agriculturalconvention are perceived as positive, may on the contrary be quite undesirable for thesuccessful adjustment of species and ecosystems.
Recent international scientific assessments have led to the conclusion that shouldthe anticipated greenhouse warming take place, it could cause a r ise in global sea levelsof 20 to 165 centimeters over the next century mainly due to thermal expansion of theoceans. Such an increase would bring about flooding in many coastal areas, induce saltwater intrusion into aquifers and submerge wetlands-vital spawning grounds for com-mercial fisheries. At least 10 to 15 percent of the arable land, populated areas, andeconomic productivity of such areas could be lost. These estimates do not include theconsiderably less probable scenarios of melting of the Antarctic and Greenlandic continen-
9
tal ice sheets which would yield progressive or sudden sea level increases on a substan-tially larger scale.
A further result of the anticipated rise in global mean temperatures will be aprobable decrease in the natural thermal gradient on the earth's surface between the polesand the equator. A likely result will be major shifts in the global patterns of wind and oceancurrents.
III. WHY THE DEVELOPMENT COMMUNITYSHOULD BE CONCERNED
When confronted by serious risks which may be menacing, cumulative, andirreversible, uncertainty argues strongly in favor of action and against complacency. Thereis a real choice (Waltz, 1987). The world can continue full speed ahead with business asusual or it can reassess policies and resource commitments, in light of the climate changerisk, but with a view towards endorsing precisely those actions which make economic,social, and environmental sense on their own merits. This approach can help buy time inwhich to learn more about the climatic and policy responses which could make sense infuture and also help us prepare for them if necessary. As Louis Pasteur once observed, "Inscience, chance favors the prepared mind."
Several factors may influence the efforts of individual countries to deal with thegreenhouse problem as well as the effort to reach the necessary international consensus,because: (a) industrialization is indisputably the principal source of trace gas emissionswhich increase global climate change uncertainties and risks; (b) the consequences of theseclimate changes are expected to be widely dispersed; (c) some countries are far moredependent than others upon natural resources and systems such as agriculture, forestry,fisheries, and monsoon patterns, natural systems that are heavily dependent on climate.These countries frequently have far fewer resources available for adapting to or mitigatingconsequences than do other countries. They are also more vulnerable to natural disasterssuch as floods, droughts, violent storms and rising sea levels (Gleick, 1988). On the otherhand, the relatively greater need for increased energy resources in developing countriesimplies an enhanced requirement to consider the need to focus on policies and measuresfor the mitigation of greenhouse effects.
As discussed earlier, the fact that the stability domain of the present climate systemis unknown, and that therefore a critical threshold to turbulent change might inadvertently(and possibly avoidably) be crossed, should give one pause. On the other hand, the factthat the climate system, like all systems, has an inherent resiliency should give us someconfidence that by doing the right things now we may even increase our chances ofavoiding truly disruptive climate change altogether.
10 THE GREENHOUSE EFFECT:
IV OPPORTUNITIES IN ECONOMIC DEVELOPMENT
Considering that delay could mandate more extreme policy measures later, takingaction now seems prudent. Particularly since there are actions available that are economi-cally, technically, and politically feasible, finding ways of minimizing exposure to thegreenhouse threat by investing in energy efficiency is the best way of "buying" insuranceagainst its hazards. Failure to pay the premiums could increase both the risk of disaster andits cost, especially in the event of a climate system "flip-flop".
The uncertainties inherent in the greenhouse issue are best met by pursuing thoseenergy policies which will help mitigate the greenhouse problem as quickly and effectivelyas possible. This means investing in the most effective correctives first. Not only is energyefficiency the most effective alternative, it is the least expensive as well (Keepin and Kats,1988; Goldemberg, et al., 1988).
A major task confronting decision makers is the determination of specific invest-ments or policies to take the risk of climate change into account (Waltz, 1987). If industrialgrowth and energy demand take off as anticipated in many countries, without correction inenergy efficiency or restraint in chlorofluorocarbon use, the result will be substantiallygreater greenhouse gas emissions than are technically necessary to meet the goals ofdevelopment.
Agriculture per se plays a substantially less significant role than does industry interms of the overall generation of greenhouse gas emissions. In view of the fact that thebiomass including existing forests contains a stock of carbon which is approximately equalin quantity to the entire quantity of carbon now resident in the atmosphere; and consideringthat the planet's storehouse of known fossil fuels is at least 15 times greater than eitherforestal or atmospheric carbon, it is clear that under no circumstances can modifying thecarbon sink through deforestation or forestation alone play any but a minor role inresponding to the greenhouse problem by decreasing carbon dioxide levels in the atmo-sphere. The extensive present burning of rainforest does, however, emit substantialamounts of methane-enhancing carbon monoxide.
The following sections of this paper indicate that there are significant opportunitiesfor mitigating the risks of climate change. There are also opportunities for adapting toclimatic changes. The mitigation and adaptation opportunities in individual sectors arepresented below.
A. Mitigation of Climatic Risks
As discussed earlier, the risk that the inherent resiliency of the climate system maybe overwhelmed will continue to grow unless steps are taken to reduce global accumula-tions of greenhouse gases. This risk includes the possibility of abrupt and turbulenttransitions, the final outcome of which is unpredictable. This imposes a serious constraintupon the potential for adaptive actions. A preferable strategy would thus be to begin toreduce the risk by more aggressively pursuing mitigation measures.
(a) Industry and Energy
Industrial policy responses can play a prominent role in reducing two of thegreenhouse gases, carbon dioxide and chlorofluorocarbons (CFCs). In addition, energyefficiency policies, including those for reducing CO emissions, may significantly reducethe methane content of the atmosphere (Arrhenius, 1987). Methane emissions throughleakage are prominent in transport and mining of fossil fuels, as well as the generation anddistribution of natural gas (Abrahamson, 1989). Fortunately, most leakage can be remediedthrough the adoption of improved leakproof natural gas handling systems and technolo-gies.
The anaerobic breakdown of organic material in urban sewage, landfill, andagricultural waste, is also a large emission source of methane. The controlled buming ofthe methane from these sources, in association with energy production whenever possible,would shift the net greenhouse gas emission mix from radiatively more active methanetowards less active carbon dioxide while increasing the total supply of energy.
Numerous economic sensitivity analyses and uncertainty studies with global mod-els have confirmed that end-use energy efficiency is the single most important technolog-ical factor determining future carbon dioxide and carbon monoxide emissions (Keepin andKats, 1988; Goldemberg, et al., 1988). Considerable emissions reductions are possible inareas beyond the energy industry as well. For example, seventeen percent of today's globalcarbon emissions are associated with energy production for heating, cooling, and lightingexisting buildings. New houses often require as little as 25 percent or less of the energy ofearlier designs, and it costs no more to build energy-efficient office buildings than ineffi-cient ones (Rosenfeld and Hafemeister, 1988). Recent advances in industrial processcontrol technologies and drive-systems, as well as consumer appliances, promise dramaticopportunities for reducing energy demand and, consequently, carbon dioxide/carbon mon-oxide emissions.
(b) Carbon Dioxide Options
The major source of global carbon dioxide emissions is the energy sector. Indus-trial (including agricultural) end uses account for the largest proportion of energy use inhighly industrialized countries-nearly 43 % of the energy consumed in the OECD inprimary energy equivalent terms in 1985 (U.S. Department of Energy, 1987). In othercountries generally, nearly 60 % of their total commercial energy production is consumedby industry.
There are four basic industrial policy response options for reducing C02 and COemissions in any sector of the economy: (1) energy efficiency and conservation, (2)alternative energy sources, (3) production process changes, and (4) emission control.
A more unified, integrated, systems approach to energy policy across all sectors,consistent with sustainable development and the likelihood of climate change needs to beelaborated. Such an energy strategy would have to stress the importance of increasedenergy efficiency, synergy among different greenhouse gas emissions (sources and sinks),reduced use of fossil fuels, and an emphasis on the incorporation where advisable of
12 THE GREENHOUSE EFFECT:
alternative energy sources such as advanced biomass, solar, wind, hydroelectric, cogenera-tion, and perhaps nuclear, as appropriate within the context of existing developmentpolicies. Renewable energy technologies such as photovoltaics and hydrogen-based en-ergy, while at the present time cost-effective only in limited applications, are rapidlyimproving in efficiency. Their technical attractiveness in particular applications such aslong range energy transport and storage should enhance their market potential in industri-alized countries. Such trends could also stimulate their earlier adaptation by developingcountries as well.
Many developing countries are now in the early stages of a period of rapidexpansion in energy and materials-intensive industries, as they strive to raise their livingstandards. Also, it is characteristic of many of these countries that their industries are farless energy efficient than those in developed countries. To a certain extent, this energydifferential is the result of government subsidies, inappropriate technologies, and lack ofmanagement skills. Energy pricing reforms can reduce costs by saving energy and alsoreduce environmental damages.
In a recent study, it was demonstrated that a $10 billion investment in cost-efficientimprovements in electricity end-use could offset anticipated demand for 22 GW of newgenerating capacity. The comparable capital cost of having to install additional capacity ofan equivalent amount would be on the order of $40 billion (Keepin and Kats, 1988; Geller,1986; Geller, et al., 1988; and Goldemberg, et al., 1988).
According to another related study of energy conservation options, relatively lowelectricity tariffs-particularly for industrial customers-presented a strong disincentive tosuch conservation investments. The same country also assembled more efficient air condi-tioners for export than it produced for sale at home. This situation was due to the fact thatthere was a 300% trade tariff on imported rotary compressors used in the air conditioners,which effectively inhibited their sale and use within the exporting country (Geller, et al.,1988).
Changes in manufacturing industry process control technology per se can measur-ably reduce C02 emissions. For example, in the cement industry, where world productionhas been increasing at an average annual rate of approximately 6% since the 1950's, thereexist a variety of cement manufacturing alternatives, some of which release more C02 thanothers (Goldemberg, et al., 1988). Carbon dioxide is emitted in the calcining phase of thecement-making process when calcium carbonate (CaCO3) is converted to lime (CaO). Forevery ton of cement produced 0.14 tons of carbon are emitted as C02 from this reaction.Generally, even more C0 2 is emitted from the fuel used to drive the process.
The energy requirements for cement-making can vary anywhere from a low of 4Gj per ton in Sweden and Japan to 7 Gj per ton in the United States . Energy is used toheat the kiln and grind the raw materials and clinker. The differences in energy require-ments are due in part to the choice between dry and wet methods of production. The latteris more costly since water is added to the process and must be evaporated afterwards, thusrequiring more energy per ton produced. Other technologies such as suspension pre-heat-ers, flash calcining, using less energy-intensive cement than Portland, or cold processing,
13
can all reduce the energy costs of cement production by 10 to 15 percent (Goldemberg, etal., 1988).
Deep ocean burial of CO2 emissions has been estimated by the U.S. Electric PowerResearch Institute (EPRI) to cost on the order of $426 billion for elimination of only30-35% of U.S. emissions. Thus, it appears doubtful that, even if proven technicallyfeasible, such technologies would be economical. As a consequence, CO2 emissions arethought to be largely irreversible.
Other policy options for carbon dioxide reduction include a variety of emissioncontrol interventions such as carbon fuel taxes, tightening automobile fuel efficiencystandards, etc.
(c) Chlorofluorocarbon Options
The Montreal Protocol for the Protection of the Ozone Layer came into effect onJanuary 1, 1989. The Protocol calls for staged reductions in consumption, production, andtrade in CFCs. Its effectiveness will depend upon the level of participation and rulecompliance. Despite any drop in emissions resulting from the implementation of theProtocol, CFC greenhouse effects may be expected to continue for a long time due to CFCsurvival rates in the lower atmosphere of 65 to 110 years (Bach, 1988). Compliancestandards for developing countries, based upon per capita measures, are also more lenientthan for others. In the Protocol, although it will take some time, replacement technologieseither exist or can be developed for most CFC applications, albeit at some cost. In themeantime, mitigating action can be undertaken by countries agreeing not to export ineffi-cient and obsolete CFC-leaking technologies to other countries.
While the chlorofluorocarbon emission and ozone depletion issue is closely relatedto the greenhouse issue, it has some important differences. One problem associated withthe CFC's is intellectual property rights and their impact on developing countries. Anotherfactor of importance is that due to the effect of CFC's on ozone, a group of industrializedcountries are more vulnerable than others and therefore should have a stronger interest incontributing economically and technologically to the resolution of the CFC problem.
(d) Agriculture and Rural Development
The relative sizes of the various compartments of the carbon cycle have importantgreenhouse warming implications for the agricultural sector. The amount of carbon resid-ing in the atmosphere is roughly comparable to the amount contained in the biosphere, andthe amount within soils is half again (1.5 times) as much as either. By contrast, 15 timesas much carbon as is presently contained in the atmosphere is stored in the ground asfossilized carbon and peat, and an overwhelming 75 times as much carbon is stored in theoceans.
Reversal of deforestation trends could be a cost-effective means of reducing netcarbon dioxide emissions in many countries. Shifting cultivation, fuel wood use, and landuse property rights are closely related issues requiring policy attention. The destruction oftropical rain forests for agricultural and livestock purposes releases large amounts of
14 THE GREENHOUSE EFFECT:
carbon monoxide as well as carbon dioxide, and amplifies the impact of deforestation byenhancing atmospheric methane concentrations. However, the preponderance of green-house gases is produced by the highly industrialized sectors of the global economy.Accordingly, the practical potential for deforestation or reforestation to modify the green-house effect is ultimately limited, and should be kept in proper perspective.
Reforestation attempts, however, must compete against alternative land use de-mands within the biosphere. They must also take account of the fact that, in order to remaineffective over the long term, the carbon must somehow be sequestered and the processrenewed as the trees mature.
Thus, efforts to reduce emissions and increase sinks for carbon would be muchenhanced if agricultural techniques could be developed for exploiting the potential inherentcapacity of soils to store carbon by gradual increases in their organic soil components.Such opportunities are likely to be greatest in the developing world where much of the landhas already been seriously degraded. They would not compete with the efficient productiveuse of land.
It has been estimated that methane emissions from ruminating livestock could bereduced by 25 to 75 percent (Gibbs and Lewis, 1989). Methane production from ruminantsis most probably caused by inappropriate cattle breeding, and/or feeding and unsuitableenvironmental factors within livestock stables in intensive animal husbandry. The potentialrange for converting carbon intake to methane in animal husbandry is very large, sinceoutput in the form of milk, carcass, and manure represents only 10 to 25 percent of thefeed input calculated on energy content. Reducing methane emissions from the animalhusbandry system, while technically feasible, has not been initiated within the livestockindustry (Arrhenius, 1987). It should be kept in mind, however, that the total contributionof livestock to the greenhouse problem is relatively small, producing 15 percent of allglobal methane and contributing about 3 percent to the total global warming forcing.
B. Adjusting to Climatic Risk
Factors such as inadequate or inaccurate data on the environment, the potentialsuitability and flexibility of technological options, and constrained availability of eco-nomic resources, present problems in many countries which will only increase as climatechanges. This is especially so in view of the fact that the frequency of extreme events andnatural catastrophes would be expected to rise in a changing climate.
(a) Industry and Energy
Since climatic change risks are notably uncertain at the local and regional levels,it is not possible nor desirable to invest now in any particular anticipated climatic transfor-mation. However, the likelihood that climatic changes at those levels are increasinglyprobable, and subject to successive changes through time, strongly suggests that it wouldbe prudent to consider the economic and financial feasibility of building in greater resil-iency in the pre-planning and design of industrial and energy infra-structures. It should alsobe remembered that the "no climate change" perspective is the least probable. This mightsuggest a scaling down and/or delay of very large or long-lived projects, in favor of buying
Is
time with smaller, shorter-lived ones, to observe what actually happens climatically withinparticular countries and regions.
(b) Infrastructure and Urban Development
As mentioned earlier in paragraph 30, ocean levels are likely to rise largely inresponse to thermal expansion. Rising sea levels would innundate coastal areas and couldlead to the loss of large areas of coastal wetlands. The potential economic threat to coastalwetlands alone would be on the order of hundreds of billions of U. S. dollars.
In the years ahead, the costs of shoreline protection may rise and the relativeeffectiveness of alternative measures could change. Estimates are that a one-foot rise insea level would erode most shorelines over 100 feet. What this would mean for coastalcommunities, especially in delta areas, hardly needs elaboration. The proposed location orexpansion of ports, cities, housing, agricultural activities, coastal developments, etc.-anyof which may have major impacts upon economic development by virtue of their multipliereffects on employment and incomes-should be reconsidered. Smaller, more flexiblydesigned projects with shorter expected lifetimes would seem to have some strategicadvantage in dam, irrigation, port, etc., planning.
In view of demonstrated non-linear tradeoffs between precipitation changes andwater runoff within drainage basins, water supplies for irrigation, dams, and sewagesystems might all be threatened. Recharge of groundwater reserves would obviously beanother serious concern with climate change. As is the case with forestry and agriculture,such potential changes need to be kept in mind in scaling those infrastructure projectswhich relate to water resources such as dams, irrigation, and sewage facilities.
(c) Agricultural and Rural Development
In agriculture, the uniformity of plant gene pools and the synchronization of plantgrowth and development through mechanization has made crops more vulnerable tolarge-scale shifts in the weather regime (Rosenberg, 1987; Rosenberg, et al., 1989). Inview of the fact that climate change itself may be a threat to the survival of the natural, orwild, gene pool, a strategic requirement exists for systematically ensuring that an adequategene pool survives and is sustained. Other considerations include the climatic threat interms of crop and livestock vulnerability to extreme weather events such as floods ordroughts, land use, pest and disease control, and soil erosion.
During past periods of long-term temperature change, shifts in the location offorest boundaries have been clocked at a rate of as much as I km per year. Severalcomputer simulated projections of greenhouse-related global surface temperature increasesfor the next century are shown as far greater than what paleoclimatic records indicate ashaving occurred prior to the industrial era. These projections imply that suitable growingareas for forests as well as for agricultural products could begin to shift at an unprece-dented pace. This would cause disruptions mainly in forests and unmanaged ecosystems.It is not too early to begin thinking about how such processes might affect investments inagriculture and forestry.
16 THE GREENHOUSE EFFECT:
(d) Population and Human Resources
As the risk of hydrological and temperature change increases, so too does thepotential for worrisome shifts in the regions infected by vector diseases threatening bothanimals and human populations. Changing patterns in nutrition, famine, morbidity, mortal-ity, and migration could result and investment planning should address such risks.
V. CONCLUSIONS
The choice of energy policies impiemented within the next few decades couldsubstantially contribute to mitigating possible future global warming effects of greenhousegas emissions. Incorporating energy-efficient choices, especially end-use energy efficiencyappears essential to successfully mapping the strategic decision-making implications ofclimatic change. Energy conservation makes good economic and environmental sense.
Policy options must be evaluated within the context of complex uncertaintieswhich prevent us now from knowing precisely how a given level of emissions will impactthe rate and magnitude of climate change. Uncertainties concerning the impact of thegreenhouse gas buildup on global climate are pervasive. However, these uncertainties arenot about whether the greenhouse effect is real or whether increased greenhouse gasconcentrations have the potential for raising global temperatures. Rather, critical uncertain-ties concern the regional magnitude and timing of potential warming and, coincidentally,the prospects for cooperatively resolving their prospective global implications.
While the actual timing of prospective global warming cannot be predicted, con-jectures about when the earth's atmospheric potential for various levels of warming willoccur based upon the choices which we might make now and in future are possible.Delaying energy-efficient policy responses to the greenhouse gas buildup would substan-tially increase the global potential for future warming. Fortunately, technical options areavailable which, if necessary, and given sufficient political and economic will, couldstabilize greenhouse gas emissions.
Most countries could significantly improve their production efficiencies in green-house gas-emitting industries. Such steps should be economically worthwhile even in theabsence of the risk of climatic change. However, because of the large potential for growthin atmospheric emissions in many countries, the participation of all countries would becrucial for stabilizing the level of greenhouse gases.
Consequently, the sooner the international community makes the necessary com-mitment to increasing energy efficiency in all sectors of the global economy, especiallyend-use energy efficiency, the more time there will be to cushion the inevitable adjust-ments which may ultimately have to be made by the most vulnerable economic sectors andgeographic regions of the world.
17
VI. BIBLIOGRAPHY
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Recent World Bank Discussion Papers (continued)
No. 49 Improving Nutrition in India: Policies and Programs and Their Impact. K. Subbarao
No. 50 Lessons of Financial Liberalization in Asia: A Comparative Study. Yoon-Je Cho and Deena Khatkhate
No. 51 Vocational Education and Training: A Review of World Bank Investment. John Middleton and Terry Demsky
No 52 The Market-Based Menu Approach in Aaion: The 1988 Brazil Financing Package. Ruben Lamdany
No. 53 Pathways to Change: Improving the Quality of Education in Developing Countries. Adriaan Verspoor
No. 54 Education Managersfor Business and Govemment. Samuel Paul, Jacob Levitsky, and John C. Ickis
No. 55 Subsidies and Countervailing Measures: Critical Issuesfor the Uruguay Round. Bela Balassa, editor
No. 56 Managing Public Expenditure: An Evolving World Bank Perspeaive. Robert M. Lacey
No. 57 The Management of Common Property Natural Resources. Daniel W. Bromley and Michael M. Cemea
No. 58 Making the Poor Creditworthy: A Case Study of the Integrated Rural Development Program in India. Robert Pulley
No. 59 Improving Family Planning, Health, and Nutrition Outreach in India: Experiencefrom Some World Bank-Assisted Programs.Richard Heaver
No. 60 Fighting Malnutrition: Evaluation of Brazilian Food and Nutrition Programs. Philip Musgrove
No. 61 Staying in the Loop: International Alliancesfor Sharing Technology. Ashoka Mody
No. 62 Do Caribbean Exporters Pay Higher Freight Costs? Alexander J. Yeats
No. 63 Developing Economies in Transition. Volume 1: General Topics. F. Desmond McCarthy, editor
No. 64 Developing Economies in Transition. Volume ll: Country Studies. F. Desmond McCarthy, editor
No. 65 Developing Economies in Transition. Volume III: Country Studies. F. Desmond McCarthy, editor
No. 66 Illustrative Effects of Voluntary Debt and Debt Service Reduction Operations. Ruben Lamdany and John M. Underwood
No. 67 Deregulation of Shipping: What Is to Be Leamedfrom Chile. Esra Bennathan with Luis Escobar and George Panagakos
No. 68 Public Sector Pay and Employment Reform: A Review of World Bank Experience. Barbara Nunberg
No. 69 A Multilevel Model of Sehool Effectiveness in a Developing Country. Marlaine E. Lockheed and Nicholas T. Longford
No. 70 User Groups as Producers in Partidpatory Afforestation Strategies. Michael M. Cemea
No. 71 How Adjustment Programs Can Help the Poor: The World Bank's Experience. Helena Ribe, Soniya Carvalho, RobertLiebenthal, Peter Nicholas, and Elaine Zuckerman
No. 72 Export Catalysts in Low-Income Countries: A Review of Eleven Success Stories. Yung Whee Rhee and Therese Belot
No. 73 Information Systems and Basic Statistics in Sub-Saharan Africa: A Review and Strategyfor Improvement. Rarnesh Chander
No. 74 Costs and Benefits of Rent Control in Kumasi, Ghana. Stephen Malpezzi, A. Graham Tipple, and Kenneth G. Willis
No. 75 Ecuador's Amazon Region: Development Issues and Options. James F. Hicks, Herman E. Daly, Shelton H. Davis, andMaria de Lourdes de Freitas (Also available in Spanish (75S)]
No. 76 Debt Equity Conversion Analysis: A Case Study of the Philippine Program. John D. Shilling, Anthony Toft,and Woonki Sung
No. 77 Higher Education in Latin Amerka: Issues of Efficency and Equity. Donald R. Winkler
No. 78 The Greenhouse Effect: Implicationsfor Economic Development. Erik Arrhenius and Thomas W. Waltz
No. 79 Analyzing Taxes on Business Income with the Marginal Effective Tax Rate Model. David Dunn and Anthony Pellechio
No. 80 Environmental Management in Developmnt: The Evoludon of Paradigms. Michael E. Colby
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