Thursday, June 7, 2012


date: Wed, 11 Jul 2001 09:58:13 +0200
from: Jean-Charles HOURCADE <>

Dear Friends,

A few remarks before the meeting of tonight and tomorrow,

I am sure that our meeting will make clearer the different objectives of
ECF, in particular regarding the articulation between the scientific agenda
and activities in direction to stakeholders and policy-makers.

I would like to stress that I will attend the ECF meeting not only in the
name of the Cired, but also in view of preparing the involvment of the
Institut Laplace in ECF, namely the community of climate modellers, with
which we develop a long term research program. I would like to explain
hereafter in a few words what should be, in my view the priorities of ECF,
in terms of scientific agenda:

Given recent Ipcc experience, the first priority would be to progress in
direction to integrated models. Indeed the lessons of the Ipcc are twofold:
- first the Sress scenarios confirm the possibility of generating very
different emissions growth scenarios over the long run, but the consistency
between the Storylines and the numerical scenarios remain uncertain; this
uncertainty and vagueness reveals a more fundamental limitation of the
state of the art of economic modelling over the long run, in particular to
provide an explicit picture of linkages between structural changes
(infrastructure transportation, urban forms that govern the energy content
of final consumption, industrial structure and the so-called
dematerialisation), innovation and both macro and micro economic drivers
(productivity, growth and price-signals). This makes very difficult to
detect where are the real bifurcations, the real policy-parameters and to
make much progress in the understanding of the timing of policy responses,
- second the sections on 'damages ' have make some progress but remain
weak in terms of the social and economic implications. More precisely they
deal mostly with impacts on physical parameters (sea-level rise), in a few
cases adress impacts on humans (tropical diseases), but all this does not
give a comprehensive picture of social and economic damages (once
discounted the effect of adapatation),

One of the scientific objective of ECF should be to be prepared to provide
in a few years for a convincing contribution in future exercises like the
SRES and in the future Ipcc rounds. This passes first through two parallel

- on long term economic modelling where the limitations of existing tools
are obvious depiste real progress; this relates basically to three
- a macroeconomic framework insuring the consistency between prices and
quantities at any point in time without necessarily resorting to the
modelling tricks relying on the conventional neo-classical growth theory;
these 'tricks' assume indeed perfect foresight, efficient markets and the
absence of strategic or routine behaviours; New conceptual frameworks about
endogenous growth theory allow for such a move, but there is a gap between
advances in pure theory and empirical modelling,
- the endogeneisation of technical change and more precisely to develop
this endogeneisation in such a way that the information coming from
sectoral models in energy, transportation or agriculture is not lost (this
comes back to the bottom-up/top-down controversy); note that one key
challenge here is to progress in direction to transportation and agriculture
- an explicit treatment of expectations and uncertainty; one key issue
indeed is that the stabilisation of expectations over the long run is the
main driver of technical change, consumption patterns and structural

- on 'coupling' economic and climate models: here there are two routes,
either to develop coupling methods between large-scale models or to develop
interface compact modules, reduced forms of large scale models. Both routes
are valid, however, in the following years, to develop integrated models
made up with reduced forms of larger models seems more promising; thanks to
tractable and numerically controlable models, in will be easier to reveal
the key mechanisms at work and to introduce uncertainties. This will pass
through progress in the representation of carbon cycle (including
sequestration) in such models and, more importantly in the representation
of damages and adaptation, which rises rather fundamental conceptual issues
that explain what seems to be the second priority in my view.

The second prority relates to the joint question of damages and
precautionary principle:
- part of the agenda is covered by Mike Hulme's paper and I will not
elaborate here on other dimensions I would link to include and how to
assess a cost. I will simply insist of the fact that we need to set up a
taxonomy of damages in economic terms, this means as resulting not of the
climate transformation per se but from the joint effect of inertia and
uncertainty (to pass to Riviera to the beaches of Normandy in not a cost in
itself in a world restabilized around a new climate equilibrium; what
matter are the transition costs and the generated variability of climate).
Moreover I would insist for adopting deliberately a worldview because,
fundamentally, climate change will generate a new human geography, and not
to be restricted to the European subcontinent,
- this should lead to develop in parallel stochastic decision modelling
tools to disentangle the many dimensions and views about the precautionary
principle and, I take some risks in saying that, in a symmetric treatment
of climate damages and nuclear risks (we cannot avoid to try and put some
rationale in this discussion which is one of the reason for the failure of
the EU tax in 1992 and of COP6, and which will be an 'hidden' division line
within the EU)

The third priority should be the topic 1 made by Klaus. For me the two
first modelling efforts I described briefly are outmostly important to
bring new insights for responding the question of the instruments. However,
we have, before waiting for the acheivement of a new generation of models
(which will respond to point 2 and 3 of Klaus's paper), it matters to
develop in parallel a specific programm on international coordination
architecture given the failure of COP6 and the lack of understanding of
economic and social implications of the selection of this architecture
(coordination through prices or quantities, full agreement or partial
expanding coalition, issue linkages, perceived equity etc ....). This
workprogramm should build on advances on the role of economic and non
economic instruments in fostering innovation, and on the distributive
static and dynamic implications of such instruments.

These are very brief remarks, simply to give you some ideas about my
current perspectives.

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