damages to high temperatures, and inadequate representation of the relationship between the discount rate and uncertainty in economic growth over long time horizons.
There are newer versions available of each of the IAMs used to calculate the interim SC-GHG estimates in this TSD that offer improvements in some of these areas beyond the version of the models used for the interim estimates. For example, the latest version of the PAGE model, PAGE-ICE (Yumashev et al. 2019, Yumashev 2020), extends PAGE09 (Hope 2013) with representation of two nonlinear Arctic feedbacks (permafrost carbon feedback and surface albedo feedback) on the global climate system and economy, among other changes. The newest version of the DICE model, DICE2016-R3 (Nordhaus 2017), includes numerous updates, including changes to the carbon cycle (to better simulate the long-run behavior of larger models with full ocean chemistry) and updated methods for estimating economic activity.[1] At comparable discount rates, DICE2016-R3 would result in SC-CO2 estimates roughly twice that of the interim estimates presented in this TSD. For example, using a 3% constant discount rate and other IWG modeling assumptions, DICE2016-R3 yields an average SC-CO2 of $104 (2018 international dollars) for 2020 emissions (Nordhaus 2019a). However, even DICE2016 and PAGE-ICE do not include all of the important physical, ecological, and economic impacts of climate change recognized in the climate change literature and the science underlying their damage functions lags behind the most recent research. Likewise, the socioeconomic and emissions scenarios used as inputs to the models in this TSD do not reflect new information from the last decade of scenario generation or the full range of projections.
The modeling limitations discussed above do not all work in the same direction in terms of their influence on the SC-GHG estimates. However, it is the IWG’s judgment that, taken together, the limitations suggest that the interim SC-GHG estimates presented in this TSD likely underestimate the damages from GHG emissions. In particular, the IPCC’s Fourth Assessment Report (IPCC 2007), which was the most current IPCC assessment available at the time when the IWG decision over the ECS input was made, concluded that SC-CO2 estimates “very likely…underestimate the damage costs” due to omitted impacts. Since then, the peer-reviewed literature has continued to support this conclusion, as noted in the IPCC’s Fifth Assessment report (IPCC 2014) and other recent scientific assessments (e.g., IPCC 2018, 2019a, 2019b; U.S. Global Change Research Program (USGCRP) 2016, 2018; and National Academies 2016b, 2019). These assessments confirm and strengthen the science, updating projections of future climate change and documenting and attributing ongoing changes. For example, sea level rise projections from the IPCC’s Fourth Assessment report ranged from 18 to 59 centimeters by the 2090s relative to 1980-1999, while excluding any dynamic changes in ice sheets due to the limited understanding of those processes at the time (IPCC 2007). A decade later, the Fourth National Climate Assessment projected a substantially larger sea level rise of 30 to 130 centimeters by the end of the century relative to 2000, while not ruling out even more extreme outcomes (USGCRP 2018). Section 5 briefly previews some of the recent advances in the
- ↑ Relative to the previous version of DICE, DICE2013, the DICE2016 updates to the carbon cycle and the methods for estimating economic activity had the greatest impact on the SC-CO2. Based on Archer et al. (2009), DICE2016’s three-box carbon cycle model aims to better simulate the long-run behavior of larger models with full ocean chemistry. In measuring economic activity, one of the important changes in DICE2016 was to move from market exchange rates to measures adjusted for purchasing power parity when comparing monetary values across countries. See Nordhaus (2017, 2019a) for more discussion of these and other updates included in DICE2016-R3. Nordhaus has also recently explored side extensions of DICE2016. For example, DICE-GIS extends DICE2016 to include representation of sea level rise from melting of the Greenland Ice Sheet (Nordhaus 2019b, Pizer 2019).
