Page:The Cost of Delaying Action to Stem Climate Change.pdf/16

Luderer et al. (2012) find that costs increase by 50 to 700 percent with global delay from 2010 to 2020, however if the industrialized countries begin mitigation efforts unilaterally in 2010 (and are joined by all countries in 2020), the estimated cost increases range from zero to about 200 percent. Luderer et al. (2013) and Riahi et al. (2014) find that costs of delay are smaller when fewer countries delay mitigation efforts, or when short-term actions during the delay are more aggressive.

Jakob et al. (2012) find it is in the best interest of the European Union to begin climate action in 2010 rather than delaying action with all other countries until 2020. They also estimate that the cost increase to the United States from delaying climate action with all other countries until 2020 is from 28 to 225 percent, relative to acting early along with other industrialized economies.^[1] McKibbin, Morris, and Wilcoxen (2014) consider the impact that a delay in imposing a unilateral price of carbon would have on economic outcomes in the United States including GDP, investment, consumption and employment. They find that although unilateral mitigation efforts do incur costs, delay is costlier.

Summary: Quantifying Patterns across the Studies

We now turn to a quantitative summary and assessment, or meta-analysis, of the studies discussed above.^[2] The data set for this analysis consists of the results on all available numerical estimates of the average or total cost of delayed action from our literature search. Each estimate is a paired comparison of a delay scenario and its companion scenario without delay. To make results comparable across studies, we convert the delay cost estimates (presented in the original studies variously as present values of dollars, percent of consumption, or percent of GDP) to percent change in costs as a result of delay.^[3] We capture variation across study and experimental designs using variables that encode the length of the delay in years; the target CO₂e concentration; whether only the relatively more-developed countries act immediately (partial delay); the discount rate used to calculate costs; and the model used for the simulation.^[4] All comparisons consider policies and outcomes measured approximately through the end of the century. To reduce the effect of outliers, the primary regression analysis only uses results with less than a 400 percent increase in costs (alternative methods of handling the outliers are

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1. Note that the IMACLIM model finds that U.S. mitigation declines to the point in which they are slightly negative (i.e. net gains compared to business-as-usual).
2. A study of the results of other studies is referred to as a meta-analysis, and there is a rich body of statistical tools for meta-analysis, see for example Borenstein et al. (2009).
3. For example, if in some paired comparison delay increased mitigation costs from 0.20 percent of GDP to 0.30 percent of GDP, the cost increase would be 50 percent. Comparisons for which the studies provided insufficient information to calculate the percentage increase in costs (including all comparisons from Riahi et al. 2014) are excluded. Also excluded are comparisons that report only the market price of carbon emissions at the end of the simulation, which is not necessarily proportional to total mitigation costs.
4. When measuring delay length for policies with multiple stages of implementation, we count the delay as ending at the start of any new participation in mitigation by any party after the start of the simulation. We also exclude scenarios with delays exceeding 30 years. When other climate targets were provided (e.g., CO₂ concentration or global average temperature increase), the corresponding CO₂e concentration levels are estimated using conversions from IPCC WG III AR5 (2014).