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Modelling the economics of climate change is daunting. Many existing methodologies from social and physical sciences need to be deployed, and new modelling techniques and ideas still need to be developed. Existing bread-and-butter micro- and macroeconomic tools, such as the expected utility framework, market equilibrium concepts and representative agent assumptions, are far from adequate. Four key issues—along with several others—remain inadequately addressed by economic models of climate change, namely: (1) uncertainty, (2) aggregation, heterogeneity and distributional implications (3) technological change, and most of all, (4) realistic damage functions for the economic impact of the physical consequences of climate change. This paper assesses the main shortcomings of two generations of climate-energy-economic models and proposes that a new wave of models need to be developed to tackle these four challenges. This paper then examines two potential candidate approaches—dynamic stochastic general equilibrium (DSGE) models and agent-based models (ABM). The successful use of agent-based models in other areas, such as in modelling the financial system, housing markets and technological progress suggests its potential applicability to better modelling the economics of climate change.

Abstract As main contributors to greenhouse gas emissions, power and transportation are crucial sectors for energy system decarbonization. Their interaction is expected to increase significantly: plug-in electric vehicles add a new electric load, increasing grid demand and potentially requiring substantial grid upgrade; hydrogen production for fuel cell electric vehicles or for clean fuels synthesis could exploit the projected massive power overgeneration by intermittent and seasonally-dependent renewable sources via Power-to-Hydrogen. This work investigates the infrastructural needs involved with a broad diffusion of clean mobility, adopting a sector integration perspective at the national scale. The analysis combines a multi-node energy system balance simulation and a techno-economic assessment of the infrastructure to deliver energy vectors for mobility. The article explores the long-term case of Italy, considering a massive increase of renewable power generation capacity and investigating different mobility scenarios, where low-emission vehicles account for 50% of the stock. First, the model solves the energy balances, integrating the consumption related to mobility energy vectors and taking into account power grid constraints. Then, an optimal infrastructure is identified, composed of both a hydrogen delivery network and a widespread installation of charging points. Results show that the infrastructural requirements bring about investment costs in the range of 43–63 G€. Lower specific costs are associated with the exclusive presence of FCEVs, whereas the full reliance on BEVs leads to the most significant costs. Scenarios that combine FCEVs and BEVs lie in between, suggesting that the overall power + mobility system benefits from the presence of both drivetrain options.

Due to climate change, the frequency and intensity of droughts are expected to increase. To improve resilience to droughts, proactive drought management is essential. Economic assessments are typically included to decide on the drought risk-reducing investments to make. The choice of both methods and scope of economic assessments influences the outcome, and thus the investment choice. This paper aims to identify how comprehensively economic assessments are applied in practice. Through a systematic literature review, 14 actual economic assessments are identified and their methods are evaluated based on seven criteria for economic assessments as derived from the United Nations Framework Convention on Climate Change (UNFCCC). The results show that in practice, economic assessments rarely address all criteria. Applying a limited number of criteria reduces the scope and narrows the approach, possibly leading to the underestimation of drought risk reduction approaches' related benefits. Applying the seven criteria in practice will improve the results of economic assessments of drought risk reduction measures, allowing for optimal investment selection. Based on the different criteria, a Framework for Economic Assessments of Drought Risk-Reducing Applications (FEADRRA) is proposed. Applying the criteria of the framework can support decision-makers in drought risk management and in carrying out the most fitting drought interventions.

National net zero emission targets could, if fully implemented, reduce best estimates of projected global average temperature increase to 2.0–2.4 °C by 2100, bringing the Paris Agreement temperature goal within reach. A total of 131 countries are discussing, have announced or have adopted net zero targets, covering 72% of global emissions. These targets could substantially lower projected warming as compared to currently implemented policies (2.9–3.2 °C) or pledges submitted to the Paris Agreement (2.4–2.9 °C). Current pledges for emissions cuts are insufficient to meet the Paris Agreement temperature goal. The wave of net zero targets being discussed and adopted could make the Paris goal possible if further countries follow suit.

Moisture availability is a strong determinant of decomposition rates in forests worldwide. Climate models suggest that many terrestrial ecosystems are at risk from future droughts, suggesting moisture limiting conditions will develop across a range of forests worldwide. The impacts of increasing drought conditions on forest carbon (C) fluxes due to shifts in organic matter decay rates may be poorly characterised due to limited experimental research. To appraise this question, we conducted a meta-analysis of forest drought experiment studies worldwide, examining spatial limits, knowledge gaps and potential biases. To identify limits to experimental knowledge, we projected the global distribution of forest drought experiments against spatially modelled estimates of (i) future precipitation change, (ii) ecosystem total above-ground C and (iii) soil C storage. Our assessment, involving 115 individual experimental study locations, found a mismatch between the distribution of forest drought experiments and regions with higher levels of future drought risk and C storage, such as Central America, Amazonia, the Atlantic Forest of Brazil, equatorial Africa and Indonesia. Decomposition rate responses in litter and soil were also relatively under-studied, with only 30 experiments specifically examining the potential experimental impacts of drought on C fluxes from soil or litter. We propose new approaches for engaging experimentally with forest drought research, utilising standardised protocols to appraise the impacts of drought on the C cycle, while targeting the most vulnerable and relevant forests.

Abstract: Second-generation biofuels, starting from lignocellulosic biomass, are considered as a renewable alternative for fossil fuels with lower environmental impact and potentially higher supply and energy security. The economic and environmental performance of second-generation bioethanol production from corn stover in the European Union (EU) is studied, starting in Belgium as base case. A comparative environmental techno-economic assessment has been conducted, with process simulations in Aspen Plus and corn stover availability data in thirteen EU countries to calculate minimum ethanol selling prices (MESP) and Greenhouse gas emissions (GHGe). In this analysis, the emphasis is on the comparison of different pretreatment technologies, namely (i) dilute acid, (ii) alkaline, (iii) steam explosion and (iv) liquid hot water. Dilute acid showed the best economic and environmental performance for the base case scenario. Within the EU, Hungary and Romania presented the lowest MESP for the steam explosion model at 0.39 and 0.43 EUR/L respectively. Poland showed the lowest GHGe, at 0.46 kg CO2eq/L for the alkaline model, mainly due to the avoided product allocation on electricity and its high carbon intensity in the electricity generation sector. The second lowest GHGe were obtained in France for the dilute acid model and are attributed to its low agricultural emissions intensity. This study identifies a location-dependence of the economic and environmental performance of pretreatment technologies, which can be extrapolated from the EU to other large regions around the world and should be taken into consideration by decision-makers.

Abstract This work focuses on the efforts being made by King County, Washington to respond to the challenges of global climate change, concentrating on both mitigation and adaptation. King County is a leader in the United States in the development and implementation of meaningful climate change efforts in local government. The county, in conjunction with ICLEI, recently produced a workbook on Preparing for Climate Change at the Local, Regional, and State levels. While the vast majority of local governments in the United States have only taken limited steps to respond to global warming, King County stands out as aggressively looking to move in a new direction. The King County Climate Plan is based on the conviction that climate change is both a problem and an opportunity for communities to improve environmental quality through mitigation of greenhouse gases and simultaneously build resilience to adapt to global climate change. Its exceptional combination of responsibilities in planning and opportunities makes this an invaluable experience to other local governments throughout the world. The work to be presented is a case study that examines the underlying issues and challenges faced by this jurisdiction in adopting its climate change plan; the development and adoption of the plan; issues associated with monitoring and sustaining these efforts; and the broader challenges of building more resilient and adaptive communities. The case study will focus both on procedural issues, as well as, on the types of mitigation and adaptive responses. One aspect of the paper will examine King County's efforts to link climate change efforts/policy/plans to other critical community concerns (e.g., issues of equity and race), and to the economic opportunities that have become critical motivators to successfully as moving forward the county attempts to establish itself as a global leader in meeting the challenges of global climate change.

Gas-based power plants have attracted more attention in providing electrical energy worldwide because of their lower costs and air pollution. In addition, the use of multi-carrier energy systems has several advantages, such as sustainability benefits and improving performance in supplying the energy demand. This study aims to optimize the total operation cost of multi-carrier energy systems considering the uncertain parameters. The storage technology and consumption side assist the operator in achieving lower costs based on conceptions of demand response programs. Therefore, this study presents a comprehensive mathematical model for the coordinated operation of integrated multi-carrier energy systems while the operational constraints of both gas and power networks are considered. Furthermore, this paper utilizes a new uncertainty modeling method based on Hong's two-point estimate method for addressing the uncertainties of load consumption and wind generation. The proposed model is applied to a gas and power multi-carrier energy system through four case studies. The results affirm the high performance of the presented method and investigate the influence of demand response programs in both sides of energy carriers.