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CHAPTER THREE The Unique Challenges of Climate Change The climate system is highly complex, as are the human institutions that are affected by and that must respond to climate change. T he difficulty of developing sound strategies for responding to climate change, and of building public support for such strategies, stems in part from the in- herent complexity of the issue. Some of this complexity relates to the physical science of climate change; but understanding and responding to climate change also raises many social, economic, ethical, and political challenges. The chapter highlights some of the unique challenges posed by climate change that must be considered in designing the nation’s response strategies. There are complex linkages among emissions, concentrations, climate changes, and impacts. Projecting future climate change requires understanding numerous linkages among human activities, greenhouse gas (GHG) emissions, changes in atmospheric composition, the response of the climate system, and impacts on human and natural systems. The basic links in this chain are well understood, but some elements (in particular, projecting specific impacts at specific times and places) are much less so. As a result, the outcomes of actions to reduce emissions or to reduce the vulnerabilities of human and natural systems must often be presented in probabilistic or qualitative terms, rather than as certain predictions. Lack of certainty about the details of future climate change is not, however, a justi- fication for inaction. People routinely take actions despite imperfect or incomplete knowledge about the future in situations such as buying home insurance, saving for retirement, or planning business strategies. Likewise, people use probability data from weather forecasts to decide if they should take an umbrella to work, move a scheduled outdoor event indoors, or cancel a ball game. Indeed, it could be argued that uncer- tainty about future climate risks is a compelling reason for taking proactive steps to reduce the likelihood of adverse consequences. There are significant time lags in the climate system. It takes very long time periods (decades to millennia) for some aspects of the climate system to respond fully to 29

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A M E R I C A’ S C L I M AT E C H O I C E S changes in atmospheric GHG concentrations.1 This is because the world’s oceans can store a large amount of heat—so it takes a long time for the climate system to warm up in response to changes in GHG concentrations2—and because impacts such as sea level rise and the melting of ice sheets can take several centuries or even millennia to be fully expressed. Some GHGs (such as methane) are removed from the atmosphere within about a decade, but CO2 persists much longer—approximately 20 percent of the CO2 emitted today will remain in the atmosphere more than a millennium from now.3 Thus, a failure to reduce GHG emissions in the near-term will “lock in” a certain amount of future climate change for decades, if not centuries, to come. There are also significant time lags in human response systems. GHG emissions are to a large extent built into societal infrastructure (e.g., buildings, power plants, settle- ment and transportation patterns) and into human habits and organizational routines, few of which change quickly. Market incentives affecting capital investments leave little room for considering consequences on century or longer time scale. Neverthe- less, making major reductions in GHG emissions and preparing to adapt to the effects of climate change will require transformative changes, for instance, in how the country produces and uses energy (see Box 3.1), builds buildings and transportation infrastruc- ture, and manages water and other natural resources. It will likewise require significant changes in consumer choices, travel behavior, and other individual and household- level decisions. Overcoming the inertia of the status quo in advancing these sorts of transformations will pose challenges for government, industry, agriculture, and indi- vidual citizens alike. An issue of particular concern is that much of the equipment and infrastructure that leads to GHG emissions (e.g., roads, vehicles, buildings, power plants) have lifetimes of decades. There are often strong economic pressures to continue use of such equip- ment and infrastructure, rather than retrofitting or replacing with a lower-emitting op- tion. Making substantial emission reductions within the next few decades will require accelerating this turnover faster than projected business-as-usual rates.4 Risks, judgments about risk, and adaptation needs are highly variable across dif- ferent contexts. Different regions, economic and resource sectors, and populations will experience different impacts from climate change, will vary in their ability to tolerate and adapt to such impacts, and will hence differ in their judgments about the potential risks posed by climate change. For instance, coastal communities that are vulnerable to serious disruptions could be expected to view the risks of climate change as quite serious. Actions that are taken in response to climate change will also pose differing types of risks to different regions, sectors, and populations. For instance, 30

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The Unique Challenges of Climate Change BOX 3.1 The U.S. Energy System The U.S. energy system includes a vast and complex set of interlocking technologies for the production, distribution, and use of fuels and electricity.a This includes technologies that convert primary energy resources (e.g., nuclear energy, renewable sources such as solar and wind, and the fossil fuels coal, oil, and natural gas) into useful forms such as gasoline and electricity; technolo- gies that transmit this energy to consumers (e.g., electrical transmission and distribution systems, gas pipelines); technologies that store or utilize this energy (e.g., batteries, motors, lights, home appliances); and associated demand-side technologies that control energy use (e.g., advanced electricity metering systems). Another key component of this system is the people that use the energy—their behaviors and preferences play a major role in shaping energy technologies. Currently, the United States relies on carbon-based fossil fuels for more than 85 percent of its energy needs. This dependence evolved not only because fossil fuels were available at low market costs but also because their physical and chemical properties are well suited to particu- lar uses: petroleum for transportation; natural gas as an industrial feedstock, for residential and commercial space heating, and more recently as a fuel for electric power generation; and coal for the generation of electricity and as a feedstock for some industrial processes. Indeed, almost all consumer-based, industrial, and governmental activities require the consumption of fossil fuels, either directly or indirectly. Absent strong and sustained policy intervention, fossil fuels are projected to remain the na- tion’s primary source of energy for the foreseeable future. Compared with alternative sources of energy, fossil fuels would likely remain relatively inexpensive to produce, and they would continue to benefit from past investments in vast existing infrastructure—investments that would need to be duplicated (in whole or in part) to enable wide-scale displacement by alternative energy sources. The nation’s reliance on carbon-based fossil fuels would only be significantly reduced in the near-term if the prices of those fuels were increased to reflect the full social costs of their extraction, transformation, distribution, and use; and only if there are incentives to encourage research and development aimed at reducing the cost and promoting the commercialization of alternative energy sources. a The material in this box was adapted from NRC, America’s Energy Future: Technology and Transformation: Summary Edition ( Washington, D.C.: National Academies Press, 2009). individuals and organizations that are heavily invested in carbon-intensive industries may prefer to face the risks of climate change impacts rather than face the potential costs of policies to limit GHG emissions. Decision makers will thus inevitably face some difficult choices and trade-offs in seeking to protect the interests of different constituencies. 31

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A M E R I C A’ S C L I M AT E C H O I C E S Decisions affecting climate change are made at all levels of society. The federal government can play a critical leadership role in setting policies that affect the actions of all parts of society. But much of the responsibility and opportunity for responding to climate change rests with state and local governments and with the private sec- tor (which accounts for most of the nation’s capital investments, industrial produc- tion, and employment). Decisions made at the individual and household level also play a major role in driving GHG emissions, and of course, public support is critical for motivating political leaders to take actions in response to climate change. A U.S. strategy for responding to climate change must therefore include careful consider- ation of which information, incentives, and regulations (provided by which level of government) will most effectively engage and facilitate wise decision making by these multiple actors. In some cases, the appropriate federal role may be limited to decision support, while in other contexts, more active policy guidance and coordination power are needed. Limiting climate change requires global-scale efforts. A molecule of CO2 emitted in India or China has the same effect on the climate system as a molecule emitted in the United States. There is wide agreement that limiting the magnitude of climate change will require substantial action on the part of all major GHG-emitting nations, including both the industrialized nations and the rapidly developing countries whose relative share of global emissions is rapidly increasing (see Figure 3.1). Yet there are many dif- ferent perspectives on how to define each country’s responsibilities for contributing to the global effort.5 Some argue that U.S. action must be conditioned on actions by other nations, given the economic disadvantages that the country might face if it com- mitted to significant emission reductions without similar commitments from other na- tions. Others argue that the United States, as the country with largest historical share of GHG emissions and with one of the highest per capita GHG emission rates, has an ethical obligation to substantially reduce domestic emissions, even in the absence of commitments from other nations. Still others suggest that there will be substantial economic advantages in leading the development of new technologies to deal with climate change. There is no simple way to reconcile these different views, but it is clear that strong, credible U.S. policies for reducing domestic emissions will help advance international-level efforts to do the same. Climate change is one of multiple, interconnected challenges. Climate change is just one of many interacting factors affecting humans and their environment. Coastal envi- ronments, for example, are being affected not only by GHG-driven changes such as sea level rise, ocean acidification, changes in air and water temperature, and precipitation and storm patterns, but also by pollution runoff, invasive species, coastal development, 32

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The Unique Challenges of Climate Change FIGURE 3.1 World energy-related CO2 emission projections (in billion metric tons CO2), by OECD (Organi- zation for Economic Cooperation and Development) and non-OECD countries over the period 2007-2035. Non-OECD countries include developing, newly industrialized, and Eastern European and former Soviet countries. For a list of OECD and non-OECD countries, see: http://www.oecd.org/countrieslist/. SOURCE: Energy Information Administration / International Energy Outlook. 2010. and overfishing. These different issues are often studied and managed as isolated mat- ters, without recognizing and accounting for interconnected causes and interactive ef- fects. Likewise on a broader global scale, many different issues affect and are affected by climate change—such as food production, water supplies, human health, energy production and use, economic development, security concerns—but these are seldom addressed in an integrated manner. These sorts of inter-linkages not only pose difficult challenges, but also offer impor- tant opportunities for alleviating multiple problems simultaneously. For instance, integrated management plans for protection of coastal zones can help alleviate many of the climate-related and non-climate-related concerns listed above. Actions taken to reduce fossil fuel use can offer substantial benefits for human health (by reducing emissions of conventional air pollutants) and for national security (by reducing depen- dence on imported energy sources).6 The costs and benefits of different courses of action are generally not well known. Decision making often involves weighing the possible benefits and costs of one course of action against another. Decisions on actions to limit or adapt to climate 33

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A M E R I C A’ S C L I M AT E C H O I C E S change have characteristics that make such analyses extremely challenging. For example: • Costs and benefits are difficult to quantify. It is difficult to characterize the costs and benefits of climate change impacts in part because many of the natural assets and ecosystem services that could be affected by climate change have no market value or are priced in a way that does not truly reflect social values. The costs of efforts to limit or adapt to climate change are often perceived as being comparatively more certain, but in reality, different as- sumptions (about, for example, the rate at which new technologies are devel- oped and brought to market) can result in widely varying conclusions about the costs of such actions.7 • Costs of actions to limit climate change risks are immediate, but many ben- efits will occur elsewhere and affect future generations. Although the United States is vulnerable to many impacts of climate change, other parts of the world—for example, low-lying island nations—are at a greater risk of cata- strophic impacts8 and thus would benefit most from actions to limit climate change. Even in this country, the primary beneficiaries of near-term actions to reduce climate change risks are the future generations that would avoid severe impacts later in the century and beyond (although there are some im- mediate, local benefits, as discussed below). In economic analyses, this issue is usually addressed by choosing a rate at which future benefits and costs are discounted relative to current benefits and costs. But many economists and others have expressed concerns about using these conventional discount- ing techniques to value public benefits, especially in the context of climate change, where trade-offs must be evaluated across multiple generations.9 • Collateral costs and benefits also need to be considered. The Earth’s physical systems (atmosphere, oceans, land surface, fresh water), ecological systems, and human social systems are highly interconnected. Changes in one system can affect others, and actions taken to limit or adapt to climate change may result in unintended consequences, both positive and negative. For instance, reducing the use of fossil fuels to limit GHG emissions can offer the ancillary benefit of also reducing emissions of several health-damaging air pollutants (e.g., nitrogen oxides, sulfur dioxide, particulate matter, mercury).10 Improv- ing freshwater use efficiency to increase a community’s resilience to climate change can also help that community deal with natural variations in water supply. As an example of ancillary costs—the production of biofuels for renew- able energy has indirect effects on land use, which in turn can increase GHG emissions and negatively affect biodiversity.11 Although some ancillary costs 34

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The Unique Challenges of Climate Change and benefits can be anticipated, there are inherent limits in the predictability of many such interactions, and it is thus difficult to account for them when as- sessing costs and benefits of specific climate change response actions. Many factors complicate and impede public understanding of climate change.12 Public understanding of climate change is important because public opinion under- pins policy and because the public—as consumers, employers, and community members—can initiate, implement, and support actions to reduce GHG emissions and encourage adaptation. Fully understanding climate change is a difficult task even for scientific experts using voluminous data and complex mathematical models. People who have less experience with quantitative data and less time to develop such de- tailed understanding must rely on other sources that may or may not provide trust- worthy information. For instance, personal experience powerfully influences people’s understanding of their environment. But this can be misleading in the context of climate change because long-term change is difficult to detect against natural vari- ability without sustained systematic measurement, and because judgments of varying phenomena are strongly influenced by memorable and recent extreme events.13 People use different types of “mental models” to understand complex phenomena, and some of the prevalent models used for understanding climate change are incon- sistent with scientific knowledge. For instance, many people appear to conflate GHGs with other forms of air pollution, such as particulates of sulfur or nitrogen oxides that (unlike long-lived GHGs) dissipate quickly when emissions are reduced.14 Even well educated nonspecialists, including many science undergraduates, tend to systemati- cally underestimate the degree to which CO2 emissions must be reduced to stabilize atmospheric concentrations.15 Most people rely on secondary sources for information, especially the mass media; and some of these sources are affected by concerted campaigns against policies to limit CO2 emissions, which promote beliefs about climate change that are not well- supported by scientific evidence. U.S. media coverage sometimes presents aspects of climate change that are uncontroversial among the research community as being matters of serious scientific debate.16 Such factors likely play a role in the increasing polarization of public beliefs about climate change, along lines of political ideology, that has been observed in the United States.17 There will inevitably be additional risks and surprises. The climate system and hu- man institutions that are affected by climate are exceedingly complex; consequently, it is impossible to anticipate all changes that may occur. Among the potential surprises that could be in store is that climate change turns out to be more manageable than 35

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A M E R I C A’ S C L I M AT E C H O I C E S BOX 3.2 The Motivation for Action The committee’s judgment—that the environmental, economic, and humanitarian risks posed by climate change indicate a pressing need for substantial action to limit the magnitude of climate change and to prepare for adapting to its impacts—rests on numerous lines of argument alluded to in this chapter, including the following: • There are significant time lags in how the climate system will respond to forcing from GHGs in the atmosphere, and there are likewise significant time lags in many of the so- cial, technological, and political systems that must respond to climate change. Waiting to act until all uncertainties are resolved, or until impacts of concern have become fully manifest, will likely mean it is too late to have any meaningful effect in mitigating many risks. • Due to uncertainties in climate sensitivity and other factors, one cannot say exactly how severe climate change and its impacts will be for any given level of atmospheric GHG concentrations. But even “moderate” climate change can pose serious risks, and there is the possibility of irreversible tipping points in the earth system, beyond which some particularly adverse impacts can occur. • The sooner that serious efforts to reduce GHG emissions proceed, the less pressure there will be to make steeper (thus likely more expensive) emission reductions later on.a • Both private and public sector decision makers face investment choices today that will affect the ability to limit emissions and to adapt to climate change for many years to come. For instance, investments in infrastructure for energy production and use can entail a massive commitment to future GHG emissions. Getting the relevant strategies and policies in place as soon as possible will provide crucial guidance for these invest- ment decisions. • Finally, in the committee’s judgment, the risks associated with doing business as usual are a much greater concern than the risks associated with engaging in ambitious but measured response efforts. This is because many aspects of an “overly ambitious” policy response could be reversed or otherwise addressed, if needed, through subsequent policy change, whereas adverse changes in the climate system are much more difficult (indeed, on the time scale of our lifetimes, may be impossible) to “undo.” a L. Clarke, J. Edmonds, V. Krey, R. Richels, S. Rose, and M. Tavoni, “International climate policy architectures: Overview of the EMF 22 International Scenarios” (Energy Economics 31(Supplement 2):S64-S81, 2009). current projections suggest. (For instance, if climate sensitivity is on the low end of current estimates, then the resulting impacts might feasibly be adapted to without major costs or disruptions.) It is also quite possible, however, that climate change could be much more severe, or have much more severe impacts, than the average 36

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The Unique Challenges of Climate Change values in current projections. For example, a climate change-induced crop failure or severe drought could precipitate a geopolitical crisis.18 There may also be “tipping points” in the climate system or affected human or natural systems, whereby a small incremental change pushes the system into a sudden and radical shift.19 Currently, it is impossible to predict where or when such crises, tipping points, or other surprises might occur. It is worth noting, however, that the potential impacts associated with larger magnitudes of climate change are less well studied than more moderate cli- mate change; and thus the potential for surprises is comparatively greater with larger magnitudes of warming. CHAPTER CONCLUSION The many complex characteristics of climate change discussed here—which reach across scientific, political, economic, psychological, and other dimensions—are not problems that must be fully “solved” before one can move ahead with making choices and taking action to address climate change (see Box 3.2). Rather, these are inherent features of climate change that must be recognized and understood in order to craft sound response strategies. As discussed later in this report, many possible response actions could be viewed as common-sense investments in our nation’s future regard- less of the complexities and uncertainties involved. The issues highlighted in this chapter point to the idea that conventional analysis tools that have historically been used for guiding responses to major environmental problems are not well suited for addressing the complexities of climate change.20 Instead, there is a need for decision frameworks that allow decision makers to weigh trade-offs, to act in the face of incomplete information, and to learn and adjust course over time. In the following chapter, we discuss the type of framework that is best suited for this context. 37

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