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with small abatement costs. At the lower temperature limits, the costs
come primarily from high abatement costs, and little of the total cost is
attributable to damages.
In this fi rst optimistic scenario, the minimum cost comes at 2.3°C (in
all our calculations, the temperatures are relative to 1900, which was
about 0.8°C lower than today's mean global temperature). At the mini-
mum, the total costs are 2.9 percent of total income, with damages being
about twice the abatement costs. As we move outside this temperature
range in either direction, the total costs increase sharply.
Here is a fi rst and centrally important conclusion: If climate-change
policies are well designed and perfectly effi cient, and if current and fu-
ture costs count equally, then a target of 2
1
⁄
4
°C is justifi ed from an eco-
nomic perspective. In this optimistic case, the cost of investments to
slow climate change is modest, about 1 percent of global income. So this
fi rst approach suggests that the 2°C target that has been the consensus
of many governmental and scientifi c reports is very close to the optimal
target under certain conditions.
Let's now move in the direction of greater realism by recognizing
that nations are unlikely to attain perfect effi ciency in their abatement
actions. Some countries will not participate in the near term.
A simple case assumes that the unenthusiastic countries do not par-
ticipate in an emissions reduction program. Recall that the Kyoto Pro-
tocol covered barely one-fi fth of global emissions by 2012. So for our
second scenario we assume that a program covers only 50 percent of
global emissions over the next century. (Recall that we examined the
effects of limited participation in Figure 26.) We continue to assume a
zero discount rate so as to isolate the effect of low participation.
Figure 30 shows the outcome. The only difference here is that the
abatement-cost curve shifts up and to the right relative to Figure 29
because of the higher costs of reaching each temperature target. In-
deed, with a 50 percent participation rate, it is not possible to attain the
2°C target—the emissions of the uncontrolled regions necessarily push
the globe beyond that limit. The cost-minimizing temperature target in
this second case rises to 3.8°C. Note as well that the total costs rise sub-
