Geoscience Reference
In-Depth Information
6
Total discounted
Discounted damages
Abatement (limited part.)
5
4
3
2
1
0
0
1
2
3
4
5
6
Global temperature limit (°C)
Figure 31.
Total costs of different targets assuming limited participation and discounting
of future incomes. This calculation shows the annualized costs when damages are
discounted at 4 percent per year but still assuming ineffi cient abatement because of
limited participation. Here, the economic calculus indicates an optimal temperature
limit of 4°C.
below 4°C the additional abatement cost is high. By contrast, the dam-
age curve around 4°C has a near-constant slope; changes in the slope of
the damage curve contribute relatively little to the minimum cost cal-
culation. Therefore, as I lowered the damage curve through discount-
ing, the minimum point moved relatively little. We should not take the
exact numbers here as the last word on the choice of an optimal target.
Rather, they point to the role of nonlinearities in costs and damages as
