Can adaptation and mitigation be complements?

Alan Ingham, Jie Ma, and Alistair M. Ulph

August 2005

Tyndall Centre for Climate Change Research

Working Paper 79

Can adaptation and mitigation be complements? *

Alan Ingham1, Jie Ma2, Alistair M. Ulph3
1

Economics Division, School of Social Sciences, University of Southampton, Highfield, Southampton SO17 1BJ, UK. E-mail: ai@soton.ac.uk. Corresponding author. 2 Economics Division, School of Social Sciences, University of Southampton, Highfield, Southampton SO17 1BJ, UK. E-mail: jiema@soton.ac.uk. 3 Faculty of Humanities, University of Manchester, Oxford Road, Manchester M13 9PL, UK. E-mail: alistair.ulph@manchester.ac.uk. Tyndall Centre Working Paper No. 79 August 2005

Please note that Tyndall working papers are "work in progress". Whilst they are commented on by Tyndall researchers, they have not been subject to a full peer review. The accuracy of this work and the conclusions reached are the responsibility of the author(s) alone and not the Tyndall Centre.

Summary It is often claimed that mitigation of greenhouse gases and adaptation to climate change are complementary strategies for dealing with climate change. If all that is meant by this is that it will usually be optimal to use both mitigation and adaptation to combat climate change, and that an increase in the perceived damages from climate change should lead to an increase in both mitigation and adaptation, then economic analysis supports this interpretation. But economic analysis has a more precise definition of complementarity: that reducing the costs of mitigation, say, will lead to more mitigation and hence more adaptation. However it turns out to be quite difficult to reproduce this result in the simple economic models that are used for the analysis of economic policy towards climate change. We show that only in the case where the effects of mitigation on marginal adaptation cost is strong do we get that increasing mitigation costs will reduce both mitigation and adaptation. The interpretation is that lowering the costs of mitigation increases mitigation, which slows climate change and makes adaptation more effective. Here mitigation and adaptation would be complements. We use simple models of a single social planner who can choose the optimal mix of adaptation and mitigation to minimize total social costs. We proceed from a very basic model in which there is only one time period and no uncertainty, so there is a known relationship which shows how mitigation and adaptation reduce the damage costs caused by climate change, and known costs of adaptation and of mitigation. It is straightforward to show that in general the optimal combination of mitigation and adaptation will require the use of both strategies and that increasing damage costs requires an increase in both adaptation and mitigation, but that the two strategies are substitutes in the sense used by economists reducing the cost of mitigation increases the use of mitigation and reduces the use of adaptation. We then extend the simple model to allow for a number of complicating features, including dynamics, multiple decision makers, and uncertainty, but it remains the case that mitigation and adaptation are substitutes. Only when we link the cost of adaptation to the level of mitigation do we find the possibility of complementarity. This paper provides details of models used to support the arguments made in our survey paper, Ingham, Ma and Ulph (2005), How do the costs of adaptation affect optimal mitigation when there is uncertainty, irreversibility and learning.

Lw lv riwhq fodlphg wkdw plwljdwlrq ri juhhqkrxvh jdvhv dqg dgdswdwlrq wr folpdwh fkdqjh duh frpsohphqwdu| vwudwhjlhv wr ghdo zlwk folpdwh fkdqjh1 Li zkdw lv phdqw e| wklv lv wkdw lw zloo xvxdoo| eh rswlpdo wr xvh erwk plwljdwlrq dqg dgdswdwlrq wr ghdo zlwk folpdwh fkdqjh / dqg wkdw d shufhlyhg lqfuhdvh lq wkh gdpdjhv fdxvhg e| folpdwh fkdqjh vkrxog uhtxluh dq lqfuhdvh lq erwk plwljdwlrq dqg dgdswdwlrq/ wkhq vlpsoh hfrqrplf dqdo|vlv zrxog vxssruw vxfk dq lqwhusuhwdwlrq1 Exw frpsohphqwdulw| kdv d pruh whfkqlfdo phdqlqj lq hfrqrplfv/ zklfk zrxog lpso| wkdw li/ vd|/ wkh frvwv ri plwljdwlrq ihoo/ wkh rswlpdo uhvsrqvh zrxog eh wr lqfuhdvh wkh ohyho ri plwljdwlrq dqg dovr dgdswdwlrq1 Vlpsoh hfrqrplf dqdo|vlv grhv qrw vxssruw vxfk dq lqwhusuhwdwlrq1 Lq doprvw doo vlpsoh hfrqrplf prghov ri folpdwh fkdqjh plwljdwlrq dqg dgdswdwlrq duh vxevwlwxwhv= d uhgxfwlrq lq/ vd|/ wkh frvw ri plwljdwlrq vkrxog ohdg vrflhw| wr gr pruh plwljdwlrq dqg ohvv dgdswdwlrq1 Lq wklv sdshu/ zklfk surylghv wkh whfkqlfdo prghoolqj wkdw vxssruwv wkh dujxphqwv zh pdgh lq rxu vxuyh| sdshu/ Lqjkdp/ Pd dqg Xosk +5338,/ zh ghyhors d udqjh ri hfrqrplf prghov wr h{soruh wkh uhodwlrqvkls ehwzhhq plwljdwlrq dqg dgdswdwlrq1 Zh surfhhg iurp d yhu| edvlf prgho lq zklfk wkhuh lv rqo| rqh wlph shulrg/ dqg qr xqfhuwdlqw|/ vr wkhuh lv d nqrzq uhodwlrqvkls/ zklfk vkrzv krz plwljdwlrq dqg dgds0 wdwlrq uhgxfh wkh gdpdjh frvwv fdxvhg e| folpdwh fkdqjh1 D vlqjoh vrfldo sodqqhu fdq fkrrvh wkh rswlpdo pl{ ri dgdswdwlrq dqg plwljdwlrq wr plqlpl}h wrwdo vrfldo frvwv1 Lw lv vwudljkwiruzdug wr vkrz wkdw lq jhqhudo wkh rswlpdo frpelqdwlrq ri plwljdwlrq dqg dgdswdwlrq zloo uhtxluh wkh xvh ri erwk vwudwhjlhv/ dqg wkdw wkh wzr vwudwhjlhv duh vxevwlwxwhv/ lq d vhqvh ghqhg deryh Zh h{whqg wkh prgho/ dvvxpswlrq e| dvvxpswlrq/ wr vhh li dqg zkhq wkh frqfox0 vlrq/ wkdw plwljdwlrq dqg dgdswdwlrq duh vxevwlwxwhv/ fkdqjhv1 Wkh uvw h{whqvlrq lv wr vhyhudo djhqwv> wklv lv grqh lq vhfwlrq 61 Wklv dulvhv iurp frqfhuq iru wkh glhuhqw vsdwldo dvshfwv ri plwljdwlrq dqg dgdswdwlrq/ zlwk plwljdwlrq ghdolqj zlwk d joredo sxeolf jrrg/ zkloh dgdswdwlrq riwhq surylghv sxuho| orfdo ehqhwv1 Zh vkrz wkdw wklv kdv wkh reylrxv lpsolfdwlrq wkdw li zh pryh dzd| iurp wkh dvvxpswlrq ri d vlqjoh vrfldo sodqqhu +zkr zrxog kdyh wr eh d joredo jryhuqphqw ri vrph w|sh, dqg uhfrj0 ql}h wkdw lqglylgxdo qdwlrq vwdwhv pd| vhw wkhlu dgdswdwlrq dqg plwljdwlrq srolflhv lqghshqghqwo| wkhq wkh qrqfrrshudwlyh rxwfrph zloo lqyroyh hdfk vwdwh vhwwlqj wrr olwwoh plwljdwlrq dqg wrr pxfk dgdswdwlrq/ uhodwlyh wr wkh fdvh ri d vlqjoh joredo vr0 fldo sodqqhu1 Wklv djdlq uh hfwv wkh idfw wkdw dgdswdwlrq dqg plwljdwlrq duh irupdoo| vxevwlwxwhv iru hdfk rwkhu1 Wkhq zh h{whqg wkh prgho wr wzr shulrgv lq vhfwlrq 71 Plwljdwlrq dqg dgdswdwlrq dovr glhu lq wkhlu whpsrudo dvshfwv lq wkdw wkh hhfwv ri plwljdwlrq lq rqh shulrg zloo surgxfh ehqhwv iru doo ixwxuh shulrgv zkloh dgds0 wdwlrq lv riwhq wkrxjkw wr surgxfh ehqhwv rqo| iru wkh shulrg lq zklfk dgdswdwlrq wdnhv sodfh1 Krzhyhu zkloh wklv pd| eh wuxh/ d iruzdug orrnlqj vrfldo sodqqhu zloo zdqw wr fkrrvh wlph sdwkv iru erwk plwljdwlrq dqg dgdswdwlrq zklfk duh rswlpdo/
Vhh LSFF +4<<9,/ Slhonh +4<<;,1
 

4

Lqwurgxfwlrq

¡

4

dqg lq d eurdg vhqvh doo wkh uhvxowv iru wkh vwdwlf prgho fduu| ryhu wr d g|qdplf prgho/ lqfoxglqj wkh qrwlrq wkdw plwljdwlrq dqg dgdswdwlrq duh vxevwlwxwhv1 Wkhq zh frqvlghu lq vhfwlrq 8 zkhwkhu pdnlqj dgdswdwlrq frvwv ghshqg rq wkh dprxqw ri plwljdwlrq pdnhv d glhuhqfh/ dqg vkrz wkdw wklv fdq doorz iru wkh srvvlelolw| ri d frpsohphqwdu| uhodwlrqvkls lq wkh suhflvh hfrqrplf vhqvh1 Lq doo ri vhfwlrqv 5 wr 8 wkh prghov frqvlghuhg duh rqhv ri fhuwdlqw|1 Vhfwlrq 9 frqvlghuv d prgho zklfk lqfoxghv xqfhuwdlqw|1 Lw lv vwudljkwiruzdug wr vkrz wkdw li rqh lqwurgxfhv dq h{rjhqrxv ulvn ri folpdwh fkdqjh gdpdjhv lqwr wkh vlpsoh prghov ri wkh suhylrxv vhfwlrqv/ wkhq wkh pdlq uhvxowv jr wkurxjk lq d vwudljkwiruzdug zd|= dq lqfuhdvh lq wkh ulvn ri folpdwh fkdqjh zloo fdxvh wkh rswlpdo ohyhov ri plwljdwlrq dqg dgdswdwlrq wr ulvh/ exw dgdswdwlrq dqg plwljdwlrq uhpdlq vxevwlwxwhv1 Vr zh wkhq orrn dw lqwurgxflqj xqfhuwdlqw| dv dq hqgrjhqrxv idfwru1 Wklv lv grqh e| xvlqj d vlpsolhg yhuvlrq ri wkh Ndqh0Vkrjuhq +5333, prgho1 Wkh| rewdlq voljkwo| glhuhqw uhvxowv e| xvlqj d vwdwlf prgho lq zklfk dgdswdwlrq dqg plwljdwlrq sod| dv|pphwulf urohv= wkh ohyho ri gdpdjh frvwv fdq eh uhgxfhg e| dgdswdwlrq/ exw plwljdwlrq uhgxfhv wkh ulvn ri folpdwh fkdqjh/ vr ulvn lv qrz hqgrjhqrxv1 Wkh| vkrz wkdw dq h{rjhqrxv lqfuhdvh lq ulvn kdv dq dpeljxrxv hhfw 0 lw dozd|v ohdgv wr dq lqfuhdvh lq dgdswdwlrq exw wkh hhfw rq plwljdwlrq ghshqgv rq zkhwkhu dq h{rjhqrxv lqfuhdvh lq ulvn fdxvhv dq lqfuhdvh ru ghfuhdvh lq wkh pdujlqdo hhfwlyhqhvv ri plwljdwlrq lq uhgxflqj ulvn/ dqg wkh| jlyh h{dpsohv ri krz wklv hhfw frxog jr hlwkhu zd|1

5

Zh frqvlghu d prgho ri folpdwh fkdqjh lq zklfk wkh frvwv ri folpdwh fkdqjh ghshqg rq krz pxfk zh hlwkhu plwljdwh ru dgdsw1 Exw plwljdwlrq dqg dgdswdwlrq erwk dovr lqfxu frvwv/ dqg zh vhw rxw ehorz d vlpsoh prgho ri wkh vshflfdwlrq ri wklv1 Ohw 6 eh wkh ohyho ri plwljdwlrq/ @ eh wkh ohyho ri dgdswdwlrq1 Wrwdo gdpdjh frvwv iurp Folpdwh Fkdqjh duh B( E6c @ zkhuh B lv d sdudphwhu dhfwlqj wkh vhyhulw| ri gdpdjh frvwv 1 Zh pdnh wkh iroorzlqj dvvxpswlrqv derxw gdpdjh frvwv1 Wkh uvw irxu duh wkrvh iru frqfdylw| ri wkh gdpdjh ixqfwlrq1 Dvvxpswlrq D418 hqvxuhv wkdw zh rewdlq dssursuldwh frpsdudwlyh vwdwlf uhvxowv
¤ £ ¢

Vlqjoh Wlph Shulrg/ Qr Xqfhuwdlqw|/ Vlqjoh Vr0 fldo Sodqqhu

( (

fc ( : fc (
£ §¤

f : f  f
¤ ¥¤

+D414, +D415, +D416,

Lq wklv vshflfdwlrq ri wkh sureohp/ rqh idfwru zklfk frxog dhfw wkh vhyhulw| ri gdpdjh frvwv lv wkh ohyho ri Exvlqhvv0dv0Xvxdo hplvvlrqv/ l1h1 hplvvlrqv zkhq erwk p dqg d duh }hur1
¨

¤ ¦£

(

£ ¥£

'(

5

D414 vd|v vlpso| wkdw lqfuhdvlqj plwljdwlrq ru dgdswdwlrq uhgxfhv gdpdjh frvwv/ zkloh D415 vd|v wkdw wkhuh duh glplqlvklqj uhwxuqv wr plwljdwlrq dqg dgdswdwlrq1 D416 vd|v wkdw lqfuhdvlqj dgdswdwlrq uhgxfhv lq devroxwh whupv wkh pdujlqdo uhgxfwlrq lq gdpdjh e| wkh odvw xqlw ri plwljdwlrq dqg ylfh yhuvd1 D417 dqg D418 vlpso| vd| wkdw wkh rzq hhfwv ri dq lqfuhdvh lq plwljdwlrq dqg dgdswdwlrq kdyh d eljjhu hhfw rq rzq pdujlqdo uhgxfwlrq lq gdpdjh frvwv wkdq wkh furvv hhfwv erwk lq devroxwh +D417, dqg lq uhodwlyh whupv +D418,1 Zh ghqrwh e|  E6 wrwdo plwljdwlrq frvwv/ dqg E@( k wrwdo dgdswdwlrq frvwv/ zkhuh k lv d sdudphwhu uh hfwlqj krz frvwo| lw lv wr fduu| rxw dgdswdwlrq1 Zh dvvxph wkdw plwljdwlrq dqg dgdswdwlrq frvwv duh vwulfwo| frqyh{1 


Wkh vrfldo sodqqhu*v sureohp lv wr fkrrvh 6 dqg @ wr plqlpl}h wrwdo frvwv dulvlqj iurp folpdwh fkdqjh gdpdjh frvwv/ dgdswdwlrq frvwv/ dqg plwljdwlrq frvwv Iru zklfk wkh uvw rughu frqglwlrqv duh
£

 : fc  : fc 


: fc 

E6c @ m Bc k  B(E6c @ n  E6 n k E@   B( n  ' fc 
 £

Wkhvh duh mxvw wkh xvxdo frqglwlrqv wkdw pdujlqdo frvwv ri plwljdwlrq vkrxog htxdo vdylqj lq uhgxfhg gdpdjh frvw iurp plwljdwlrq/ dqg vlploduo| iru dgdswdwlrq1 Ghqrwh wkh rswlpdo vroxwlrq wr wkh frvw plqlpl}dwlrq sureohp e| 6 EBc k dqg @ EBc k Zh qrz wxuq wr frpsdudwlyh vwdwlfv ri krz 6 dqg @ fkdqjh dv B dqg k ydu|1 Frqvlghu uvw wkh hhfw ri dq lqfuhdvh lq gdpdjh frvwv/ uhsuhvhqwhg e| dq lqfuhdvh lq B Wkhq     Y6 c +6, ' { YB
F @ G ? 3> F
"  "! 

 B( n k
¤ ¤

' f

@ G ? 3> 


F

@ 3> F

@ D A 3=

6   

¦  



! 

¦ 

Qrwlfh wkdw F @ G Ilqdoo| qrwh wkdw 
¦ 

. P A 3> F

@ G

. D A 3=    

§¤ £

¤ 

£ 

¤ ¥¤

£ ¥£

£ 

¥¤

¦£ ¤

¦£ ¤

£ 

¤ ©¤

¤ 

(  (

4? i( c ( j  (  

  ( :  ( 

 c  

(  ( 

  ( :  ( 

  

+D417,

¤ ¦£

¤ ©¤

£ ¥£

+D418,

:f

+4, +5,

zkhuh 

   Y@  ' { YB 
¤ £ ©£ £  £ §¤ 

+7,

Zh kdyh { : f e| D415/ D417/ dqg wkh dvvxpswlrqv rq  dqg  : f Vr dq lqfuhdvh lq : fc E| D418/ lw lv vwudljkwiruzdug wr vkrz wkdw gdpdjh frvwv lqfuhdvhv erwk plwljdwlrq dqg dgdswdwlrq1 Qrz frph wr wkh hhfw ri dq lqfuhdvh lq dgdswdwlrq frvwv/ uhsuhvhqwhg e| dq lqfuhdvh lq k Wkhq zh zloo kdyh vlqfh  ' B( / dqg ( : f/ (  f  

Y6 ' { Yk
©£ £

: fc 

Vr pdnlqj dgdswdwlrq pruh h{shqvlyh uhgxfhv wkh dprxqw ri dgdswdwlrq dqg lqfuhdvhv wkh dprxqw ri plwljdwlrq1 Lq wklv vhqvh/ dgdswdwlrq dqg plwljdwlrq duh vxevwlwxwhv1 Wklv iroorzv iurp wkh dvvxpswlrq rq wkh gdpdjh frvw ixqfwlrq wkdw dq lqfuhdvh lq plwljdwlrq/ vd|/ uhgxfhv wkh pdujlqdo uhgxfwlrq lq gdpdjhv wkdw fdq eh dfklhyhg e| wkh pdujlqdo xqlw ri dgdswdwlrq1 Ri frxuvh/ wklv prgho lv h{wuhpho| vlpsoh dqg lw lv zruwk qrwlqj d qxpehu ri zd|v lq zklfk wkh uhvxow pd| qrw eh urexvw ehiruh h{whqglqj wkh prgho lq pruh vxevwdqwldo zd|v1 +d, Lq wkh deryh dqdo|vlv zh dvvxph dq lqwhulru vroxwlrq dqg wklv zloo fhuwdlqo| eh wkh fdvh li dv lv riwhq dvvxphg +l1h1 dw uvw/ wkh frvw ri plwljdwlrq ru dgdswdwlrq lv hhfwlyho| frvwohvv,1 Ri frxuvh li  Ef : B( Efc @  wkhq lw lv rswlpdo rqo| wr dgdsw/ zkhq k Ef : B( E6 c f lw lv rswlpdo rqo| wr plwljdwh1 Krzhyhu/ zklovw wkhvh fruqhu vroxwlrqv duh wkhruhwlfdoo| srvvleoh/ wkh| gr qrw vhhp wr eh hpslulfdoo| uhohydqw1 +e, Wkh prgho dvvxphv wkdw Dvvxpswlrq 4 krogv/ zklfk hqvxuhv wkdw wkhuh lv d xqltxh vroxwlrq wr wkh uvw rughu frqglwlrqv dqg wkdw wkh frpsdudwlyh vwdwlfv h{huflvh lv dssursuldwh1 Lw lv srvvleoh wkdw gdpdjh frvwv duh qrw dv zhoo ehkdyhg dv wklv/ dqg wkdw wkhuh duh vljqlfdqw qrq0frqyh{lwlhv1 Lw lv zhoo nqrzq wkdw vxfk qrq0frqyh{lwlhv srvh gl!fxowlhv iru wkh frqyhqwlrqdo dqdo|vlv ri rswlpdo h{whuqdolw| srolflhv +vhh Gdv0 jxswd dqg Pçohu +5336,, dqg wkh sureohp ri Wkhuprkdolqh flufxodwlrq pd| eh mxvw vxfk dq lvvxh ri qrq0frqyh{lwlhv +wkrxjk uhodwhg wr g|qdplfv,1 Iru wkh sxusrvhv ri 7 
£   ¤   ¤ 

Y@ ' Yk  

{

f

B( Efc 
£

fc  Ef ' fc B( E c f

fc k Ef ' fc

¤ £ 

# & ( 0)#

£ ¥£

£ §¤ 

# & $ '%# 

£ ¤

¤ £

¤ ¦£

¤ ¥¤

{' 
©£ £ 

 

¤ ¦£ 

+8,

+9,

wklv vxuyh|/ zh vkdoo frqwlqxh wr dvvxph wkdw wkh vhfrqg ghulydwlyhv ri wkh gdpdjh frvw ixqfwlrq kdyh wkh vljqv vkrzq lq Dvvxpswlrq 41 +f, Wkh prgho lv d yhu| vlpsoh sduwldo htxloleulxp prgho/ dqg lw lv zhoo nqrzq wkdw jrrgv ru dfwlylwlhv zklfk duh vxevwlwxwhv lq sduwldo htxloleulxp dqdo|vlv pd| qrw eh vxevwlwxwhv lq d jhqhudo htxloleulxp dqdo|vlv1 Wkxv lqfuhdvlqj plwljdwlrq pd| dhfw rwkhu sulfhv lq wkh hfrqrp|/ hvshfldoo| idfwru sulfhv/ zklfk frxog fdxvh wkh frvwv ri dgdswdwlrq wr idoo1 Vr/ lqfuhdvlqj plwljdwlrq ri hplvvlrqv frxog fdxvh hqhuj| sulfhv wr idoo fdxvlqj vrph irupv ri dgdswdwlrq zklfk xvhv hqhuj| lqwhqvlyho| +h1j1 Dlu Frqglwlrqlqj, wr ehfrph fkhdshu dqg vr pruh xvh lv pdgh ri dgdswdwlrq/ vr pdnlqj dgdswdwlrq dqg plwljdwlrq frpsohphqwv dw wkh jhqhudo htxloleulxp ohyho1 Zh duh qrw dzduh wkdw vxfk jhqhudo htxloleulxp hhfwv duh vwurqj hqrxjk wr ryhuwxuq wkh frqfoxvlrq ri wkh vlpsoh prgho wkdw plwljdwlrq dqg dgdswdwlrq duh vxevwlwxwhv1 +g, Wkhuh lv d voljkwo| glhuhqw dvshfw wr wkh suhylrxv h{dpsoh1 Vxssrvh wkdw zh ljqruh jhqhudo htxloleulxp hhfwv1 Qhyhuwkhohvv wkh nlqg ri olqn ehwzhhq dgdswdwlrq dqg plwljdwlrq lv vrphwlphv vxjjhvwhg wr srvvleo| fdxvh wkh sureohp ri pdodgdswd0 wlrq 1 Vxssrvh rqh irup ri dgdswdwlrq uhtxluhv xvh ri hqhuj| +h1j1 Dlu Frqglwlrqlqj,/ lv lw srvvleoh wkdw wkh dgglwlrqdo hplvvlrqv fdxvhg e| xvh ri dlu frqglwlrqlqj frxog fdxvh dgglwlrqdo gdpdjh vx!flhqw wr rxwzhljk wkh gluhfw dgdswdwlrq ehqhw ri xvlqj Dlu FrqglwlrqlqjB Wr h{dplqh wklv lq wkh frqwh{w ri wkh prgho/ vxssrvh wkdw wkh gdpdjh ixqfwlrq lv zulwwhq dv=
2 1

zkhuh >E@ fdswxuhv rvhwv wr plwljdwlrq fdxvhg e| wkh xvh ri d sduwlfxodu dgdswdwlrq vwudwhj|1 Wkh uvw rughu frqglwlrqv duh= B( n  ' fc 

B(E6

>E@c @c

+:,

Qrz vxssrvh wkdw k fdswxuhv doo ri wkh gluhfw frvw ri wkh dgdswdwlrq vwudwhj|/ lqfoxglqj wkh frvw ri dq| hqhuj| xvhg e| wkh dgdswdwlrq vwudwhj|/ exw h{foxglqj wkh vrfldo frvw ri wkh hplvvlrqv jhqhudwhg e| wkh dgdswdwlrq1 Wkhq iurp +;, lw lv srvvleoh wkdw B( Ee c f : k Efc 
 ¤

Wklv kdv ehhq uhfrjqlvhg dv d sureohp iru d yhu| orqj wlph1 Iru h{dpsoh/ Kxqwlqjwrq +4<4:, glvfxvvhv folpdwh fkdqjh lq wkh frqwh{w ri wkh ghfolqh ri wkh Urpdq Hpsluh dqg vxjjhvwv wkdw fkdqjhv lq udlqidoo sdwwhuqv ohg wr fkdqjhv lq djulfxowxudo sudfwlfhv wkdw h{dfhuedwhg wkrvh1 Rwkhu srvvleoh fdxvhv ri pdodgdswdwlrq duh wkurxjk frpshwlwlrq iru uhvrxufhv ehwzhhq plwljdwlrq dqg idflolwdwlyh dgdswdwlrq/ Wro +5336,/ lqwhuqdwlrqdo wudgh hhfwv rq khdowk lq ghyhorslqj frxqwulhv/ Edelnhu hw do1 +5333,1 Vfkhudjd dqg Judpevfk +4<<;, uhihu wr pdodgdswdwlrq gxh wr vxerswlpdo sulydwh ghflvlrqv/ exw wklv lv pruh d fdvh ri pdo0uhjxodwlrq1
4 3

8 

£

¤

B(

B( > n k 

£

' f

+;,

vr lw orrnv dv li lw lv sulydwho| ghvludeoh wr xvh wkh dgdswdwlrq vwudwhj| edvhg rq wkh pdujlqdo frvwv dw }hur ohyho ri dgdswdwlrq1 Exw lw pd| dovr eh wuxh wkdw vr wkdw zkhq rqh wdnhv dffrxqw ri wkh gdpdjh frvw ri wkh h{wud hplvvlrqv/ lw zrxog qrw eh zruwk xvlqj wkh dgdswdwlrq vwudwhj|/ djdlq dw }hur ohyho ri dgdswdwlrq edvhg rq pdujlqdo frvwv exw qrz lqfoxglqj wkh vrfldo frvwv ri wkh dgdswdwlrq vwudwhj|1 Vr lw orrnv dv li wkhuh lv srwhqwldo pdodgdswdwlrq1 Krzhyhu/ wklv uhvxowv iurp dvvxplqj wkdw wkh gdpdjh frvw ri wkh hplvvlrqv/ zklfk zloo dulvh iurp wkh dgdswdwlrq hplvvlrqv/ kdyh qrw ehhq idfwruhg lqwr wkh sulydwh frvwv ri dgdswdwlrq1 Exw surylghg plwljdwlrq lv rswlpdoo| uhjxodwhg/ dw wkh dgdswdwlrq vwdjh zh gr qrw qhhg wr idfwru lqwr wkh dgdswdwlrq frvwv wkh vrfldo frvwv ri dgdswdwlrq hplvvlrqv ehfdxvh wkhvh zloo kdyh ehhq wdnhq dffrxqw ri lq wkh plwljdwlrq vwudwhj|1 Vr/ lw vkrxog qrw eh wkh fdvh wkdw wkh vrfldo frvwv ri wkh dgglwlrqdo hplvvlrqv/ dvvrfldwhg zlwk dgdswdwlrq/ kdyh wr eh uh hfwhg lq wkh xvhu frvw ri dgdswdwlrq1 Wklv lv d fdvh ri dq rswlpdo fruqhu vroxwlrq zkhuh dgdswdwlrq lv qrw hpsor|hg1 Lw uh hfwv djdlq wkh idfw wkdw plwljdwlrq dqg dgdswdwlrq qhhg wr eh mrlqwo| ghwhuplqhg1 
  £

B( Ee c f 
¤

mB( Ee c f> Efm n k Efc

6

Dowkrxjk wkh irupdo prgho lv zulwwhq grzq dv wkh sureohp ri d vrfldo sodqqhu fkrrv0 lqj rswlpdo uhjxodwlrq ri dgdswdwlrq dqg plwljdwlrq lw lv zruwk dvnlqj krz vxfk rswlpdo srolflhv frxog eh lpsohphqwhg1 Lpsolflw lq wkh glvfxvvlrq lq sduw +g, lv dq lpsruwdqw glvwlqfwlrq vrphwlphv pdgh ehwzhhq plwljdwlrq dqg dgdswdwlrq/ qdpho| wkdw plwljdwlrq zloo fdoo iru vrph irup ri jryhuqphqw uhjxodwlrq wr uh hfw wkh sure0 ohpv ri h{whuqdolwlhv dqg wkh sxeolf jrrg qdwxuh ri plwljdwlrq/ zklovw wkh dgdswdwlrq ghflvlrq fdq eh ghfhqwudol}hg/ l1h1 ohiw wr lqglylgxdo djhqwv wr zhljk wkh frvwv dqg ehqhwv ri dgdswlqj1 Zh kdyh dujxhg lq sduw +g, wkdw wklv uhpdlqv wkh fdvh dv orqj dv plwljdwlrq lv rswlpdoo| uhjxodwhg1 Exw wkhuh lv dqrwkhu lpsruwdqw dvshfw ri wklv sxeolf jrrg2sulydwh jrrg glvwlqfwlrq1 Iru plwljdwlrq lv d joredo sxeolf jrrg dfwlylw| vlqfh zkdw dhfwv wkh gdpdjh rq dq| rqh frxqwu| lv wkh joredo ohyho ri plwljdwlrq1 Krzhyhu lw lv uhdvrqdeoh wr vxssrvh wkdw dgdswdwlrq lv d sulydwh ehqhw  dv hdfk frxqwu|*v dgdswdwlrq dhfwv rqo| wkdw frxqwu|1 Zh fdq fdswxuh wklv glvwlqfwlrq e| vxssrvlqj wkdw wkhuh duh frxqwulhv/  ' c c c zkhuh iru frxqwu|  wkh dssursuldwh frvw ixqfwlrq lv S   E c c  c @ m B c k   B ( 6 c @ n  E6  n k E@  
Vhh Kdqhpdqq +5333,/ Ndqh dqg Vkrjuhq +5333,/ Phqghovrq +5333,/ Nohlq hw do1 +5336,1
6 6 6 6 6 6 8 5 £ ¥8 9 7 6 6 6 6 6 7 £ 6

Pxowl0Djhqwv

Zh fdq wkhq glvwlqjxlvk irupdo rxwfrphv zkhuh wkh frxqwulhv dfw qrq0frrshudwlyho| +l1h1 qr Folpdwh Fkdqjh Surwrfro, dqg zkhuh wkh| dfw frrshudwlyho| +l1h1 d joredoo| elqglqj djuhhphqw,1 Wkh uvw rughu frqglwlrqv iru wkh wzr fdvhv duh
@

9 

Qrq0Frrshudwlyh=

B ( n  ' fc
A6 6

+<, +43,

B ( nk  Frrshudwlyh=
6 ¤ 6

+<, dqg +43, duh mxvw wkh dqdorjxh ri +4, dqg +5, iru hdfk frxqwu|/ dqg vd|v wkdw hdfk frxqwu| zloo fkrrvh wr plwljdwh dw wkh srlqw zkhuh wkh pdujlqdo frvw ri dq dgglwlrqdo xqlw ri plwljdwlrq htxdov lwv rzq sulydwh ehqhw iurp plwljdwlrq/ dqg vlploduo| iru dgdswdwlrq1 Wkh glhuhqfh lq +44, dqg +45, lv wkdw lq wkh plwljdwlrq ghflvlrq zkdw lv uhohydqw iru hdfk frxqwu| lv wkh pdujlqdo uhgxfwlrq lq joredo gdpdjh frvwv iurp dq h{wud xqlw ri plwljdwlrq1 Li zh ghqrwh wkh rswlpdo vroxwlrq wr wkh qrq0frrshudwlyh fdvh e| E6 c @ Sdqg wr S frrshudwlyh fdvh e| E6 c @ c wkhq  wkh lw lv vwudljkwiruzdug wr vhh wkdw 6 6 c vr wkhuh zloo eh wrr olwwoh joredo plwljdwlrq li frxqwulhv gr qrw frrshudwh  wkh vwdqgdug iuhh0ulghu sureohp1 Dowkrxjk +43, dqg +45, orrn wkh vdph/ ehfdxvh wkh ohyho ri plwljdwlrq zloo eh glhuhqw/ lw lv vwudljkwiruzdug wr vhh wkdw @ : @  Vr wkh idloxuh wr jhw joredo djuhhphqw rq plwljdwlrq phdqv wkdw wkhuh zloo eh wrr olwwoh plwljdwlrq/ dqg frxqwulhv uhvsrqg e| fduu|lqj rxw wrr pxfk dgdswdwlrq1 Ri frxuvh/ lw pxvw eh fohdu wkdw wkh idfw wkdw frxqwulhv lqfuhdvh dgdswdwlrq iurp @ wr @ zkhuh wkhuh lv d idloxuh wr uhdfk dq lqwhuqdwlrqdo djuhhphqw grhv qrw phdq wkdw wklv dgdswdwlrq uhvsrqvh lv lpsrvlqj dgglwlrqdo frvwv rq frxqwulhv frpsduhg wr zkdw wkh| zrxog idfh li wkh| ohiw dgdswdwlrq dw ohyho @  Ehfdxvh wkh pryh iurp @ wr @ lv wkh ehvw uhvsrqvh ri hdfk frxqwu| wr wkh idloxuh wr djuhh rq plwljdwlrq1 Li frxqwulhv mxvw ohiw dgdswdwlrq dw ohyhov @ wkh| zrxog eh hyhq zruvh r li wkhuh lv qr djuhhphqw rq plwljdwlrq/ ehfdxvh wkh| zrxog lqfxu hyhq juhdwhu gdpdjh frvwv1

7

Dq reylrxv zhdnqhvv ri wkh suhylrxv prgho lv wkdw lw odfnv dq| g|qdplf ihdwxuhv/ dqg folpdwh fkdqjh lv lqkhuhqwo| g|qdplf1 Khuh zh h{whqg wkh prgho lq wkh vlpsohvw
Iru h{dpsoh/ Nohlq hw do1 +5336, glvfxvv wkh glhuhqw whpsrudo dvshfwv ri plwljdwlrq dqg dgds0 wdwlrq1
E
D

Wzr0Shulrg Prghov/ Qr Xqfhuwdlqw|

:

C

6

C

6

C

6

76

C

6

A6

6

B ( nk
6 ¤ 6

A B6

C

6

£

8

C

6

76

8

[
8

B ( n  ' fc ' f

A B6

£

6

6

' f

+44, +45,

76

76

76

76

76

C

6

srvvleoh zd| wr doorz iru g|qdplfv wr vhh zkdw glhuhqfhv wklv pdnhv wr wkh suhylrxv frqfoxvlrqv1 Vxssrvh qrz wkdw wkhuh duh wzr wlph shulrgv/ | ' c 2c dqg plwljdwlrq dqg dgdswdwlrq lq shulrg | duh ghqrwhg e| 6 c @  Gdpdjhv rffxu dw wkh hqg ri shulrg 2c dqg ghshqg rq fxpxodwlyh plwljdwlrq 6 ' 6 n 6 c dqg fxpxodwlyh dgdswdwlrq @ ' @ n @ c dqg duh B( E6c @  Frvwv ri plwljdwlrq dqg dgdswdwlrq lq shulrg | duh jlyhq e|  E6  c k E@   Iru vlpsolflw| zh vkdoo ljqruh dq| ghsuhfldwlrq wr wkh vwrfn ri plwljdwlrq dqg dgdswdwlrq dqg dovr glvfrxqwlqj1 Wkh vrfldo sodqqhu qrz fkrrvhv 6 c @ wr plqlpl}h lq shulrg 2c zlwk uvw rughu frqglwlrqv
¤ ¤ ¤ 

E6 c 6 c @ c @ m Bc k   B(E6c @ n  E6  n k   B( n  ' fc
¤  ¤ ¤ ¤ ¤ ¤ £ ¤ £ ¤ 

 B( n k
¤ ¤ ¤  

' f

Wkhvh duh mxvw wkh dqdorjxh ri +4, dqg +5, iru wkh rqh shulrg sureohp1 Ghqrwlqj wkh vroxwlrq e| 6 E6 c @ c Bc k c @ E6 c @ c Bc k / zh kdyh wkh qrupdo uhvxowv

Wxuqlqj wr wkh hhfwv ri d fkdqjh lq uvw shulrg plwljdwlrq dqg dgdswdwlrq/ qrwh wkdw
£§¤ G I$ ¤ ¤ £ ©£ G H$ ¤ £ 

' B(

: fc 

' B( ' B(
£ §¤ ¤ 

fc : f

Lw lv vwudljkwiruzdug wr vkrz wkdw Y6 ' Y6
£ 
¤

G %# $ ( &R )#

G %# $ $ &R %#

G $%# ( &R )#

vr



fc dqg



n

f ; 

¤

¤

§¤ £

£ 

¤

I$%# G &R $ Q%#

vr



f

Y@ ' Y6

B(  c {

¤

¤

¥¤ ¤ 

¤

n

¤ 

EB( n k {

¦£ ¤ ¤

©¤ ¤ ¤

{ ' 
£ ¥£ ¤ ¤ 



: fc

¤ ¥¤

G P( ¤ ¤

¤ ¦£

G P( ¤ £ 

' B( 

fc 

¤

Y@ Y@ Y6 Y6 : fc : fc : fc Yk YB Yk YB 
¤ 
¤ 
¤

¤

£

F 

¤

F

¤

F

£

£

F

¤

£

¤

£

¤

¤

F 

¤

F

£

F

£

F

¤

F

¤

£

E@  +46, +47,

f 

c

Vr lqfuhdvlqj plwljdwlrq e|  xqlw lq shulrg  uhgxfhv plwljdwlrq dqg dgdswdwlrq lq shulrg 2c exw e| ohvv wkdq  xqlw lq wrwdo1 Vlplodu uhvxowv dsso| iru dq lqfuhdvh lq f n dgdswdwlrq ri  xqlw/  Ohw

Wxuqlqj wr wkh uvw shulrg/ wkh sureohp ri wkh vrfldo sodqqhu lv ghwhuplqh 6 c @ wr plqlpl}h Iru zklfk wkh uvw rughu frqglwlrqv duh= 
£  ¤ £ £ £ £ £ £  ¤ 

'  ' 
¤ ¤ £

n  E6  n k

E@ 

n  ' B( n  ' fc
£  £

Ohw wkh vroxwlrq wr wkh deryh wzr htxdwlrqv eh ghqrwhg e| 6 EBc k c k c @ EBc k c k  Wr dvvhvv wkh surshuwlhv ri wkhvh ixqfwlrqv qrwh wkdw=   Y@ Y6 n  : fc n B(  ' B( n Y6 Y6

<

¤

¤ ©¤

¤

£ §¤

¤ 

¤ £ 

' ( n B(

Y@ Y6 c n B( YB YB  

¤

¤ £

¤

¥£ £

£ 

£ £ 

' ( n B(

Y@ Y6 c n B( YB YB  

£ §¤ £

¤ ¦£ £

¤ ©¤ £

{ ' 
£ ¥£ £ £ 



: fc

£ 

£

£

¤

¤ ¥¤

¤

£

£ §¤

¥¤ ¤ £  

Y6 n B( ' B( Y@  

Y@ n Y@ 

nk

£

¤

¤¥¤

£

¤

£ S¤

£ §¤ £  

 Y@ Y6 : fc n B( n ' B( Y6 Y6  

£

¤

¤ ¦£

¤

£

©£ £

¤¦£ £  

Y6 n B( ' B( Y@  

Y@ n Y@ 

: fc

: fc

¤

£

£ 

¤

£ 

£ 

£

£ 

¤

¤ £

¤

£ 

£ 

¤

£ 

'
£ ¤

nk

' B( n k

' f

£

£ 

¤

¤

¤ 

E6 c @ c Bc k   B(E6 n 6 c @ n @  n  E6  n k 
¤ ¤  ¤ £  ¤ £ ¤ £ £  ¤ 

£

£

G ( ))# 0)# &R (

)P# G ( &R $ '%#

E@ 

¥£ £

£

£

¥£ £ £

Lw lv vwudljkwiruzdug li whglrxv wr vkrz wkdw
£ 
£ 

Vr djdlq wkh uhvxowv iru wkh rqh shulrg prgho fduu| ryhu1 Lq vxppdu|/ doo wkh uhvxowv iurp wkh rqh0shulrg prgho fduu| ryhu wr wkh g|qdplf prgho1 Djdlq d ihz frpphqwv derxw urexvwqhvv duh lq rughu1 Wkhvh prghov dvvxph gdpdjh frvwv rffxu rqo| lq wkh vhfrqg shulrg1 Lq wklv vhqvh zh fdq wklqn ri dgdswdwlrq lq shulrg  dv ehlqj sur0dfwlyh zklovw dgdswdwlrq lq shulrg 2 pljkw eh wkrxjkw dv uhdfwlyh1 Krzhyhu/ wkh uhvxowv duh urexvw wr lqfoxglqj gdpdjh frvwv lq hdfk wlph shulrg/ dowkrxjk lq wklv fdvh lw lv pruh gl!fxow wr glvwlqjxlvk ehwzhhq dgdswdwlrq dv uhdfwlyh ru sur0dfwlyh1 Dgdswdwlrq lq dq| rqh shulrg zloo uh hfw erwk wkh gdpdjh wkdw rffxuv lq wkdw shulrg dv d uhvxow ri wkh fxuuhqw vwrfn ri juhhqkrxvh jdv hplvvlrqv +vr fohduo| rq sdvw fkdqjhv,/ exw wr wkh h{whqw wkdw fxuuhqw dgdswdwlrq exlogv d vwrfn ri ixwxuh dgdswdwlrq fdslwdo lw dovr khosv wr dgdsw wr ixwxuh folpdwh fkdqjh1 Ri frxuvh/ sduw ri wklv eoxuulqj mxvw uh hfwv wkh idfw wkdw zh xvh d vlpsoh yduldeoh dqg lw sod|v d vwrfn dqg rz uroh1 Pxfk ri wkh dyru ri wkhvh uhvxowv dovr fduulhv ryhu li zh h{whqg wkh prgho wr dq lqqlwh0krul}rq prgho1 Qrqh ri wklv vkrxog eh yhu| vxusulvlqj1 Hyhq lq wkh rqh0shulrg prgho/ xvlqj d vlqjoh yduldeoh wr fdswxuh plwljdwlrq dqg d vlqjoh yduldeoh wr fdswxuh dgdswdwlrq lv d jurvv vlpsolfdwlrq1 Wkhuh zloo eh pdq| irupv ri plwljdwlrq dqg dgdswdwlrq1 Exw li gdpdjhv lqfuhdvh wkh jhqhudo h!flhqf| dujxphqw zrxog vxjjhvw zh vkrxog lqfuhdvh doo irupv ri dgdswdwlrq dqg plwljdwlrq zkloh li doo irupv ri dgdswdwlrq ehfrph pruh h{shqvlyh wkhq zh zrxog h{shfw wr vhh ohvv dgdswdwlrq ri doo nlqgv dqg pruh plwljdwlrq ri doo nlqgv1 Dgdswdwlrq dqg plwljdwlrq lq glhuhqw wlph shulrgv duh mxvw glhuhqw zd|v ri dgdswlqj dqg plwljdwlqj1

8

Wr jhw d pruh lqwhuhvwlqj rxwfrph zh qhhg wr lqwurgxfh g|qdplf frqvlghudwlrqv lq d pruh lqwhuhvwlqj zd|1 Rqh dujxphqw vrphwlphv dgydqfhg lv wkdw dgdswdwlrq pd| eh kdughu wr lpsohphqw li wkh udwh ri fkdqjh ri folpdwh lv idvw1 Qrz lw lv qrw fohdu zkdw xqghuolhv wklv eholhi1 Sduw ri lw pljkw uh hfw lvvxhv wr gr zlwk wkh delolw| wr ohduq/ exw wkdw fdqqrw eh fdswxuhg lq wkh prgho vr idu zklfk dvvxphv fhuwdlqw|1 Sduwo| wklv frxog
Vhh LSFF +5334,/ Vdodwkì +5336,1

Zkhq Frvw ri Dgdswdwlrq Ghshqgv rq Dprxqw ri Plwljdwlrq
U

43

£

£

Y@ Y@ Y6 Y6 : fc : fc : fc Yk YB Yk YB 

£  £

£ 

T G £ ¤ 

T G ¦£ £ 

' fc : f

'

f

V

mxvw uh hfw wkh idfw wkdw lw wdnhv wlph wr dffxpxodwh d vwrfn ri dgdswlyh fdslwdo  li rqh kdv pdq| ghfdghv dydlodeoh wkhq wkh frvwv ri prylqj d frdvwdo flw| lqodqg zloo eh uhodwlyho| vpdoo frpsduhg wr wkh frvwv ri grlqj wklv zlwklq d ihz ghfdghv/ hvvhqwldoo| ehfdxvh wkh iruphu fdq uho| rq wkh qdwxudo surfhvv ri uhsodflqj revrohvfhqw fdslwdo wr dfklhyh dgdswdwlrq/ zkhuhdv lq wkh odwwhu rqh kdv wr uhwluh fdslwdo hduo|1 Wklv hhfw lv douhdg| fdswxuhg/ doehlw fuxgho|/ e| dvvxplqj lqfuhdvlqj frvw ri dgglqj wr wkh qhz vwrfn ri fdslwdo lq dq| rqh shulrg/ vr dq| lqfuhdvh lq wkrvh frvwv zloo douhdg| eh fdswxuhg e| wkh vkliw sdudphwhu k  Wkh lqfuhdvhg gl!fxow| ri dgdswdwlrq wkh idvwhu wkh fkdqjh lq folpdwh fdq dovr uh hfw sureohpv iru qrq0kxpdq djhqwv zkhuh ryhu wlph vshflhv pljkw eh deoh wr pljudwh ru pxwdwh wr dgdsw wr folpdwh fkdqjh/ exw li lw lv wrr udslg wkh| frxog eh zlshg rxw1 Krzhyhu/ zkdw zh duh frqfhuqhg zlwk khuh lv krz wkh vshhg ri folpdwh fkdqjh pljkw dhfw kxpdq dgdswdwlrq1 Zkdwhyhu wkh xqghuo|lqj h{sodqdwlrq/ d fuxgh zd| ri fdswxulqj wklv lq rxu prgho pljkw eh wr dvvxph wkdw lq shulrg 2 +zh frqvlghu shulrg 2 mxvw iru vlpsolflw|, wkh frvwv ri dgdswdwlrq dovr ghshqg rq wkh ohyho ri plwljdwlrq lq shulrg 2c zlwk pruh plwljdwlrq lq shulrg 2 +vorzhu udwh ri fkdqjh ri folpdwh lq shulrg 2, uhgxflqj wkh frvw ri dgdswdwlrq1 Vr zh frxog zulwh dgdswdwlrq frvwv lq shulrg 2 dv vr pruh plwljdwlrq uhgxfhv erwk wrwdo dqg pdujlqdo frvwv ri dgdswdwlrq1 Iru vlpsolflw| zh sxw wkh frvw vkliw sdudphwhu rqwr wkh plwljdwlrq frvw1 Wkhq wkh shulrg 2 sureohp fdq qrz eh zulwwhq dv fkrrvh 6 c @ wr plqlpl}h zlwk uvw rughu frqglwlrqv=
¤ ¤ ¤ ¤ £ ¤ ¤ ©¤ ¤ ¤ ¤

E@ c 6 c |
¤ ¤ ¤

e   B(E6c @ n > E6  n
¤

Qrz

44 

¤

W £ ¤

e 

'  : fc

¤

¤ ¦£ ¤

¤ ¥¤ ¤

e e e { ' 
£ ¥£ ¤ ¤ 

 e  c

¤ £

¤

e  ' B( n
¤ ©¤ ¤ ¥¤ ¤

: fc

¤ ©¤

¤

AA ¤

e  ' B( n >
£ ¥£ £ ¥£ ¤

£

e   B( n
¤ ¤ ¤

' f : fc

n

¤

¤

e   B( n > n
A ¤ £ ¤ £

¤

¤

¤

6

fc

: fc

fc

¤

E@ c 6 c

¤

' fc

vr dv

wkhq r}?

zklfk pd| eh srvlwlyh ru qhjdwlyh ghshqglqj rq wkh uhodwlyh pdjqlwxghv ri dqg ( 1 Vr li wkh hhfwv ri plwljdwlrq rq pdujlqdo dgdswdwlrq frvw lv vwurqj hqrxjk/ plw0 e ljdwlrq ohdgv wr orzhu pdujlqdo gdpdjh frvwv iurp dgdswdwlrq/ vr  fc khqfh lqfuhdvlqj plwljdwlrq frvwv zloo uhgxfh erwk plwljdwlrq dqg dgdswdwlrq1 Wkh frqfoxvlrq lv reylrxv  orzhulqj frvwv ri plwljdwlrq lqfuhdvhv plwljdwlrq zklfk vorzv Folpdwh Fkdqjh dqg pdnhv dgdswdwlrq pruh hhfwlyh1 Vr qrz plwljdwlrq dqg dgdswdwlrq zrxog eh frpsohphqwv1

Zh qrz doorz iru xqfhuwdlqw| derxw gdpdjh frvwv1 Ohw Z eh wkh suredelolw| ri srvlwlyh gdpdjh frvwv/  Z wkh suredelolw| ri qr gdpdjh frvwv1 Zh dvvxph wkdw Z ghshqgv rq d sdudphwhu/ 41 Lq wklv vhfwlrq zh dovr doorz iru Z wr ghshqg hqgrjhqrxvo| rq wkh ohyho ri plwljdwlrq1 Wklv |lhogv d prgho vlplodu wr wkh suhylrxv vhfwlrq exw zlwk hqgrjhqrxv ulvn dorqj wkh olqhv vxjjhvwhg e| Ndqh dqg Vkrjuhq +5333,1 Krzhyhu plwljdwlrq rqo| dhfwv wkh suredelolw| ri gdpdjh dqg qrw lwv ohyho zklfk ghshqgv vroho| rq wkh dprxqw ri dgdswdwlrq1 Wkh dqdo|vlv surylghg khuh vkrzv wkdw zh rewdlq wkh vdph jhqhudo frqfoxvlrq wkdw plwljdwlrq dqg dgdswdwlrq zloo eh vxevwlwxwhv/ dqg vr wkdw rxu uhvxow iurp wkh suhylrxv vhfwlrq lv urexvw wr h{whqvlrq wr hqgrjhqrxv suredelolw|1 45

9

Hqgrjhqlvlqj Ulvn

¤ ¦£

¤

£ §¤ ¤

§¤ £ ¤ 

¤ 

e e   Y@ c ' e Y> {

Y@ Y>  

 e  ' r}? 

W !£ ¤ 

£ W ¤

¤

¤

§¤ £ ¤

¤ ¥¤ ¤

Y6 ' Y>  

¤

e e   e {

¤ £

¤

¤ £

¤

¤ ¦£ ¤

¤ ¦£

¤ £

¤

Exw dv

f/ ( 

fzh duh xqdeoh wr ghqlwho| vljq e  ' B( n c

W ¦¤ ¤

e 

' fc

fc

¦£ ¤

Wkh remhfwlyh ixqfwlrq lv qrz dv iroorzv=
R $%# a R #
` Y %( H$ X

4? Z E4c 6 ( E@ n  E6 n k E@ c 
  $ b %#§)# a R #
b %# a%#

f( ( fc ( : fc : fc : fc dqg : fc fc zkhuh zh kdyh : f  : fc  : f Wkh uvw rughu frqglwlrqv zklfk ghwhuplqh wkh rswlpdo pl{ ri plwljdwlrq dqg dgdswdwlrq duh dv iroorzv= YZ ( ' f +48,  n Y6

Qh{w zh gr frpsdudwlyh vwdwlfv dqdo|vlv1 Iluvw wkh uvw rughu frqglwlrqv glhuhqwldwh zlwk uhvshfw wr 4c zh kdyh YZ Y6 Y@ (c ' n5 5 Y4 Y4 Y4
¤
d
c

5 
£

( n  : fc dqg ( : fc 5 ' zkhuh zh kdyh 5 ' Z( n k : fc 5 ' 5 ' 5 5 : f Lw suryhv wkdw {'5 5      Y Z YZ  Y@ ( c ( n5 5 ' Y4Y6 Y4 { Y4      YZ Y Z  Y6  ( ( n5 5 ' Y4 Y4Y6 { Y4 Vr zh rewdlq wkh uhvxow wkdw li wkh furvv hhfwv duh qhjoljleoh/ l1h1/ 5 ' 5 ' fc : f/ vr lqfuhdvlqj ulvn ri gdpdjhv lqfuhdvhv erwk plwljdwlrq dqg : fc dqg wkhq dgdswdwlrq1 Qh{w glhuhqwldwlqj wkh uvw rughu frqglwlrqv zlwk uhvshfw wr kc zh kdyh Y6 Y@ c ' n5 5 Yk Yk

Wklv suryhv wkdw

 Y6 : f ' 5 { Yk dqg vr wkdw zh kdyh wkh uhvxow wkdw plwljdwlrq dqg dgdswdwlrq duh vxevwlwxwhv1 zklfk lv zkdw zh rewdlqhg lq vhfwlrq 41

46  

d

Y@ ' Yk

 5 {
c

d

c

5

Y6 Y@ ' fc n5 Yk Yk

fc

c 

¤

$ R %# a R #

Y6 Y@ ' n5 Y4 Y4
c ¤ 

Y Z (c Y4Y6 
$ %# a %# 

d

¤  

c 

¤ 

¤

¤

¤ 

k

n Z E4c 6 ( ' f 

£

£

d

£ 

b%# $ )#

$%# a %#

c

¤ 

d

b %# )# (

£ 

+49,

:

Lq jhqhudo/ zh vkrz wkdw dgdswdwlrq dqg plwljdwlrq zloo eh vxevwlwxwhv1 Wklv mxvw uh hfwv wkh udwkhu plog dvvxpswlrq wkdw dq lqfuhdvh lq plwljdwlrq uhgxfhv wkh pdujlqdo uhgxfwlrq lq gdpdjh frvwv wkdw fdq eh dfklhyhg e| dgdswdwlrq1 Zkhq lv lw srvvleoh iru frpsohphqwdulw| wr rffxuB Zh irxqg wkdw lw lv srvvleoh iru vxfk frpsohphqwdulw| lq wkh fdvh wkdw dgdswdwlrq frvwv ghshqg rq wkh dprxqw ri plwljdwlrq1 Wkh fdvh ri pdodgdswdwlrq lv riwhq vxjjhvwhg dv dqrwkhu uhdvrq zk| plwljdwlrq dqg dgdswdwlrq frxog eh frpsohphqwv1 Krzhyhu/ lw lv rqo| srvvleoh li wkhuh zhuh vxe0rswlpdo srolflhv lq rwkhu sduwv ri wkh hfrqrp|/ dqg d fohdu srolf| uhfrpphqgdwlrq hphujhv wkdw wkh fdxvhv ri wklv vxe0rswlpdolw| vkrxog eh uhpryhg1 Exw fohduo|/ vshfldo uhtxluhphqwv pd| eh qhhghg iru wklv wr kdsshq1 Wkh idfw wkdw dgdswdwlrq dqg plwljdwlrq zloo eh vxevwlwxwhv frqupv wkh ylhz ri Ndqh dqg \rkh +5333, dqg Sduu| hw do1 +5333, wkdw zh qhhg wr kdyh dq lqwhjudwhg dssurdfk wr dgdswdwlrq dqg plwljdwlrq/ dqg zh fdqqrw uho| rq hlwkhu plwljdwlrq dorqh ru dgdswdwlrq dorqh wr ghdo zlwk folpdwh fkdqjh1 Wklv uhvxow grhv qrw fkdqjh li zh lqwurgxfh hqgrjhqrxv ulvn lqwr wkh prgho1 Lw rqo| fkdqjhv zkhq zh pdnh wkh dgdswdwlrq frvw ghshqg rq wkh dprxqw ri plwljdwlrq1 Rqo| lq wkh fdvh zkhuh wkh hhfwv ri plwljdwlrq rq pdujlqdo dgdswdwlrq frvw lv vwurqj gr zh jhw wkdw lqfuhdvlqj plwljdwlrq frvwv zloo uhgxfh erwk plwljdwlrq dqg dgdswdwlrq1 Vr wkdw orzhulqj wkh frvwv ri plwljdwlrq lqfuhdvhv plwljdwlrq zklfk vorzv Folpdwh Fkdqjh dqg pdnhv dgdswdwlrq pruh hhfwlyh1 Khuh plwljdwlrq dqg dgdswd0 wlrq zrxog eh frpsohphqwv1

Frqfoxvlrqv

Uhihuhqfhv

^8` Lqjkdp/ D1/ Pd/ M1/ dqg Xosk/ D1 +5338,1 Krz gr wkh frvwv ri dgdswdwlrq dhfw rswlpdo plwljdwlrq zkhq wkhuh lv xqfhuwdlqw|/ luuhyhuvlelolw| dqg ohduqlqjB/ plphr1 47

^7` Kxqwlqjwrq/ H1 +4<4:,1 Folpdwlf Fkdqjh dqg Djulfxowxudo H{kdxvwlrq dv Hoh0 phqwv lq wkh Idoo ri Urph/ Wkh Txduwhuo| Mrxuqdo ri Hfrqrplfv/ yro1 64/ ss1 4:6053;1

^6` Kdqhpdqq/ Z1 +5333,1 Dgdswdwlrq dqg lwv phdvxuhphqw= Dq Hglwruldo/ Fol0 pdwlf Fkdqjh/ yro1 78/ ss1 8:408;41

^5` Gdvjxswd/ S1 dqg Pçohu/ N10J1 +5336,1 Wkh hfrqrplfv ri qrq0frqyh{ hfrv|v0 whpv= Lqwurgxfwlrq/ Hqylurqphqwdo dqg Uhvrxufh Hfrqrplfv/ yro1 59/ ss1 7<<0 8581

^4` Edelnhu/ P1/ Uhloo|/ M1 dqg Mdfre|/ K1 +5333,1 Wkh N|rwr Surwrfro dqg ghyho0 rslqj frxqwulhv/ Hqhuj| Srolf|/ yro1 5;/ ss1 8580691

^9` Lqwhujryhuqphqwdo Sdqho rq Folpdwh Fkdqjh +LSFF,1 +4<<9,1 +U1W1 Zdwvrq/ P1 F1 ]lq|rhzhud/ dqg U1 K1 Prvv/ Hgv1, Folpdwh Fkdqjh 4<<8 0 Lpsdfwv/ Dgds0 wdwlrqv dqg Plwljdwlrq ri Folpdwh Fkdqjh= Vflhqwlf0Whfkqlfdo Dqdo|vhv1 Fdp0 eulgjh= Fdpeulgjh Xqlyhuvlw| Suhvv1 ^:` Lqwhujryhuqphqwdo Sdqho rq Folpdwh Fkdqjh +LSFF,1 +5334,1 +M1 M1 PfFduwk|/ R1 I1 Fdq}ldql/ Q1 D1 Ohdu|/ G1 M1 Grnnhq/ dqg N1 V1 Zklwh/ Hgv1, Folpdwh Fkdqjh 5334 0 Lpsdfwv/ Dgdswdwlrq/ dqg Yxoqhudelolw|1 Fdpeulgjh= Fdpeulgjh Xqlyhuvlw| Suhvv1

^44` Nohlq/ U1 M1 W1/ Vfklsshu/ H1 O1 dqg Ghvvdl/ V1 +5336,1 Lqwhjudwlqj plwljdwlrq dqg dgdswdwlrq lqwr folpdwh dqg ghyhorsphqw srolf|= Wkuhh uhvhdufk txhvwlrqv/ W|qgdoo Fhqwuh Zrunlqj Sdshu 731 ^45` Phqghovrq/ U1 +5333,1 H!flhqw dgdswdwlrq wr folpdwh fkdqjh/ Folpdwlf Fkdqjh/ yro1 78/ ss1 8;609331

^43` Nohlq/ U1 M1 W1 +5336,1 Sduw 6 ri Uhvlolhqfh dqg Dgdswdwlrq wr Folpdwh Fkdqjh= Dq Lqwhuglvflsolqdu| Shuvshfwlyh/ SkG Wkhvlv/ Fkulvwldq0Doeuhfkwv0Xqlyhuvlwçw }x Nlho1

^<` Ndqh/ V1 dqg \rkh/ J1 +5333,1 Vrflhwdo dgdswdwlrq wr folpdwh yduldelolw| dqg fkdqjh= dq lqwurgxfwlrq/ Folpdwlf Fkdqjh/ yro1 78/ ss1 4071

^;` Ndqh/ V1 dqg Vkrjuhq/ M1 I1 +5333,1 Olqnlqj dgdswdwlrq dqg plwljdwlrq lq fol0 pdwh fkdqjh srolf|/ Folpdwlf Fkdqjh/ yro1 78/ ss1 :804351

^46` Sduu|/ P1/ Duqhoo/ Q1/ PfPlfkdho/ W1/ Qlfkroov/ U1/ Pduwhqv/ S1/ Nrydwv/ V1/ Olyhupruh/ P1/ Urvhq}zhlj/ F1/ Ljohvldv/ D1 dqg Ilvfkhu/ J1 +5333,1 Ploolrqv dw ulvn= ghqlqj fulwlfdo folpdwh fkdqjh wkuhdwv dqg wdujhwv/ Joredo Hqylurqphqwdo Fkdqjh/ yro1 44/ ss1 4;404;61 ^47` Slhonh/ U1 D1/ Mu1 +4<<;,1 Uhwklqnlqj wkh uroh ri dgdswdwlrq lq folpdwh srolf|/ Joredo Hqylurqphqwdo Fkdqjh/ yro1 ;/ ss1 48<04:31

^49` Vfkhudjd/ M1 dqg Judpevfk/ D1 +4<<;,1 Ulvnv/ rssruwxqlwlhv/ dqg dgdswdwlrq wr folpdwh fkdqjh/ Folpdwh Uhvhdufk/ yro1 43/ ss1 ;80<81 ^4:` Wro/ U1 V1 M1 +5336,1 Lv wkh xqfhuwdlqw| derxw folpdwh fkdqjh wrr odujh iru h{shfwhg frvw0ehqhw dqdo|vlvB/ Folpdwlf Fkdqjh/ yro1 89/ ss1 59805;<1

^48` Vdodwkì/ W1 +5336,1 Folpdwh fkdqjh dqg zhwodqgv= Lpsdfwv/ dgdswdwlrq/ dqg plwljdwlrq/ plphr1

48

The trans-disciplinary Tyndall Centre for Climate Change Research undertakes integrated research into the long-term consequences of climate change for society and into the development of sustainable responses that governments, business-leaders and decision-makers can evaluate and implement. Achieving these objectives brings together UK climate scientists, social scientists, engineers and economists in a unique collaborative research effort. Research at the Tyndall Centre is organised into four research themes that collectively contribute to all aspects of the climate change issue: Integrating Frameworks; Decarbonising Modern Societies; Adapting to Climate Change; and Sustaining the Coastal Zone. All thematic fields address a clear problem posed to society by climate change, and will generate results to guide the strategic development of climate change mitigation and adaptation policies at local, national and global scales. The Tyndall Centre is named after the 19th century UK scientist John Tyndall, who was the first to prove the Earth’s natural greenhouse effect and suggested that slight changes in atmospheric composition could bring about climate variations. In addition, he was committed to improving the quality of science education and knowledge. The Tyndall Centre is a partnership of the following institutions: University of East Anglia UMIST Southampton Oceanography Centre University of Southampton University of Cambridge Centre for Ecology and Hydrology SPRU – Science and Technology Policy Research (University of Sussex) Institute for Transport Studies (University of Leeds) Complex Systems Management Centre (Cranfield University) Energy Research Unit (CLRC Rutherford Appleton Laboratory) The Centre is core funded by the following organisations: Natural Environmental Research Council (NERC) Economic and Social Research Council (ESRC) Engineering and Physical Sciences Research Council (EPSRC) UK Government Department of Trade and Industry (DTI) For more information, visit the Tyndall Centre Web site (www.tyndall.ac.uk) or contact: External Communications Manager Tyndall Centre for Climate Change Research University of East Anglia, Norwich NR4 7TJ, UK Phone: +44 (0) 1603 59 3906; Fax: +44 (0) 1603 59 3901 Email: tyndall@uea.ac.uk

Tyndall Working Papers are available online at http://www.tyndall.ac.uk/publications/working_papers/working_papers.shtml Mitchell, T. and Hulme, M. (2000). A Country-byCountry Analysis of Past and Future Warming Rates, Tyndall Centre Working Paper 1. Hulme, M. (2001). Integrated Assessment Models, Tyndall Centre Working Paper 2. Berkhout, F, Hertin, J. and Jordan, A. J. (2001). Socio-economic futures in climate change impact assessment: using scenarios as 'learning machines', Tyndall Centre Working Paper 3. Barker, T. and Ekins, P. (2001). How High are the Costs of Kyoto for the US Economy?, Tyndall Centre Working Paper 4. Barnett, J. (2001). The issue of 'Adverse Effects and the Impacts of Response Measures' in the UNFCCC, Tyndall Centre Working Paper 5. Goodess, C.M., Hulme, M. and Osborn, T. (2001). The identification and evaluation of suitable scenario development methods for the estimation of future probabilities of extreme weather events, Tyndall Centre Working Paper 6. Barnett, J. (2001). Security and Climate Change, Tyndall Centre Working Paper 7. Adger, W. N. (2001). Social Capital and Climate Change, Tyndall Centre Working Paper 8. Barnett, J. and Adger, W. N. (2001). Climate Dangers and Atoll Countries, Tyndall Centre Working Paper 9. Gough, C., Taylor, I. and Shackley, S. (2001). Burying Carbon under the Sea: An Initial Exploration of Public Opinions, Tyndall Centre Working Paper 10. Barker, T. (2001). Representing the Integrated Assessment of Climate Change, Adaptation and Mitigation, Tyndall Centre Working Paper 11. Dessai, S., (2001). The climate regime from The Hague to Marrakech: Saving or sinking the Kyoto Protocol?, Tyndall Centre Working Paper 12. Dewick, P., Green K., Miozzo, M., (2002). Technological Change, Industry Structure and the Environment, Tyndall Centre Working Paper 13. Shackley, S. and Gough, C., (2002). The Use of Integrated Assessment: An Institutional Analysis Perspective, Tyndall Centre Working Paper 14. Köhler, J.H., (2002). Long run technical change in an energy-environment-economy (E3) model for an IA system: A model of Kondratiev waves, Tyndall Centre Working Paper 15. Adger, W.N., Huq, S., Brown, K., Conway, D. and Hulme, M. (2002). Adaptation to climate change: Setting the Agenda for Development Policy and Research, Tyndall Centre Working Paper 16. Dutton, G., (2002). Hydrogen Energy Technology, Tyndall Centre Working Paper 17. Watson, J. (2002). The development of large technical systems: implications for hydrogen, Tyndall Centre Working Paper 18. Pridmore, A. and Bristow, A., (2002). The role of hydrogen in powering road transport, Tyndall Centre Working Paper 19. Turnpenny, J. (2002). Reviewing organisational use of scenarios: Case study - evaluating UK energy policy options, Tyndall Centre Working Paper 20. Watson, W. J. (2002). Renewables and CHP Deployment in the UK to 2020, Tyndall Centre Working Paper 21. Watson, W.J., Hertin, J., Randall, T., Gough, C. (2002). Renewable Energy and Combined Heat and Power Resources in the UK, Tyndall Centre Working Paper 22. Paavola, J. and Adger, W.N. (2002). Justice and adaptation to climate change, Tyndall Centre Working Paper 23. Xueguang Wu, Jenkins, N. and Strbac, G. (2002). Impact of Integrating Renewables and CHP into the UK Transmission Network, Tyndall Centre Working Paper 24 Xueguang Wu, Mutale, J., Jenkins, N. and Strbac, G. (2003). An investigation of Network Splitting for Fault Level Reduction, Tyndall Centre Working Paper 25 Brooks, N. and Adger W.N. (2003). Country level risk measures of climate-related natural disasters and implications for adaptation to climate change, Tyndall Centre Working Paper 26 Tompkins, E.L. and Adger, W.N. (2003). Building resilience to climate change through adaptive management of natural resources, Tyndall Centre Working Paper 27

Dessai, S., Adger, W.N., Hulme, M., Köhler, J.H., Turnpenny, J. and Warren, R. (2003). Defining and experiencing dangerous climate change, Tyndall Centre Working Paper 28 Brown, K. and Corbera, E. (2003). A MultiCriteria Assessment Framework for CarbonMitigation Projects: Putting “development” in the centre of decision-making, Tyndall Centre Working Paper 29 Hulme, M. (2003). Abrupt climate change: can society cope?, Tyndall Centre Working Paper 30 Turnpenny, J., Haxeltine A. and O’Riordan, T. (2003). A scoping study of UK user needs for managing climate futures. Part 1 of the pilotphase interactive integrated assessment process (Aurion Project), Tyndall Centre Working Paper 31 Xueguang Wu, Jenkins, N. and Strbac, G. (2003). Integrating Renewables and CHP into the UK Electricity System: Investigation of the impact of network faults on the stability of large offshore wind farms, Tyndall Centre Working Paper 32 Pridmore, A., Bristow, A.L., May, A. D. and Tight, M.R. (2003). Climate Change, Impacts, Future Scenarios and the Role of Transport, Tyndall Centre Working Paper 33 Dessai, S., Hulme, M (2003). Does climate policy need probabilities?, Tyndall Centre Working Paper 34 Tompkins, E. L. and Hurlston, L. (2003). Report to the Cayman Islands’ Government. Adaptation lessons learned from responding to tropical cyclones by the Cayman Islands’ Government, 1988 – 2002, Tyndall Centre Working Paper 35 Kröger, K. Fergusson, M. and Skinner, I. (2003). Critical Issues in Decarbonising Transport: The Role of Technologies, Tyndall Centre Working Paper 36 Ingham, A. and Ulph, A. (2003) Uncertainty, Irreversibility, Precaution and the Social Cost of Carbon, Tyndall Centre Working Paper 37 Brooks, N. (2003). Vulnerability, risk and adaptation: a conceptual framework, Tyndall Centre Working Paper 38 Tompkins, E.L. and Adger, W.N. (2003). Defining response capacity to enhance climate change policy, Tyndall Centre Working Paper 39

Klein, R.J.T., Lisa Schipper, E. and Dessai, S. (2003), Integrating mitigation and adaptation into climate and development policy: three research questions, Tyndall Centre Working Paper 40 Watson, J. (2003), UK Electricity Scenarios for 2050, Tyndall Centre Working Paper 41 Kim, J. A. (2003), Sustainable Development and the CDM: A South African Case Study, Tyndall Centre Working Paper 42 Anderson, D. and Winne, S. (2003), Innovation and Threshold Effects in Technology Responses to Climate Change, Tyndall Centre Working Paper 43 Shackley, S., McLachlan, C. and Gough, C. (2004) The Public Perceptions of Carbon Capture and Storage, Tyndall Centre Working Paper 44 Purdy, R. and Macrory, R. (2004) Geological carbon sequestration: critical legal issues, Tyndall Centre Working Paper 45 Watson, J., Tetteh, A., Dutton, G., Bristow, A., Kelly, C., Page, M. and Pridmore, A., (2004) UK Hydrogen Futures to 2050, Tyndall Centre Working Paper 46 Berkhout, F., Hertin, J. and Gann, D. M., (2004) Learning to adapt: Organisational adaptation to climate change impacts, Tyndall Centre Working Paper 47 Pan, H. (2004) The evolution of economic structure under technological development, Tyndall Centre Working Paper 48 Awerbuch, S. (2004) Restructuring our electricity networks to promote decarbonisation, Tyndall Centre Working Paper 49 Powell, J.C., Peters, M.D., Ruddell, A. & Halliday, J. (2004) Fuel Cells for a Sustainable Future? Tyndall Centre Working Paper 50 Agnolucci, P., Barker, T. & Ekins, P. (2004) Hysteresis and energy demand: the Announcement Effects and the effects of the UK climate change levy, Tyndall Centre Working Paper 51 Agnolucci, P. (2004) Ex post evaluations of CO2 –Based Taxes: A Survey, Tyndall Centre Working Paper 52

Agnolucci, P. & Ekins, P. (2004) The Announcement Effect and environmental taxation, Tyndall Centre Working Paper 53 Turnpenny, J., Carney, S., Haxeltine, A., & O’Riordan, T. (2004) Developing regional and local scenarios for climate change mitigation and adaptation, Part 1: A framing of the East of England, Tyndall Centre Working Paper 54 Mitchell, T.D. Carter, T.R., Jones, .P.D, Hulme, M. and New, M. (2004) A comprehensive set of high-resolution grids of monthly climate for Europe and the globe: the observed record (1901-2000) and 16 scenarios (2001-2100), Tyndall Centre Working Paper 55 Vincent, K. (2004) Creating an index of social vulnerability to climate change for Africa, Tyndall Centre Working Paper 56 Shackley, S., Reiche, A. and Mander, S (2004) The Public Perceptions of Underground Coal Gasification (UCG): A Pilot Study, Tyndall Centre Working Paper 57 Bray, D and Shackley, S. (2004) The Social Simulation of The Public Perceptions of Weather Events and their Effect upon the Development of Belief in Anthropogenic Climate Change, Tyndall Centre Working Paper 58 Anderson, D and Winne, S. (2004) Modelling Innovation and Threshold Effects In Climate Change Mitigation, Tyndall Centre Working Paper 59 Few, R., Brown, K. and Tompkins, E.L. (2004) Scaling adaptation: climate change response and coastal management in the UK, Tyndall Centre Working Paper 60 Brooks, N. (2004) Drought in the African Sahel: Long term perspectives and future prospects, Tyndall Centre Working Paper 61 Barker, T. (2004) The transition to sustainability: a comparison of economics approaches, Tyndall Centre Working Paper 62 Few, R., Ahern, M., Matthies, F. and Kovats, S. (2004) Floods, health and climate change: a strategic review, Tyndall Centre Working Paper 63 Peters, M.D. and Powell, J.C. (2004) Fuel Cells for a Sustainable Future II, Tyndall Centre Working Paper 64

Adger, W. N., Brown, K. and Tompkins, E. L. (2004) The political economy of cross-scale networks in resource co-management, Tyndall Centre Working Paper 65 Turnpenny, J., Haxeltine, A., Lorenzoni, I., O’Riordan, T., and Jones, M., (2005) Mapping actors involved in climate change policy networks in the UK, Tyndall Centre Working Paper 66 Turnpenny, J., Haxeltine, A. and O’Riordan, T., (2005) Developing regional and local scenarios for climate change mitigation and adaptation: Part 2: Scenario creation, Tyndall Centre Working Paper 67 Bleda, M. and Shackley, S. (2005) The formation of belief in climate change in business organisations: a dynamic simulation model, Tyndall Centre Working Paper 68 Tompkins, E. L. and Hurlston, L. A. (2005) Natural hazards and climate change: what knowledge is transferable?, Tyndall Centre Working Paper 69 Abu-Sharkh, S., Li, R., Markvart, T., Ross, N., Wilson, P., Yao, R., Steemers, K., Kohler, J. and Arnold, R. (2005) Can Migrogrids Make a Major Contribution to UK Energy Supply?, Tyndall Centre Working Paper 70 Boyd, E. Gutierrez, M. and Chang, M. (2005) Adapting small-scale CDM sinks projects to low-income communities, Tyndall Centre Working Paper 71 Lowe, T., Brown, K., Suraje Dessai, S., Doria, M., Haynes, K. and Vincent., K (2005) Does tomorrow ever come? Disaster narrative and public perceptions of climate change, Tyndall Centre Working Paper 72 Walkden, M. (2005) Coastal process simulator scoping study, Tyndall Centre Working Paper 73 Ingham, I., Ma, J., and Ulph, A. M. (2005) How do the costs of adaptation affect optimal mitigation when there is uncertainty, irreversibility and learning?, Tyndall Centre Working Paper 74 Fu, G., Hall, J. W. and Lawry, J. (2005) Beyond probability: new methods for representing uncertainty in projections of future climate, Tyndall Centre Working Paper 75

Agnolucci,. P (2005) The role of political uncertainty in the Danish renewable energy market, Tyndall Centre Working Paper 76 Barker, T., Pan, H., Köhler, J., Warren., R and Winne, S. (2005) Avoiding dangerous climate change by inducing technological progress: scenarios using a large-scale econometric model, Tyndall Centre Working Paper 77 Agnolucci,. P (2005) Opportunism and competition in the non-fossil fuel obligation market, Tyndall Centre Working Paper 78 Ingham, I., Ma, J., and Ulph, A. M. (2005) Can adaptation and mitigation be complements?, Tyndall Centre Working Paper 79