Page - 352 - in Loss and Damage from Climate Change - Concepts, Methods and Policy Options

352 A.MarkandyaandM.González-Eguino andinthehighdamagecasetheyaremorethandoublefortheselectedyearsto2030. Over time thegapbetween the lowdamageandhighdamageestimatesdeclinesbut by2100 thehighfigure is still 150%of the lowdamagebased residual cost. The next point to note is the range of residual costs across IAMs. For the three models considered here, the highest estimates are 5–50% greater than the lowest ones, with the exception of two regions: China and East Asia, where the range is much larger—around100%.This arises because theAD-WITCHmodel hasmuch higherdamagecost estimates for these two regions.Overall, the twosetsoffigures indicate twothings: thefact that ifL&Dis tobebasedonresidualcosts theamounts involvedwill be significant, but the rangeoffigures is still verywide. LossandDamage-ResidualCostsVersusAdaptationCosts It is also instructive tocompare the residualcostswith theadaptationcostestimates fromthesamemodellingexercise.Thiswill helpputL&Dfigures incontext, given the focus on finance for adaptation. To keep the tabulations simple we limit the comparison to the Bosello et al. (2010) model. Tables 14.3 and 14.4 report both adaptationcosts and residual costs aspercentof adaptationcosts.This isdoneonly for the six regions/countrieswhereL&Dfinance is likely tobean issue. The tablesandfigures showthat adaptationexpendituresare relatively lowcom- pared to residual costs,which are 3–20 timeshigher to startwith in 2020, but then decline, so that by2100 theyare40–400%higher.There are also significant differ- ences in the ratio of adaptation to residual costs across regions and scenarios. For China the difference is smallest, implying a larger share of costs are eliminatedby adaptation, while in LACA, SASIA and SSA the ratios are very high, implying a relatively small contribution of adaptation to reducing climate damages.With the exception of estimates for 2020, the difference between residual costs and adap- tation costs is greater with the low damage/high discount rate thanwith the high damage/lowdiscount rate case; it appears thatmore adaptation is undertaken rela- tive to total damage in the latter than in the former. The same information is also presented inFig.14.4. 14.3.3 ImplicationsofHigherEmissionsandGreater Climate ImpactsonResidualDamages The analysis presented has focussed on the case where equilibrium temperatures increaseby2.5–3.4°C, implyingsomemitigation,but less thanisrequiredunder the Parisaccord.Howmuchdifferencedoes itmake ifa lower reduction in temperature is attained? According to the IPCCAR5 report (Arent et al. 2014) estimates of global annual economic losses for additional temperature increases of ~2 °C are incomplete, but lie in the range of between 0.2 and 2.0% of GDP (±1 standard deviationaroundthemean)(mediumevidence,mediumagreement).Lossesaremore likelythannottobegreater,ratherthansmallerthanthisrange(limitedevidence,high agreement).Additionally, there are largedifferencesbetweenandwithin countries.