Uncertainty in forecasts of long-run economic growth

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Abstract

<p id="d1910710e204">This study develops estimates of uncertainty in projections of global and regional per-capita economic growth rates through 2100, comparing estimates from expert forecasts and an econometric approach designed to analyze long-run trends and variability. Estimates from both methods indicate substantially higher uncertainty than is assumed in current studies of climate change impacts, damages, and adaptation. Results from this study suggest a greater than 35% probability that emissions concentrations will exceed those assumed in the most severe of the available climate change scenarios (RCP 8.5), illustrating particular importance for understanding extreme outcomes. </p><p class="first" id="d1910710e207">Forecasts of long-run economic growth are critical inputs into policy decisions being made today on the economy and the environment. Despite its importance, there is a sparse literature on long-run forecasts of economic growth and the uncertainty in such forecasts. This study presents comprehensive probabilistic long-run projections of global and regional per-capita economic growth rates, comparing estimates from an expert survey and a low-frequency econometric approach. Our primary results suggest a median 2010–2100 global growth rate in per-capita gross domestic product of 2.1% per year, with a standard deviation (SD) of 1.1 percentage points, indicating substantially higher uncertainty than is implied in existing forecasts. The larger range of growth rates implies a greater likelihood of extreme climate change outcomes than is currently assumed and has important implications for social insurance programs in the United States. </p>

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An Overview of CMIP5 and the Experiment Design

Karl E. Taylor, Ronald J Stouffer, Gerald Meehl (2012)

The fifth phase of the Coupled Model Intercomparison Project (CMIP5) will produce a state-of-the- art multimodel dataset designed to advance our knowledge of climate variability and climate change. Researchers worldwide are analyzing the model output and will produce results likely to underlie the forthcoming Fifth Assessment Report by the Intergovernmental Panel on Climate Change. Unprecedented in scale and attracting interest from all major climate modeling groups, CMIP5 includes “long term” simulations of twentieth-century climate and projections for the twenty-first century and beyond. Conventional atmosphere–ocean global climate models and Earth system models of intermediate complexity are for the first time being joined by more recently developed Earth system models under an experiment design that allows both types of models to be compared to observations on an equal footing. Besides the longterm experiments, CMIP5 calls for an entirely new suite of “near term” simulations focusing on recent decades and the future to year 2035. These “decadal predictions” are initialized based on observations and will be used to explore the predictability of climate and to assess the forecast system's predictive skill. The CMIP5 experiment design also allows for participation of stand-alone atmospheric models and includes a variety of idealized experiments that will improve understanding of the range of model responses found in the more complex and realistic simulations. An exceptionally comprehensive set of model output is being collected and made freely available to researchers through an integrated but distributed data archive. For researchers unfamiliar with climate models, the limitations of the models and experiment design are described.

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Irreversible climate change due to carbon dioxide emissions.

Susan Solomon, Gian-Kasper Plattner, Reto Knutti … (2009)

The severity of damaging human-induced climate change depends not only on the magnitude of the change but also on the potential for irreversibility. This paper shows that the climate change that takes place due to increases in carbon dioxide concentration is largely irreversible for 1,000 years after emissions stop. Following cessation of emissions, removal of atmospheric carbon dioxide decreases radiative forcing, but is largely compensated by slower loss of heat to the ocean, so that atmospheric temperatures do not drop significantly for at least 1,000 years. Among illustrative irreversible impacts that should be expected if atmospheric carbon dioxide concentrations increase from current levels near 385 parts per million by volume (ppmv) to a peak of 450-600 ppmv over the coming century are irreversible dry-season rainfall reductions in several regions comparable to those of the "dust bowl" era and inexorable sea level rise. Thermal expansion of the warming ocean provides a conservative lower limit to irreversible global average sea level rise of at least 0.4-1.0 m if 21st century CO(2) concentrations exceed 600 ppmv and 0.6-1.9 m for peak CO(2) concentrations exceeding approximately 1,000 ppmv. Additional contributions from glaciers and ice sheet contributions to future sea level rise are uncertain but may equal or exceed several meters over the next millennium or longer.