4. Cost Analysis of Mitigation Policies
Mikiko Kainuma1, Yuzuru Matsuoka2, Tsuneyuki Morita1, Toshihiko Masui1, andKiyoshi Takahashi1
Summary. This analysis evaluates the economic and environmental impacts ofclimate change policies. Firstly, the economic impacts of the Kyoto Protocol are
analyzed to assess the short-term effects of climate change policies. It is foundthat the GDP loss to Japan, the USA, the EU, and Russia will be 0.42%, 0.56%,
0.44%, and 0.25%, respectively, if the Annex B countries ratify the Kyoto
Protocol and reduce their emissions without emissions trading and without taking
carbon sinks into account. On the other hand, the GDP loss to Japan and the EU
will grow if the USA does not ratify the Kyoto Protocol, and these losses will berecovered if the Kyoto mechanisms are adopted. Atmospheric stabilization
scenarios are then examined to estimate long-term economic and environmental
impacts. It is found that the global mean temperature will increase 1.8-2.8ºC by
the year 2100 under 550 ppmv scenarios. Impacts on crop productivity in India
and the incidence of malaria in China are estimated to become very serious.

4.1 Introduction
The Kyoto Protocol was adopted in 1997 as a first step toward stabilizing theatmospheric concentrations of greenhouse gases. The most important feature of
the Protocol is the quantified emissions reduction targets. These would result in a
reduction in emissions of greenhouse gases from Annex B countries in the 20082012 period to about 5 percent below their 1990 levels. For the purpose of
meeting these commitments, the Protocol established the principles of emissions
trading, joint implementation and the Clean Development Mechanism (CDM).
The Protocol also approved the principle that removal of atmospheric carbon
using carbon sinks formed by direct human-induced land use changes and forestry
activities could be counted as a means of managing emissions.
In March 2001, President Bush announced that the United States would not
ratify the Kyoto Protocol. Since the United States emits the largest amount of CO2
of any country in the world, the influence of this decision on other industrialized
nations could be quite significant.
This paper analyzes the effect of the decision of the USA as well as otherimportant factors related to the reduction of greenhouse gas emissions. Several
cases are studied. One case assumes ratification of the Protocol by Annex B
countries, including the United States. Another case assumes that it becomesinternational law without ratification by the United States. Other factors such as
1
2

National Institute for Environmental Studies, Tsukuba 305-8506, Japan
Kyoto University, Kyoto 606-8501, Japan

56

Kainuma, M. et al.

price-induced technological change and a movement to boycott the products of
non-ratifying countries are also considered.
Even though there are many hurdles to effectively reducing greenhouse gas
emissions under the Kyoto target, it is necessary to go further to meet the ultimate
goal of the United Nations Framework Convention on Climate Change(UNFCCC); “stabilization of greenhouse gas concentrations in the atmosphere at alevel that will prevent dangerous anthropogenic interference with the climate
system.”As an example of a stabilization scenario, the target of stabilizing theatmospheric concentration of CO2 to less than 550 ppmv is considered. The global
temperature changes and the rise in sea levels are estimated. Estimated climatechanges are used to analyze the climatic impacts on crop production and infectious
diseases in the Asia-Pacific region.

4.2 Structure of AIM/CGE (Energy) for Mitigation Analysis
The AIM/CGE (Energy) model is a recursive dynamic equilibrium model of theworld economy used to analyze the effects of climate stabilization policies(Kainuma et al. 1999). The model divides the world into 21 geopolitical regions.
To analyze the impacts of the Kyoto Protocol, Annex B countries are categorized
into the following regions: Japan, Australia, New Zealand, the United States ofAmerica (USA), Canada, the European Union (EU), and Eastern Europe and theFormer Soviet Union (EEFSU). The AIM model focuses in detail on the AsiaPacific region, which is divided into 10 regions: China, Taiwan, the Republic ofKorea, Hong Kong, Singapore, India, Indonesia, Malaysia, the Philippines, andThailand. Other regions are Latin America, Middle East Asia and North Africa,
Sub-Saharan Africa, and the Rest of World (ROW).
Goods are aggregated into seven energy goods and four non-energy goods. Theenergy goods are coal, crude oil, petroleum and coal products, natural gas, nuclear
energy, renewable energy, and electricity. The non-energy goods are aggregatedinto four categories. The first category includes energy-intensive products; thesecond includes agriculture, other manufactures and services; the third includes
transport industries; and the last is savings.
Figure 1 shows the structure of the AIM/CGE (Energy) model used for the cost
analysis. The model has three sectors—the production, household, andgovernment sectors—in each region. CO2 and other greenhouse gases are emitted
by each of these sectors.
The production of electricity and non-energy goods involves the use of fossil
fuels and the emission of CO2 in the production sector. In addition, the use of
automobiles and other direct uses of fossil fuels emit CO2 in the household andgovernment sectors. It is assumed that the household sector has carbon emission
rights and distributes them to the other sectors and within the household sector
itself. Fossil fuels cannot be used without having carbon emission rights. The priceof these carbon rights depends on several factors such as emissions targets and the4. Cost Analysis of Mitigation Policies

57

input
CO2
Fuels
input

Electricity

CO2
input

input
Non-energy
goods

input

primaryfactors

Governments

investment

consumption

CO2

Carbon emission
rightconsumption

rent

Production sectors

CO2HouseholdFig. 1. The structure of AIM/CGE (Energy) for mitigation analysis

method of emissions trading. The household sector also supplies primary factors
to the production and government sectors. An agent in the household sector
determines consumption and savings. The marginal propensity to save is acalibrated function of a weighted aggregate of regional and global rates of returnon fixed capital. Regional investment is calculated using the GDP growth rate andregional and global rates of return. Investment is balanced with savings on a
global scale. The model allows for trade in intermediate goods. AIM assumes
identical preferences in all countries for foreign versus domestic goods; i.e., theelasticity of substitution is the same for all regions. Domestic and imported goods
are not perfect substitutes.
Figure 2 shows the nesting of the production structure in AIM. All industries
have a similar production structure. Output is calculated by including primaryfactors, intermediate goods, and energy. Energy is nested into fossil fuels andelectricity, and fossil fuels are in turn nested into fuel goods and carbon emission
rights. It is assumed that the elasticity between fuel goods and carbon rights equals
zero. Therefore, carbon rights become a constraint on production functions.

58

Kainuma, M. et al.

OutputEnergyFossil fuels
Fuel
goods

Primary factors

Intermediate
goodsElectricity
CarbonrightsLabor

CapitalFig. 2. Nesting of the production structure (elasticity of substitution: energy/primary/intermediates =0.3 for energy intensive products and 0.2-0.5 for other products;
electricity/fossil fuel=0.3; fuel/fuel =1; labor/capital=1; fuel/carbon=0)

4.3 Cost of the Kyoto Protocol
4.3.1 Scenario assumptions
The emissions reduction target adopted at COP3, held in Kyoto, is analyzed using
the AIM model. The reduction target for each country compared to the 1990
emissions level is as follows: Australia: 0.8%, New Zealand: 0%, FSU: 0%,
Japan: -6%, Canada: -6%, USA: -7%, EU: -8%. It is assumed that several policy
measures such as a carbon tax and the Kyoto mechanisms are used to meet thesetargets.
Besides the reference scenario, three sets of scenarios are examined. In the firstset, it is assumed that each country should reduce emissions without adopting aflexibility mechanism. In the second set, emissions trading is assumed without any
restrictions on the amount of carbon traded. In the third set, CDM is also counted
besides emissions trading without restriction of tradable amounts. In each set, theimpacts of participation or non-participation of the USA in the Kyoto Protocol are
examined. Also examined are price-induced technological change and amovement to boycott goods exported by non-ratifying countries. In the priceinduced technological change scenario, it is assumed that technologies shift toenergy-saving types as the price of energy rises. In the boycott movement scenario,
it is assumed that the price of goods exported by non-ratifying countries is 10%
higher than the price in the reference scenario.
In addition to above scenarios, restriction case with one-third of the reduction
commitment and the effects of carbon sinks are analyzed. The quantities absorbedby the sinks are assumed to be as follows: EU: 9.84 Mt-C/year, FSU: 19.46 MtC/year, Australia: 0 Mt-C/year, Canada: 12.0 Mt-C/year, Japan: 13.0 Mt-C/year,
New Zealand: 0.2 Mt-C/year, USA: 28.0 Mt-C/year.

4. Cost Analysis of Mitigation Policies

59

GDP change (%)

0.4
0.2

With USA

0.0

Without USA-0.2

With USA (technology)-0.4

Without USA (technology)
Without USA (boycott)-0.6

Without USA (combination)

-0.8
-1.0
Japan

USA

EU

FSU

China

NonAnnex B

Fig. 3. Percentage change in the GDP in 2010 without emissions trading

4.3.2 GDP changes in 2010
Figure 3 shows the percentage reduction in the GDP compared to the reference
scenario without emissions trading. Six scenarios are compared. They areclassified according to three factors: ratification and non-ratification by the USA,
price-induced technological development and a boycott movement. The
combination scenario is one that includes both price-induced technologicaldevelopment and a boycott movement.
The GDP loss for the USA is the highest in the “with USA” scenario, eventhough the carbon price is the lowest among Japan, the USA, and the EU. The
GDP change is negative in every region in the “with USA” scenario, while that for
the USA becomes positive in the “without USA” scenario. The GDP changes
become positive for Japan, the USA and the EU, while remaining negative for
Russia in the "priced-induced technological change with USA" scenario. The
absolute value of the impacts decreases in the "priced-induced technologicalchange without USA" compared to the "with USA" scenario. This is because it isassumed that there is a very high potential for technological change if the price ofenergy increases substantially. The GDP change for the USA is negative and theamount of the loss in the "boycott movement" scenario is larger than the “withUSA (ratifying the Kyoto Protocol)” scenario. This means that the economic loss
to the USA is greater than if the USA ratifies the Protocol as long as othercountries boycott US goods. However, the impacts are also negative for Japan, theEU and Russia. The effect of a boycott movement on the world economy is not
good. In the "technological change+boycott movement" scenario, the GDPchanges are positive for Japan and the EU, and the negative impact on China islessened.

GDP change (%)

60

Kainuma, M. et al.
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0

With USA
Without USA
With USA (technology)
Without USA (technology)
Without USA (boycott)Without USA (combination)

Japan

USA

EU

FSU

China

NonAnnex B

Fig. 4. Percentage change in the GDP in 2010 with emissions trading

GDP change (%)

2.0
With USA

1.5

Without USA

1.0

With USA (technology)
0.5

Without USA (technology)

0.0

Without USA (boycott)-0.5

Without USA (combination)

-1.0
Japan

USA

EU

FSU

China

NonAnnex B

Fig. 5. Percentage change in the GDP in 2010 with emissions trading and CDM

Figure 4 shows the percentage change in the GDP in 2010 in the "emissions
trading with no restrictions" scenarios. Again six scenarios are analyzed. In thesescenarios, positive impacts for Russia are observed, especially in the "with USA"
scenarios and the "price-induced technological change" scenario. Although anegative impact for the USA with the "boycott" scenario is observed, the impact is
not large for other regions.
Figure 5 shows the percentage change in the GDP in the "emissions trading and
CDM with no restrictions" scenarios. Positive impacts for Russia and non-Annex
B countries are observed, especially in the "with USA" and "price-induced
technological change" scenarios. Impacts are minimal for Japan, the USA and theEU.
When the assumption is that the amount of tradable carbon is restricted, forexample, to one-third of the emissions reduction, the impacts on Annex B
countries become greater compared to the "no-restrictions" scenarios. The impacts
for Russia are negative in the "without USA" scenarios. The gains for Russia fromemissions trading are much less than those corresponding to the "no-restrictions"scenarios.
When carbon sinks are taken into account, the GDP impacts are substantiallyreduced. The GDP impacts on Japan, the USA, the EU, and Russia in 2010 are -4. Cost Analysis of Mitigation Policies

61

0.28, -0.47, -0.41, and -0.23, respectively, in the "with USA" scenario. These
would be -0.33, 0.01, -0.43, and -0.15, respectively, in the "without USA" scenario.
Impacts decrease in the emissions trading scenario. These would be -0.04, 0.01, 0.06, and 0.6 for Japan, the USA, the EU and Russia, respectively, in "theemissions trading without USA" scenario.
Table 1 shows the GDP changes in three sets of scenarios. The GDP gain for
China is the highest in the “CDM case with USA” scenario. This gain is loweredin the "without USA" scenario.
Table 2 shows the corresponding carbon price. The carbon price for Japan is thehighest in all the scenarios. If the CDM is assumed in addition to emissions
trading, the carbon price becomes very low. This is especially true in the case ofthe "without USA" scenarios. If price-induced technological change occurs, theprice becomes much lower.

Table 1. Percentage change in the GDP in 2010

without emissions trading
With USA
Without USA
With USA (technology)
Without USA (technology)
Without USA (boycott)Without USA (combination)with emissions trading
With USA
Without USA
With USA (technology)
Without USA (technology)
Without USA (boycott)Without USA (combination)with emissions trading and CDM
With USA
Without USA
With USA (technology)
Without USA (technology)
Without USA (boycott)Without USA (combination)

Japan

USA

EU

FSU

China

NonAnnex
B

-0.42
-0.48
0.27
0.20
-0.47
0.21

-0.56
0.01
0.06
0.02
-0.92
-0.91

-0.44
-0.47
0.35
0.31
-0.45
0.35

-0.25
-0.16
-0.31
-0.21
-0.16
-0.21

-0.20
-0.13
-0.05
-0.03
-0.17
-0.07

-0.24
-0.14
-0.22
-0.12
-0.15
-0.13

-0.14
-0.06
0.08
0.01
-0.06
0.02

-0.33
0.00
-0.07
0.00
-0.92
-0.92

-0.19
-0.08
0.08
0.01
-0.06
0.04

3.50
0.92
3.32
0.94
0.96
0.97

-0.09
-0.03
-0.04
-0.01
-0.07
-0.06

-0.11
-0.02
-0.11
-0.03
-0.04
-0.04

0.00
0.00
0.11
0.03
0.00
0.04

-0.20
0.00
-0.06
0.00
-0.92
-0.92

-0.09
-0.03
0.06
0.01
-0.01
0.04

1.44
0.24
1.51
0.27
0.27
0.31

0.51
0.12
0.49
0.12
0.10
0.10

0.19
0.05
0.16
0.05
0.04
0.04

62

Kainuma, M. et al.

Table 2. Price of carbon in 2010

without emissions trading
With USA
Without USA
With USA (technology)
Without USA (technology)
Without USA (boycott)Without USA (combination)with emissions trading
With USA
Without USA
With USA (technology)
Without USA (technology)
Without USA (boycott)Without USA (combination)with emissions trading and CDM
With USA
Without USA
With USA (technology)
Without USA (technology)
Without USA (boycott)Without USA (combination)
Unit: US$/t-C

Japan

USA

EU

FSU

343
337
252
247
355
260

177
0
145
0
0
0

256
250
195
191
264
200

0
0
0
0
0
0

69
25
61
23
27
25

69
0
61
0
0
0

69
25
61
23
27
25

69
25
61
23
27
25

38
10
35
9
11
11

38
0
35
0
0
0

38
10
35
9
11
11

38
10
35
9
11
11

4.3.3 Carbon leakage
Figure 6 shows CO2 emissions changes in 2010 under the "no-trading," "emissions
trading" and "emissions trading and CDM" scenarios without the USA comparedto the emissions of the reference scenario. Carbon leakage in non-Annex B
countries is observed in the no-trading scenario. Leakage in non-Annex B
countries decreases as the GDP recovers in the Annex B countries in the trading
scenario. In the "emissions trading and CDM" scenario, as the amount ofallowable emissions of the non-Annex B countries is restricted to the reference
scenario, theoretically there is no leakage. The emissions of Russia in the"trading" scenario are higher than those in the "no-trading" scenario by 0.16 Gt-C.

4. Cost Analysis of Mitigation Policies

63

CO2 emission change (%)

5
Japan

0

USA
EU

-5

EEFSU
-10

Korea
China

-15

India

-20
-25
No trading

Emissions Trading

Emissions Trading &CDM

Fig. 6. CO2 emissions changes in 2010 compared to the reference scenario

4.3.4 Major findings
The change in the GDP in 2010 to achieve the target of the Kyoto Protocol is lessthan 0.3% in any region if emissions trading is assumed. It can be said that
achievement of the target will not have a major influence on any single economy.
If it is assumed that there is a movement to boycott the goods of the non-ratifying
countries, the GDP loss will grow further. On the other hand, there is a possibilityof reducing the economic loss or even expanding the economy by promoting the
introduction of energy conservation technologies.
No ratification by the United States lowers the carbon price and decreases the
CDM incentive. In this case, total greenhouse gases will increase compared to thereference scenario.

4.4 Long-term Emissions Reduction Scenarios
4.4.1 Long-term mitigation scenarios
The economic impacts of the Kyoto Protocol have been evaluated using the AIM
model. Although the Kyoto Protocol is very important as a milestone in climate
policy, it is necessary to reduce emissions by more than the reduction target
specified by the Protocol in order to achieve the long-term goals of the UNFCCC.
Considerable efforts have been devoted to estimating the different stabilization
pathways in the post-SRES experiments (IPCC 2001a). Based on theseexperiments, stabilization of emissions pathways and economic as well as climatic
impacts were studied using the AIM model. The emissions model examines

64

Kainuma, M. et al.
300
GDP (trillion 2000US$)

ROW
250

Mexico & OPEC

200

India
China

150

EEFSU

100

Japan

50

Canada, Australia,
New ZealandEU02000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

USA

Year

CO2 emissions (million t-C)

Fig.7. Projection of the world GDP under the reference scenario

ROW

25000

Mexico & OPEC

20000

India
China

15000

EEFSU

10000

Japan
Canada, Australia,
New Zealand
EU

5000
0
50
20
60
20
70
20
80
20
90
21
00

40

20

30

20

20

20

10

20

20

20

00

USA

Year
Fig. 8. Projection of CO2 emissions under the reference scenario

several important variables such as GDP changes, energy consumption, carbon
emissions, and marginal costs. Outputs of the emissions model are fed as inputs
into the climate model. Estimated climate changes under different scenarios areused to estimate the climatic impacts on food production and infectious diseases
focusing on the Asia-Pacific region.
Atmospheric stabilization scenarios were used that limit the atmosphericconcentration of CO2 at 550 ppmv. As a reference scenario the driving forces usedby the SRES B2 scenario (IPCC 2000) were taken. It is assumed that carbon
emissions can be traded without quantitative limitations on trading cases within
the allowable emissions. The global allowable emissions are specified in the 550
ppmv scenarios and they are allocated according to the population.
Figure 7 shows a projection of the world GDP from 2000 through 2100. World
growth rates during this period vary from 1.25% to 3.16%, with an average of
2.1%. The highest is that of China, which varies from 1.5% to 6.4%. Figure 8

Total primary energy consumption (EJ)

4. Cost Analysis of Mitigation Policies

65

1600
1400

Biomass

1200

Solar
Nuclear

1000

Hydro

800

Coal

600

Gas
Oil
OIl

400
200
0
2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Year

Fig. 9. World energy demand in enduse sectors under the reference scenario

Total primary energy consumption (EJ)

1600
1400
Biomass
Solar
Nuclear
Hydro
Coal
Gas
Oil
OIl

1200
1000
800
600
400
200
0
2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Year

Fig. 10. World energy demand in enduse sectors under the WRE 550 scenario

shows a projection of world CO2 emissions. It is projected that China will become
the top CO2-emitting country after 2020. The growth rate in world CO2 emissions
will follow a downward curve, whereas that of China will increase. The growthrate in CO2 is much higher than the growth rate of the GDP in China under thisreference scenario. This is because energy efficiency in China is estimated to belower than that of the developed countries in this case.
The results of the reference scenario are compared with three 550 ppmv
scenarios. The three 550 ppmv scenarios examined are WRE 550, WGI 550, andMID 550. The WRE scenario was proposed by Wigley et al. (1995) to find the
optimal path to 550 ppmv from the economic point of view. WGI 550 is a scenario
proposed by IPCC Working Group I (IPCC 1995). It is a path aimed at avoiding
an abrupt change in emissions in achieving the 550 ppmv target. The MID 550
scenario is proposed, representing the mean of these two scenarios.
Figure 9 shows world energy demand in enduse sectors in the reference
scenario and Fig. 10 shows the results of the WRE 550 scenario. In the reference
scenario, the use of solid energy increases from 18% in 2000 to 48% in 2100, andCarbon tax (2000US$/t -C)

66

Kainuma, M. et al.
600
500

WRE 550 ppmv
WGI 550 ppmv

400

MID 550 ppmv
300
200
100
0
2000

2020

2040

2060

2080

2100

Year
Fig. 11. Projection of marginal costs to reduce emissions

more than half is used in China in 2100. The world final energy demand in the
WRE 550 scenario decreases to nearly half that in the reference scenario in 2100.
This reduction comes about mainly from cutting coal use. The share of coal in the
WRE 550 scenario becomes 29% in 2100. Electricity demand will increase in thepolicy scenarios. The share of electricity will increase from 17% in 2000 to 29 %in 2100 in WRE 550.

4.4.2 GDP changes until 2100
Figure 11 shows the projections of the marginal costs for reducing emissions. The
marginal costs for the WGI 550 scenario are the highest through the year 2060,
those of MID 550 become the highest from 2060 through 2080, and then those of
WRE 550 become the highest from 2090 onwards. Although the constraint of the
WGI 550 scenario is the severest until 2070, the marginal costs become the second
highest in 2060. The restructuring of the energy system at an early stage will
decrease the marginal costs after 2050.
Figure 12 shows the projections for GDP changes compared to the reference
scenario. The GDP loss in the WGI 550 scenario increases until 2050 and thenrecovers, while that of WRE 550 increases until 2070. The GDP loss in WRE 550
is the highest among the three 550 scenarios in 2100. This means that even if the
impact of WRE 550 is minimal for the first three decades, it will become large
later. The environmental impacts that will be discussed in Section 4.4.4 show that
if the timing of reductions is early, this will reduce the impacts compared toscenarios in which action is taken later.
Figure 13 shows the consumption changes relative to the reference scenario.
The values shown are the present discounted values for macroeconomic
consumption change with respect to the reference scenario in trillions of 2000 US
dollars through 2050. The discount rate is 5%. Consumption in India will grow at

4. Cost Analysis of Mitigation Policies

67

0.0
GDP change compared
to reference case (%)

-0.2
-0.4
-0.6
-0.8

WRE 550 ppmv

-1.0

WGI 550 ppmv

-1.2

MID 550 ppmv

-1.4
-1.6
-1.8
-2.0
2000

2020

2040

2060

2080

2100

Year

Fig. 12. Projection of GDP changes compared to the reference scenario

the highest level, especially in the WGI 550 scenario. Consumption will decline inAnnex B countries and China. The greatest decline is in the US, followed by
China, under the assumptions of the policy scenarios.

4.4.3 Global climate change

Macroeconomic consumption loss (2000US$)

The impact on the global mean temperature is shown in Figure 14. By 2100, thetemperature rises by 2.77°C compared with the 1990 value in the reference
scenario. The results of the IPCC SRES range from 1.4°C to 5.8°C (IPCC 2001b).
As the economic assumptions of the reference scenario are taken from the SRES
B2 scenario, it is lower than the average of the SRES range. While the SRES B26
4
WRE 5502

WGI 550
MID 550

0
-2
-4
-6
US

EEC

CANZ

Japan

EEFSU

China

India

Mexico &OPEC

ROWFig. 13. Present discounted value of macroeconomic consumption loss with respect tothe reference scenario (in trillion 2000 US$)

68

Kainuma, M. et al.

Global mean temperature increase
relative to 1990 value (oC)

3.0
2.5
Reference

2.0
1.5

WRE 550

1.0

WGI 550

0.5

MID 550

0.0
-0.5
-1.0
1750

1800

1850

1900

1950

2000

2050

2100

Year
Fig. 14. Temperature increases relative to the 1990 value

Sea level rise relative to1990 value (cm)60
50
Reference40

WRE 55030

WGI 550

20

MID 550

10
0
-10
1750

1800

1850

1900

1950

2000

2050

2100

Fig. 15. Rise in the sea level relative to the 1990 valueemissions range from 10.8 Gt-C to 21.8 Gt-C in 2100, the result of the reference
scenario is 21.9 Gt-C. This is because the reference scenario uses the assumptionsof population and GDP from SRES B2, but does not focus so much on
environmental sustainability.
The temperature increase in the WGI 550 scenario is the lowest, at 1.79°C in
2100. The increase in the WRE 550 scenario is 2.02°C. Although the targets ofthese two scenarios are the same, there is a 0.23°C difference in the temperature
increase in 2100. These 550 ppmv scenarios can decrease the temperature by
0.75°C to 0.98°C in 2100 compared to the reference scenario. Although themacroeconomic consumption loss of the WRE 550 scenario is lower than that of
the WGI 550 scenario, its impact on climate change is greater.
The globally averaged sea level rise relative to that of 1990 is shown in Figure
15. It ranges from 40 cm to 52 cm. The global sea level in 2100 is projected to riseby 9 cm to 88 cm for the full range of SRES scenarios. The sea level in the WRE
550 scenario rises higher by 3.9 cm than that in the WGI 550 scenario.

4. Cost Analysis of Mitigation Policies

69

4.4.4 Potential impacts in the Asian region

Sc

ce
eren
Ref RE550 0
W GI 55 0
W ID 55
M
ar
en

io

ar
nm ia
ya od
M mb sia
Ca alay ines
M lipp di n
Ph aila DR sh
Th o P ade
La nglBa pal am
Ne et N ka
Vi Lani
Sr dia sia
In oned
In utan
Bh iwan PR
Ta ea Dicr
bl
Ko ina
pu
Re
Ch
rea
Ko n
pa
Ja

-100
-90
-80
-70
-60
-50
-40
-30
-20
-10
0

Change of productivity (%)

Climate change has direct or potential impacts on water resources, agricultural
production, natural ecosystems, and human health, even if socioeconomic
interactions are ignored. In the real world, global trade, immigration, andmeasures for adaptation modify the direct impacts. Hence, there are two stages of
the impact study: the direct and indirect stages. In this study, the direct impacts
under the reference and 550 ppmv scenarios were considered.
Figure 16 shows the changes in winter wheat productivity in 2100 compared to1990. The productivity of wheat will decline significantly in Sri Lanka, Malaysia,
Korea-PDR, Burma, and other tropical countries.
Figure 17 shows changes in rice productivity in 2100 compared to 1990 under
the reference and 550 ppmv scenarios. A slight decrease in rice production is
expected in most countries, while a slight increase is expected in Bhutan andTaiwan. The productivity decline in India is projected to be the highest.
Air and water pollution, as well as solid and hazardous wastes, affect humanhealth directly. Global climate change will also affect human health in the future
in many ways. For example, global warming will result in increasing temperaturesand changing vegetation close to the ground. This will allow expansion of thehabitat of the anopheles mosquito, which is the malaria vector. In addition, thedevelopment period of the malaria protozoa will shorten and their reproductive
potential will increase. As a result, it is expected that the global risk of a higher
incidence of malaria will increase.

Fig. 16. Change in winter wheat productivity from 1990 to 2100 (see color plates)

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Kainuma, M. et al.

50
40
30
20

o
ari
en
Sc

ce
eren
Ref RE550 0
W GI 55 50
W ID 5Mnuta n
Bh iwaTahinaC an sia
Japdone am sh
In et N ade
Viangl DPR ublic
B rea epKo rea R R
Ko o PD dia
La mboCa pal ka
Ne Lan ar
Sri anmay
M laysi es
Ma p inilip
Ph iland
a
Th ia
Ind

10
0
-10
-20

Change of productivity (%)

60

Fig. 17. Change in rice productivity from 1990 to 2100

Figure 18 shows the changes in the populations living where there is endemic
malaria. The risk of a higher incidence of malaria in China, Nepal, Taiwan,
Indonesia, and Sri Lanka will increase due to the environmental changes.
Although China may be little affected by climate change in terms of foodproductivity, the impact it will experience in terms of malaria risk will be thegreatest in the Asian region. Even under the 550 scenarios, the population living inareas at risk will double in 2100 compared to 1990.

4.4.5 Major findings
Several climate change stabilization pathways are examined by the AIM model.
An urgent task is to take action to combat global warming as it is an irreversible
process and, once it occurs, the probability is very high that it will have multipliereffects that will further expand its impact. It is necessary to consider the many
uncertainties involved in human activities such as population growth, economic
development, and technological innovation, as well as uncertainties in naturalprocesses to estimate future CO2 emissions and to make plans for climate
stabilization. The scenario approach is a practical means of analyzing the policy
options under such uncertainties.
Although the emissions of developing countries were lower than those ofdeveloped countries in 2000, it is expected that they will grow much faster thanthose of developed countries in the future. The estimated impacts on developing
countries in the Asian region are serious. The model projects that the early
implementation of emissions reductions can minimize the scale of such impacts inthe future.

4. Cost Analysis of Mitigation Policies

71

200

150

100
50
c

Change of malaria risk (%)

250

0

ri
na
o

ina
Ch pal n
Naeiwa esia
T don nka
In i La dSr ailanmar
Th yanM dia am
In t Ne
Vi utan R
Bh PD PR lico
La rea D epub
Ko ea R
r
Ko an
h
es
p
Ja ladiang
Ba bodm
Ca ysia s
ala ine
pp
ili
Ph
M

e
Sc

ce
eren
Ref RE550 0
W G I 55 0
W D 55MI

Fig. 18. Change in population living in areas at high malaria risk from 1990 to 2100 (seecolor plates)

4.5 Concluding Remarks
Without the Kyoto target, the global temperature will increase by more than 2°C
in 2100. In such a case, severe impacts of climate change can be predicted on
agricultural productions and human health.
It is predicted that ratification of the Kyoto Protocol may have negative
economic impacts. However, there are several ways to mitigate these economic
impacts as well as possibilities for promoting the growth of economies. For
example, if investments are shifted to energy-saving technologies, there is a highlikelihood of improving the economy. It is found that the GDP will increase if theprice-inducing mechanism is enhanced and the CDM is introduced.

References
IPCC (1995) Climate Change 1995. Cambridge University Press
IPCC (2000) Special Report on Emissions Scenarios. Cambridge University Press
IPCC (2001a) Climate Change 2001, Mitigation. Cambridge University Press
IPCC (2001b) Climate Change 2001, The Scientific Basis. Cambridge University Press
Kainuma M, Matsuoka Y, Morita T (1999) Analysis of post-Kyoto scenarios: the AsianPacific Integrated Model. Special Issue of The Energy Journal, The Costs of the

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Kyoto Protocol: a Multi-Model Evaluation, pp207-220
Wigley TML, Richels R, Edmonds JA (1995) Economic and environmental choices in thestabilization of CO2 concentrations: choosing the “right” emissions pathway. Nature,
379: 240-243