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Liability for carbon emissions literature review

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This literature review supported the following publication:

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* Negin Heidari & Joshua M. Pearce. A Review of Greenhouse Gas Emission Liabilities as the Value of Renewable Energy for Mitigating Lawsuits for Climate Change Related Damages. Renewable and Sustainable Energy Reviews 55C (2016) pp. 899-908. DOI: 10.1016/j.rser.2015.11.025 open access

Contents

GHG Emission Liability[edit]

Future flood losses in major coastal cities[1][edit]

Abstract Flood exposure is increasing in coastal cities1, 2 owing to growing populations and assets, the changing climate3, and subsidence4, 5, 6. Here we provide a quantification of present and future flood losses in the 136 largest coastal cities. Using a new database of urban protection and different assumptions on adaptation, we account for existing and future flood defences. Average global flood losses in 2005 are estimated to be approximately US$6 billion per year, increasing to US$52 billion by 2050 with projected socio-economic change alone. With climate change and subsidence, present protection will need to be upgraded to avoid unacceptable losses of US$1 trillion or more per year. Even if adaptation investments maintain constant flood probability, subsidence and sea-level rise will increase global flood losses to US$60–63 billion per year in 2050. To maintain present flood risk, adaptation will need to reduce flood probabilities below present values. In this case, the magnitude of losses when floods do occur would increase, often by more than 50%, making it critical to also prepare for larger disasters than we experience today. The analysis identifies the cities that seem most vulnerable to these trends, that is, where the largest increase in losses can be expected.

Attribution of Weather and Climate-Related Events[2][edit]

Abstract

Unusual or extreme weather and climate-related events are of great public concern and interest, yet there are often conflicting messages from scientists about whether such events can be linked to climate change. There is clear evidence that climate has changed as a result of human-induced greenhouse gas emissions, and that across the globe some aspects of extremes have changed as a result. But this does not imply that human influence has significantly altered the probability of occurrence or risk of every recently observed weather or climate-related event, or that such events are likely to become significantly more or less frequent in the future. Conversely, it is sometimes stated that it is impossible to attribute any individual weather or climate-related event to a particular cause. Such a statement can be interpreted to mean that human-induced climate change could never be shown to be at least partly responsible for any specific weather event, either the probability of its occurrence or its magnitude. There is clear evidence from recent case studies that individual event attribution is a feasible, if challenging, undertaking.

We propose a way forward, through the development of carefully calibrated physically-based assessments of observed weather and climate-related events, to identify changed risk of such events attributable to particular factors including estimating the contributions of factors to event magnitude. Although such event-specific assessments have so far only been attempted for a relatively small number of specific cases, we describe research under way, coordinated as part of the international Attribution of Climate-related Events (ACE) initiative, to develop the science needed to better respond to the demand for timely, objective, and authoritative explanations of extreme events. The paper considers the necessary components of a prospective event attribution system, reviews some specific case studies made to date (Autumn 2000 UK floods, summer 2003 European heatwave, annual 2008 cool US temperatures, July 2010 Western Russia heatwave) and discusses the challenges involved in developing systems to provide regularly updated and reliable attribution assessments of unusual or extreme weather and climate-related events.


Contributing to local policy making on GHG emission reduction through inventorying and attribution: A case study of Shenyang, China[3][edit]

AbstractCities consumed 84% of commercial energy in China, which indicates cities should be the main areas for GHG emissions reduction. Our case study of Shenyang in this paper shows how a clear inventory analysis on GHG emissions at city level can help to identify the major industries and societal sectors for reduction efforts so as to facilitate low-carbon policy-making. The results showed total carbon emission in 2007 was 57 Mt CO2 equivalents (CO2e), of which 41 Mt CO2e was in-boundary emissions and 16 Mt CO2e was out-of-boundary emissions. The energy sector was dominant in the emission inventory, accounting for 93.1% of total emissions. Within energy sector, emissions from energy production industry, manufacturing and construction industry accounted for 88.4% of this sector. Our analysis showed that comparing with geographical boundary, setting system boundary based on single process standard could provide better information to decision makers for carbon emission reduction. After attributing electricity and heating consumption to final users, the resident and commercial sector became the largest emitter, accounting for 28.5% of total emissions. Spatial analysis of emissions showed that industrial districts such as Shenbei and Tiexi had the large potential to reduce their carbon emissions. Implications of results are finally discussed.

  • The ideal scope for accounting GHG emissions should include single process and production chain emissions
  • Cities consume about three-fourth of global energy and emit about three-fourth of anthropogenic GHGs
  • Most protocols and methods focus on accounting the total amount of GHG emissions but are not specifically designed in a manner that fits local statistical data for inventorying and facilitates urban decision makers to prepare their low carbon development policies
  • local governments need to understand not only the total emission picture but also detailed emission perspectives from different industrial and societal sector and different geographical areas
  • Inventorying GHG emissions of cities requires a specific definition of system boundary within which emissions are counted
  • To reduce the total carbon emission, various efforts should be made by considering the local realities, including urban energy structure optimization, industrial structure changes, full implementation of circular economy and capacity-building initiatives

Anthropogenic greenhouse gas contribution to UK autumn flood risk[4][edit]

  • A probabilistic event attribution framework is used to estimate the contribution of anthropogenic greenhouse gas emissions which involves comparing an unprecedented number of daily river runoff realisations for the region, under Autumn 2000 scenarios both with and without emissions
  • Realisations are produced using publicly volunteered distributed computing power to generate several thousands seasonal forecast resolution climate model simulations that are then fed into a precipitation runoff model

The Detection and Attribution of Human Influence on Climate[5][edit]

AbstractThis article describes the field of the detection and attribution of cli-mate change and highlights recent progress, major issues, and future directions. The attribution of global temperature variations over the past century to a combination of anthropogenic and natural influences is now well established, with the anthropogenic factors dominating.Other aspects of the climate system, including regional quantities, are increasingly being found to also show a detectable signal of human influence. Of particular interest, though, is the attribution of changes in nonmeteorological quantities, such as hydrological and ecological measures, and of changes in the risk of extreme weather events to an-thropogenic emissions. Methods are being developed for tackling these two problems but are still in the early stages. As the field gradually includes a service focus, the biggest challenges will become the integration of various approaches into an overall framework and the communication of the capabilities and limitations of that framework to the outside community.

  • The initial tasks of detection and attribution studies were to determine if the global climate was warming and to determine the cause of any detected change
  • The risk of damaging weather events is often the most visible and influential aspect of climate change
  • Surface air temperature is the first quantity to be studied in the detection and attribution field because it is well monitored, it is well understood, and it is the first variable to respond to most external influences especially greenhouse gases
  • Accurate representation of synoptic frontal systems, needed for examining precipitation in many regions, requires a climate model to be run at such a high resolution that the traditional regression approach is infeasible

A three-perspective view of greenhouse gas emission responsibilities in New Zealand[6][edit]

AbstractWhile responsibility for the environmental impacts of production has been commonly assigned to producers, production is driven by consumer demand, and it is valid to question whether impacts should instead be assigned to consumers. However, in each of these approaches producers and consumers either bear the full burden of responsibility or none at all. An example of this is the Kyoto Protocol, where all greenhouse gas emissions areassigned to the producer and no consideration is given to where goods are finally consumed.Rather than taking the conventional producer or consumer responsibility approach, a third perspective is possible in which responsibility is shared. We use input–output analysis to apply all three of these responsibility perspectives to New Zealand's domestic greenhouse gas emissions. Our main findings from the shared responsibility approach are that New Zealand producers are responsible for 44% of domestic emissions, New Zealand consumers take 28%, and 27% are exported. A shared responsibility approach appears to distribute the burden of responsibility and associated liability between parties more fairly,and is likely to be more widely acceptable than pure producer or consumer perspectives.

International Liability as an Instrument to Prevent and Compensate for Climate Change[7][edit]

Abstract In this Article, we will examine some of the fundamental questions that would arise in litigation on liability for climate change, covering both domestic and international liability law. We will sketch some of the questions and issues that would have to be dealt with when a potential liability suit is brought. On a practical level, this Article is an attempt to explore the issues and set the agenda for those who wish to pursue such a liability suit. On a more fundamental level, our paper examines the power and limits of liability law to address such a highly complex and transnational issue as climate change.

Liability for Climate Change: The Benefits, the Costs, and the Transaction Costs[8][edit]

  • Liability for climate change has several advantages: it could generate knowledge about the size and probability of economic damages, and it could create institutions to minimize these costs, such as insurance
  • Liability for climate change would be extremely expensive not only in terms of insurance costs but also in terms of transaction costs
  • The sum of damage costs and transaction costs per ton of carbon could thus range from $2 to $120 per ton of carbon, depending on how the duty of care is established, what type of accountability rule applies, how damages are awarded, and the size and type of transaction costs involved
  • If the United States were to establish a crushingly expensive regime ascribing liability to individual polluters, there would be a serious incentive to relocate GHG intensive industries to to countries such as China and India, which have no or almost no restrictions on GHG emissions and no liability for climate-related damages

Research for Deployment: Incorporating Risk, Regulation, and Liability for Carbon Capture and Sequestration[9][edit]

Abstract Carbon capture and sequestration (CCS) has the potential to enable deep reductions in global carbon dioxide (CO2) emissions, however this promise can only be fulfilled with large-scale deployment. For this to happen, CCS must be successfully embedded into a larger legal and regulatory context, and any potential risks must be effectively managed. We developed a list of outstanding research and technical questions driven by the demands of the regulatory and legal systems for the geologic sequestration (GS) component of CCS. We then looked at case studies that bound uncertainty within two of the research themes that emerge. These case studies, on surface leakage from abandoned wells and groundwater quality impacts from metals mobilization, illustrate how research can inform decision makers on issues of policy, regulatory need, and legal considerations. A central challenge is to ensure that the research program supports development of general regulatory and legal frameworks, and also the development of geological, geophysical, geochemical, and modeling methods necessary for effective GS site monitoring and verification (M&V) protocols, as well as mitigation and remediation plans. If large-scale deployment of GS is to occur in a manner that adequately protects human and ecological health and does not discourage private investment, strengthening the scientific underpinnings of regulatory and legal decision-making is crucial.

Climate Change: What Are Local Governments Liable for?[10][edit]

The detection and attribution of climate change using an ensemble of opportunity[11][edit]

Abstract The detection and attribution of climate change in the observed record play a central role in synthesizing knowledge of the climate system. Unfortunately, the traditional method for detecting and attributing changes due to multiple forcings requires large numbers of general circulation model (GCM) simulations incorporating different initial conditions and forcing scenarios, and these have only been performed with a small number of GCMs. This paper presents an extension to the fingerprinting technique that permits the inclusion of GCMs in the multisignal analysis of surface temperature even when the required families of ensembles have not been generated. This is achieved by fitting a series of energy balance models (EBMs) to the GCM output in order to estimate the temporal response patterns to the various forcings.

This methodology is applied to the very large Challenge ensemble of 62 simulations of historical climate conducted with the NCAR Community Climate System Model version 1.4 (CCSM1.4) GCM, as well as some simulations from other GCMs. Considerable uncertainty exists in the estimates of the parameters in fitted EBMs. Nevertheless, temporal response patterns from these EBMs are more reliable and the combined EBM time series closely mimics the GCM in the context of transient forcing. In particular, detection and attribution results from this technique appear self-consistent and consistent with results from other methods provided that all major forcings are included in the analysis.

Using this technique on the Challenge ensemble, the estimated responses to changes in greenhouse gases, tropospheric sulfate aerosols, and stratospheric volcanic aerosols are all detected in the observed record, and the responses to the greenhouse gases and tropospheric sulfate aerosols are both consistent with the observed record without a scaling of the amplitude being required. The result is that the temperature difference of the 1996–2005 decade relative to the 1940–49 decade can be attributed to greenhouse gas emissions, with a partially offsetting cooling from sulfate emissions and little contribution from natural sources.

The results support the viability of the new methodology as an extension to current analysis tools for the detection and attribution of climate change, which will allow the inclusion of many more GCMs. Shortcomings remain, however, and so it should not be considered a replacement to traditional techniques.

Climate change, insurability of large-scale disasters and the emerging liability challenge[12][edit]

Abstract This paper focuses on the interaction between uncertainty and insurability in the context of some of the risks associated with climate change. It discusses the evolution of insured losses due to weather-related disasters over the past decade, and the key drivers of the sharp increases in both economic and insured catastrophe losses over the past 20 years. In particular we examine the impact of development in hazard-prone areas and of global warming on the potential for catastrophic losses in the future. In this context we discuss the implications for insurance risk capital and the capacity of the insurance industry to handle large-scale events. A key question that needs to be addressed is the factors that determine the insurability of a risk and the extent of coverage offered by the private sector to provide protection against extreme events where there is significant uncertainty surrounding the probability and consequences of a catastrophic loss. We discuss the concepts of insurability by focusing on coverage for natural hazards, such as earthquakes,hurricanes and floods. The paper also focuses on the liability issues associated with global climate change, and possible implications for insurers (including D&O), given the difficulty in identifying potential defendants, tracing harm to their actions and apportioning damages among them. The paper concludes by suggesting ways that insurers can help mitigate future damages from global climate change by providing premium reductions and rate credits to companies investing in risk-reducing measures.

  • Catastrophe models and exceedance probability (EP) curves are useful decision aids for determining whether extreme events, such as natural disasters, are insurable risks
  • Even after utilizing the outputs from catastrophic models there is an uncertainty in the estimates of the likelihood and consequences of specific events
  • Data bases suggest ways that insurance coupled with other policy tools can reduce the risk associated with climate change while providing the financial resources to aid the recovery process when the next large-scale disaster occurs

Basic Compensation for the Victims of Climate Change[13][edit]

  • For compensation scheme designation, two types of impacts can be put aside like the impacts that are less likely to be clearly identifiable as impacts of climate change, and climate surprises, catastrophic events that are unlikely to happen, such as the collapse of Antarctic ice cap.
  • Methods of compensation are private insurance, litigation against responsible private parties, and gaining compensation from government.
  • Types of institutional framework that should be utilized for damage assessment and awarding compensation are: 1)Litigation, 2)Administrative Adjudication, 3)Grants, 4)Declaratory relief

Data access and analysis with distributed federated data servers in climate< i> prediction</i>. net[14][edit]

Abstract climateprediction.net is a large public resource distributed scientific computing project. Members of the public download and run a full-scale climate model, donate their computing time to a large perturbed physics ensemble experiment to forecast the climate in the 21st century and submit their results back to the project. The amount of data generated is large, consisting of tens of thousands of individual runs each in the order of tens of megabytes. The overall dataset is, therefore, in the order of terabytes. Access and analysis of the data is further complicated by the reliance on donated, distributed, federated data servers. This paper will discuss the problems encountered when the data required for even a simple analysis is spread across several servers and how webservice technology can be used; how different user interfaces with varying levels of complexity and flexibility can be presented to the application scientists, how using existing web technologies such as HTTP, SOAL, XML, HTML and CGI can engender the reuse of code across interfaces; and how application scientists can be notified of their analysis' progress and results in an asynchronous architecture.

The End-to-End Attribution Problem: From Emissions to Impacts[15][edit]

Abstract When a damaging extreme meteorological event occurs, the question often arises as to whether that event was caused by anthropogenic greenhouse gas emissions. The question is more than academic, since people affected by the event will be interested in recurring damages if they find that someone is at fault. However, since this extreme event could have occurred by chance in an unperturbed climate, we are currently unable to properly respond to this question. A solution lies in recognising the similarity with the cause-effect issue in the epidemiological field. The approach there is to consider the changes in the risk of the event occurring as attributable, as against the occurrence of the event itself. Inherent in this approach is a recognition that knowledge of the change in risk as well as the amplitude of the forcing itself are uncertain. Consequently, the fraction of the risk attributable to the external forcing is a probabilistic quantity. Here we develop and demonstrate this methodology in the context of the climate change problem.

  • The risk represents statistical information on the occurrence of the event, and it can be viewed as being related to the forcing in a deterministic sense
  • The implication is that risk, just like climate, can be quite predictable since it depends only on knowledge of future external forcing, while event occurrence and weather are less predictable since they depend strongly on the initial conditions
  • The probabilities are uncertain since they are estimated from finite samples and the individual samples themselves are only approximations of the true system
  • A step function is assumed for damage function, i.e. either the event does or does not occur

Unilateral regulation of bilateral trade in greenhouse gas emission permits[16][edit]

Abstract This paper considers the coordination of domestic markets for tradable emission permits where countries determine their own emission reduction targets, using a two-country model. Linking such schemes is beneficial to both countries but may cause the exporting country to decrease its emission reduction target and export more permits. This in turn would not only reduce the costs for both countries as less emissions have to be reduced, but it also lowers the environmental benefits of the importing country.

One price instrument (tariff) and two quantity instruments (discount, quota) to prevent the exporting country from issuing more permits are examined. Each instrument restricts trade and alters the terms of trade for the two countries. The importing country (and regulator) prefers an import tariff and an import quota to a carbon discount. If the exporting country releases additional permits, the importing country should not try to keep total emissions constant, as that would be ineffective and maybe even counterproductive. Instead, the importing country should aim to keep the total import constant; this would impose costs on the exporting country that are independent of the policy instrument; an import quota would be the cheapest option for the importing country. An import quota would also stress the idea of supplementary of the flexible mechanism as it increases the share of emissions reduced domestically. Compliance and liability issues constrain the market further. However, both the importing and the exporting country would prefer that the permit seller is liable in case of non-compliance, as sellers' liability would less constrain the market.

  • Each firm would have to demonstrate to the regulator that its actual emissions do not exceed its total amount of permits
  • If a firm is out of compliance because it has sold too much, that is the problem of that firm and not a problem of the firms it has traded with
  • The regulating company can regulate the market with price and quantity instruments and this can be done to smoothen regulatory differences between the countries

The End-to-End Attribution Problem: From Emissions to Impacts[17][edit]

AbstractWhen a damaging extreme meteorological event occurs, the question often arises as to whether that event was caused by anthropogenic greenhouse gas emissions. The question is more than academic, since people affected by the event will be interested in recurring damages if they find that someone is at fault. However, since this extreme event could have occurred by chance in an unperturbed climate, we are currently unable to properly respond to this question. A solution lies in recognising the similarity with the cause-effect issue in the epidemiological field. The approach there is to consider the changes in the risk of the event occurring as attributable, as against the occurrence of the event itself. Inherent in this approach is a recognition that knowledge of the change in risk as well as the amplitude of the forcing itself are uncertain. Consequently, the fraction of the risk attributable to the external forcing is a probabilistic quantity. Here we develop and demonstrate this methodology in the context of the climate change problem.

Red Dawn, Blue Thunder, Purple Rain: Corporate Risk of Liability for Global Climate Change and the SEC Disclosure Dilemma[18][edit]

  • Death and spread of disease in vulnerable populations are of consequences of global warming
  • Shareholders started to mobilize for reducing greenhouse gases because of the risks that a shareholder might face by selecting a portfolio that is rich in GHG producing activities.

Potential applications of renewable energy sources, biomass combustion problems in boiler power systems and combustion related environmental issues[19][edit]

AbstractThis paper describes the potential applications of renewable energy sources to replace fossil fuel combustion as the prime energy sources in various countries, and discusses problems associated with biomass combustion in boiler power systems. Here, the term biomass includes organic matter produced as a result of photosynthesis as well as municipal, industrial and animal waste material. Brief summaries of the basic concepts involved in the combustion of biomass fuels are presented. Renewable energy sources (RES) supply 14% of the total world energy demand. RES are biomass, hydropower, geothermal, solar, wind and marine energies. The renewables are the primary, domestic and clean or inexhaustible energy resources. The percentage share of biomass was 62.1% of total renewable energy sources in 1995. Experimental results for a large variety of biomass fuels and conditions are presented. Numerical studies are also discussed. Biomass is an attractive renewable fuel in utility boilers. The compositions of biomass among fuel types are variable. Ash composition for the biomass is fundamentally different from ash composition for the coal. Especially inorganic constituents cause to critical problems of toxic emissions, fouling and slagging. Metals in ash, in combination with other fuel elements such as silica and sulfur, and facilitated by the presence of chlorine, are responsible for many undesirable reactions in combustion furnaces and power boilers. Elements including K, Na, S, Cl, P, Ca, Mg, Fe, Si are involved in reactions leading to ash fouling and slagging in biomass combustors. Chlorine in the biomass may affect operation by corrosion. Ash deposits reduce heat transfer and may also result in severe corrosion at high temperatures. Other influences of biomass composition are observed for the rates of combustion and pollutant emissions. Biomass combustion systems are non-polluting and offer significant protection of the environment. The reduction of greenhouse gases pollution is the main advantage of utilizing biomass energy.

Estimating the price of tradable permits for greenhouse gas emissions in 2008–12[20][edit]

Abstract Many attempts have been made recently to predict the prices of tradable permits for greenhouse gas (GHG) emissions in the first commitment period of the Kyoto Protocol (2008–12). In this paper, we attempt to refine these price estimates based on (i) the results of economic models and identification of factors which influence prices but are not fully reflected in the models, (ii) lessons from price forecasting experience in the US sulfur dioxide market, and (iii) current price data from the nascent international market for GHG permits. We expect GHG permit prices to be at the lower end of the broad spectrum of existing predictions. This implies, among other things, that resource transfers to developing countries associated with emissions trading will be relatively low. Nevertheless, even a modest price will have a significant influence on the decisions of consumers and investors in energy markets around the world.

Climate Change: It's Not Just a Policy Issue for Corporate Counsel - It's a Legal Problem[21][edit]

  • The Kyoto Protocol provides three market-based mechanisms:1) emissions trading 2)joint implementation 3) the clean development mechanism
  • Development of a climate change action plan requires minimum components as follow: 1. Preparation of inventory of past and present carbon emissions 2. Enrollment in a registry 3. Ongoing accounting systems for carbon 4. Political attentiveness 5. SEC reporting 6. Public and private assistance

Human contribution to the European heatwave of 2003[22][edit]

  • It is possible to estimate by how much human activity may have increased the risk of the occurrence of extreme weather events
  • First the origins of long term changes in decadal-mean European summer temperatures have been investigated, determining the changes attributable to anthropogenic drivers of the climate system and changes attributable to natural drivers, then we estimate how the risk of mean June-August temperatures exceeding a particular extreme threshold in any individual summer has changed as a result of this anthropogenic interference in the climate system
  • A necessary requirement for any detection of significant warming is that HadCM3 adequately represents the natural internal variability of European summer temperatures
  • A set of speckle-tracking algorithms is used to determine the 1992,1994, 1995 and 2000 velocities from 1-24-day image pairs. Speckle tracking uses the displacement of the correlated speckle patterns in pairs of SAR images to derive ice motion estimates
  • The 2001 through 2003 estimates were derived using the IMCORR feature-tracking software applied to 16-to-64-day Landsat image pairs
  • Established methods were applied to passive microwave data to determine the 2002 melt extent

The blame game[23][edit]

  • More than half the risk of the heatwave occured in 2003 was due to human influence, specially greenhouse gases
  • The critical issue is working out who will pay the cost of adaptation, and compensation for those who cannot adapt

Liability for climate change[24][edit]

  • In order to produce an equitable distribution of liability the concept of averaging over possibilities has been used
  • It is impossible to say that how much the human influence has contributed to an actual weather event
  • We are facing some challenges in tracking down who has emitted what, and where liability lies

WARMING UP TO A NOT-SO-RADICAL IDEA: TORT-BASED CLIMATE CHANGE LITIGATION[25][edit]

  • Plaintiffs could seek for compensation for the damages that might occur in the future as a result of climate change
  • Courts have been reluctant to award damages for future injuries
  • Some actions taken for future damages mitigation are: building sea-walls, relocating structures, and raising the land
  • Another damage claim that plaintiffs might assert is the need for a system to monitor and provide advance warning of the onset of harm to roads and buildings, which could make repairs significantly easier and less expensive
  • The casual change in climate change tort suit would likely look something like following:1) companies produce fuel, power, engines, and other products;2)consumer use of these goods and products generate carbon dioxide emissions, which rise into atmosphere; 3)the emissions combine with other greenhouse gas emissions to warm the air via greenhouse gas effect; 4) this warming causes sea level to rise , permafrost to thaw, and sea ice to melt and thin; and 5) these effects cause damage to plaintiff's property
  • Climate change plaintiffs might seek to bring a warning defect claim against defendants for failure to warn users of the climate changing dangers of their products' carbon dioxide emissions

The market for tradable GHG permits under the Kyoto Protocol: a survey of model studies[26][edit]

Abstract This paper gathers results from 25 models of the market for tradable greenhouse gas (GHG) emission permits under the Kyoto Protocol. Due to diverging projections of emissions growth and different modeling approaches, the model results differ substantially. The average market volume is approximately 17 and 33 billion USD under global trading and Annex B trading, respectively. Including non-carbon GHG lowers compliance costs and permit prices. In the absence of the US, permit demand roughly equals ‘hot air’ from the former Soviet Union. These countries can increase their revenues from selling permits by restricting supply, which raises the permit price.

Buyer liability and voluntary inspections in international greenhouse gas emissions trading: a laboratory study[27][edit]

AbstractThis paper reports a preliminary laboratoryexperiment in which traders make investments toincrease the reliability of tradableinstruments that represent greenhouse gasemissions allowances. In one half of thesessions these investments are unobservable,while in the other half traders can invitecostless and accurate inspections that makereliability investments public. We implement abuyer liability rule, so that if emissionsreductions are unreliable (i.e., sellersdefault), the buyer of the allowances cannotredeem them to cover emissions. We find thatallowing inspections significantly increasesthe reliability investment rate and overallefficiency. Prices of uninspected allowancesusually trade at a substantial discount due tothe buyer liability rule, which provides astrong market incentive for sellers to investin reliability.

  • Emissions trading can reduce the overall cost of implementing emission reduction because the reductions would occur where they are the cheapest
  • Buyer beware liability rule may be effective in using market incentives to help deter seller noncompliance, under this rule an allowance buyer bears the risk that the issuing party may not be in compliance
  • Sold allowances would be returned to the issuer if she is not in compliance, so the buyer would not be able to use the purchased allowances to offset his own emissions
  • This buyer beware liability encourages buyers to purchase allowances from sellers who are most likely to comply
  • In a buyer beware setting the allowances issued by different sellers are likely to trade at different prices
  • The market prices reflect the noncompliance risk and these prices provide incentives for sellers to meet their emission reduction commitments
  • To obtain high prices an allowance seller would like to assure buyers that she will be in compliance
  • If traders make a costly investment in emission control they can substantially reduce the likelihood that they are out of compliance
  • Allowance sellers are more likely to invest in abatement reliability when they can allow inspectors to verify their investment, and this increases the allocative efficiency of the emissions and output market

Estimating signal amplitudes in optimal fingerprinting, part I: theory[28][edit]

AbstractThere is increasingly clear evidence that human influence has contributed substantially to the large-scale climatic changes that have occurred over the past few decades. Attention is now turning to the physical implications of the emerging anthropogenic signal. Of particular interest is the question of whether current climate models may be over- or under-estimating the amplitude of the climate system's response to external forcing, including anthropogenic. Evidence of a significant error in a model-simulated response amplitude would indicate the existence of amplifying or damping mechanisms that are inadequately represented in the model. The range of uncertainty in the factor by which we can scale model-simulated changes while remaining consistent with observed change provides an estimate of uncertainty in model-based predictions. With any model that displays a realistic level of internal variability, the problem of estimating this factor is complicated by the fact that it represents a ratio between two incompletely known quantities: both observed and simulated responses are subject to sampling uncertainty, primarily due to internal chaotic variability. Sampling uncertainty in the simulated response can be reduced, but not eliminated, through ensemble simulations. Accurate estimation of these scaling factors requires a modification of the standard "optimal fingerprinting" algorithm for climate change detection, drawing on the conventional "total least squares" approach discussed in the statistical literature. Code for both variants of optimal fingerprinting can be found on http://www.climateprediction.net/detection.

On National and International Trade in Greenhouse Gas Emission Permits[29][edit]

Abstract This paper considers the question under what conditions domestic markets of emission permits would and should merge to become an international market. Emission permits are licenses, and so governments would need to recognize other countries’ permits. In a two-county model, we find that it is in both countries’ interests to form an international market, and it may even be beneficial to the environment. Three different policy instruments of the importing country are examined, namely a price instrument (tariff) and two quantity instruments (discount and import quota). All instruments restrict trade. The importing country (and regulator) prefers an import tariff and an import quota to a carbon discount. If the exporting country releases additional permits, the importing country should not try to keep total emissions constant, as that would be ineffective if not counterproductive. Instead, the importing country should aim to keep the total import constant; this would impose costs on the exporting country that are independent of the policy instrument; an import quota would be the cheapest option for the importing country. Compliance and liability issues constrain the market further. However, both the importing and the exporting country would prefer that the permit seller is liable in case of non-compliance, as sellers’ liability would less constrain the market.

Equity, greenhouse gas emissions, and global common resources[30][edit]

  • With a commitment to equal per capita allocations, a global emissions cap covering developing and developed countries becomes possible, with enormous associated advantages
  • Per capita entitlements would eliminate the incentive for developing countries to delay reductions in emissions in order to increase their claim to atmospheric space
  • A transition to an agreement based on equal per capita rights would help us to stabilize atmospheric GHG concentration at lower levels and to limit the risks of dangerous climate change

Quantifying the risk of extreme seasonal precipitation events in a changing climate[31][edit]

AbstractIncreasing concentrations of atmospheric carbon dioxide will almost certainly lead to changes in global mean climate1. But because—by definition—extreme events are rare, it is significantly more difficult to quantify the risk of extremes. Ensemble-based probabilistic predictions2, as used in short- and medium-term forecasts of weather and climate, are more useful than deterministic forecasts using a 'best guess' scenario to address this sort of problem3, 4. Here we present a probabilistic analysis of 19 global climate model simulations with a generic binary decision model. We estimate that the probability of total boreal winter precipitation exceeding two standard deviations above normal will increase by a factor of five over parts of the UK over the next 100 years. We find similar increases in probability for the Asian monsoon region in boreal summer, with implications for flooding in Bangladesh. Further practical applications of our techniques would be helped by the use of larger ensembles (for a more complete sampling of model uncertainty) and a wider range of scenarios at a resolution adequate to analyse average-size river basins.

Implementing greenhouse gas trading in Europe: lessons from economic literature and international experiences[32][edit]

AbstractThe European Commission (document COM (2001) 581) has recently presented a directive proposal to the European Parliament and Council in order to implement a greenhouse gas emission trading scheme. If this proposal survives the policy process, it will create the most ambitious trading system ever implemented. However, the legislative process is an opportunity for various interest groups to amend environmental policies, which as a result generally deviate further from what economic literature proposes. A close look at implemented emission trading schemes, stressing their discrepancies with economic literature requests, is thus useful to increase the chances of forthcoming emission trading schemes to go through the political process. We thus review ten emission trading systems, which are either implemented or at an advanced stage of the policy process. We draw attention to major points to be aware of when designing an emission trading system: sectoral and spatial coverage, permits allocation, temporal flexibility, trading organisation, monitoring, enforcement, compliance, and the harmonisation vs. subsidiarity issue. The aim is to evaluate how far experiences in emission trading move away from theory and why. We then provide some lessons and recommendations on how to implement a greenhouse gas emission trading program in Europe. We identify some pros of the Commission proposal (spatial and sectoral coverage, temporal flexibility, trading organisation, compliance rules), some potential drawbacks (allocation rules, monitoring and enforcement) and items on which further guidance is needed (monitoring and allocation rules). Lastly, the European Commission should devote prominent attention to the US NOX Ozone Transport Commission budget program, as the only example of integration between the federal and state levels.

Does the Market Value Environmental Performance?[33][edit]

Abstract Previous studies that attempt to relate environmental to financial performance have often led to conflicting results due to small samples and subjective environmental performance criteria. We report on a study that relates the market value of firms in the S&P 500 to objective measures of their environmental performance. After controlling for variables traditionally thought to explain firm-level financial performance, we find that bad environmental performance is negatively correlated with the intangible asset value of firms. The average ‘intangible liability’ for firms in our sample is $380 million—approximately 9% of the replacement value of tangible assets. We conclude that legally emitted toxic chemicals have a significant effect on the intangible asset value of publicly traded companies. A 10% reduction in emissions of toxic chemicals results in a $34 million increase in market value. The magnitude of these effects varies across industries, with larger losses accruing to the traditionally polluting industries.

The liability rules under international GHG emissions trading[34][edit]

Abstract Article 17 of the Kyoto Protocol authorizes emissions trading, but the rules governing emissions trading have been deferred to subsequent conferences. In designing and implementing an international greenhouse gas (GHG) emissions trading scheme, assigning liability rules has been considered to be one of the most challenging issues. In general, a seller-beware liability works well in a strong enforcement environment. In the Kyoto Protocol, however, it may not always work. By contrast, a buyer-beware liability could be an effective deterrent to non-compliance, but the costs of imposing it are expected to be very high. To strike a middle ground, we suggest a combination of preventive measures with strong but feasible end-of-period punishments to ensure compliance with the Kyoto emissions commitments. Such measures aim to maximize efficiency gains from emissions trading and at the same time, to minimize over-selling risks.

  • Under a seller-beware regime, any permits acquired by the buyer are valid regardless of whether the seller is in compliance
  • All permits would be worth the same
  • Buyers bears no risks in under the seller-beware liability
  • The seller-beware liability is unlikely to exert sufficient pressure on seller's overselling
  • Trading is allowed to eligible parties whose domestic monitoring, tracking and enforcement systems have met certain "minimum quality" criteria
  • A tradeoff exists between the desirability of assigning the seller responsibility for the validity of acquired permits and the appropriate eligibility threshold
  • To provide incentives for sellers to sell only assigned amounts surplus to their compliance needs could be done with a escrow account
  • Sellers that are perceived to be too risky, may be unable to obtain insurance at a reasonable premium
  • Parties that comply with inventory and reporting obligations of Article 5 and 7 of the Kyoto Protocol, and that establish and maintain a satisfactory national registry are allowed to participate in trading
  • A part or all of the proceeds from the initial sales of AAUs would be deposited in an escrow account until compliance has been established, or the initial seller of AAUs would be required to acquire insurance from accredited insurance agencies, or all eligible parties would be annually required to retire the number of their AAUs to cover their GHG emissions in that year
  • If a party is in noncompliance with its commitments it is required to acquire additional AAUs to cover its excess tons of emissions during a true-up period of no longer than 6 months

Prospects for mitigating carbon, conserving biodiversity, and promoting socioeconomic development objectives through the clean development mechanism[35][edit]

Abstract Should forest-based climate mitigationmeasures be approved for crediting through the CleanDevelopment Mechanism (CDM), they could offer anopportunity to accomplish three important objectives:cost-effective reductions in carbon emissions andsequestration of atmospheric carbon; conservation andrestoration of forests and their biological diversity;and, the assistance of host countries and communitiesin their socioeconomic development. However,prospective investors in CDM projects, host countriesand other CDM `stakeholders' might be expected toplace widely different priorities on achieving theseobjectives. This paper describes several factors thatwill affect investor interest in CDM projects, thecharacteristics of forest-based CDM projects that willattract investments, and an approach to identifyingprojects that meet the key objectives of multiplestakeholders. This approach entails identifyingsites, such as degraded watersheds, where CDMfinancing for forest conservation and restoration cangenerate readily monetizable local and regionalsocioeconomic benefits, while mitigating carbonemissions in forests with importance for conservingbiodiversity.

Equity and greenhouse gas responsibility[36][edit]

A nonlinear dynamical perspective on climate prediction[37][edit]

AbstractA nonlinear dynamical perspective on climate prediction is outlined, based on a treatment of climate as the attractor of a nonlinear dynamical system D with distinct quasi-stationary regimes. The main application is toward anthropogenic climate change, considered as the response of D to a small-amplitude imposed forcing f.

The primary features of this perspective can be summarized as follows. First, the response to f will be manifest primarily in terms of changes to the residence frequency associated with the quasi-stationary regimes. Second, the geographical structures of these regimes will be relatively insensitive to f. Third, the large-scale signal will be most strongly influenced by f in rather localized regions of space and time. In this perspective, the signal arising from f will be strongly dependent of D’s natural variability.

A theoretical framework for the perspective is developed based on a singular vector decomposition of D’s tangent propagator. Evidence for the dyamical perspective is drawn from a number of observational and modeling studies of intraseasonal, interannual, and interdecadal variability, and from climate change integrations. It is claimed that the dynamical perspective might resolve the apparent discrepancy in global warming trends deduced from surface and free troposphere temperature measurements.

A number of specific recommendations for the evaluation of climate models are put forward, based on the ideas developed in this paper.

Do-it-yourself climate prediction[38][edit]

Causes of twentieth-century temperature change near the Earth's surface[39][edit]

Abstract Observations of the Earth's near-surface temperature show a global-mean temperature increase of approximately 0.6 K since 1900 (ref. 1), occurring from 1910 to 1940 and from 1970 to the present. The temperature change over the past 30–50 years is unlikely to be entirely due to internal climate variability2, 3, 4 and has been attributed to changes in the concentrations of greenhouse gases and sulphate aerosols5 due to human activity. Attribution of the warming early in the century has proved more elusive. Here we present a quantification of the possible contributions throughout the century from the four components most likely to be responsible for the large-scale temperature changes, of which two vary naturally (solar irradiance and stratospheric volcanic aerosols) and two have changed decisively due to anthropogenic influence (greenhouse gases and sulphate aerosols). The patterns of time/space changes in near-surface temperature due to the separate forcing components are simulated with a coupled atmosphere–ocean general circulation model, and a linear combination of these is fitted to observations. Thus our analysis is insensitive to errors in the simulated amplitude of these responses. We find that solar forcing may have contributed to the temperature changes early in the century, but anthropogenic causes combined with natural variability would also present a possible explanation. For the warming from 1946 to 1996 regardless of any possible amplification of solar or volcanic influence, we exclude purely natural forcing, and attribute it largely to the anthropogenic components.

International greenhouse gas emissions trading: who should be held liable for the non-compliance by sellers?[40][edit]

Abstract Article 17 of the Kyoto Protocol authorizes emissions trading, but the rules governing emissions trading have been deferred to subsequent conferences. In designing and implementing an international greenhouse gas (GHG) emissions trading scheme, assigning liability has been considered to be one of the most challenging issues. This article discusses a variety of the rules for accountability under international GHG emissions trading. It indicates that a ‘buyer beware’ liability is effective only to the extent that it puts additional pressure on sellers to comply with their commitments because after all sellers exercise great, if not complete, control over whether or not they comply with their commitments. Because putting such a pressure on sellers to develop effective compliance systems is not without costs to buyers, a ‘buyer beware’ liability should thus be imposed only in the case where non-compliance of sellers is virtually certain to occur. Moreover, in determining the optimal combination of these not-mutually-exclusive rules for accountability that are discussed in the article, the marginal benefits of adding one rule needs to be weighted against the increased costs of doing so.

  • A seller beware liability works well in a strong enforcement environment where the built-in effective enforcement mechanisms make non-compliance very expensive and unattractive
  • Enforcement at the international level has proved to be less likely to be effective than at the national level
  • The eligibility requirement and the seller beware liability with an escrow account could effectuate compliance by the seller, but may not be sufficient
  • The last in first out approach is preferred to the simple discounting approach in taking back the seller's overage, if the parties decide that buyer beware liability is needed to complement traditional compliance procedure
  • To prevent non-compliance it is desired to assign the buyer-seller hybrid responsibility by introducing the process of evaluating parties' efforts towards implementation during the commitment period
  • If a party is is found to be in non-compliance at the end of the commitment period, a buyer beware liability should be imposed on all its sales in the subsequent commitment period and its assigned amounts should be reduced in the subsequent commitment period

Enforcing Compliance: The Allocation of Liability in International GHG Emissions Trading and the Clean Development Mechanism[41][edit]

AbstractThe possibility of international trade in credits for greenhouse gas (GHG) emission reductions is a key “flexibility mechanism” built into the December 1997 Kyoto Protocol for international GHG reduction. The Protocol allows ntities in Annex I countries (the industrialized countries agreeing to cap their total emissions) to trade emission reductions. Through the “Clean Development Mechanism” (CDM), investors in Annex I countries also can secure GHG reduction credits for emission-reducing activities in non-Annex I developing countries that have not accepted national emission caps. For these forms of international emissions trading to be seen as credible forms of real emissions reductions, legal responsibility, or liability, must be assigned for the failure of promised emission reductions embodied in the credits to materialize. While a well-functioning compliance system is crucial for the integrity of trading, however, excessive restrictions on trading to enforce responsibility could stifle emission credit markets and raise international compliance costs to unacceptable levels. The desirable allocation of liability trades off these two concerns. Liability for the “quality” of an emission reduction credit when created could rest with buyer, seller, or both parties; it also could stay with whoever originally is assigned the liability, or the liability could be transferred as credits are resold. A very high level of compliance by sellers could always be ensured by “gold plating” credits or permits. Before credits can be sold we could require they be certified by an independent agent. Buyers and sellers would then have to decide how often to bring in the certifiers, trading off the costs of more frequent quality control against the advantage of a more continuous flow of certified credits or permits. Since this approach is likely to be quite expensive, either because of certification costs or illiquidity, we focus in this paper on systems that allow trading of emission permits or credits prior to certification with post-trade liability rules that aim to enhance the credibility of trading. Designing good compliance systems would be easy if everybody – traders and governments – had lots of information about the emission-reducing activities of different entities and there were strong legal sanctions within every participating country for nonperformance. In practice, information is scarce and not evenly shared, and both domestic and international enforcement mechanisms are limited in what they can accomplish. Starting with these two points, we first consider some of the general institutional background for international emissions trading. We then consider the assignment of liability in an international GHG trading system for the Annex I developed countries, focusing on the assignment of liability for “bad” emission permits when the seller country is not in compliance with its Kyoto targets known as “assigned amounts.” We turn then to address issues of credibility and liability in the context of CDM joint ventures.

  • The CDM transactions involve joint ventures between actors in Annex I countries and actors in non-Annex I developing countries, wherein the former invest in the latter to obtain emission reduction credits which are less costly for the investor than other forms of GHG control
  • The ultimate responsibility for meeting the numerical emission control obligations rest with the national governments of Annex I countries
  • The sanctions could include having a lower national assigned amount in subsequent commitment periods
  • Within a trading program, sanctions on selling countries that are out of compliance could include strictures on future trading opportunities
  • Efficiency of trading is likely to be the greatest when buyer and seller both are sub-national private actors with incentives to make the best deal given the specific information about trading opportunities they possess
  • Annex I and CDM transactions involve different actors and operate under different domestic regulatory which leads us to different conclusions about how responsibility for the integrity of the trading system should be imposed
  • Keep records of all your searches.(e.g. Google Scholar for "GHG emission liability").
  • Make a Citation List for all the articles you find relevant to your topic. Arrange in chronological order.
  • Put citation in this format: Van der Geer, J., Hanraads, J.A.J., Lupton, R.A., 2010. The art of writing a scientific article. J. Sci. Commun. 163, 51–59.
  • Hyperlink your citation to the available electronic file or at least the abstract.Ideally link to the DOI and include a link to an open access version if it exists.
  • copy in the abstract
  • include a bullet point list of the main points or useful data in the paper. Do not use complete sentences

Regional scale hydrology: I. Formulation of the VIC-2L model coupled to a routing model[42][edit]

AbstractA grid network version of the two-layer Variable Infiltration Capacity (VIC-2L) macroscale hydrological model is described. The VIC-2L model is a hydrologically-based SVAT (Soil Vegetation Atmospheric Transfer) scheme designed to represent the land surface in numerical weather prediction and climate models. It is coupled to a linear routing scheme which is optimized with measured precipitation and streamflow data and is derived independently from the VIC-2L model. In this way it is possible to utilize streamflow measurements for the validation of coupled atmospheric-hydrological models. A baseflow separation routine is used to derive an equivalent description between the VIC-2L model and the routing model.

Regional scale hydrology: II. Application of the VIC-2L model to the Weser River, Germany[43][edit]

AbstractThis paper describes the application of a grid network version of the twolayer Variable Infiltration Capacity (VIC-2L) macroscale hydrological model. The VIC-2L model is implemented on a rotated grid, which is compatible with the weather forecast and climate model REMO (Regional Model), a joint project of the German Weather Service (DWD), GKSS Research Centre and the Max-Planck-Institute for Meteorology, Hamburg. Observed surface meteorological data in the Weser River basin are used to force the model off-line on a daily time step. After a 22-month calibration period, simulated and measured streamflow data are compared for a 12-year period. The resulting predictions compare well with observations at daily, monthly and annual time scales. A sensitivity analysis is presented.

Deterministic Nonperiodic Flow[44][edit]

AbstractFinite systems of deterministic ordinary nonlinear differential equations may be designed to represent forced dissipative hydrodynamic flow. Solutions of these equations can be identified with trajectories in phase space. For those systems with bounded solutions, it is found that nonperiodic solutions are ordinarily unstable with respect to small modifications, so that slightly differing initial states can evolve into considerably different states. Systems with bounded solutions are shown to possess bounded numerical solutions.

A simple system representing cellular convection is solved numerically. All of the solutions are found to be unstable, and almost all of them are nonperiodic.

The feasibility of very-long-range weather prediction is examined in the light of these results.

to include[edit]

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