The Anatomy of A Silent Crisis The Anatomy of A Silent Crisis

Notes on report methodolog
The PAGE 2002 model is based on a top-down approach with the following key components:
• It relies on aggregate data on population and on economic growth for 8 regions in the world.
• The basic inputs include emissions policy, adaptation and mitigation scenarios.
• There is not a break-down per economic sector: The model does not give results for water or
agriculture or other independent sectors.
• Impact in the model is the sum of three components: Economic loss, non-economic loss and cost
of discontinuous events (i.e. tipping point events).
Key indicators
• Economic losses — i.e. benefits minus costs of climate change.
• Social cost of carbon — i.e. the monetary indicator of the global damage done over time by the
emission of one extra ton of carbon today.
• Reduced growth rate — i.e. how much lower is GDP growth because of climate change.
Assumptions defined under expert guidance
For the purpose of the estimates for the Human Impact Report, a number of assumptions
have been updated to reflect recent research findings. The original model dates back to 2002. The
updating of assumptions has been carried out under the guidance of the expert who is in charge of
PAGE 2002. The key assumptions include:
• Discount rate increased to [0, 0.75, 1.5] from a constant of 0.1 to lower discount impact (in line
with recommendations by Prof. Hope).
• Increased equity weights to correct for income difference in developing countries. Therefore
changed marginal utility to [0.5;1.25;2] from a constant of 1 (in line with recommendations by
Prof. Hope, see Hepburn and Cameron).
• Updated tipping point scenarios to account for more realistic values: Threshold lowered to
[1;3;6] degrees (from [2;5;8]). Risk increased to [10;20;30] percent (from [1;10;20]), Loss
lowered to [1;5;10] of GDP (from [5;10, 20]) (in line with recommendations by Lenton and other
tipping point experts).
• Assumed that no adaptation takes place before 2010 — changed value to 0 (in line with
recommendations by Prof Hope).
• Weather-related disasters attributable to climate change are underrepresented in the model. We
therefore changed the mean value of the impact of a 2.5 degree increase in temperature from 1.3
percent of GDP to 2.53 percent of GDP and set the Min value at 0.5 percent of GDP and the max at
2.53 percent. (Based on experts indications that the Min value was too low, and that extreme events
were underrepresented in the model, found no indication that the Max value in the model was too
high). See calculation below.
91