NRM Term Paper­ Global War’n’ing? 
                                                                                                                                                                      

                                                 Submitted to: Prof. C.Shambu Prasad 

                                                          Submitted by  

                                                           Fidel Mehra ‐16 
                                                           Pooja Menon‐22 
                                                            PGDM‐RM(II) 
 

 
 

Introduction 
The buzz around the word ‘global warming’ can be heard in all the corners of the world. A
simple Google search of the word ‘global warming’ yields about 59,700,000 results. This is just
an indicator of the fact that it is indeed a widely circulated and discussed topic of the present day
world, although it does not offers a plausible explanation of its impact.

The formation of IPCC, Kyoto Protocol, Al gore’s documentary ‘The Inconvenient Truth’ and
IPCC reports are the outcome of realization of the fact that global warming indeed poses a ‘
present and clear danger’. The Stern’s Review on Economics of Climate Change gave a different
perspective linking the economic setback which global warming may lead to.

This paper is divided into four sections:

1) IPCC Report Climate Change 2007 ‘AR4 Synthesis Report’

2) Stern Review
3) Inconvenient Truth
4) Clean Development Mechanisms.

The IPCC report review begins with the introduction about IPCC followed by a comment on
some of the previous reports and then the analysis of the AR4.

The Stern’s report review is mainly the criticism of the overstating of the facts in the report.

The Inconvenient Truth is then analyzed for the facts stated in the movie.
 

 IPCC Report                                                                                                                 

The IPCC was established in 1988 by the World Meteorological Organization (WMO) and the
UN Environment Programme (UNEP). Its purpose is to assess scientific, technical and
socioeconomic information relevant to understanding the risks associated with human-induced
climate change, its potential impacts and options for adaptation and mitigation. The IPCC does
not undertake new research, nor does it monitor climate-related data, but it conducts assessments
on the basis of published and peer-reviewed scientific and technical literature.
Its role is to assess on a comprehensive, objective, open and transparent basis the latest scientific,
technical and socio-economic literature produced worldwide relevant to the understanding of the
risk of human-induced climate change, its observed and projected impacts and options for
adaptation and mitigation. IPCC reports should be neutral with respect to policy, although they
need to deal objectively with policy relevant scientific, technical and socio economic factors.
They should be of high scientific and technical standards, and aim to reflect a range of views,
expertise and wide geographical coverage.

The IPCC fourth assessment report ‘Climate Change 2007’ is the latest report available
explaining the global climate change phenomenon. Some of the points taken from the report are
mentioned below:

Observed changes in climate and their effects 
 

• Eleven of the last twelve years (1995-2006) rank among the twelve warmest years in the
instrumental record of global surface temperature (since 1850).
• Global average sea level rose at an average rate of 1.8 [1.3 to 2.3]mm per year over 1961
to 2003 and at an average rate of about 3.1 [2.4 to 3.8]mm per year from 1993 to 2003.
• Satellite data since 1978 show that annual average Arctic sea ice extent has shrunk by
2.7 [2.1 to 3.3]% per decade, with larger decreases in summer of 7.4 [5.0 to 9.8]% per
decade.
• There is observational evidence of an increase in intense tropical cyclone activity in the
North Atlantic since about 1970, and suggestions of increased intense tropical cyclone
activity in some other regions where concerns over data quality are greater.
 

Cause of Change 
 

• Global atmospheric concentrations of CO2, CH4 and N2O have increased markedly as a
result of human activities since 1750 and now far exceed pre-industrial values determined
from ice cores spanning many thousands of years. The atmospheric concentrations of
CO2 and CH4 in 2005 exceed by far the natural range over the last 650,000 years.
• Most of the observed increase in global average temperatures since the mid-20th century
is very likely due to the observed increase in anthropogenic GHG concentrations.
• Anthropogenic warming over the last three decades has likely had a discernible influence
at the global scale on observed changes in many physical and biological systems

Projections for future 
• Continued GHG emissions at or above current rates would cause further warming and
induce many changes in the global climate system during the 21st century that would
very likely be larger than those observed during the 20th century.
• The report also suggests that due to climate change there will be direct impact on most of
the nations of the world. The food, ecosystem, industry , water etc all will be affected in
the 21st century.
• Altered frequencies and intensities of extreme weather, together with sea level rise, are
expected to have mostly adverse effects on natural and human systems.

Comparison with TAR (Third assessment report) 

The Third Assessment Report ( TAR) released in 2001 has found most of its stated fact
strengthened in the AR4. The AR4 Concludes that human influences on climate are ‘very
likely’(>90% chance) detectable in observational record which increased from ‘likely’(>66%
chance) of the TAR.

The conclusions have been significantly strengthened relative to what was in the TAR,
something which is expected given the numerous additional studies that have since been done all
point in the same direction.
 

The conclusion that large-scale recent warmth likely exceeds the range seen in past centuries has
been extended from the past 1000 years in the TAR, to the past 1300 years in the current report,
and the confidence in this conclusion has been upped from "likely" in the TAR to "very likely" in
the current report for the past half millennium.

   Stern’s  Review on the Economics of Climate Change       

                                                                                             
The Stern Review the Economics of Climate Change is a report to the Prime Minister and the
Chancellor of the Exchequer of the United Kingdom. A team of 23 people, led by Sir Nicholas
Stern and supported by many consultants, worked for a little over a year to produce a report of
some 700 pages on the economics of climate change. The report says many things, some better
supported than others.

The main points outlined in the stern’s report are enlisted below:
• On current trends, average global temperatures will rise by 2C to 3C within 50
years.
• If emissions continue to grow, the Earth could warm by several more degrees, with
severe consequences that would hit poor countries most.
• Stabilising greenhouse gases in the atmosphere will cost about one per cent of
annual global output by 2050. If no action is taken, climate change will reduce global
consumption per head by between five and 20 per cent.
• The global power sector will have to be at least 60 per cent decarbonised by 2050
to stabilise greenhouse gases.
• Markets for low-carbon energy products are likely to be worth at least £265 billion
per year by 2050.
• Worldwide incentives to encourage the use of new low-carbon technologies should
be raised by two to five times from the current level of some £18 billion a year.
• Deforestation emissions are estimated to represent more than 18 per cent of global
emissions, more than the global transport sector.
• The poorest developing countries will be hit earliest and hardest by climate change.
 

The points outlined in the report attracted lots of criticism from the scientific community and
were said to be overhyped.
Some of the criticisms that were highlighted within a year of publishing of the report have been
illustrated below.
According to an editorial in Wall Street Journal “The review is one sided, focusing almost
exclusively on carbon emission cuts as the solution to the problem of climate change”. The
author in the article argues about Stern’s claim of increasing hurricane damage in the U.S being
linked to carbon controls. Further certain errors like the cost of hurricanes in the U.S is said to be
both 0.13% and ten times of the same figure in the review also the cost of emitting each extra ton
of CO2 is said to be $85 in his report while the well recognized climate economist like William
Nordhaus puts the cost at $2.50 per ton of CO2. So the report is suggested as based on fear-
mongering arguments which are being sensationalized.

One of the author while concluding his review says “The bottom line here is that the Stern
Review should receive an incredible amount of scrutiny based on the bold claims it makes and
the rather dubious “evidence” upon which it relies. I have not read the entire 700 page report, but
in my brief review I was able to pick out several suspicious assertions and one blatant falsehood.
What will happen when a real scientist delves into this meaty analytical offering? I expect
it fall fall apart like the meat from a rack of Memphis ribs.”

The following defects come out in the review of various articles on the stern’s report:

First, the likely temperature and other climatic effects of global warming are exotically
overstated, producing conclusions that are in many respects more extreme than those of the UN.
Secondly, the likely cost of investment now to prevent future cataclysm is exotically
underestimated, suggesting that just 1% of GDP spent now and forever will be enough to solve
the problem, when previous UN estimates have put the cost at not less than 5% of GDP pa.
Given that Kyoto is costing $50 billion and counting to achieve a temperature reduction of 0.04C
(and only then if all Kyoto signers meet their targets, which most won't), spending $450bn pa
won't solve the problem. The UN's draft shows that previous CO2 emissions will continue to
provide half the projected temperature increase even if emissions are capped at present levels.
Stern makes no allowance for this.
 

Thirdly, Stern's proposal amounts to a prodigious misallocation of resources. On the UN's own
figures, $75 billion pa, or less than a fifth of the $450 billion annual spending on climate-change
remediation proposed by Stern, would permit eradication of several major diseases, and the
supply of clean water, basic health care and elementary education to the entire population that
now lacks these benefits. The real problem is not emission of ghgs: it's the coming worldwide
energy shortage. Fourthly, Stern's rate of discounting to present value the future income-stream
from investment now in remedial measures is less than half the minimum rate which a
commercial entity would use, and the economic convention that when deciding when as well as
whether to invest one does not invest until the N.P.V. of the return is shown to be at least double
the investment is altogether ignored.
 

 
 

Inconvenient Truth  

The movie inconvenient truth brought out a lot of points about global warming that immediately
caught the attention of world, fetching Al Gore a Nobel for his contribution in making the global
warming phenomenon public and spreading awareness. However the movie has attracted a lot of
criticism from the scientific and non scientific community alike.

A Gallop poll of the Meteorological society and the American geophysical Society suggested
that 83% of the scientists disagreed that global warming is caused by human action.

The movie shows that the dramatic melting of Antarctic and Greenland ice caps could raise sea
level to 20 feet by 2100. While “the consensus” of climate scientists as represented in UN’s
IPCC is that the sea level is likely to increase between 4 inches to 35 inches with a central value
of 19inches which disproves Florida being under sea water as shown in the movie.

The movie shows that mountain glaciers are melting away all around the world- glaciers in
Alaska , Europe and Mount Kilimanjaro are responding to increased warming while the Glaciers
in Mount Kilimanjaro are said to be melting away because of changes in rainfall patterns as
suggested in a study.

One of the World Wildlife Fund study in 2002 suggests that polar bears are becoming
cannibalistic in nature and another study suggest that the population of polar bears has gone up
which debunks the claim in the movie that polar bears are dying because of global warming.
 

                                                                                                 

Gore points to the devastation of the Hurricane Katrina and flatly says that global warming is
increasing the intensity of hurricanes. But that claim is highly contested by climate scientists. For
example, a recent study in Geophysical Research Letters finds "based on data over the last
twenty years, no significant increasing trend is evident in global ACE [accumulated cyclone
energy]."

Of course, the increase of carbon dioxide released into the atmosphere by burning fossil fuels is
thought to be the chief contemporary driver of global warming. All things being equal higher
 

carbon dioxide levels lead to higher temperatures. Gore illustrates the relation between carbon
dioxide and temperatures with a chart showing data taken from ice cores from Antarctica. These
ice cores contain tiny bubbles of air from the earth's atmosphere all the way back 650,000 years
ago. Scientists measure them to see the proportion of various gases that were in the atmosphere
when the bubbles were trapped. Gore points out that temperatures and carbon dioxide go up in
tandem over the last four ice ages. Gore fails to mention something interesting. Temperatures go
up first and then the level of carbon dioxide in the atmosphere increases some 800 or more years
later. One interpretation is that orbital changes start periods of warming which then affect ocean
circulation such that the oceans begin to release carbon dioxide into the atmosphere which leads
to further warming.

West Nile virus (WNV) is a mosquito-borne virus that first appeared in New York City in 1999.
It has been shown in the movie that the virus spread because of global warming, while it is a well
known fact that the virus has got no relation with higher temperatures. The virus found its way
there just like diseases like malaria find their way with an appropriate carrier.

There are many such incidences in the movie which can be pointed out. But on a larger view the
movie recommends people to cut back on their carbon emissions—install compact fluorescent
light bulbs; take mass transit; adjust thermostats two degrees up in summer and two down in
winter; use less hot water; and plant carbon-absorbing trees. He urges people in his own country
to come forward and openly contribute in abating the Global Warming phenomenon. The
messages from the movie can be taken only for the purpose of reducing our contribution to the
GHG emissions but cannot be argued as the sole reason for the temperature increase and other
related phenomenon as human contribution to the green house gas emissions remains minuscule
with not even 1% in the total emissions.
 

Clean Development Mechanisms                                                                                

The Clean Development Mechanism (CDM, hereafter) allows industrialized countries which
have accepted emissions reduction targets to develop or finance projects that reduce greenhouse
gas emissions in certain countries in exchange for emission reduction credits. If the technology
used in a CDM project is not available in the host country but must be imported, the project
leads, de facto, to a technology transfer. This technology may consist of “hardware” elements,
such as machinery and equipment involved in the production process, and/or “software”
elements, including knowledge, skills, and know-how.

Some terms

Certified Emission Reduction (CER)

The name given to a carbon credit from a CDM project. Credits from JI-Joint Implementation
projects are called Emission Reduction Units (ERU). CERs are equal to one tonne of carbon
dioxide equivalent (tCO2e).

Designated National Authority (DNA) for the CDM

The DNA is the focal point for CDM matters in your country. It is frequently a unit in a
government ministry that is responsible for administering CDM implementation and overseeing
approval of projects.

Designated Operational Entity

DOEs are accredited by the Executive Board and perform two functions : validating CDM
projects, and verifying and certifying emissions reductions from projects. The same DOE cannot
perform both functions for one project unless it is a small-scale project.

Adaptation Fund
Two percent of the CERs (Certified Emission Reduction) from every CDM project are deposited
in a special registry run by the Executive Board. Revenues from their sale will be used to fund
climate change adaptation projects in developing countries. Projects in Least Developed
Countries are exempt.
 

Baseline
The baseline describes what will happen, and how many greenhouse gas emissions will
eventuate, in the absence of the CDM project, ie. the business as usual outcome. It is the
alternative, or “counter-factual” scenario that is used as a comparison with the proposed CDM
project to estimate the emissions reductions that will be achieved, and helps to determine
additionality.

Additionality
The EU’s PROBASE program on accounting and baselines offers the following
explanation of the concept:
“It is generally recognised that credits for GHG emissions reduction should only be granted for
projects that are additional; that is, for projects which would not have taken place in the absence
of the crediting procedure or trading scheme”.
Additionality is a critical issue. Registering a non-additional CDM project will result in no
additional benefit to the climate and thus represents wasted investment. Furthermore, a non-
additional project will generate fake carbon credits that an Annex I(mentioned at www.ipcc.ch)
country can use to avoid making real emission reductions domestically, and ultimately leads to
an increase in global emissions above what was expected due to the Kyoto Protocol.
Crediting period
The crediting period is the length of time during which the project will generate carbon credits.
Under the Marrakech Accords projects can choose between a 7 year period which can be
renewed twice to make a total of 21 years, or a one-off 10 year period. If they chose the former
they must renew the baseline after every 7 year period. The crediting period is different from the
project lifetime ; a dam, for example, may have an estimated life of 50 years, but only be a CDM
project and generate credits for 10 of those years.
Project Design Document (PDD)
The document that describes the prospective CDM project and how it meets the validation
requirements spelt out in the Marrakech Accords. The PDD is the main document assessed by
the validator and is made available during the 30-day public comment period.
 

The Kyoto Protocol does not explicitly indicate the project categories that are eligible for the
CDM. However under Marrakech Agreements, land use, land use change and forestry projects
are not eligible during the first period of commitment (2008-2012). The project categories like
energy sector, housing and tertiary sector, agriculture sector, forestry sector, transport and
industrial sector are eligible for the CDM.

Project Cycle

Step 1: Preparing a CDM project for validation (ie. approval)

Before a developer can submit a project for validation, they need three things :

1). A Project Design Document (PDD)..

2). Approved methodologies for the baseline and the plan to monitor the emission

reductions.

3). Approval of voluntary participation by involved Parties and host country confirmation
that the project contributes to sustainable development. The confirmation is provided by the
Designation National Authority (DNA) for the CDM.

Step 2: Validation and the 30-day public comment period

The validation process includes a 30-day public comment period during which stakeholders,
the public and NGOs can make submissions to the validator about whether or not the project
meets the validation requirements and thus whether it should be approved.

Step 3: Registration by the Executive Board

It is automatic eight weeks after the validation report has been received, unless one of the
countries involved in the project, or at least 3 members of the Executive Board request a review.

Step 4: Verification, certification and issuance of emission reduction credits

Periodically a DOE (which has to be different from the one that did the validation) must
verify that the reductions are taking place and compile a verification report, which must be made
 

public, as must the monitoring report. If the DOE’s assessment is that the reductions have
occurred, then they certify this in writing to the Executive Board, and this document must also be
made public. The information about which DOE is verifying emissions from a particular project
can be found on the UNFCCC website:

Technology transfer through CDM

So far, most climate-friendly technologies have been developed and used in developed countries.
Therefore, expecting international technology transfer through CDM projects sounds reasonable.
However, whether this is true in practice is an empirical question. In a study financed by the
French environmental agency (ADEME), a dataset describing the 644 CDM projects registered
up to 1 May 2007 was used in order to explore this issue.

Data show that international technology transfers take place in 44% of CDM projects, accounting
for 84% of the expected annual CO2 emissions reductions (towards 2012). Very few projects
involve the transfer of equipment alone. Instead, projects often include the transfer of knowledge
and operating skills, allowing project implementers to appropriate the technology.

Current technology transfers under the CDM mainly concern two areas. The first area is end-of-
pipe destruction of non-CO2 greenhouse gases with high global warming potentials, such as
HFCs, CH4 and N2O, which are mainly transfers focused on the chemicals industry, the
agricultural sector and the waste management sector. The second category is wind power, with
60% of projects using equipment from abroad. Biomass electricity production projects or energy
efficiency measures in the industry sector mainly rely on local technologies. Data also show that
host countries are very heterogeneous in their propensity to attract technology transfers. For
example, 59% of the Chinese projects involve a transfer while the percentage is only 12% in
India.

Serious efforts to address the climate challenge face several daunting tasks. Among them is the
engagement of developing countries—in particular the emerging markets such as China and
India that account for a substantial and growing share of world emissions of greenhouse gases.
 

Another major challenge is the need to design national cap-and-trade systems so that the costs of
compliance are sufficiently predictable that industry can plan investment and so that costs do not
unexpectedly spiral up to levels that are politically unsustainable.

Efforts to implement the Kyoto Protocol have combined these two challenges through the
mechanism of CDM offsets. Experience with the CDM suggests that many CDM projects do not
reflect real reductions in emissions. Moreover, the actual issuance of emission credits through
the CDM mechanism operates at a pace and with exposure to severe administrative bottlenecks
that make it unlikely that CDM can supply the emission credits needed, with sufficient
reliability, to be a good cost control mechanism. A more transparent “safety valve,” focused
solely on the task of cost control, would be much superior.

Improving the quality of the CDM would require much stronger regulatory oversight and much
improved verification systems. That approach will also imply that CDM will become a smaller
market with a possibly even less predictable supply of emission credits. Such conclusions
underscore the need for a separate cost control mechanism since failure to have such a
mechanism will generate strong political pressure to relax and ease the CDM rules to generate
needed supplies of emission credits and keep compliance costs in a cap-and-trade system within
politically sustainable limits.

Finally, a recent working paper raised concerns about offsets as a mechanism to engage
developing countries. Ultimately, in order to address climate change on a global basis, the energy
sectors of all major emitters will have to accept binding limits on their emissions of greenhouse
gases. Currently however, most important developing countries are unwilling to enter into
discussions that contemplate such limits because they are seen as inconsistent with their
development path. Ideally, the financial incentives provided by carbon offsets along with other
financial and diplomatic tools would encourage changes in behavior now that will ultimately
make the transition to binding emissions limits easier for these understandably reluctant nations.
 

Links used: 

http://www.opinionjournal.com/extra/?id=110009182 

http://environment.guardian.co.uk/climatechange/story/0,,1935211,00.html

http://news.bbc.co.uk/1/hi/sci/tech/6115644.stm

http://www.tcsdaily.com/article.aspx?id=110206B

http://julesandjames.blogspot.com/2006/10/stern-review-of-stern.html

http://asecondhandconjecture.com/?p=224

http://www.theage.com.au/news/opinion/its-the-cause-of-climate-change-thats-inquestion/
2006/11/01/1162339915604.html

http://thebewilderness.typepad.com/my_weblog/2006/10/sterns_greenwas.html

http://www.ft.com/cms/s/48bf3b58-6ae0-11db-83d9-0000779e2340.html

http://www.thebusinessonline.com/Document.aspx?id=83497085-CFCF-4763-AF81-
687746BE6F0A

http://www.eurekalert.org/pub_releases/2006-03/osu-spi030906.php

http://www.geo.umass.edu/faculty/bradley/kaser2004.pdf

http://www.grida.no/climate/IPCC_tar/wg1/409.html 

http://www.ipcc.ch/ 

*http://cdm.unfccc.int/index.html