DOCUMENT 2: TGCIA Presentations and Memo 2 (1)

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1 DOCUMENT 2: TGCIA Presentations and Memo 2 (1) Text used by Ian Castles in making a presentation to the IPCC TGCIA Expert Meeting in Amsterdam on 10 January My thanks go first of all to the IPCC for inviting me to this meeting to elaborate on concerns about the SRES which I expressed in messages I sent to Dr. Pachauri, at his invitation, some months ago. I am most grateful to the IPCC for meeting the costs of my travel from Australia, and for giving serious consideration to the issues that David Henderson and I have raised. Although I have spent most of my life working for the Australian Governments, I need to make clear that I am not now affiliated with any government agency, nor indeed with any other organisation involved in climate change matters. Secondly, I want to thank Dr. Richard Moss for the great efforts he has made to accommodate this presentation within what was already a very full program for the meeting, and also for finding many hours during his extremely busy program to serve as convenor for the productive discussions which David Henderson and I have had with SRES authors and other experts during the course of this week. My final thanks go to Professor Nakicenovic and other participants for their courteous and frank approach to these discussions. We did succeed in removing some of the differences between us. And, for the rest, we now have a better understanding of what our differences are. In recent months I have been told, many times, that I have not understood the purpose of the SRES scenarios - that I do not know why and how they were prepared, nor how they are being used in research. I have certainly learned more about these matters in recent months, and especially in recent days. And I have to say that the more I learn about the processes and the outcome, the more uneasy I have become about the way that the scenarios have been used by the IPCC and are being used by the research community. Let me agree at once that the SRES process has been an open one. At the outset, an open and widely advertised invitation was issued to modellers to take part in the exercise; later, initial scenario results were posted on the internet and revised in the light of comments received; and in the final stages, following standard IPCC procedures, the draft SRES as well as the scenarios were subject to a series of expert and government reviews. But whatever the merits of the process, serious ambiguities and contradictions remain. On the one hand, the SRES authors state repeatedly that the scenarios are neither predictions nor forecasts ; yet, on the other, the blurb on the back cover states explicitly that the report describes new scenarios of the future, and PREDICTS greenhouse gas emissions associated with such developments (emphasis added). Perhaps the statements can be reconciled, along the lines that the scenarios themselves are not predictions but that their quantification in terms of model results are statements about the future which are conditional upon the realisation of the stated assumptions about driving forces. This seems to me to be splitting hairs, but in any case the key question about the future turns upon the reasonableness and consistency of those assumptions. Where did the assumptions come from? The Terms of Reference for the SRES required that modelling teams would be provided with information on the input assumptions and other necessary information, and that the writing team, for its part, would ensure that the range of results reflects the underlying uncertainty (p. 324). And the report itself states that Quantitative storyline targets rec-

2 ommended for use in all scenarios within a given family included, in particular, population and GDP growth assumptions (p. 174). It would seem to follow that the various storyline targets relating to GDP should have reflected the full range of underlying uncertainty relating to the future growth in world output. But they did not do so. The SRES writing team analysed hundreds of scenarios from different literature sources and other scenario evaluation activities, which spanned a wide range of assumptions about... levels of economic development... and other factors (p. 79) and found that, for 2050, the gross world product (GWP) in most of the scenarios clustered around a rather narrow range equivalent to 5 times the 1990 level (p. 94). In fact, less than 5% of 166 scenarios analysed assumed that GWP would reach 6.5 times the 1990 level by 2050 (Figure 2-6a on p. 94). Yet the storylines for the A1 and B1 scenario families - the groups that include the scenarios with the highest and the lowest projections of emissions - assume higher levels of GWP in 2050 than more than 95% of the scenarios in the open literature. In fact the storyline for the A1 scenario family, which includes 17 of the 40 SRES scenarios, assumes a higher level of GWP in 2050 than any of the 166 scenarios in the database. For technical reasons that are explained in my letters to Dr. Pachauri, the levels of future GWP which are in fact assumed in the A1 and B1 scenarios are even higher than the projected levels reported in the SRES. The SRES identifies GDP as one of the main primary driving forces of future greenhouse gas trajectories, but uses an erroneous method of aggregating the GDPs of individual countries and regions. It is surprising that this unacceptable method was used in the report, because the UN System of National Accounts that was formally adopted by governments and leading international agencies in 1993 is explicit that When the objective is to compare the volumes of goods and services produced or consumed per head, data in national currencies must be converted into a common currency by means of purchasing power parities and not exchange rates. This recommendation was soon reflected, insofar as practice had not already changed, in the work of the IMF, the OECD and other international agencies. An exception, until recently, was the United Nations Development Programme (UNDP), in its annual and widely-quoted Human Development Report (HDR). But the UNDP has now changed its ways, following a report by an expert group appointed by the UN Statistical Commission, which said that the HDR s practice of presenting international comparisons of GDP per head using market exchange rates was a material error - that is, an error which left the reader with a fundamentally distorted view of the phenomenon being described. It is regrettable that material errors of this kind, taken from still-unreconstructed volumes of the HDR, are presented both in the SRES and in Chapter 3 of the Report of Working Group III of the IPCC. One might ask how many of the multitude of authors and reviewers of both documents, and the anonymous officials involved in the review process for these two reports, were aware of the existence of the SNA and the fact that its recommendations on the use of purchasing power parities had been endorsed by UN member governments and the leading international economic agencies. As someone who is strongly committed to the application of sound scientific method in the social sciences no less than in the natural sciences, I was concerned to learn from Dr. Parry s presentation on Wednesday that the IPCC Data Dissemination Centre now provides projections (or are they predictions?) of GDP converted at exchange rates for all countries at 5-year intervals to the year 2100, for the IPCC marker scenarios. I would question whether such an exercise can be of any value. If it is to be undertaken, the resulting projections should certainly be accompanied by a strong health warning, which should make clear that the numbers do not reflect relative volumes of output, and therefore cannot properly be used in international comparisons of living standards or GHG emissions.

3 There is a serious risk that the dissemination of this material will be worse than useless: it will encourage researchers to base their work on faulty data and to reach unsound conclusions - as indeed the SRES authors themselves do in the charts purportedly reporting historical data on energy intensity in various countries and the related discussion in the report (p. 97, 125). The unprofessional use of statistics to make exaggerated statements about differences in income levels between regions and countries of the world (p. 197) places at risk the status of the IPCC as an objective and policy-neutral body. The SRES Summary for Policymakers claims that the SRES scenarios together encompass... the current knowledge of and uncertainties that arise from scenario driving forces such as demographic, social and economic... that drive the models, as described in the storylines (p. 3). In my view, this statement is not consistent with the fact that most of the scenarios, including those that yield the lowest levels of future emissions, assume higher levels of global output in the decades ahead than does the bulk of the open literature. In his very interesting paper in the session The SRES scenarios and application in climate research on Wednesday afternoon, Dr. Tom Wigley identified the A2G IMAGE and the B1T MESSAGE scenarios as the extreme scenarios in terms of the 2100 forcing pattern. He noted that the A2 IMAGE scenario projected a burden of 780 parts per million (ppm) of CO2 in 2100, whereas the B1T MES- SAGE scenario projected a burden of 480 ppm. And he described these extremes as capturing the total range of possible variation. But do they? The B1 family of scenarios, including the B1T MESSAGE scenario, is described in the SRES itself as assuming a future world with high levels of economic activity (p. 182) and a high rate of economic growth to a high level of per capita income in 2100 (Table 6-2a, p. 317). In the decade immediately ahead, the projected rate of growth in world output in the B1T MESSAGE scenario is far higher than that predicted by the leading international institutions. For the developing regions, the B1T MESSAGE projections of output growth are higher than the highest of three scenarios considered by the World Bank in assessing progress towards the achievement of the Millennium Development Goals. The projection of fossil CO2 emissions in B1T MESSAGE for 2010 is not particularly low - it is, in fact, around the median for the 40 SRES scenarios (8.3 GtC) and represents an average rate of increase in per capita emissions of 1.2% annually between 1999 and 2010 (compared with an average annual rate of DECREASE in per capita emissions between 1990 and 1999 of 0.8%). Far from marking the lower bound of prospective emissions at the end of this decade, the B1T MESSAGE projection of emissions of the main greenhouse gas seems unlikely to be realised. It is true that the projections in this scenario rest upon optimistic assumptions about the rate of technological advance and its application in the second half of the century - and it is mainly for this reason that B1T MESSAGE marks the lower extreme of the SRES scenarios in terms of the 2100 forcing pattern. But it is not obvious that the technological advances assumed in this scenario could only be achieved if developing countries achieve unprecedented rates of growth in income and output in the decades immediately ahead. This argues for the early development of some variants to the SRES models, which combine the long-term characteristics of these models with a more realistic appraisal of short- and medium-term prospects for the developing countries. Some of these variants would probably yield a model with a lower forcing pattern in 2100 than that of B1T MESSAGE, although it is impossible to be more specific until the detailed modelling work is done. I now pass to David Henderson. He will make some further points relating to the scenario work, and offer some ideas for strengthening it through a broader professional involvement and participation.

4 2(2) Text used by David Henderson in making a presentation to the IPCC TGCIA Expert Meeting in Amsterdam on 10 January Like Ian Castles, I am pleased to have had the opportunity to take an active part in these proceedings. I too would like to thank Dr Pachauri for the invitation to come to Amsterdam as a full participant in the Experts Meeting of the TGCIA, Dr Moss for the time and effort that he has devoted to chairing the technical discussions that Ian and I have taken part in here, and Professor Nakicenovic and the other participants in those discussions for their courteous and frank approach I think that these discussions that Ian and I have been involved in, with SRES authors and others under Richard Moss s able chairmanship, can be aptly described in the traditional diplomatic communique formula: we had a full and frank exchange of views in a cordial atmosphere. Substantial differences remain, as Ian has noted, but the meetings were helpful and constructive. They also gave rise to a promising suggestion for taking things further at the next stage, which I will mention at the end of my remarks. Before doing so, let me acknowledge, what you will in any case have noticed, that both Ian and I are well beyond the stage of being salarymen: neither of us has any official status, and some of you may have drawn unflattering parallels with Jack Lemmon and Walter Matthau. But the issues that we have raised concerning the IPCC scenario work, as also some further issues that we might have raised or taken further had this been possible, do not just reflect the eccentric intuitions of two elderly retirees: we are making central points which many if not most of our interested professional colleagues would broadly endorse. Yet it needed outsiders to raise these points that bear on the IPCC process, and bring them to the attention of participants in that process. Why this need for outsiders? The SRES lists 53 authors and 89 reviewers, and to these 142 persons one might add those involved in the sections of the WGIII Report where similar topics are treated in a similar way. Yet the issues that we have raised were not picked up by, or at least did not clearly emerge from, these serried ranks of IPCC participants. In the IPCC process, as elsewhere, a lot of weight is given to peer reviewing. But what has happened shows that multiplying peer reviewers is no safeguard against dubious procedures and conclusions if the peers are all drawn from the same restricted professional milieu. The moral of this episode, as I see it, is that the scenario exercise, and the IPCC s economic work more generally, should be broadened. You need to establish a more extended, and more fully representative, economic milieu. In particular, you need to ensure wider participation, or at any rate greater awareness of what you are doing, with respect both to institutions and to professional ways of thinking. As to institutions, what this chiefly involves is (1) national and international statistical offices, and (2) the central economic departments in member governments i.e., treasuries, ministries of finance, ministries of economics, and agencies such as the US Council of Economic Advisers. You need a wider involvement of official responsibilities and expertise. As to people as distinct from institutions, the main need is for closer involvement of economic historians and historically-minded economists. The historical element in the IPCC s economic work is greatly in need of strengthening, the sooner the better. Alas be warned! broadening and reinforcing the economic programme, and professional participation within it, will not necessarily give the carbon cycle and global climate change modellers a much firmer basis for their work: have no illusions about what economists can say hope to say with confidence about the future. But what I propose would bring with it two improvements. It would make the IPCC less vulnerable, less exposed to charges of bias, superficiality, or omission. It could help to bring new ideas and insights to bear. Under both headings, it would serve to make this element in the IPCC process more professionally watertight,

5 which right now it is not. I do not make these suggestions in a spirit of reproach. The IPCC could no doubt have tried harder to involve these missing groups of professionals; but equally perhaps more equally, so to speak people within these groups could themselves have shown greater interest in, and awareness of, IPCC-related issues, and greater readiness to participate. In any case, what chiefly matters is the future. What to do now? On this, I would like to make two points. The first is longer-term, and the second more immediate. Should the scenario exercise be rethought? Yes, chiefly for the reasons that we have given but also for some others that we could have developed had time permitted. But does a radical revision need to be put in place, or attempted, specifically for AR4? I think the answer to that second question is No. The work that has already been done on emissions scenarios, with suitable amendments to take account of considerations of the kind to which Ian has just referred, can provide an adequate basis for sensitivity analysis in the next assessment. Rethinking can have a longer time-horizon, which it will probably need. However, the process of rethinking should begin now; and in our technical discussion group we emerged with a proposal for immediate action. In particular, the suggestion was made to hold a specially convened experts meeting to review the kinds of issues that we had been debating within the group; and one or two of us have taken this idea further through memoranda containing specific proposals for giving effect to it. In my own memo I make the suggestion that such a meeting could be jointly sponsored by the IPCC and my former organisation, the OECD. So I will conclude by expressing the hope that some of us will meet again in Paris in the spring! 2 (3) The attached memorandum sets out a suggestion by David Henderson as to the agenda, venue and attendance for a meeting that could be held with the aim of reviewing the kinds of projections of economic change that enter into the scenario work of the IPCC. The memo builds on a proposal for such a meeting that was made in the course of technical discussions held in connection with an Experts Meeting of the IPCC s TGCIA, which took place in Amsterdam on 7-10 January This text makes some corrections to an earlier draft that was put together in Amsterdam, and incorporates some improvements in wording suggested there by Professor Nakicenovic. Ideas for a special meeting A proposal has been made, which I support, for convening a special meeting to consider ways of viewing and assessing long-term economic changes and development, in the context of the work and mandate of the IPCC. I believe that one object in holding such a meeting would be to secure the interest, participation and advice of professionals who have not so far been much involved in IPPC work. This would contribute to a wider understanding of what has been done within the programme, and could help to generate new ideas for its future conduct. I have two groups of persons especially in mind for closer involvement in the IPCC process, starting with this proposed meeting. On the official side, there are representatives of national statistical offices and finance ministries. In the groves of academe, the main target groups are economic historians and historically-minded economists. With this in mind, here are some first suggestions as to venue, subject-matter and attendance.

6 Venue. Given the objective of drawing in treasuries and official statistical agencies, in addition to the government departments and agencies that are already involved with the IPCC, a good place to hold the meeting would be the OECD where all these ministries are accustomed to meet and where they each have their own Secretariat back-up. Hence the meeting could be a joint IPCC-OECD venture, held in Paris. (If the OECD s restricted membership raises a problem, we could think in terms of tripartite sponsorship, through involving the World Bank). Subject matter. The title could be, Long Term Economic Scenarios in the Context of the Work of the IPCC. Given (say) a day and a half for the meeting, the final morning, or session, should look ahead to what could be done for the future. The meeting should try to come up with clear proposals for action. There should be a background paper, distributed well in advance and primarily for information, on the past economic projections and the SRES. The list of subject headings (and possible speakers) for the meeting could be, or include: reviewing and building on the past: a historical perspective: Nicholas Crafts projecting growth in poor countries and rich: Shankar Acharya the interactions of economic and technical change: Paul David the basis for international comparisons: Ian Castles the uses and limits of model-based scenarios: William Nordhaus Ways ahead: methods and ways of thinking: Angus Maddison Ways ahead: participants and procedures: an IPCC speaker. (The fifth heading reflects a personal view of mine, that the use of scenarios should not be viewed as the only possible route to take). Attendance. Besides individuals, the OECD (Environment and Statistics Directorates, Economics Department, and possibly other units), and the IPCC (including leading SRES authors), we should I think try to involve the IEA, the World Bank, the UNDP, the UN Statistical Commission, and the IMF if they proved to be keen and ready to contribute. One way of securing wide representation of OECD member governments while keeping numbers manageable would be to get nominations of individuals from the relevant OECD committees. David Henderson 15 January 2003

WORKSHOP ON BASIC RESEARCH: POLICY RELEVANT DEFINITIONS AND MEASUREMENT ISSUES PAPER. Holmenkollen Park Hotel, Oslo, Norway October 2001

WORKSHOP ON BASIC RESEARCH: POLICY RELEVANT DEFINITIONS AND MEASUREMENT ISSUES PAPER Holmenkollen Park Hotel, Oslo, Norway 29-30 October 2001 Background 1. In their conclusions to the CSTP (Committee for