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Got methane? Economic modelers assess greenhouse gas trades

Trading greenhouse gas emissions is one of the most contentious issues in the global climate debate. Countries hope to wiggle out of costly carbon dioxide emission cuts by decreasing the amount of other important greenhouse gases spewed into the atmosphere. In an April 5 letter to Nature, two researchers at Stanford and EPRI used a computer model to evaluate the most cost-effective way to trade off among the varied zoo of greenhouse gases.

"President Bush may have rejected the Kyoto protocol, but the problem of climate change is not going to go away," said Alan S. Manne, professor emeritus of operations research at Stanford. "Something has to be done about greenhouse gas emissions."

Economists want to cut back on greenhouse gases in the cheapest, most cost-effective way. They want to be able to shift the focus away from carbon dioxide if reducing an equivalent amount of methane would be cheaper and just as effective.

But teasing out equivalence between gases is an apples-and-oranges comparison. A greenhouse offender such as methane may trap heat more efficiently than carbon dioxide, but in the rough-and-tumble, molecule-eat-molecule atmospheric environment, methane survives only a fleeting few decades, while other gases, such as the hardier carbon dioxide and smog-related nitrous oxide, hang around for more than a century. And carbon dioxide, even though it is not a particularly effective planet-warmer on a molecule-by-molecule basis, is pumped into the atmosphere in such huge amounts that it may contribute up to 75 percent of the estimated warming, experts say.

Figuring out a fair swap of methane for carbon dioxide or nitrous oxide isn't straightforward. The writers of the Kyoto protocol decided to define tradeoffs with a quantity called the "global warming potential," or GWP. The GWP characterizes the amount of heat that a certain amount of gas will trap from now until a designated time in the future.

Economists have been fretting over global warming potentials ever since the idea was introduced in 1990, Manne said. Global warming potentials don't consider damages that could stem from global warming such as property damage from increased flooding or the loss of crops. Nor do they take into account the money companies will spend -- or lose -- as they reduce their emissions.

Manne and co-author Richard Richels of EPRI proposed an alternative to the GWP in the Nature letter.

"This paper by Manne and Richels clearly illustrates the serious limitations of the currently proposed method and skillfully demonstrates the advantages of some workable alternatives," said John Weyant, director of the Energy Modeling Forum at Stanford.

Manne and Richels's first step is to agree on a damage limit a restraint on the amount of havoc global warming will be allowed to wreak. Right away, problems crop up.

"The trouble is that these damages can be difficult to quantify," Manne said. "It's easy in agriculture and forestry, where you can track the price of potatoes or lumber, but when you come to ecological values and ecological systems, it becomes very debatable how much an otter is worth."

To get around this complication, Manne suggests setting a concrete goal, such as limiting the global temperature change that occurs by 2100 to 3 degrees. "You reach more agreement if you list the temperature change you want to maintain," he said. Temperature change is a reasonable barometer for damages, Manne said, because researchers link temperature with the rise in sea level, changes in weather patterns and the spread of tropical diseases.

Next, the researchers plug the goal into a computer model named MERGE (for Model for Evaluating the Regional and Global Effects of greenhouse gas reduction policies) and let the model determine the cheapest way to make that goal a reality. MERGE performs three major functions: It calculates the atmospheric warming due to different gas combinations, it evaluates emission tradeoffs between nine political regions, and it considers economic factors such as the need for electricity and the business costs of new technology and lost productivity.

The model doesn't exactly spit out a portfolio of gases perfectly tuned to give the winning combination. It does, however, describe how the cost-effectiveness of reducing gases other than carbon dioxide goes up or down as a goal deadline approaches.

In a nutshell, unless the deadline is imminent, reducing methane doesn't really make much sense given its short lifetime in the atmosphere, Manne said. Cutting back on longer-lived gases (like carbon dioxide and nitrous oxide) would be more effective in the long run.

And it's the long-term solutions -- like new technologies plus a carbon-emissions tax that increases with time -- that economists favor, Manne said. "Kyoto means that the U.S. economy would take a big hit in the next 10 years," he said.

"The evaluation of short- versus long-lived greenhouse gases is something that's got to be faced," Manne said. "The people who put together Kyoto didn't have many alternatives, and when they decided on global warming potentials they knew it was a shortcut. They wanted to end the argument. But it doesn't end the argument."

Katie Greene is a science writing intern at the Stanford News Service.


By Katie Greene

For more information and a free license to run the MERGE model, see

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