From	Jean-Charles HOURCADE	Date	Wed, 11 Jul 2001 09:58:13 +0200
To	roger.harrabin@bbc.co.uk, Klaus Hasselmann, stephan.herbst@volkswagen.de, nhohne@unfccc.de, david.c.hone@si.shell.com, Mike Hulme, Saleemul Huq, siegfried.jacke@dlr.de, Carlo Jaeger, ffu@zedat.fu-berlin.de, ola.johannessen@nrsc.no, Elaine Jones, Kabat, dr. P., bernd_kasemir@harvard.edu, Claudia Kemfert, kohl.harald@bmu.de, julia-maria.kundermann@cec.eu.int, tloster@munichre.com, prbuero@uni-hamburg.de, mccaffi@bp.com, g.meran@ww.tu-berlin.de, a-michaelowa@hwwa.de, jane.milne@abi.org.uk, horst.minte@volkswagen.de, eckard.minx@daimlerchrysler.com, annette.muenzenberger@dlr.de, adelbert.niemeyer@gerling.de, Tim O'Riordan, Carlo Carraro, tol@dkrz.de
Subject	No Subject
Dear Friends, A few remarks before the meeting of tonight and tomorrow, I am sure that our meeting will make clearer the different objectives of ECF, in particular regarding the articulation between the scientific agenda and activities in direction to stakeholders and policy-makers. I would like to stress that I will attend the ECF meeting not only in the name of the Cired, but also in view of preparing the involvment of the Institut Laplace in ECF, namely the community of climate modellers, with which we develop a long term research program. I would like to explain hereafter in a few words what should be, in my view the priorities of ECF, in terms of scientific agenda: Given recent Ipcc experience, the first priority would be to progress in direction to integrated models. Indeed the lessons of the Ipcc are twofold: - first the Sress scenarios confirm the possibility of generating very different emissions growth scenarios over the long run, but the consistency between the Storylines and the numerical scenarios remain uncertain; this uncertainty and vagueness reveals a more fundamental limitation of the state of the art of economic modelling over the long run, in particular to provide an explicit picture of linkages between structural changes (infrastructure transportation, urban forms that govern the energy content of final consumption, industrial structure and the so-called dematerialisation), innovation and both macro and micro economic drivers (productivity, growth and price-signals). This makes very difficult to detect where are the real bifurcations, the real policy-parameters and to make much progress in the understanding of the timing of policy responses, - second the sections on 'damages ' have make some progress but remain weak in terms of the social and economic implications. More precisely they deal mostly with impacts on physical parameters (sea-level rise), in a few cases adress impacts on humans (tropical diseases), but all this does not give a comprehensive picture of social and economic damages (once discounted the effect of adapatation), One of the scientific objective of ECF should be to be prepared to provide in a few years for a convincing contribution in future exercises like the SRES and in the future Ipcc rounds. This passes first through two parallel efforts: - on long term economic modelling where the limitations of existing tools are obvious depiste real progress; this relates basically to three challenges: - a macroeconomic framework insuring the consistency between prices and quantities at any point in time without necessarily resorting to the modelling tricks relying on the conventional neo-classical growth theory; these 'tricks' assume indeed perfect foresight, efficient markets and the absence of strategic or routine behaviours; New conceptual frameworks about endogenous growth theory allow for such a move, but there is a gap between advances in pure theory and empirical modelling, - the endogeneisation of technical change and more precisely to develop this endogeneisation in such a way that the information coming from sectoral models in energy, transportation or agriculture is not lost (this comes back to the bottom-up/top-down controversy); note that one key challenge here is to progress in direction to transportation and agriculture - an explicit treatment of expectations and uncertainty; one key issue indeed is that the stabilisation of expectations over the long run is the main driver of technical change, consumption patterns and structural adaptation. - on 'coupling' economic and climate models: here there are two routes, either to develop coupling methods between large-scale models or to develop interface compact modules, reduced forms of large scale models. Both routes are valid, however, in the following years, to develop integrated models made up with reduced forms of larger models seems more promising; thanks to tractable and numerically controlable models, in will be easier to reveal the key mechanisms at work and to introduce uncertainties. This will pass through progress in the representation of carbon cycle (including sequestration) in such models and, more importantly in the representation of damages and adaptation, which rises rather fundamental conceptual issues that explain what seems to be the second priority in my view. The second prority relates to the joint question of damages and precautionary principle: - part of the agenda is covered by Mike Hulme's paper and I will not elaborate here on other dimensions I would link to include and how to assess a cost. I will simply insist of the fact that we need to set up a taxonomy of damages in economic terms, this means as resulting not of the climate transformation per se but from the joint effect of inertia and uncertainty (to pass to Riviera to the beaches of Normandy in not a cost in itself in a world restabilized around a new climate equilibrium; what matter are the transition costs and the generated variability of climate). Moreover I would insist for adopting deliberately a worldview because, fundamentally, climate change will generate a new human geography, and not to be restricted to the European subcontinent, - this should lead to develop in parallel stochastic decision modelling tools to disentangle the many dimensions and views about the precautionary principle and, I take some risks in saying that, in a symmetric treatment of climate damages and nuclear risks (we cannot avoid to try and put some rationale in this discussion which is one of the reason for the failure of the EU tax in 1992 and of COP6, and which will be an 'hidden' division line within the EU) The third priority should be the topic 1 made by Klaus. For me the two first modelling efforts I described briefly are outmostly important to bring new insights for responding the question of the instruments. However, we have, before waiting for the acheivement of a new generation of models (which will respond to point 2 and 3 of Klaus's paper), it matters to develop in parallel a specific programm on international coordination architecture given the failure of COP6 and the lack of understanding of economic and social implications of the selection of this architecture (coordination through prices or quantities, full agreement or partial expanding coalition, issue linkages, perceived equity etc ....). This workprogramm should build on advances on the role of economic and non economic instruments in fostering innovation, and on the distributive static and dynamic implications of such instruments. These are very brief remarks, simply to give you some ideas about my current perspectives.