Video: Model Introduction (2:24)
Model Introduction
PRESENTER: For the module ten summative assessment, we're going to be working with this very large and complicated model, that consists of a number of different parts. You can see down in here this is the global carbon cycle and then that includes the percent or the concentration of CO2 in the atmosphere. That concentration of CO2 in the atmosphere then feeds into a climate model that tells us the temperature. And that temperature then goes into determining the sort of climate damages caused by a global temperature, global warming. Those climate damage costs then affect the amount of money that we have leftover to invest in the economy. So here's global capital - this is the whole kind of the heart of the economic model up in here. So climate damages come into play here. Another important cost that comes into play are the abatement costs. These are the costs related to reducing carbon emissions. And so there's something down here called the emissions control rate that we'll fiddle around with. It represents, essentially, different choices we make about how much we're going to try to limit carbon emissions. That limits how much goes in the atmosphere, it limits the temperature, and so on. But it costs money, so there's a certain abatement cost per gigaton of carbon that you are not emitting into the atmosphere. There are a whole bunch of other parts of this global climate and climate and economic model, including something that keeps track of what Nordhaus calls social utility. The global population here is sort of fixed and these are a bunch of things that just sort of sum up some of these economic components of the model. So this is the big model that's behind the scenes. When you look at the actual model, you'll be seeing something like this - an interface where you're just going to change a few basic things. And for this summative assessment, we're really just going to change the emissions control rate here, which is a graphical function of time.
The global climate system and the global economic system are intertwined — warming will entail costs that will burden the economy, there are costs associated with reducing carbon emissions, and policy decisions about regulating emissions will affect the climate. These interconnections make for a complicated system — one that is difficult to predict and understand — thus the need for a model to help us make sense of how these interconnections might work out. In this activity, we’ll do some experiments with a model that will help us do a kind of informal cost-benefit analysis of emissions reductions and climate change.
The economic part of the model we will explore here is based on work by William Nordhaus of Yale University, who is considered by many to be the leading authority on the economics of climate change. His model is called DICE, for Dynamic, Integrated Climate, and Economics model. It consists of many different parts and to fully understand the model and all of the logic within it is well beyond the scope of this class, but with a bit of background we can carry out some experiments with this model to explore the consequences of different policy options regarding the reduction of carbon emissions.
Nordhaus’ economic model has been connected to the global carbon cycle model we used in Module 8, connected to a simple climate model like the one we used in Module 4.
The economic components are shown in a highly simplified version of a STELLA model below:
The image is a complex flowchart diagram representing a model with various interconnected components. The background is black, and the diagram uses different shapes and colors to denote different elements and flows:
Components:
- Rectangles (Yellow): Represent key factors or inputs in the model:
- ECON UTILITY: Located at the top left.
- POPULATION: Positioned to the right of ECON UTILITY.
- PRODUCTIVITY FACTOR: Located further to the right.
- GLOBAL CAPITAL: Positioned below PRODUCTIVITY FACTOR.
- Rectangles (Gray): Represent various environmental or physical components:
- ATMOSPHERE: Positioned below ECON UTILITY.
- LAND BIOTA: Located at the bottom left.
- SOIL: Positioned to the right of LAND BIOTA.
- SURFACE OCEAN: Positioned to the right of SOIL.
- DEEP OCEAN: Located below SURFACE OCEAN.
Circles (Purple): Represent intermediate variables or processes within the model:
- Several purple circles are interconnected with red arrows, indicating complex interactions. Labels include:
- Per-Capita Consumption
- Atmospheric Change
- Other various processes
- Circles (Green): Likely represent points of interaction or transition between components.
Connections:
- Arrows (Red): Indicate the flow of influence or interaction between components. These arrows are numerous and create a web of connections, particularly dense around the purple circles, suggesting many interactions among these processes.
- For example, there are connections from ECON UTILITY to various purple circles, from POPULATION to GLOBAL CAPITAL, and from PRODUCTIVITY FACTOR to various parts of the model
Arrows (Black): Indicate simpler or perhaps less dynamic connections between components:
- These arrows connect the gray rectangles (environmental components) in a more straightforward manner, with fewer interconnections compared to the red arrows
Specific Flows:
- ECON UTILITY has arrows leading to several purple circles and then to POPULATION.
- POPULATION is connected to GLOBAL CAPITAL via a red arrow labeled "degradation."
- PRODUCTIVITY FACTOR has connections to various parts of the model, including purple circles and GLOBAL CAPITAL.
- GLOBAL CAPITAL has an arrow labeled "degradation" leading out of it.
- ATMOSPHERE, LAND BIOTA, SOIL, SURFACE OCEAN, and DEEP OCEAN are connected in a chain with black arrows, suggesting a flow or cycle among these environmental components.
Observations:
- The diagram is highly schematic, indicating a simplified representation of a complex model, likely related to economic, environmental, and possibly climatic interactions.
- The red arrows suggest dynamic and possibly feedback-driven relationships, particularly around economic and human-related factors.
- The black arrows suggest more straightforward environmental processes or cycles.
This diagram visually represents the interconnections and flows between economic utility, population, productivity, global capital, and various environmental components, illustrating a model where human activities and natural systems interact in a complex manner.
- Several purple circles are interconnected with red arrows, indicating complex interactions. Labels include:
In this diagram, the gray boxes are reservoirs of carbon that represent in a very simple fashion the global carbon cycle model from Module 8; the black arrows with green circles in the middle are the flows between the reservoirs. The brown boxes are the reservoir components of the economic model, which include Global Capital, Productivity, Population, and something called Social Utility. The economic sector and the carbon sector are intertwined — the emission of fossil fuel carbon into the atmosphere is governed by the Emissions Control part of the economics model, and the global temperature change part of the carbon cycle model affects the economic sector via the Climate Damage costs. Let’s now have a look at the economic portions of the model. You should view this video about the DICE Economic Model first, and then study the text that follows.