potential economic consequences

Synonyms

economic potential, , physical potential

Definition

Potential - In the context of climate change, potential is the amount of mitigation or adaptation that could be - but is not yet – realized over time. As potential levels are identified: market, economic, technical and physical. Market potential indicates the amount of GHG mitigation that might be expected to occur under forecast market conditions including policies and measures in place at the time.. It is based on private unit costs and discount rates, as they appear in the base year and as they are expected to change in the absence of any additional policies and measures. Economic potential is in most studies used as the amount of GHG mitigation that is cost-effective for a given carbon price, based on social cost pricing and discount rates, including energy savings, but without most externalities. Theoretically, it is defined as the potential for cost-effective GHG mitigation when non-market social costs and benefits are included with market costs and benefits in assessing the options for particular levels of carbon prices (as affected by mitigation policies) and when using social discount rates instead of private ones. This includes externalities, i.e., non-market costs and benefits such as environmental co-benefits. Technical potential is the amount by which it is possible to reduce GHG emissions or improve energy efficiency by implementing a technology or practice that has already been demonstrated. No explicit reference to costs is made but adopting ‘practical constraints’ may take into account implicit economic considerations. Physical potential is the theoretical (thermodynamic) and sometimes, in practice, rather uncertain upper limit to mitigation. (IPCC, 2014)

Potential - In the context of climate change, potential is the amount of mitigation or adaptation that could be - but is not yet ? realized over time. As potential levels are identified: market, economic, technical and physical. Market potential indicates the amount of GHG mitigation that might be expected to occur under forecast market conditions including policies and measures in place at the time.. It is based on private unit costs and discount rates, as they appear in the base year and as they are expected to change in the absence of any additional policies and measures. Economic potential is in most studies used as the amount of GHG mitigation that is cost-effective for a given carbon price, based on social cost pricing and discount rates, including energy savings, but without most externalities. Theoretically, it is defined as the potential for cost-effective GHG mitigation when non-market social costs and benefits are included with market costs and benefits in assessing the options for particular levels of carbon prices (as affected by mitigation policies) and when using social discount rates instead of private ones. This includes externalities, i.e., non-market costs and benefits such as environmental co-benefits. Technical potential is the amount by which it is possible to reduce GHG emissions or improve energy efficiency by implementing a technology or practice that has already been demonstrated. No explicit reference to costs is made but adopting ?practical constraints? may take into account implicit economic considerations. Physical potential is the theoretical (thermodynamic) and sometimes, in practice, rather uncertain upper limit to mitigation. (IPCC, 2014)

Broader terms

projection of impacts