This is part of the labels / documentation for <a href='http://jcm.chooseclimate.org'>Java Climate Model</a><hr/>

#costs		¨oldJCM4 addJCM5		§This module may eventually help in comparison of regional emissions abatement costs and regional climate impacts. 

This module was developed as a contribution to the Belgian project Climneg II. Some results obtained are discussed in the report of that project, and also in the presentation "Optimisation under Uncertainty" made in Trieste 2004 (see link from webpage of applications of JCM) 

All quantitative output from this module should be considered @experimental, as the cost functions (derived from the RICE model) are very crude, the authors of JCM do **not** trust these formulae although they are typical of those used in "optimisation" type models.;;
(//It is envisaged that better functions may be added later as @jcm.mod.regimp are developed. In this case, this module would probably be split into three - mitigation costs, impacts and welfare//)

Neverthless, the module enables the user to gain some qualitative insights regarding relative efforts and impacts in different regions, particularly by experimenting to discover their sensitivity to value assumptions embedded in various parameters.

There are two sets of curves: raw costs, and @welfare.
Both sets include abatement, impacts and total. {{ 
*: Costs 
%%Costs are measured in US$ (2000), as for @GDP. They are shown without discounting, so they typically continue increasing into the future. As they do not take into account equity-weighting (see @inequality-aversion), they tend to overemphasise costs in richer countries (although such un-weighted costs may be appropriate when considering international emissions trading). %%

*: @Welfare £%welfare
}}
----
 €€adju Try adjusting the stabilisation level (see @stabilisation). Naturally, lowering this level increases costs in the short term, but reduces the total in the longer term - an issue of intergenerational equity (see @equity).  

€€adju For regional comparisions, it may be better to view costs or welfare per capita or per unit of GDP - by using @variant with curve-sets from @popgdp

€€adju The balance in costs between the regions also depends on the options in @shares .

€€adju Other parameters available in @expert level adjust the mitigation and impacts costs functions

%%€€cogs The region set  used is determined by the parameter @socregions, affecting all emissions and socioeconomic projections. As these regions differ from those used by the original cost functions, some automatic interpolations have to be made - which may produce strange results for small/atypical countries! %% 

  %% €€adju Note: Abatement cost (and welfare change) only makes sense, if the global @objective is **not** set to @nopolicy %%

#costsplot		¨oldJCM4		§£^apptag This plot illustrates the effect of varying JCM parameters on economic costs of emissions abatement and climate change impacts. Note that the current cost functions (derived from the RICE model) are very crude, and the author of JCM does <b>not</b> trust these formulae! It is envisaged that new functions will be added later.

  %% €€adju Important! Abatement (and total) cost only makes sense, if you have chosen both a mitigation scenario from @emitmenu  <i>and</i> a distribution option from @distribmenu. In the default setup the future distribution is unspecified (because this is a controversial issue) -in this case, future regional emissions are zero, so the costs would look very high! %%
  £§graphinfo
  €€adju Try adjusting the stabilisation level (@stabconcall or @stabtempdoc). Naturally, lowering this level increases costs in the short term, but reduces the total in the longer term - an issue of intergenerational equity (see @equity).  The balance in costs between the regions (best viewed per capita or per GDP) also depends on the @distribmenu.

#abcost		¨oldJCM4		§a nonlinear function (different for each region) of baseline emissions (from @sres) minus mitigated emissions (which depend on the future @stabilisation and @distribution options)

#damcost		¨oldJCM4		§a nonlinear function (different for each region)  of temperature from @heatflux .

#totcost		¨oldJCM4		§The sum of : £§abcost plus £§damcost

#disccost		¨oldJCM4		§Integral of future total costs, discounted over time. Total costs = £§totcost

#abatepow		¨oldJCM4		§Adjustable exponent within the RICE99 @abatefunc

#abatelin		¨oldJCM4		§Adjustable multiplier applied to all @abatefunc

#damagelin		¨oldJCM4		§Adjustable multiplier applied to all @impfunc

#macgem		¨oldJCM4		§Marginal Abatement Curves extracted from the MacGEM model of KUL (Univ Leuven) for the Climneg II project.

#discountrate		¨oldJCM4		§JCM does not use one simple discount rate.

Discount rates differ between regions and change over time, due to the use of @inequality-aversion combined with the  @pure_rate_time_pref.
The @effdisc2000 is only an example, a global average at one point in time.

Consequently, the effective discount rate in each region depends on the economic growth (see @gdp_ppp), so it is typically higher in fast-growing developing regions and lower in more stable industrialised regions. This reflects observations and typical policies. 

The global average discount rate will also decrease over time as developing countries become richer. Such "hyperbolic discounting" is an intrinsic consequence of using the @inequality-aversion, and helps to permit long-term impacts (such as sea-level rise) to be taken into account within an economic framework.