8.2 Ancillary effects of climate change policies

Climate change policies are commonly evaluated on their potential to reduce greenhouse gas emissions. However, they also have potential indirect or ancillarly effects on various sectors such as public health, transportation and ecosystem. Therefore, it is important to understand the ancillarly effects of policies on climate change in order to have a complete picture of the potential consequences they have for the environment and the economy. The term ancillarly benefits of greenhouse gas mitigation policies have been defined as the social welfare improvements from greenhouse gas abatement policies other than those caused by changes in greenhouse gas emissions, which incidentally arise as a consequence of mitigation policies.

Figure 4.0: Ancillary benefits of GHG mitigation

All said however, there is no denying that many uncertainties exists in ancillary effects analysis, and it requires a very careful and transparent approach, including considering of ancillary costs, if major policy mistakes are to be avoided. There are again far more uncertainty when it comes to the developing countries, as practically no data are available for analysis. Most of the ancillary effects till date came from the developed countries, especially USA and Europe. These data are again based on detailed, national assessments of health and other impacts and values. The question of which effects are direct and which are ancillary are again a conflict zone when it comes to the developing countries. In the developed countries with quantitative commitments under the Kyoto Protocol, governments are compelled to consider alternative approaches to meeting the Kyoto targets, their costs and benefits. Hence, there is little fundamental difficulty with the consideration of ancillarly effects of climate policies in principle. In this context, it is important that the potential CDM projects initiated are assessed to ensure development needs.