Much of the ambiguity related to sustainable development and climate change arises from the lack of measurements that could provide policymakers with essential information on the alternative choices at stake, how those choices affect clear and recognizable social, economic, and environmental critical issues, and also provide a basis for evaluating their performance in achieving goals and targets. Therefore, indicators are indispensable to make the concept of sustainable development operational. At the national level important steps in the direction of defining and designing different sets of indicators have been undertaken; however, much work remains to be done to translate sustainability objectives into practical terms.

It is difficult to generalize about sustainable development policies and choices. Sustainability implies and requires diversity, flexibility, and innovation. Policy choices are meant to introduce changes in technological patterns of natural resource use, production and consumption, structural changes in the production systems, spatial distribution of population and economic activities, and behavioural patterns. Climate change literature has by and large addressed the first three topics, while the relevance of choices and decisions related to behavioural patterns and lifestyles has been paid scant attention. Consumption patterns in the industrialized countries are an important reason for climate change. If people changed their preferences this could alleviate climate change considerably. To change consumption patterns, however, people must not only change their behaviour but also change themselves because these patterns are an essential element of lifestyles and, therefore, of self-esteem. Yet, apart from climate change there are other reasons to do so as well as indications that this change can be fostered politically.

A critical requirement of sustainable development is a capacity to design policy measures that, without hindering development and consistent with national strategies, could exploit potential synergies between national economic growth objectives and environmentally focused policies. Climate change mitigation strategies offer a clear example of how co-ordinated and harmonized policies can take advantage of the synergies between the implementation of mitigation options and broader objectives. Energy efficiency improvements, including energy conservation, switch to low carbon content fuels, use of renewable energy sources and the introduction of more advanced non conventional energy technologies, are expected to have significant impacts on curbing actual GHG emission tendencies. Similarly, the adoption of new technologies and practices in agriculture and forestry activities as well as the adoption of clean production processes could make substantial contributions to the GHG mitigation effort. Depending on the specific context in which they are applied, these options may entail positive side effects or double dividends, which in some cases are worth undertaking whether or not there are climate-related reasons for doing so.

Sustainable development requires radical technological and related changes in both developed and developing countries. Technological innovation and the rapid and widespread transfer and implementation of individual technological options and choices, as well as overall technological systems, constitute major elements of global strategies to achieve both climate stabilization and sustainable development. However, technology transfer requires more than technology itself. An enabling environment for the successful transfer and implementation of technology plays a crucial role, particularly in developing countries. If technology transfer is to bring about economic and social benefits it must take into account the local cultural traditions and capacities as well as the institutional and organizational circumstances required to handle, operate, replicate, and improve the technology on a continuous basis.

The process of integrating and internalizing climate change and sustainable development policies into national development agendas requires new problem solving strategies and decision-making approaches. This task implies a twofold effort. On one hand, sustainable development discourse needs greater analytical and intellectual rigor (methods, indicators, etc.) to make this concept advance from theory to practice. On the other hand, climate change discourse needs to be aware of both the restrictive set of assumptions underlying the tools and methods applied in the analysis, and the social and political implications of scientific constructions of climate change. Over recent years a good deal of analytical work has addressed the problem in both directions. Various approaches have been explored to transcend the limits of the standard views and decision frameworks in dealing with issues of uncertainty, complexity, and the contextual influences of human valuation and decision making. A common theme emerges: the emphasis on participatory decision making frameworks for articulating new institutional arrangements.

Different levels of globally agreed limits for climate change (or for corresponding atmospheric GHG concentrations), entail different balances of mitigation costs and net damages for individual nations. Considering the uncertainties involved and future learning, climate stabilization will inevitably be an iterative process: nation states determine their own national targets based on their own exposure and their sensitivity to other countries' exposure to climate change. The global target emerges from consolidating national targets, possibly involving side payments, in global negotiations. Simultaneously, agreement on burden sharing and the agreed global target determines national costs. Compared to the expected net damages associated with the global target, nation states might reconsider their own national targets, especially as new information becomes available on global and regional patterns and impacts of climate change. This is then the starting point for the next round of negotiations. It follows from the above that establishing the "magic number" (i.e., the upper limit for global climate change or GHG concentration in the atmosphere) will be a long process and its source will primarily be the policy process, hopefully helped by improving science.

Looking at the key dilemmas in climate change decision making, the following conclusions emerge (see also Table TS.7):

• a carefully crafted portfolio of mitigation, adaptation, and learning activities appears to be appropriate over the next few decades to hedge against the risk of intolerable magnitudes and/or rates of climate change (impact side) and against the need to undertake painfully drastic emission reductions if the resolution of uncertainties reveals that climate change and its impacts might imply high risks;
• emission reduction is an important form of mitigation, but the mitigation portfolio includes a broad range of other activities, including investments to develop low-cost non-carbon, energy efficient and carbon management technologies that will make future CO₂ mitigation less expensive;
• timing and composition of mitigation measures (investment into technological development or immediate emission reductions) is highly controversial because of the technological features of energy systems, and the range of uncertainties involved in the impacts of different emission paths;
• international flexibility instruments help reduce the costs of emission reductions, but they raise a series of implementation and verification issues that need to be balanced against the cost savings;
• while there is a broad consensus to use the Pareto optimality³⁰ as the efficiency principle, there is no agreement on the best equity principle on wich to build an equitable international regime. Efficiency and equity are important concerns in negotiating emission limitation schemes, and they are not mutually exclusive. Therefore, equity will play an important role in determining the distribution of emissions allowances and/or within compensation schemes following emission trading that could lead to a disproportionately high level of burden on certain countries. Finally, it could be more important to build a regime on the combined implications of the various equity principles rather than to select any one particular equity principle. Diffusing non-carbon, energy-efficient, as well as other GHG reducing technologies worldwide could make a significant contribution to reducing emissions over the short term, but many barriers hamper technology transfer, including market imperfections, political problems, and the often-neglected transaction costs;
• some obvious linkages exist between current global and continental environmental problems and attempts of the international community to resolve them, but the potential synergies of jointly tackling several of them have not yet been thoroughly explored, let alone exploited.

Mitigation and adaptation decisions related to anthropogenically induced climate change differ. Mitigation decisions involve many countries, disperse benefits globally over decades to centuries (with some near-term ancillary benefits), are driven by public policy action, based on information available today, and the relevant regulation will require rigorous enforcement. In contrast, adaptation decisions involve a shorter time span between outlays and returns, related costs and benefits accrue locally, and their implementation involves local public policies and private adaptation of the affected social agents, both based on improving information. Local mitigation and adaptive capacities vary significantly across regions and over time. A portfolio of mitigation and adaptation policies will depend on local or national priorities and preferred approaches in combination with international responsibilities.

Given the large uncertainties characterizing each component of the climate change problem, it is difficult for decision makers to establish a globally acceptable level of stabilizing GHG concentrations today. Studies appraised in Chapter10 support the obvious expectations that lower stabilization targets involve substantially higher mitigation costs and relatively more ambitious near-term emission reductions on the one hand, but, as reported by WGII, lower targets induce significantly smaller bio/geophysical impacts and thus induce smaller damages and adaptation costs.

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