Richard S. Eckaus, November 1990
Policies dealing with global warming require a measure of the effects of the emissions of greenhouse gases that create different magnitudes of instantaneous radiative forcing and have different lifetimes. The Global Warming Potential (GWP), a physical index of the total radiative forcing due to an emission of a unit amount of a particular greenhouse gas has been proposed by the Intergovernmental Panel on Climate Change as a such a policy tool. In general, no such physical index will serve this purpose. Adding up physical measures of radiative forcing in different periods resulting from emissions at different times and places is, in an economic and policy sense, like adding apples and oranges. Discounting of radiative forcing in successive periods, as in done in some versions of the GWP, is only an arbitrary weighting.
Reduction of radiative forcing effects in different future periods of greenhouse gas emissions that occur at different times and places can be expected to impose different economic costs. These opportunity cost valuations must be used to weight the effects of a greenhouse gas emission over its lifetime. That leads to the concept of the Emissions Opportunity Cost (EOC) of a greenhouse gas emission. While this is more difficult to measure, it is the essential guide to policy.