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Policies designed to control greenhouse gases imply domestic tradeoffs and international externalities, which lead to both domestic and international conflicts, influencing their feasibility and implementations. Our paper investigates two quantitative aspects within this debate. We intend to quantify the impact of: (a) the internalization of international externalities; and (b) the damage associated with a short-term view of climate policies. In this respect, we adopt the innovative (in this field) idea of model predictive control to formalize moving-horizon policy strategies and, thus, to build counterfactuals characterized by a different horizon for all policymakers. [ABSTRACT FROM AUTHOR]

The research aim of the paper is to analyze the objectives of the European Union (EU) climate policy and the instruments for their implementation, as well as to present the challenges on the way to achieving climate neutrality by the EU. In 2015, during the 21st UN Climate Change Conference in Paris, an agreement was agreed, the purpose of which is to limit global warming, aiming, among other things, for limiting the increase in global average temperature to well below 2°C above pre-industrial levels, and preferably to no more than 1.5°C. All EU Member States have ratified the above agreement, while agreeing to take action to make the EU the world’s first climate-neutral economy and society by 2050. To achieve this, the “European Green Deal” strategy was adopted, followed by the European Climate Law and the “Fit for 55” package of legislative proposals. In addition, a more ambitious EU climate target for 2030 has been agreed, namely a reduction of net greenhouse gas emissions by at least 55% compared to 1990 levels. Based on this, the following research hypothesis should be put forward, assuming that if all initiated projects, climate programs and mechanisms are fully implemented, the EU will become the first climate neutral continent by 2050. The first part of the article focuses on the goals of the European Green Deal and their implementation. The second part discusses the assumptions of European Climate Law and the elements of the “Fit for 55” package, as well as presents the most important financial instruments of the EU climate policy. The third part contains an analysis of the challenges standing in the way of the EU achieving climate neutrality by 2050, including the COVID-19 pandemic and the Russian aggression against Ukraine. [ABSTRACT FROM AUTHOR]

The European Union's climate policy aims to reduce greenhouse gas emissions by 55% by 2030 and to achieve climate neutrality by 2050. One of the instruments for achieving these climate goals is the development of offshore wind energy. Unfortunately, Poland, as one of the few European Union countries with access to the sea, does not have offshore wind farms yet. The purpose of this article is to determine the importance of offshore wind energy for the development of Poland based on the example of two sea regions: the West Pomeranian and Pomeranian Voivodeships. This article uses the input–output method to determine the economic effects of offshore wind power. The region's share in the supply chain was determined based on the location of the offshore wind energy sector. A comparative analysis with the Saint-Brieuc offshore wind farm in France made it possible to show the differences between the studied locations. The supply chain share of the regions surveyed was 2.28% and 6.00% in the CAPEX phase and 5.98% and 8.23% in the OPEX phase. The annual average global value in the CAPEX phase at the country level was EUR 2793 million, and at the regional level, EUR 243 million and EUR 663 million. In the OPEX phase, the corresponding values are EUR 2106 million, EUR 223 million and EUR 663 million. The average annual employment in the CAPEX phase at the national level amounted to 26,323 jobs and at the regional level, 1953 and 5804. In the OPEX phase, employment amounted to 4790, 558 and 751 jobs, respectively. On the other hand, the average annual value added in the CAPEX phase at the national level was EUR 1221 million, and at the regional level, it was EUR 106 million and EUR 290 million. In the OPEX phase, it was EUR 920 million, EUR 97 million and EUR 239 million, respectively. While not all of the findings are conclusive, in general, the domestic offshore wind industry has weaker economic linkages and lower wage levels than the location adopted for comparison. It uses more labour-intensive economic sectors with lower OPEX value added. The results of the analyses presented in this paper are of crucial importance not only for Poland, as their advantage is the possibility to present, from an economic point of view, the profitability of this type of investment in general. [ABSTRACT FROM AUTHOR]

This paper explores whether economic viability is the key to achieve deep decarbonization or net zero emissions. The hypothesis tested is that popular support for decarbonization policies is conditional upon most people's belief that their economic well-being will improve, or at least not suffer with these policies. While GDP growth is the typical metric for economic health, a more useful socio-economic indicator for gauging the political viability of climate policies may be job creation. Specifically, the paper reviews the existing evidence about whether climate policies are more successful in achieving deep decarbonization in the long run if policy-makers include job creation as well as emissions reductions when designing and implementing climate policies, because, to date, climate policy-makers have often focused on emissions reductions as the primary criterion for policy choice. While empirical evidence remains thin, we find that job creation in low-carbon industries appears to lead to greater political support for the climate policies that contribute to decarbonization, but employment factors are not always the most salient factor in a voter's decision. We also find empirical evidence that clean energy deployment policies, such as feed-in tariffs, have led to significant net gains in employment in the countries that have been studied. The review points to several policy implications, including the need to assess competitive advantage, develop plans, design and execute industrial policy, and develop a low-carbon workforce. [ABSTRACT FROM AUTHOR]

The lack of equal globally binding GHG's emission reduction targets is currently leading to a set of diverging GHG's emission prices across the world (or even no price for GHG's emission in some regions). This may result in distortions with direct implications on competitiveness of the industries in regions with strict climate policies (as the European Union) and can cause the issue of carbon leakage. Carbon leakage is defined as 'the increase in emission outside a region as a direct result of the policy to cap emission in this region'. This paper is the first part of the set of two analysis aiming at the carbon leakage assessment. In the following paper (aimed to be published this year), we will assess the impact of free allowances for emission intensive trade exposed industries (EITE) and the NDCs in the rest of the world countries - for the sake of brevity, we decided to remove these results from the current paper, but they will be presented later this year. The purpose of this paper is to assess the possible scale of the carbon leakage using different assumptions and policy scenarios and identify channels to efficiently prevent the carbon leakage phenomenon. The analysis has been carried out using the computable general equilibrium d-PLACE model developed within the Centre for Climate and Policy Analysis (CAKE).2 Our model is a recursive dynamic multi-regional and multi-commodity tool in which emissions are modelled in great detail, for example, the process and each fossil fuel combustion related emission are modelled separately. Furthermore, the big advantage of the applied model is a very detailed modelling of EU ETS as well as non-ETS emission targets. In the paper, the simulations using two versions of model was presented - with and without endogenous technical change to elaborate on how the assumptions on technical change affect the modelling results and consequent scale of the carbon leakage. Moreover, this paper aims mainly at the assessment of different channels of carbon leakage; therefore, we do not take into account either NDCs in the rest of the world or free allowances for emission intensive trade exposed sectors. These problems will be handled in the next paper, aimed to be published later this year. Using the above mentioned CGE (computable general equilibrium model, we captured the main factors, that determine the carbon leakage rates. We assessed the contribution of three channels - demand channel, competitiveness channel and carbon intensity channel to the risk of carbon leakage. It turned out that carbon intensity channel and competitiveness channel are the most important, while demand channel contributes to changes in GHG's emission only in the most restrictive scenario. Moreover, energy channel was further decomposed to the impact of sectoral structure and influence in emission intensity within each sector - the impact of these two channels is also similar, but dependent on the analysed scenario. Such a decomposition allowed us to determine the main channels through which the carbon leakage occur and pursue relevant policy recommendations. [ABSTRACT FROM AUTHOR]

Humanity has a shrinking window to drastically reduce greenhouse gas emissions, yet climate action is still lacking on both individual and policy levels. We argue that this is because behavioral interventions have largely neglected the basic principles of operant conditioning as one set of tools to promote collective climate action. In this perspective, we propose an operant conditioning framework that uses rewards and punishments to shape transportation, food, waste, housing, and civic actions. This framework highlights the value of reinforcement in encouraging the switch to low-emission behavior, while also considering the benefit of decreasing high-emission behavior to expedite the transition. This approach also helps explain positive and negative spillovers from behavioral interventions. This paper provides a recipe to design individual-level and system-level interventions to generate and sustain low-emission behavior to help achieve net zero emissions. [ABSTRACT FROM AUTHOR]

A method to objectively compare and link climate policies, expressed in CO2eq, to IPCC's carbon budgets, expressed in CO2-only, is exhibited, as countries often omit to so in their Nationally Determined Contributions. Furthermore, they are usually pledging only towards territorial targets despite the fact that imported emissions are now greater in occidental countries, thus relying on the countries they are importing from to achieve their own territorial emissions reductions. This paper demonstrates that the +1.5 °C carbon budgets of France and Wallonia will be exceeded even with territorial emissions only. For the +2 °C carbon budget to be secured, France should reduce its imported emissions at least to the same extent as their projected territorial emissions. For Wallonia, this is even emphasized since it has no margin in the +2 °C carbon budget with only the territorial emissions. It should therefore legally adopt more ambitious territorial and imported emissions reduction pathways with short-term commitments. [ABSTRACT FROM AUTHOR]

At present, the potential climate benefits of natural gas are largely offset by methane emissions from the natural gas supply chain. This paper estimates the cost of reducing methane emissions from the extraction segment of the industry by examining how production facilities' emissions respond to natural gas prices. Because firms mitigate emissions up to the point at which their marginal cost of abatement equals their marginal private benefit of being able to sell captured gas, an estimated relationship between emission rates and prices can be mapped to a marginal abatement cost curve. Results indicate that pricing methane emissions would generate substantial net social benefits. For instance, a relatively modest emissions tax equivalent to a $5 carbon price would decrease emissions by 60%, achieving about $1.8 billion annually in avoided climate damages at a net cost of about $50 million per year. [ABSTRACT FROM AUTHOR]

Emissions from aviation are expected to grow. With evidence that the International Civil Aviation Organization's Carbon Offsetting and Reduction Scheme for International Aviation is an inadequate mitigation mechanism, there is interest in upscaling the sector's climate-related policies. This paper reviews potential aviation emissions mitigation policies against the background of emerging complexities, such as the large share of radiative forcing not covered under any policy agreement, as well as highly skewed demand distributions. In total, 30 voluntary, market-based and regulatory "transition policies" are identified and evaluated with regard to their potential to reduce emissions from air passenger transport and to initiate the transition to new fuels and propulsion technologies. The paper also discusses the potential public acceptance of differing policies. It concludes that the removal of fossil fuel and related subsidies represents a priority, supported by policy mixes comprising levies (CO2, frequent fliers, premium classes) and a feed-in quota for definitively established sustainable aviation fuels. To reduce flight emissions is feasible in principle, but will require policy initiatives at the national level or at the level of regional jurisdictions such as the European Union. [ABSTRACT FROM AUTHOR]

To meet the Paris Agreement targets, carbon emissions from the energy system must be eliminated by mid-century, implying vast investment and systemic change challenges ahead. In an article in WIREs Climate Change, we reviewed the empirical evidence for effects of carbon pricing systems on technological change towards full decarbonisation, finding weak or no effects. In response, van den Bergh and Savin (2021) criticised our review in an article in this journal, claiming that it is "unfair", incomplete and flawed in various ways. Here, we respond to this critique by elaborating on the conceptual roots of our argumentation based on the importance of short-term emission reductions and longer-term technological change, and by expanding the review. This verifies our original findings: existing carbon pricing schemes have sometimes reduced emissions, mainly through switching to lower-carbon fossil fuels and efficiency increases, and have triggered weak innovation increases. There is no evidence that carbon pricing systems have triggered zero-carbon investments, and scarce but consistent evidence that they have not. Our findings highlight the importance of adapting and improving climate policy assessment metrics beyond short-term emissions by also assessing the quality of emission reductions and the progress of underlying technological change. [ABSTRACT FROM AUTHOR]

Marginal emissions of CO2 from the electricity sector are critical for evaluating climate policies that rely on shifts in electricity demand or supply. This paper provides estimates of marginal CO2 emissions from US electricity generation using the most recently available and comprehensive data. The estimates vary by region, hour of the day, and year to year over the last decade. We identify an important and somewhat counterintuitive finding: While average emissions have decreased substantially over the last decade (28% nationally), marginal emissions have increased (7% nationally). We show that underlying these trends is primarily a shift toward greater reliance on coal to satisfy marginal electricity use. We apply our estimates to an analysis of the Biden administration’s target of having electric vehicles (EVs) make up 50% of new vehicle purchases by 2030. We find that, without significant and concurrent changes to the electricity sector, the increase in electricity emissions is likely to offset more than half of the emission reductions from having fewer gasoline-powered vehicles on the road. Moreover, using average rather than marginal emissions to predict the impacts significantly overestimates the emission benefits. Overall, we find that the promise of EVs for reducing emissions depends, to a large degree, on complementary policies that decarbonize both average and marginal emissions in the electricity sector. [ABSTRACT FROM AUTHOR]

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The German Federal Climate Change Act includes binding annual greenhouse gas (GHG) emission targets for the economic sectors energy, industry, buildings, transport, agriculture and waste. For sectors that fail to meet their targets, climate policy measures have to be implemented immediately. However, some sectors may only have achieved their targets thanks to the COVID-19 pandemic, while others may have missed their targets because of COVID-19. For policy making, it is therefore important to disentangle the effects of the COVID-19 pandemic from the effects of policy and other drivers on emissions. In this paper, the effects of the pandemic on GHG emissions in Germany in 2020 are estimated at the national level and at the levels of the economic sectors. Counterfactual emissions are estimated here based on autoregressive econometric models, thereby distinguishing between different factors of emissions based on decomposition analysis. The findings at the national level suggest that the COVID-19 pandemic lowered GHG emissions in 2020 in Germany by about 41 Mt CO2-eq (5.15%) compared to counterfactual emissions. Accordingly, about 58% of the reduction in emissions between 2019 and 2020 in Germany may be attributed to the pandemic. The findings at the sectoral level imply that without the COVID-19 pandemic, all sectors with the exception of the transport sector, would have met their emissions target in 2020 as set in the Federal Climate Change Act. The transport sector would have missed its emission target in 2020 without COVID-19, suggesting that existing policies were not strong enough to bend the curve of emissions trends sufficiently down. In contrast, the buildings sector failed to meet its target in 2020 because of COVID-19, prompting immediate climate policy measures in this sector. The COVID-19 pandemic lowered greenhouse gas (GHG) emissions in Germany in 2020 by 5.5% compared to counterfactual emissions and accounted for about 58% of total estimated reductions between 2019 and 2020. Without COVID-19, all sectors but the transport sector would have met their emissions targets. Climate policy response should take into account the effects of extraordinary events like COVID-19 suppressing GHG emissions based on counterfactual emissions because failure to implement measures early on may turn out to be costly in the medium term once the transitory emissions reductions no longer occur. Counterfactual emissions should be considered prior to crediting emissions surplus or deficit to subsequent years. [ABSTRACT FROM AUTHOR]

Frequent site energy consumption auditing is a potential strategy to mitigate greenhouse gas (GHG) emissions from existing buildings. Such a strategy has been practised in Australia for nearly 15 years. This paper documents and analyses the effect of repetitive audits on measured site energy consumption. Using a self-constructed database of over 3500 audited disclosures representing over 800 unique office buildings, empirical models demonstrate that measured site energy consumption declines, on average, over the first five re-certification periods. The results also suggest a market average post-certification equilibrium in Australia of approximately 430 MJ/m2/year (120 kWh/m2/year) within approximately six years, if all else – including green management strategy – is held constant. Since GHG emissions from buildings in Australia are highly correlated with site energy consumption, such a result is comparable with meeting 50-year GHG mitigation targets reliant on the implementation of existing technologies. This suggests that repetitive auditing is a successful approach for motivating owners to invest in existing energy efficiency technologies. [ABSTRACT FROM PUBLISHER]

Economists tend to view a uniform emissions price as the most cost-effective approach to reducing greenhouse gas emissions. This paper scrutinizes the assumptions in general equilibrium which underlie the established view that uniform emissions pricing is optimal, focusing on economies where society values the well-being of future generations more than private actors. When social and private discount rates differ, we show that a uniform carbon price is optimal only under restrictive assumptions about technology homogeneity and intertemporal decision-making. Non-uniform pricing spurs capital accumulation and benefits future generations. Depending on sectoral heterogeneity in the substitutability between capital and energy inputs, we find that optimal carbon prices differ widely across sectors and yield substantial welfare gains relative to uniform pricing. Realizing these welfare gains, however, requires that the regulator has information on the technology heterogeneity across sectors. Differentiated carbon pricing based on imperfect estimates of technology heterogeneity can yield significant welfare losses. [ABSTRACT FROM AUTHOR]

The EU has established the world's first cross-border emission-trading systems (ETS) for greenhouse gas (GHG) emissions, currently covering aviation, emission-intensive sectors, and electricity (EITE). The EU Commission has offered to apply emissions trading in new sectors where emissions from maritime transport will be incorporated into the current EU ETS, while a separated emissions trading system will cover emissions from road transport and the building sector. This paper employs a multi-regional multi-sectoral computable general equilibrium (CGE) model with two simultaneous international emission permit markets. After examining the abatement costs for the EU regions, various policy scenarios are implemented to study the welfare effects of forming an ETS covering the sectors other than EITE (NEIT) and its linking with the EITE sectors under two different baselines and four emission reduction targets. The results provide several important insights: (i) Marginal abatement costs in Germany and the Eastern European Union region (EEU) are significantly lower than in the rest of the EU regions. (ii) The carbon price in the emission permit market covering NEIT is significantly higher than the carbon price in the emission permit market covering EITE. (iii) Germany and EEU appear as notable suppliers of emission permits in both markets. (iv) There is a significant aggregate welfare gain under the scenario in which the ETS covering NEIT co-exists parallel with the ETS covering EITE. (v) The aggregate welfare in the EU under the full integration of EITE and NEIT may fall below its value under the scenario with two parallel emission permit markets. [ABSTRACT FROM AUTHOR]

Measures to limit greenhouse gas concentrations will result in dramatic changes to energy and land systems and in turn alter the character of human requirements for water. We employ the global change assessment model (GCAM), an integrated assessment model, to explore the interactions of energy, land, and water systems under combinations of three alternative radiative forcing stabilization levels and two carbon tax regimes. The paper analyzes two important research questions: i) how large may global irrigation water demands become over the next century, and ii) what are the potential impacts of emissions mitigation policies on global irrigation-water withdrawals. We find that increasing population and economic growth could more than double the demand for water for agricultural systems in the absence of climate policy, and policies to mitigate climate change further increase agricultural demands for water. The largest increases in agricultural irrigation water demand occur in scenarios where only fossil fuel emissions are priced (but not land use change emissions) and are primarily driven by rapid expansion in bio-energy production. Regions such as China, India, and other countries in South and East Asia are likely to experience the greatest increases in water demands. Finally, we test the sensitivity of water withdrawal demands to the share of bio-energy crops under irrigation and conclude that many regions have insufficient space for heavy bio-energy crop irrigation in the future-a result that calls into question the physical possibility of producing the associated biomass energy, especially under climate policy scenarios. [ABSTRACT FROM AUTHOR]

The Paris Climate Agreement is based on pledges from 195 countries to substantially reduce emissions of greenhouse gases (GHG) to prevent dangerous climate change. The tourism sector has likewise pledged to reduce its GHG emissions (−70% by 2050); however, current emission trends would result in a tripling in the same timeframe. In order to understand how the sector understands the decarbonisation challenge, 17 senior tourism leaders were interviewed with regard to their perspectives on the risks and opportunities associated with climate change impacts and action. Respondents affirmed that the climate is already changing, fuelled by human activities, including tourism, and that its impacts on society and tourism will be largely negative and devastating in some regions. Opinion was divided regarding mitigation timelines, the compatibility of continued tourism growth with Paris Climate Agreement decarbonisation goals, and the role of technology and governance in reducing emissions. The paper examines leaders' perspectives in terms of "belief systems" that interpret information in decision-making, as well as forms of agnogenesis; this is, the fabrication of uncertainty to justify non-action. Belief systems and agnogenesis are thought to represent important barriers to progress on the decarbonisation of tourism, as they are for the global low-carbon transition. [ABSTRACT FROM AUTHOR]

The most dangerous effects of anthropogenic climate change can be mitigated by using emissions taxes or other regulatory interventions to reduce greenhouse gas (GHG) emissions. This paper takes a regulatory viewpoint and describes the Weighted Sum Bisection method to determine the lowest emission tax rate that can reduce the anticipated emissions of the power sector below a prescribed, regulatorily-defined target. This bilevel method accounts for a variety of operating conditions via stochastic programming and remains computationally tractable for realistically large planning test systems, even when binary commitment decisions and multiperiod constraints on conventional generators are considered. Case studies on a modified ISO New England test system demonstrate that this method reliably finds the minimum tax rate that meets emissions targets. In addition, it investigates the relationship between system investments and the tax-setting process. Introducing GHG emissions taxes increases the value proposition for investment in new cleaner generation, transmission, and energy efficiency; conversely, investing in these technologies reduces the tax rate required to reach a given emissions target. [ABSTRACT FROM AUTHOR]

Global climate change governance has changed substantially in the last decade, with a shift in focus from negotiating globally agreed greenhouse gas (GHG) reduction targets to nationally determined contributions, as enshrined in the 2015 Paris Agreement. This paper analyses trends in adoption of national climate legislation and strategies, GHG targets, and renewable and energy efficiency targets in almost all UNFCCC Parties, focusing on the period from 2007 to 2017. The uniqueness and added value of this paper reside in its broad sweep of countries, the more than decade-long coverage and the use of objective metrics rather than normative judgements. Key results show that national climate legislation and strategies witnessed a strong increase in the first half of the assessed decade, likely due to the political lead up to the Copenhagen Climate Conference in 2009, but have somewhat stagnated in recent years, currently covering 70% of global GHG emissions (almost 50% of countries). In comparison, the coverage of GHG targets increased considerably in the run up to adoption of the Paris Agreement and 89% of global GHG emissions are currently covered by such targets. Renewable energy targets saw a steady spread, with 79% of the global GHG emissions covered in 2017 compared to 45% in 2007, with a steep increase in developing countries. Key policy insights The number of countries that have national legislation and strategies in place increased strongly up to 2012, but the increase has levelled off in recent years, now covering 70% of global emissions by 2017 (48% of countries and 76% of global population). Economy-wide GHG reduction targets witnessed a strong increase in the build up to 2015 and are adopted by countries covering 89% of global GHG emissions (76% not counting USA) and 90% of global population (86% not counting USA) in 2017. Renewable energy targets saw a steady increase throughout the last decade with coverage of countries in 2017 comparable to that of GHG targets. Key shifts in national measures coincide with landmark international events - an increase in legislation and strategy in the build-up to the Copenhagen Climate Conference and an increase in targets around the Paris Agreement - emphasizing the importance of the international process to maintaining national momentum. [ABSTRACT FROM AUTHOR]

With the EU adopting more ambitious emission reduction targets this year, the European Commission in July published a proposal on measures for adjusting EU climate policy. Measures include a carbon border adjustment mechanism (CBAM) that imposes a price on emissions embodied in products imported to the EU. In this policy note, we review the main lines of the CBAM proposal and discuss its potential economic effects on China, India, Russia, Turkey and Ukraine - the EU's largest import sources for products subject to CBAM. We calculate illustrative estimates for the potential cost effects of several specifications of the CBAM for these countries and compare them against earlier estimates. We also discuss the potential aggregate economic effects of the CBAM for these economies based on earlier literature. Despite considerable variation across countries and sectors, our analysis suggests that the aggregate economic effects of the CBAM would be limited for most exporting countries. [ABSTRACT FROM AUTHOR]

The EU climate and energy policy landscape is characterized by a combination of instruments to achieve the EU 2020 and 2030 targets. In this paper, some of the most relevant interactions between RES-E support and a wide array of other climate and energy policies including the EU ETS, the Energy Taxation Directive and the Effort Sharing Directive in the European Union are assessed. A qualitative methodology is applied considering different assessment criteria such as effectiveness and efficiency of RES-E support and support costs but also distribution of costs between different stakeholder groups. Our analysis shows that, despite a common perception that interactions lead to conflicts, this is not really the case when the discussion is broadened and considers different assessment criteria. While adding one instrument or policy to another worsens one criterion, it usually improves another. Furthermore, the results of the interactions are not only specific to the policy, but also depend on the choice of instruments and design elements. [ABSTRACT FROM AUTHOR]

Swiss climate policy consists of three regulatory instruments for greenhouse gas emissions reduction: A CO 2 levy, the Swiss Emissions Trading System (CH EHS) and an additional program for medium-sized plants that is labeled 'nonEHS' and consists of command-and-control elements plus a sizeable abatement subsidy. Our paper informs about this tripartite climate policy, which is unique in the international context. Second, we estimate the differential impact of the CH EHS and the nonEHS program on plants' emissions. Our empirical strategy exploits a policy change in 2013 that instituted a mandatory emissions trading system for a subset of previously regulated plants. We find that the nonEHS outperforms the CH EHS for a minority of plants, but that on average, the two programs result in similar abatement efforts despite very different financial incentives. Plants that previously engaged in abatement efforts continue to do so even after the financial incentives were reduced by an order of magnitude. Key policy insights We find similar pollution abatement for plants regulated by an emissions trading system relative to plants receiving an abatement subsidy in Switzerland This is surprising given that the allowance price in the CH EHS is an order of magnitude lower than the abatement subsidy Emissions reductions in the ETS are especially pronounced for large plants, and for plants that had engaged in significant abatement in the past [ABSTRACT FROM AUTHOR]

This study answers four research questions by contextualising the background to Japan's "carbon neutrality and net-zero" (CNN) policy, which was announced in October 2020, and identifying important changes in Japanese climate policy between 1990 and 2020. What is the link between the problem of fairness under the Kyoto targets and the Japanese government's initial reluctance towards ambitious carbon emission reductions? Why did the Japanese business sector initially resist the possibility of ambitious carbon emission reductions? How has the term "climate crisis" contributed to the need for CNN policy? Why did the Japanese government change its reluctant stance and announce the CNN policy in October 2020? Four main findings were extracted from a narrative technique-based analysis of Japan's policy documents related to CNN. The following are the findings: [i] the framing of climate change as a "climate crisis" by influential Japanese climate stakeholders was a key motivation for Japan to formally announce its CNN policy in October 2020; [ii] pressure from the international community and the political leadership of the Yoshihide Suga administration are essential factors that led the Japanese government to change its stance and announced this policy; [iii] it is possible that the policy could have been announced sooner, but concern among Japanese climate stakeholders about the problem of fairness in the Kyoto Protocol's emission reduction targets likely impeded such an announcement; and [iv] this concern underpinned Keidanren's (or the business sector's) consistent opposition to the introduction of regulatory schemes. These results emerge for the first time in a study of Japan's carbon neutrality, particularly in terms of the broader context of climate politics. Finally, we offer a possible explanation for Suga's deliberate announcement of the CNN policy. This opens up space for future research to complement our study by providing important indicators on the trajectory of this important policy. [ABSTRACT FROM AUTHOR]

From 2021 onwards, forests and forestry will for the first time contribute to the European Union's climate action targets. The new Land Use, Land Use Change & Forestry (LULUCF) Regulation commits Member States to achieve carbon neutrality on the basis of an EU-wide system. The system accounts for carbon sequestered and emitted from forests and other land uses like crop- and wetland. What looks like a significant step in the Union's climate policy framework, however, leaves the large potential of Europe's forest sector for climate mitigation untapped. The present article draws this conclusion from a comprehensive analysis of 67 documents related to decision-making on the LULUCF Regulation. It reveals coalitional politics and the salience of the Commission's behavior as key to explain the Regulation's limited scope and concludes with assessing the future role of forests in the Union's climate policy framework. [ABSTRACT FROM AUTHOR]

This paper explores the climate consequences of “ delayed near-term action ” and “ staged accession ” scenarios for limiting warming below 2 °C. The stabilization of greenhouse gas concentrations at low levels requires a large-scale transformation of the energy system. Depending on policy choices, there are alternative pathways to reach this objective. An “ optimal ” path, as emerging from energy-economic modeling, implies immediate action with stringent emission reductions, while the currently proposed international policies translate into reduction delays and higher near-term emissions. In our delayed action scenarios, low stabilization levels need thus to be reached from comparatively high 2030 emission levels. Negative consequences are higher economic cost as explored in accompanying papers and significantly higher mid-term warming, as indicated by a rate of warming 50% higher by the 2040s. By contrast, both mid- and long-term warming are significantly higher in another class of scenarios of staged accession that lets some regions embark on emission reductions, while others follow later, with conservation of carbon-price pathways comparable to the optimal scenarios. Not only is mid-term warming higher in staged accession cases, but the probability to exceed 2 °C in the 21st century increases by a factor of 1.5. [ABSTRACT FROM AUTHOR]

It is widely acknowledged that there is an urgent need for policies that can reduce greenhouse gas emissions. Yet, the policies implemented by governments are far from sufficient to reach their long-term climate targets. In this paper, we propose a theoretical framework to study the implications of political pressure on optimal climate policy. A key feature of the framework is its ability to capture dynamic inconsistency, which naturally arises from the long time horizon of climate policies and their susceptibility to modifications due to political pressure. Our findings offer a new rationale for why green lobbying can make pollution regulation less stringent. We also show that political pressure from the polluting sector leads to a higher rate of clean energy investment chosen by the government and can shift the energy mix towards renewables in the long run. Similarly, this long-run shift can be caused by political pressure from members of the public who care only about immediate consumption. [ABSTRACT FROM AUTHOR]

In this paper Kenya’s climate change mitigation ambitions are analysed from an energy system perspective, with a focus on the role of renewable and other low-carbon energy technologies. At COP-21 in 2015 in Paris, Kenya has committed to a ‘nationally determined contribution’ of reducing domestic greenhouse gas emissions by 30% in 2030 in comparison to a business-as-usual projection. An efficient exploitation of the country’s renewable energy resources is key to achieving this target. We use the TIAM-ECN model to characterize plausible development pathways for the Kenyan energy mix until 2050 under different climate change mitigation scenarios. We conclude that the power sector can expand with mostly renewable energy options even in the absence of stringent greenhouse gas abatement targets. On the contrary, on the demand side a substantial deployment of low-carbon technologies is triggered only when ambitious emission reduction objectives are in place. The introduction of these technologies entails additional energy system costs, ranging in 2050 from 0.5% to 2% of the country’s GDP. Our analysis supports the feasibility of Kenyan climate management goals, provided that adequate investments in renewable and other low-carbon energy technologies are timely made available. [ABSTRACT FROM AUTHOR]

Climate change is one of the most daunting challenges human kind has ever faced. In the paper, we provide a survey of the micro and macro economics of climate change from a complexity science perspective and we discuss the challenges ahead for this line of research. We identify four areas of the literature where complex system models have already produced valuable insights: (i) coalition formation and climate negotiations, (ii) macroeconomic impacts of climate-related events, (iii) energy markets and (iv) diffusion of climate-friendly technologies. On each of these issues, accounting for heterogeneity, interactions and disequilibrium dynamics provides a complementary and novel perspective to the one of standard equilibrium models. Furthermore, it highlights the potential economic benefits of mitigation and adaptation policies and the risk of under-estimating systemic climate change-related risks. [ABSTRACT FROM AUTHOR]

Global warming is an existential threat to humanity and the rapid energy transition, which is required, will be the defining social, political and technical challenge of the 21st century. Practical experience and research results of recent years have showed that our actions to cover the gap between real situation and aims of climate agreements are not enough and that improvements in climate policy are needed, primarily in the energy sector. It is becoming increasingly clear that hydrocarbon resources, which production volume is increasing annually, will remain a significant part of the global fuel balance in the foreseeable future. Taking this into account, the main problem of the current climate policy is a limited portfolio of technologies, focused on replacement of hydrocarbon resources with renewable energy, without proper attention to an alternative ways of decreasing carbon intensity, such as carbon sequestration options. This study shows the need to review the existing climate policy portfolios through reorientation to CO2 utilization and disposal technologies and in terms of forming an appropriate appreciation for the role of hydrocarbon industries as the basis for the development of CO2-based production chains. In this paper we argue that: (1) focusing climate investments on a limited portfolio of energy technologies may become a trap that keeps us from achieving global emissions goals; (2) accounting for greenhouse gas (GHG) emissions losses, without taking into account the potential social effects of utilization, is a barrier to diversifying climate strategies; (3) with regard to hydrocarbon industries, a transition from destructive to creative measures aimed at implementing environmental projects is needed; (4) there are no cheap climate solutions, but the present cost of reducing CO2 emissions exceeds any estimate of the social cost of carbon. [ABSTRACT FROM AUTHOR]

This paper investigates the social costs of second-best agricultural greenhouse gas (GHG) mitigation policies. Adjustments along the land use and input intensity margins are represented within a regionalized optimization model of California crop production calibrated to economic and agronomic information. Second-best policies relying on spatially aggregated GHG emission factors lead to small abatement efficiency losses, while policies targeting a single GHG lead to moderate losses. In contrast, policies targeting a single input entail large abatement efficiency losses, which nonetheless can be reduced by combining instruments. [ABSTRACT FROM AUTHOR]

This paper adopts an ex ante perspective to investigate the potential techno-organisational dynamics related to reducing greenhouse gas (GHG) emissions in the EU by 2030 and 2050. We provide a qualitative analysis based on interviews with representatives from the main manufacturing sectors in the EU. Path dependency and enhanced carbon pricing may support the ‘incremental path’. More radical changes are achievable through strong techno-organisational reorganisation and new policy support. It follows that technological innovation is sufficiently effective only if coupled with organisational innovation. Earmarking ‘environmental revenues’ to support sector R&D is a way to enhance the governance of the innovation-policy realm and create opportunities for radical innovation. [ABSTRACT FROM AUTHOR]

The literature on metrics to measure contributions to climate change from emissions of different greenhouse gases divides into studies that highlight physical aspects and studies that show the importance of economic factors. This paper distinguishes the physical aspects and implications of economic factors by asking what is demanded from physically based metrics if used for a specific policy objective. We study the aim of maximizing the welfare of emissions generated by consumption when there is a limit to the increase in global mean temperature. In that case, metrics ought to change over time, with increasing weight on short-living gases before the temperature limit is met. Metrics for short-living gases increase also with increasing uncertainty. Adjustments to new information spur higher metrics for short-living gases if it reduces the expected allowable emissions before the target is met, and lower metrics in the opposite case. Under a binding target, metrics refer to the instantaneous impact on radiative forcing multiplied by the lifetime of the respective gases, and adjusted by the attitude to risk. [ABSTRACT FROM AUTHOR]

In this paper, we present ten scenarios developed using the IMAGE2.4 framework (Integrated Model to Assess the Global Environment) to explore how different assumptions on future climate and air pollution policies influence emissions of greenhouse gases and air pollutants. These scenarios describe emission developments in 26 world regions for the 21st century, using a matrix of climate and air pollution policies. For climate policy, the study uses a baseline resulting in forcing levels slightly above RCP6.0 and an ambitious climate policy scenario similar to RCP2.6. For air pollution, the study explores increasingly tight emission standards, ranging from no improvement, current legislation and three variants assuming further improvements. For all pollutants, the results show that more stringent control policies are needed after 2030 to prevent a rise in emissions due to increased activities and further reduce emissions. The results also show that climate mitigation policies have the highest impact on SO 2 and NO X emissions, while their impact on BC and OC emissions is relatively low, determined by the overlap between greenhouse gas and air pollutant emission sources. Climate policy can have important co-benefits; a 10% decrease in global CO 2 emissions by 2100 leads to a decrease of SO 2 and NO X emissions by about 10% and 5%, respectively compared to 2005 levels. In most regions, low levels of air pollutant emissions can also be achieved by solely implementing stringent air pollution policies. The largest differences across the scenarios are found in Asia and other developing regions, where a combination of climate and air pollution policy is needed to bring air pollution levels below those of today. [ABSTRACT FROM AUTHOR]

Soils are an enticing reservoir for nature-based climate solutions, but long timescales are required to store amounts of C of relevance to mitigate warming acknowledging its impermanence. Scientific clarity on the controlling factors in soil C persistence should help to disambiguate debates related to permanence in the climate policy domain. However, another contributing factor that is lacking in this debate is a way to compute the climate benefits of C in terrestrial ecosystems over time in the same units as greenhouse gas emissions. We use a case study approach here to demonstrate the use of the metrics of carbon sequestration (CS) and climate benefit of sequestration (CBS) with the aim of assessing the contribution of simultaneous emissions and uptake on radiative forcing. We show how this new computational framework quantifies the climate benefit achieved in two different agricultural systems, one a managed tropical perennial grass system in Hawaiʻi, USA and the other a boreal (cold-temperate, semi-humid) agricultural soil from long term amendment trials in Sweden. Using a set of computations, we show how C inputs and persistence interact to produce different levels of radiative forcing at relevant time frames, which could greatly help to clarify issues of carbon permanence discussed in climate policy. Temporary soil C storage could help to decrease peak warming provided that ambitious emission reductions are part of the portfolio of solutions; the CS and CBS framework gives us a way to quantify it based on biogeochemical understanding of soil C persistence. [ABSTRACT FROM AUTHOR]

Environmental policy with uncertainty is often posed as a choice between price and quantity instruments. Adding flexibility to fixed policy instruments can improve outcomes. Roberts and Spence noted the efficiency advantages of matching emissions allowances supply to the marginal damage schedule. We propose an implementable approach to making that match, an approach we call "price-responsive supply," which treats prices and quantities as simultaneously determined in the allowance auction. For competitive environments, price-responsive supply outperforms fixed-price and fixed-quantity instruments. Price-responsive supply can enhance the performance of real-world regulatory environments through an automatic adjustment mechanism that responds instantaneously to new information about abatement costs. We demonstrate the improved performance of price-responsive supply in experiments and simulations. A price-responsive supply schedule, while offering efficiency advantages, also translates the cost-lowering effects of other, coincident policies into accelerated reductions under an emissions cap, thereby helping to resolve the waterbed effect. [ABSTRACT FROM AUTHOR]

The way Norway is spearheading electrification in the transport sector is of global interest. In this study, we used the Norwegian Emissions from Road Vehicle Exhaust (NERVE) model, a bottom-up high-resolution traffic emission model, to calculate all emissions in Norway (2009–2020) and evaluate potential co-benefit and trade-offs of policies to target climate change mitigation, air quality and socioeconomic factors. Results for municipal data with regard to traffic growth, road network influences, vehicle composition, emissions and energy consumption are presented. Light vehicle CO 2 emissions per kilometer have been reduced by 22% since 2009, mainly driven by an increasing bio-fuel mixing and battery electric vehicles (BEV) share. BEVs are mostly located in and around the main cities, areas with young vehicle fleets, and strong local incentives. Beneficiaries of BEVs incentives have been a subset of the population with strong economic indicators. The incentivized growth in the share of diesel-fuelled passenger vehicles has been turned, and together with Euro6 emission standards, light vehicle NOx emissions have been halved since peaking in 2014. BEVs represent an investment in emission reductions in years to come, and current sales set Norway up for an accelerated decline in all exhaust emissions despite the continual growth in traffic. [ABSTRACT FROM AUTHOR]

We implement the hybrid (energy-economy) recursive-dynamic multisector IMACLIM model with important adaptations to Saudi macroeconomics. We design two scenarios reflecting both the Saudi Vision 2030 economic development program and Nationally Determined Contribution (NDC) to greenhouse gas mitigation: Continuity of previous plans to expand energy-intensive activities under maintained energy-pricing policies, versus Transformation by economic diversification away from hydrocarbon-related activities and fiscal and energy-pricing reforms. We show that, compared to Continuity, Transformation improves activity, employment and public budget outlooks, while considerably abating the energy intensity of GDP and total CO2 emissions. Our results thus point at the relevance of economic diversification as both a hedging strategy against international climate change mitigation depressing oil markets and a national climate mitigation strategy for Saudi Arabia. However, the successful advancement of the reforms necessary for diversification remains conditional to setting a suitable institutional framework for a competitive economy. [ABSTRACT FROM AUTHOR]

The reduction of greenhouse gas emissions is the key action to limit global warming. An important source of greenhouse gas emissions and pollution is the inefficiency of production processes. We report results from a stochastic nonparametric efficiency analysis using directional distance functions to take account of undesirable outputs like greenhouse gases. With this approach, we are able to provide estimates of the potential emission reductions for 7 main sectors in 16 European countries. A specially adapted bootstrapping approach allows to implement a bias correction of the estimates and to compute confidence intervals. The results show that static efficiency improvements are a quantitatively important element of the emission reductions which are required to achieve the reduction targets of the European Union. [ABSTRACT FROM AUTHOR]

In order to achieve stringent greenhouse gas emission reductions, a transition of our entire energy system from fossil to renewable resources needs to be designed. Such an energy transition brings two main challenges: most renewables generate variable electric energy, yet most demand is currently not electric (carrier mismatch) and does not always manifest at the same time as supply (temporal mismatch). Integrating multiple energy infrastructures can address both challenges by using the synergy between different energy carriers; building on existing infrastructure, while allowing a robust and flexible integration of the new. This paper proposes an optimization framework for long-term, multi-period investment planning of urban energy systems in an integrated manner. We formulate it as a mixed-integer linear program, combining a capacitated facility location with a multi-dimensional, capacitated network design problem. It includes generation and network expansion planning as well as interconnections between networks and storage infrastructure for each energy system. It can incorporate pathway effects like techno-economic developments, policy measures, and weather variations. The intended use is to support urban decision makers with long-term investment planning, though it can be tailored to fit other geographical or temporal scales. We demonstrate the model using two cases based on an average city in The Netherlands, which wants to reduce its CO 2 -emissions with 95% by 2050. In the first case, we include explicit carbon-emission constraints to study the effects of the carrier mismatch. In the second case, we implement interannual weather variations to analyze the temporal mismatch. The results give valuable insights into the energy transition design strategy for urban decision makers. They also show the future potential, as well as the computational challenges of the optimization framework. [Display omitted] • Generic optimization framework for energy transition design of urban infrastructures. • Full coupling of multiple energy infrastructures provides serious potential for robust and flexible solutions. • Multi-period investment planning allows explicit inclusion of social, techno-economical, and physical pathway effects. • Strict climate goals can be achieved and interannual weather variations balanced well. • Novel formulation of a capacitated facility location network design problem implies significant mathematical and computational complexity. [ABSTRACT FROM AUTHOR]

Almost 10 years ago, California’s legislature passed Assembly Bill 32, the Global Warming Solutions Act of 2006. AB 32 set the most ambitious legally binding climate policy in the United States, requiring that California’s greenhouse gas emissions return to 1990 levels by the year 2020. The centerpiece of the state’s efforts—in rhetorical terms, if not practical ones—is a comprehensive carbon market, which California’s leaders promote as a model policy for controlling carbon pollution. Over the course of the past 18 months, however, California quietly changed its approach to a critical rule affecting the carbon market’s integrity. Under the new rule, utilities are rewarded for swapping contracts on the Western electricity grid, without actually reducing greenhouse gas emissions to the atmosphere. Now that the Environmental Protection Agency is preparing to regulate greenhouse gases from power plants, many are looking to the Golden State for best climate policy practices. On that score, California’s experience offers cautionary insights into the challenges of using carbon markets to reduce greenhouse gas emissions. [ABSTRACT FROM PUBLISHER]

Numerical simulations of the global climate system provide inputs to integrated assessment modeling for estimating the impacts of greenhouse gas mitigation and other policies to address global climate change. While essential tools for this purpose, computational climate models are subject to considerable uncertainty, including intermodel "structural" uncertainty. Structural uncertainty analysis has emphasized simple or weighted averaging of the outputs of multimodel ensembles, sometimes with subjective Bayesian assignment of probabilities across models. However, choosing appropriate weights is problematic. To use climate simulations in integrated assessment, we propose, instead, framing climate model uncertainty as a problem of partial identification, or "deep" uncertainty. This terminology refers to situations in which the underlying mechanisms, dynamics, or laws governing a system are not completely known and cannot be credibly modeled definitively even in the absence of data limitations in a statistical sense. We propose the min-max regret (MMR) decision criterion to account for deep climate uncertainty in integrated assessment without weighting climate model forecasts. We develop a theoretical framework for cost-benefit analysis of climate policy based on MMR, and apply it computationally with a simple integrated assessment model. We suggest avenues for further research. [ABSTRACT FROM AUTHOR]

International cooperation on the reduction of greenhouse gas emissions, disarmament, or free trade needs to be negotiated. The success of such negotiations depends on how they are designed. In the context of international climate change policy, it has been proposed [e.g., M. L. Weitzman J. Assoc. Environ. Resour. Econ. 1, 29-49 (2014)] that shifting the negotiation focus to a uniform common commitment (such as a uniform minimum carbon price) would lead to more ambitious cooperation. Yet, a proof-of-concept for this important claim is lacking. Based on game theoretical analyses, we present experimental evidence that strongly supports this conjecture. In our study, human subjects negotiate contributions to a public good. Subjects differ in their benefits and costs of cooperation. Participation in the negotiations and all commitments are voluntary. We consider treatments in which agreements are enforceable, and treatments in which they have to be self-enforcing. In both situations, negotiating a uniform common commitment is more successful in promoting cooperation than negotiating individual commitments (as in the Paris Agreement) and complex common commitments that tailor the commitment to the specific situation of each party (as attempted with the Kyoto Protocol). Furthermore, as suggested by our model, a uniform common commitment benefits most from being enforced. [ABSTRACT FROM AUTHOR]

It has been proven that the development of any nation is correspondingly related to increasing greenhouse gases and per capita energy demand and uses. In India, approximately nineteen thousand eight hundred villages are still without electricity, and at the same time, India is the world's thirdlargest greenhouse gas emitter. Soon, greenhouse gas emissions and energy demand will be more than double in India. Therefore, India needs an effective and inclusive climate policy to handle high greenhouse gas emissions and meet energy demand. In this article, looking into the past of the Indian domestic climate policy, it has appeared that the country's climate policy is changing over time, especially from 2009 onwards. After briefly examined major achievements and shortfalls of India's domestic climate policy, especially, National Action Plan on Climate Change, it has cleared that not all the national missions effectively successful. For example, the National Mission on Sustainable Habitat only reframes some existing laws; there are no particular plans for rural habitats in the context of climate change. National Mission for Enhanced Energy Efficiency and National Mission for Sustaining the Himalayan Ecosystem achievements are negligible. Moreover, the state-wise performances on the implementation of eight national missions, there are skewed distributions of financial allocation. However, all missions are equally essential to mitigate the vulnerabilities of climate change. However, there are many shortfalls and lacks in climate policy; nonetheless, India is putting the climate change policy at the heart of development strategies, particularly in energy security and economic development. [ABSTRACT FROM AUTHOR]

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Two decades after creation of the UN Framework Convention on Climate Change (UNFCCC), parties reached a general political consensus in support of reducing global greenhouse gas (GHG) emissions, but debate continues over how to share equitably the burden of mitigation across countries. As part of the December 2015 Paris Agreement, countries submitted Nationally Determined Contributions (NDCs) for GHG mitigation. I analyze these mitigation targets to evaluate the degree to which they resemble any specific burden-sharing proposals. Results could have several applications as the UNFCCC process continues, including simulating how mitigation commitments may evolve as countries develop and considering how increased ambition might be allocated while maintaining the current implicit burden-sharing allocation. [ABSTRACT FROM AUTHOR]