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Economic tools to promote transparency and comparability in the Paris Agreement

Nature Climate Change volume 6, pages 1000–1004 (2016)Cite this article

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Abstract

The Paris Agreement culminates a six-year transition towards an international climate policy architecture based on parties submitting national pledges every five years1. An important policy task will be to assess and compare these contributions2,3. We use four integrated assessment models to produce metrics of Paris Agreement pledges, and show differentiated effort across countries: wealthier countries pledge to undertake greater emission reductions with higher costs. The pledges fall in the lower end of the distributions of the social cost of carbon and the cost-minimizing path to limiting warming to 2 °C, suggesting insufficient global ambition in light of leaders’ climate goals. Countries’ marginal abatement costs vary by two orders of magnitude, illustrating that large efficiency gains are available through joint mitigation efforts and/or carbon price coordination. Marginal costs rise almost proportionally with income, but full policy costs reveal more complex regional patterns due to terms of trade effects.

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Figure 1: Average 2025–2030 mitigation costs and emission reductions for the four models and seven major economies.
Figure 2: Average 2025–2030 marginal abatement costs for the four models.
Figure 3: Average 2025–2030 mitigation costs (marginal abatement costs on the vertical axis, and % GDP losses proportional to markers size) in relation to average 2025–2030 per capita income for the four models, and seven major economies.

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Acknowledgements

The Research Institute of Innovative Technology for the Earth provided financial support for this project. L.E.C., J.E., G.C.I. and H.C.M. were supported by the Global Technology Strategy Project. The views expressed here reflect those of the individual authors and not necessarily those of EPRI or its members.

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Authors and Affiliations

  1. Harvard University, Cambridge, Massachusetts 02138, USA

    Joseph Aldy

  2. Resources for the Future, Washington DC 20036, USA

    Joseph Aldy & William Pizer

  3. National Bureau of Economic Research, Cambridge, Massachusetts 02138, USA

    Joseph Aldy & William Pizer

  4. Center for Strategic and International Studies, Washington DC 20036, USA

    Joseph Aldy

  5. Duke University, Durham, North Carolina 27708, USA

    William Pizer

  6. Fondazione Eni Enrico Mattei (FEEM), Milan 20123, Italy

    Massimo Tavoni, Lara Aleluia Reis & Carlo Carraro

  7. Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Milan 20123, Italy

    Massimo Tavoni, Lara Aleluia Reis & Carlo Carraro

  8. Department of Management and Economics, Politecnico di Milano, Milan 20133, Italy

    Massimo Tavoni

  9. Research Institute of Innovative Technology for the Earth, Kyoto 619-0292, Japan

    Keigo Akimoto & Fuminori Sano

  10. Energy and Environmental Analysis Research Group, Electric Power Research Institute (EPRI), Palo Alto, California 94304, USA

    Geoffrey Blanford, Richard Richels & Steven Rose

  11. University of Venice, Venice 30123, Italy

    Carlo Carraro

  12. Joint Global Change Research Institute, Pacific Northwest National Laboratory, College Park, Maryland 20740, USA

    Leon E. Clarke, James Edmonds, Gokul C. Iyer & Haewon C. McJeon

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  1. Joseph Aldy
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  14. Fuminori Sano
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Contributions

J.A., K.A., W.P. and M.T. were responsible for project planning and scenario design. K.A., L.A.R., G.B., C.C., L.E.C., J.E., G.C.I., H.C.M., R.R., S.R., F.S. and M.T. contributed to the modelling results. J.A., L.A.R., W.P. and M.T. undertook the synthesis of the analyses. J.A., W.P. and M.T. drafted the paper.

Corresponding author

Correspondence to Joseph Aldy.

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The authors declare no competing financial interests.

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Aldy, J., Pizer, W., Tavoni, M. et al. Economic tools to promote transparency and comparability in the Paris Agreement. Nature Clim Change 6, 1000–1004 (2016). https://doi.org/10.1038/nclimate3106

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