Skip to main content

Thank you for visiting You are using a browser version with limited support for CSS. To obtain the best experience, we recommend you use a more up to date browser (or turn off compatibility mode in Internet Explorer). In the meantime, to ensure continued support, we are displaying the site without styles and JavaScript.

Complementing carbon prices with technology policies to keep climate targets within reach


Economic theory suggests that comprehensive carbon pricing is most efficient to reach ambitious climate targets1, and previous studies indicated that the carbon price required for limiting global mean warming to 2 °C is between US$16 and US$73 per tonne of CO2 in 2015 (ref. 2). Yet, a global implementation of such high carbon prices is unlikely to be politically feasible in the short term. Instead, most climate policies enacted so far are technology policies or fragmented and moderate carbon pricing schemes. This paper shows that ambitious climate targets can be kept within reach until 2030 despite a sub-optimal policy mix. With a state-of-the-art energy–economy model we quantify the interactions and unique effects of three major policy components: (1) a carbon price starting at US$7 per tonne of CO2 in 2015 to incentivize economy-wide mitigation, flanked by (2) support for low-carbon energy technologies to pave the way for future decarbonization, and (3) a moratorium on new coal-fired power plants to limit stranded assets. We find that such a mix limits the efficiency losses compared with the optimal policy, and at the same time lowers distributional impacts. Therefore, we argue that this instrument mix might be a politically more feasible alternative to the optimal policy based on a comprehensive carbon price alone.

This is a preview of subscription content

Access options

Buy article

Get time limited or full article access on ReadCube.


All prices are NET prices.

Figure 1: Relationship between carbon prices and total GHG emissions in 2030.
Figure 2: Global electricity generation by technology.
Figure 3: Economic indicators for the long-term challenges of achieving the 2 °C target after 2030.
Figure 4: The effect of technology policies on the emissions gap and the climate action gap.


  1. Goulder, L. H. & Parry, I. W. H. Instrument choice in environmental policy. Rev. Environ. Econ. Policy 2, 152–174 (2008).

    Article  Google Scholar 

  2. IPCC Climate Change 2014: Mitigation of Climate Change (eds Edenhofer, O. et al.) (Cambridge Univ. Press, 2014).

    Google Scholar 

  3. Kriegler, E. et al. What does the 2 °C target imply for a global climate agreement in 2020? The LIMITS study on Durban Platform scenarios. Clim. Change Econ. 04, 1–30 (2013).

    Google Scholar 

  4. Riahi, K. et al. Locked into Copenhagen pledges — Implications of short-term emission targets for the cost and feasibility of long-term climate goals. Technol. Forecast. Soc. Change 90, 8–23 (2015).

    Article  Google Scholar 

  5. Luderer, G. et al. Economic mitigation challenges: How further delay closes the door for achieving climate targets. Environ. Res. Lett. 8, 034033 (2013).

    Article  Google Scholar 

  6. Luderer, G., Bertram, C., Calvin, K., Cian, E. D. & Kriegler, E. Implications of weak near-term climate policies on long-term mitigation pathways. Climatic Change 1–14 (2013).

  7. Rogelj, J., McCollum, D. L., Reisinger, A., Meinshausen, M. & Riahi, K. Probabilistic cost estimates for climate change mitigation. Nature 493, 79–83 (2013).

    Article  Google Scholar 

  8. The Emissions Gap Report 2014 (United Nations Environment Programme (UNEP), 2014).

  9. Den Elzen, M. G. J., Hof, A. F. & Roelfsema, M. The emissions gap between the Copenhagen pledges and the 2 °C climate goal: Options for closing and risks that could widen the gap. Glob. Environ. Change 21, 733–743 (2011).

    Article  Google Scholar 

  10. Blanford, G. J., Kriegler, E. & Tavoni, M. Harmonization vs. fragmentation: Overview of climate policy scenarios in EMF27. Climatic Change 123, 383–396 (2014).

    CAS  Article  Google Scholar 

  11. Kriegler, E. et al. Making or breaking climate targets: The AMPERE study on staged accession scenarios for climate policy. Technol. Forecast. Soc. Change 90, 24–44 (2015).

    Article  Google Scholar 

  12. Grubb, M., Chapuis, T. & Duong, M. H. The economics of changing course: Implications of adaptability and inertia for optimal climate policy. Energy Policy 23, 417–431 (1995).

    Article  Google Scholar 

  13. Bertram, C. et al. Carbon lock-in through capital stock inertia associated with weak near-term climate policies. Technol. Forecast. Soc. Change 90, 62–72 (2015).

    Article  Google Scholar 

  14. Bauer, N., Baumstark, L. & Leimbach, M. The REMIND-R model: The role of renewables in the low-carbon transformation—first-best vs. second-best worlds. Climatic Change 114, 145–168 (2012).

    Article  Google Scholar 

  15. Jaffe, A. B., Newell, R. G. & Stavins, R. N. A tale of two market failures: Technology and environmental policy. Ecol. Econ. 54, 164–174 (2005).

    Article  Google Scholar 

  16. Bennear, L. S. & Stavins, R. N. Second-best theory and the use of multiple policy instruments. Environ. Resour. Econ. 37, 111–129 (2007).

    Article  Google Scholar 

  17. Kalkuhl, M., Edenhofer, O. & Lessmann, K. Renewable energy subsidies: Second-best policy or fatal aberration for mitigation? Resour. Energy Econ. 35, 217–234 (2013).

    Article  Google Scholar 

  18. Weitzman, M. L. Prices vs. quantities. Rev. Econ. Stud. 41, 477–491 (1974).

    Article  Google Scholar 

  19. Requate, T. & Unold, W. Environmental policy incentives to adopt advanced abatement technology: Will the true ranking please stand up? Eur. Econ. Rev. 47, 125–146 (2003).

    Article  Google Scholar 

  20. Goulder, L. H. & Schein, A. Carbon Taxes vs. Cap and Trade: A Critical Review (National Bureau of Economic Research, 2013).

    Book  Google Scholar 

  21. Leimbach, M., Bauer, N., Baumstark, L. & Edenhofer, O. Mitigation costs in a globalized world: Climate policy analysis with REMIND-R. Environ. Model. Assess. 15, 155–173 (2010).

    Article  Google Scholar 

  22. Bauer, N., Brecha, R. J. & Luderer, G. Economics of nuclear power and climate change mitigation policies. Proc. Natl Acad. Sci. USA 109, 16805–16810 (2012).

    CAS  Article  Google Scholar 

  23. Den Elzen, M., Roelfsema, M., Hof, A. F., Böttcher, H. & Grassi, G. Analysing the Emission Gap Between Pledged Emission Reductions Under the Cancún Agreements and the 2 °C Climate Target (PBL/IIASA/JRC, 2012).

    Google Scholar 

  24. Kriegler, E. et al. The role of technology for achieving climate policy objectives: Overview of the EMF 27 study on global technology and climate policy strategies. Climatic Change 123, 353–367 (2014).

    Article  Google Scholar 

  25. Krey, V., Luderer, G., Clarke, L. & Kriegler, E. Getting from here to there—energy technology transformation pathways in the EMF27 scenarios. Climatic Change 123, 369–382 (2014).

    Article  Google Scholar 

  26. Pietzcker, R. C. et al. Long-term transport energy demand and climate policy: Alternative visions on transport decarbonization in energy-economy models. Energy 64, 95–108 (2014).

    Article  Google Scholar 

  27. Marschinski, R., Flachsland, C. & Jakob, M. Sectoral linking of carbon markets: A trade-theory analysis. Resour. Energy Econ. 34, 585–606 (2012).

    Article  Google Scholar 

  28. Fischer, C. & Newell, R. G. Environmental and technology policies for climate mitigation. J. Environ. Econ. Manage. 55, 142–162 (2008).

    Article  Google Scholar 

  29. Schwanitz, V. J., Piontek, F., Bertram, C. & Luderer, G. Long-term climate policy implications of phasing out fossil fuel subsidies. Energy Policy 67, 882–894 (2014).

    Article  Google Scholar 

  30. Schaeffer, M. et al. Mid- and long-term climate projections for fragmented and delayed-action scenarios. Technol. Forecast. Soc. Change 90, 257–268 (2015).

    Article  Google Scholar 

Download references


The research leading to these results has received funding from the European Union’s Seventh Framework Programme (FP7/2007-2013) under grant agreement no. 308329 (ADVANCE).

Author information

Authors and Affiliations



C.B. and G.L. designed the research with input by R.C.P., E.K. and O.E.; C.B. performed the modelling and data analysis; C.B. wrote the paper with contributions and edits by all authors.

Corresponding author

Correspondence to Christoph Bertram.

Ethics declarations

Competing interests

The authors declare no competing financial interests.

Supplementary information

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Bertram, C., Luderer, G., Pietzcker, R. et al. Complementing carbon prices with technology policies to keep climate targets within reach. Nature Clim Change 5, 235–239 (2015).

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI:

Further reading


Quick links

Nature Briefing

Sign up for the Nature Briefing newsletter — what matters in science, free to your inbox daily.

Get the most important science stories of the day, free in your inbox. Sign up for Nature Briefing