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# The surprisingly inexpensive cost of state-driven emission control strategies

## Abstract

Traditionally, analysis of the costs of cutting greenhouse gas emissions has assumed that governments would implement idealized, optimal policies such as uniform economy-wide carbon taxes. Yet actual policies in the real world, especially in large federal governments, are often highly heterogeneous and vary in political support and administrative capabilities within a country. While the benefits of heterogeneous action have been discussed widely for experimentation and leadership, little is known about its costs. Focusing on the United States, we represent plausible variation (by more than a factor of 3) in the stringency of state-led climate policy in a process-based integrated assessment model (GCAM-USA). For a wide array of national decarbonization targets, we find that the nationwide cost from heterogeneous subnational policies is only one-tenth higher than nationally uniform policies. Such results hinge on two critical technologies (advanced biofuels and electricity) for which inter-state trade ameliorates the economic efficiencies that might arise with heterogeneous action.

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### Extended Data Fig. 5 Carbon mitigation costs for four levels of national mitigation efforts under alternative formations of policy heterogeneity.

Here we show the carbon mitigation cost in 2050 as a fraction of projected 2050 GDP, by three groups of states (low, medium and high-supporting states). ‘Uni’ stands for the uniform approach. Het, Het (Gov), Het (LN), Het (+range), Het (3 zero), Het (5 zero) and Het (AP) represent different heterogeneous approaches with detailed description in the Sensitivity Analysis section and Supplementary Methods. The inserted figure shows the contribution by low-, medium-, and high-supporting states to national total CO2 emissions in 201650.

### Extended Data Fig. 6 Reduction in energy-related CO2 emissions when carbon capture and storage (CCS) technology is not available.

Here we show the reduction in energy-related CO2 emissions in 2050 relative to 2015 for: a, National total; b, Low-supporting states; c, Medium-supporting states; d, High-supporting states. Different colors of the bars represent different economic sectors. The white numbers represent the percent contribution of the electricity sector to total CO2 mitigation. 40% U – 40% decarbonization with uniform approach; 40% H – 40% decarbonization with heterogeneous approach; 80% U – 80% decarbonization with uniform approach; 80% H - 80% decarbonization with heterogeneous approach.

## Supplementary information

### Supplementary information

Supplementary Notes 1–4, Methods and Figs. 1–12.

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Peng, W., Iyer, G., Binsted, M. et al. The surprisingly inexpensive cost of state-driven emission control strategies. Nat. Clim. Chang. 11, 738–745 (2021). https://doi.org/10.1038/s41558-021-01128-0

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• DOI: https://doi.org/10.1038/s41558-021-01128-0

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