The Costs of Achieving a Global Climate Change Mitigation Target: An Integrated Assessment Model Inter-Comparison

Adam Daigneault and Mario Fernandez

No 332627, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: We use the New Zealand Integrated Assessment Modelling System (NZIAMS) that includes a global dynamic CGE model, a global timber model, and a simple climate model to assess the potential economic and climate change impacts of meeting a range of long-run GHG emissions reduction targets. The model is configured to 6 regions and 18 aggregated sectors (including several energy sources and land activities), and includes several sources of GHG emissions abatement, including forest carbon sequestration and electricity generation with carbon capture and sequestration (CCS). In this paper, we assess the impacts of meeting a Kyoto GHG emissions concentration of 500 and 450 parts per million (ppm) in 2100, with and without GHG prices imposed on the agricultural sector. We estimate that global net emissions in 2100 would need to be reduced by 85 to 90% relative to the baseline case to achieve 500 ppm and by 98-103% to meet the 450 ppm target. GHG emissions price estimates range from $44 to 76/tCO2e in 2030 and from $503 to $1,816/tCO2e in 2070. Major sources of abatement include the switching most of the world’s electricity generation to either renewable energy or CCS and planting several 100s of million hectares of trees. All policy scenarios were estimated to reduce global GDP relative to the baseline, particularly in the second half of the century. For the scenarios that price GHG emissions from all sectors, GDP is reduced by 1.6 to 2.0% in 2030 while GDP in 2070 could be reduced by 7 to 9%. For the scenarios that excluded agriculture from GHG pricing, global GDP impacts decrease by 1.7 to 2.2% in 2030 and by 13 to 18% in 2070. This suggests that excluding agriculture could have a dramatic increase on global economic impacts as the increase in GHG price on all emissions from all other sectors to meet the 2100 GHG concentration target dominate the potential increases in economic output that could be achieved from not pricing agriculture.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:332627

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