The Economics of Greenhouse Gas Mitigation in Developing Asia

Lara Aleluia Reis (), Johannes Emmerling, Massimo Tavoni () and David Raitzer
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Lara Aleluia Reis: Fondazione Eni Enrico Mattei

No 504, ADB Economics Working Paper Series from Asian Development Bank

Abstract: Developing Asia has the world’s fastest greenhouse gas emissions growth. This study uses an economy–energy–climate model to assess the effects of Paris Agreement pledges on Asia, in comparison with business as usual (BAU) and more ambitious scenarios. Results confirm that pledges must be strongly increased in ambition to achieve the Paris Agreement’s goal of less than 2 degrees Celsius (2°C) warming. The policy costs of Asia’s pledges are found to be less than 1% of gross domestic product (GDP) through 2050, while 2°C scenarios may cost less than 2% of GDP. However, costs are sensitive to assumptions about international carbon markets and mitigation timing, with costs for 2°C scenarios doubling in the absence of carbon trade, and increasing the later that mitigation is initiated. Under the 2°C scenarios, annual average energy supply investments are about $300 billion above the BAU levels through 2050. Mitigation policy may substantially reduce air pollution mortality, with up to 600,000 fewer deaths in Asia annually by 2050. When costs, benefits of avoided climate change, and cobenefits are considered together, investment in mitigation policy is found to have substantial economic returns for the region—if action is taken rapidly and international carbon market mechanisms are implemented.

Keywords: climate change; energy; greenhouse gas; mitigation; Paris Agreement (search for similar items in EconPapers)
JEL-codes: C61 D58 Q52 Q53 Q54 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2016-12-23
New Economics Papers: this item is included in nep-agr, nep-ene and nep-env
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