Carbon Abatement Costs and Climate Change Finance
This study provides alternative estimates of the costs of greenhouse gas abatement through 2050 that would be necessary to limit CO2 atmospheric concentrations to approximately 450 parts per million and limiting warming to 2°C. Specific estimates are provided for 25 major economies (with the European Union as a single economy). Business as usual baselines are first developed, based on US Department of Energy projections through 2030 and on maintenance of country-specific trends in GDP growth, energy efficiency growth, and carbon-efficiency of energy growth thereafter. The central policy simulation then involves a "Copenhagen Convergence" path, in which major economies meet their Copenhagen (December 2009) pledges for 2020, and thereafter emissions per capita decline along a path that by 2050 results in equal per capita emissions in all countries.
Three abatement cost functions are used for calculating the resulting abatement costs: a model based on McKinsey & Co. estimates for 2030; the Nordhaus RICE model cost functions; and a set of summary cost regressions calculated from the Stanford Energy Modeling Forum (EMF-22) survey of abatement models. It is found that abatement costs should be moderate, reaching about one-fourth to two-thirds of one percent of GDP by 2030 and 1 to 2 percent of GDP by 2050. Costs can be reduced by international trading, but by less than generally perceived. A more ambitious early start on abatement than pledged at Copenhagen could reduce full-period costs. The study calculates corresponding magnitudes of investment for abatement as well as adaptation costs for developing countries, and identifies a benchmark of about $80 billion annually (excluding China) by 2020, lending support to the $100 billion target pledged for industrial country financial support by that year.
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Ch 2 Baseline Emissions under Business as Usual
Ch 3 Abatement Initiatives in the Copenhagen Accord and Cancún Agreements
Ch 4 Abatement Cost Functions
Ch 5 Abatement Costs through 2050
Ch 6 Trade and Timing
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2050 Argentina 25 emitters abatement cost estimates adaptation costs amount Argentina atmospheric concentration Australia bau baseline billion in 2020 Brazil Business as usual Canada Cancún capita emissions carbon dioxide carbon efficiency Chakravarty China Climate Change CO2 emissions CopCon scenario Copenhagen Accord cost functions cost parameters Country/group 2020 cut from baseline developing countries emissions growth emissions paths emissions rights emissions trading energy efficiency European Union financing Frankel global abatement costs global emissions global warming growth rates GtCO2 India Indonesia industrial countries IPCC Iran Japan Kazakhstan levels Malaysia marginal cost McKinsey ment cost Mexico million tons Nordhaus offset Pakistan percent by 2050 percent of GDP percent of world pledged policy scenario present value Radiative forcing reallocation Rest of world RICE cost RICE model Russia Saudi Arabia shadow price South Africa South Korea Taiwan target tCO2 Thailand trillion Ukraine UNDP UNFCCC United Venezuela world developing world industrial world product