Carbon price dynamics in ambitious climate mitigation scenarios: an analysis based on the IAMC 1.5 °C scenario explorer

Abstract

We analyse global carbon price trajectories from integrated assessment studies of 2 °C and below-compatible emission pathways based on a new scenario ensemble that has been made publicly available together with other relevant data sets in the IAMC 1.5 °C Scenario Explorer. We complement and extent the findings of the initial study on carbon price variations in integrated assessment models of (Guivarch and Rogelji 2017 Carbon price variations in 2 °C scenarios explored, Carbon Pricing Leadership Coalition) by providing a broader and more robust empirical assessment based on a comprehensive statistical analysis. We discuss the prospects and challenges of in‐depth bivariate econometric analyses of key impact factors in data sets from integrated assessment models. We show that the amount of meta‐information reported for individual models differs significantly across all variables where a large part of all recorded scenario explorer variables can be attributed to only a small number of applied models. We analyse the trend patterns emerging from the analysed global carbon price trajectories based on a statistical trend identification procedure. About half of the analysed carbon price projections seem to be best characterised by long run exponential growth patterns in carbon prices. Moreover, we break down the explanatory contribution of individual components on global carbon prices by the Kaya identity, i.e. global GDP, primary energy intensity and emission intensity. We show that the price of carbon is lower in baseline scenarios with faster economic growth per capita, low‐energy consumption patterns and high potentials for low carbon technologies compared to fossil fuels. In contrast to previous findings, the observed carbon price developments are impacted much more strongly by scenario‐specific than by model‐specific influences. Next to the diagnostic indicators for models, further indicators for the categorization of scenarios describing key context and policy parameterisations applied in individual model runs should be developed and included in descriptions of integrated assessment studies.