On the optimality of 2\xb0C targets and a decomposition of uncertainty

Kaj-Ivar Van Der Wijst,Andries F Hof,Detlef P Van Vuuren

doi:10.1038/s41467-021-22826-5

Kaj-Ivar Van Der Wijst, Andries F Hof + Show 1 more

Open Access

https://doi.org/10.1038/s41467-021-22826-5

Copy DOI

Abstract

Determining international climate mitigation response strategies is a complex task. Integrated Assessment Models support this process by analysing the interplay of the most relevant factors, including socio-economic developments, climate system uncertainty, damage estimates, mitigation costs and discount rates. Here, we develop a meta-model that disentangles the uncertainties of these factors using full literature ranges. This model allows comparing insights of the cost-minimising and cost-benefit modelling communities. Typically, mitigation scenarios focus on minimum-cost pathways achieving the Paris Agreement without accounting for damages; our analysis shows doing so could double the initial carbon price. In a full cost-benefit setting, we show that the optimal temperature target does not exceed 2.5 °C when considering medium damages and low discount rates, even with high mitigation costs. With low mitigation costs, optimal temperature change drops to 1.5 °C or less. The most important factor determining the optimal temperature is the damage function, accounting for 50% of the uncertainty.

Highlights

Determining international climate mitigation response strategies is a complex task
We directly compare the insights of the two main Integrated Assessment Modelling communities: the cost-minimising models which focus on how climate targets can be reached, without taking damages into account, and the cost-benefit models which compare the marginal mitigation costs to marginal damages to calculate optimal temperature goals
This paper focuses on the economic aspects of climate policy by discussing cost-minimising paths and optimal temperatures in a cost-benefit setting

Summary

Introduction

Determining international climate mitigation response strategies is a complex task. Integrated Assessment Models support this process by analysing the interplay of the most relevant factors, including socio-economic developments, climate system uncertainty, damage estimates, mitigation costs and discount rates. We develop a flexible and transparent model to calculate the optimal carbon price path under a set of assumptions regarding damage functions, temperature goals, mitigation costs, climate sensitivities, discount rates and socio-economic developments. With this model, we directly compare the insights of the two main Integrated Assessment Modelling communities: the cost-minimising models which focus on how climate targets (e.g., a carbon budget) can be reached, without taking damages into account, and the cost-benefit models which compare the marginal mitigation costs to marginal damages to calculate optimal temperature goals

Methods

Results

Conclusion