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EMF 36: Carbon Pricing After Paris (CarPri)

Ongoing

Investigators

Abstract: 
The EMF 36 study investigates how the Paris Agreement on greenhouse gas emission reductions can be reached through climate policy measures by means of more stringent carbon pricing. The starting point of the analysis are the national climate action plans submitted to the Paris Agreement by individual countries (the so-called Nationally Determined Contributions – NDCs) which comprise national emission reduction pledges and policy instruments for emission reductions. The EMF study will provide an impact assessment of existing climate action plans and discuss alternative climate policy regimes to meet the Paris targets. The fundamental objective is to provide robust insights into policy options trading off key dimensions of a sustainable climate future, i.e. environmental effectiveness, overall economic performance and the incidence of regulatory measures.

The Paris Agreement of 2015 is the central international agreement dealing with the challenge of anthropogenic climate change. The overall objective of EMF 36 is to provide an impacts assessment (1) for the implementation of the national CO2 emission reduction targets that have been submitted in the context of the Paris agreement and (2) for alternative climate policy futures to comply with more ambitious global reduction requirements, which are in line with a 2°C and/or a 1.5°C temperature target as proclaimed in the Paris agreement.

The Post-Paris climate futures thus include scenarios along three key dimensions. The first dimension is the development of the economy and emissions without further climate policy (the so-called business-as-usual scenario), the second dimension sets the emission reduction obligations which are either given by the NDCs or by additional efforts to meet the 2°C (1.5°C) temperature targets; the third dimension refers to international cooperation schemes for meeting the emission reduction requirements. The core scenarios on climate policy futures thus include:

  • two business-as-usual scenarios derived from (1) the World Energy Outlook of the International Energy Agency and (2) the International Energy Outlook by the Energy Information Agency. 
  • three climate policy targets, namely unconditional NDCs, conditional NDCs (NDC+) and a 2°C scenario
  • five cooperation scenarios including a no trade scenario, where each region/country achieves reduction targets through regional action; a global emission trading across all sectors; emissions trading in the energy intensive and trade exposed (EITE) sectors across all regions, EITE emissions trading between EU and China; and EITE emissions trading between China, Japan and Korea.

Beyond this common set of scenarios investigated jointly across all participating modeling groups, the additional complementary scenarios studied by individual groups are clustered around two more specific topics.

  • Cluster 1 focusses on further degrees of “where-flexibility” by means of sectoral and regional expansion of emissions trading and international cooperation, addressing in particular international burden-sharing.
  • Cluster 2 focusses on distributional effects of carbon pricing and different associated revenue recycling schemes for different countries. This addresses within-country burden sharing and the question of how this can be addressed to ensure acceptability of climate policy.

The steering committee members for the EMF 36 CarPri are:

  • Christoph Böhringer (University of Oldenburg, Germany)
  • Sonja Peterson (Kiel Institute for the World Economy, Germany)
  • Tom Rutherford (University of Wisconsin, USA)
  • John Weyant (Stanford University, USA)


Tentative Schedule:
Kick-off: Kiel, Germany, April 4-5, 2019
Modeling Meeting  #1: Seville, Spain, October 24-25,
Modeling Meeting # 2: Spring 2020 – postponed due to Corona
Dissemination Workshops: Spring 2021
Final Report Release and Special Issue: Mid 2021

Project Contact:
Sonja Peterson, sonja.peterson@ifw-kiel.de

Funding is provided by the German Federal Ministry of Education and Research (BMBF) within its framework programme “Research for Sustainable Development” (FONA)