Economic Impacts of Alternative Greenhouse Gas Emission Metrics: A Model-Based Assessment
Climatic Change, Forthcoming
24 Pages Posted: 30 Sep 2013
Date Written: September 30, 2013
In this paper we study the impact of alternative metrics on short- and long-term multi-gas emission reductions and the associated global and regional economic costs. We compare global warming potentials with three different time horizons (20, 100, 500 years), global temperature change potential and global cost potentials with and without temperature overshoot. We find that the choice of metric has a relatively small impact on the CO2 budget compatible with the 2° target and therefore on global costs. However it substantially influences mid-term targets as rise or reduction of CH4 emissions in the next decades.
Though CO2 budgets are not affected much, we find changes in CO2 prices which substantially affect regional costs. Lower CO2 prices lead to more fossil fuel use and therefore higher prices. This increases profits of fossil-fuel exporters. Due to the different weights of non-CO2emissions associated with different metrics, there are large differences in nominal CO2 equivalent budgets. This may induce large shifts in emission permit trade, especially in regions where agriculture with its high associated CH4 emissions plays an important role. Furthermore it makes it important to determine CO2 equivalence budgets with respect to the chosen metric. Our results suggest that the currently used GWP100 performs well despite its conceptual simplicity.
Keywords: Greenhouse gas emission metrics, IAM, global warming potentials, climate change mitigation, emissions trading
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