Climate mitigation costs: a more realistic view?

Traditionally economic models have shown that the costs of climate mitigation increase exponentially as the target for atmospheric carbon dioxide concentrations is lowered. But by altering the focus to the probability of staying below a temperature rise target, a team from the Netherlands and Germany has shown that mitigation costs tend to increase in proportion to the amount of benefit.

Date02 March 2009

Jan 19, 2009
by Liz Kalaugher

“We find that shifting the viewpoint to one that is more policy-relevant (reaching a temperature target with a desired probability) radically changes the outcome,” Michiel Schaeffer, formerly at Wageningen University and now at Climate Analytics toldenvironmentalresearchweb. “We now find an initial investment threshold, followed by a broad region of proportionally increasing costs. Thus it is now the deeper emission cuts that give the best returns, while the initial investments seem relatively less effective.”

In the traditional model, the focus has been on stabilizing carbon dioxide concentrations. According to Schaeffer, this brings a view that initial investments to bring down concentrations are effective, because costs rise slowly as the concentration target is lowered. “However, as the concentration target gets much lower, costs tend to escalate [exponentially] and thus a concentration target will be chosen that is not too low,” he explained.

But it’s arguably more relevant for “real-world” climate impacts to use a temperature target rather than a concentration target. The European Union, for example, has chosen a 2°C limit for climate change as a guideline for its mitigation policies.

“Shifting the target to temperatures rather than concentrations introduces large additional uncertainties, i.e. the response of the climate system,” said Schaeffer. “That means that one needs to change the viewpoint to a risk approach. Instead of asking oneself how much a specific concentration target would cost, one focuses on the question of how high investments need to be to reach a specific likelihood that a temperature target, such as 2°C, will not be exceeded due to anthropogenic greenhouse-gas emissions.”

It turns out that including the climate system response offsets the familiar exponential rise in costs as concentration targets are lowered. That’s because as concentration is lowered the probability of meeting a temperature target rises rapidly, which counterbalances the increasing costs.

“Effectively, we find that cost increases are near-linear over a large range of probabilities of reaching various temperature targets,” said Schaeffer. “Using the EU’s 2°C target as an example, we find that initial investments need to cross a threshold: modest increases in likelihood require steep cost rises. By contrast, it’s the deep emission cuts at higher costs that give the most favourable, near-linear returns (fast increase in probability). Very high probabilities, however, remain very difficult to achieve.”

Schaeffer and colleagues from Wageningen University in The Netherlands, The Netherlands Environmental Assessment Agency and Potsdam Institute for Climate Impact Research in Germany now plan to replace the simple equations they used in their calculations with more complex climate models. “By doing that, we will tease out the actual numbers that may be useful for policy making,” said Schaeffer.

At the moment there is also a lack of cost estimates for concentration targets below 450 ppmv CO2-equivalent. “We need those for exploring high probabilities that relatively low temperature targets are achieved,” said Schaeffer. “Having more reliable actual numbers, we may be able to estimate where the investment threshold is located in the probability space and where the improved returns on yet deeper emission cuts begin.”

The researchers reported their work in PNAS.

© Institute of Physics (the “Institute”) and IOP Publishing