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Reducing climate change mitigation costs through carbon pricing, biomass’ role in power generation, COP22 and business, and more
Greater cooperation through carbon trading could reduce the cost of climate change mitigation by 32 per cent by 2030 and by more than 50 per cent in 2050, according to our new analysis. The results are contained in the landmark State and Trends of Carbon Pricing 2016 report, prepared with the World Bank and Ecofys. Increased international carbon trading could enable large-scale emissions reductions at much lower cost than at present, based on the carbon mitigation goals detailed in countries’ national climate plans under the Paris Agreement.
Our policy analysis also examined the many critical interactions between carbon pricing and other domestic policies, such as those that govern electricity generation markets.
Below you will find some of the other projects we have delivered in the past few months, several of which highlight important issues closely related to the 22nd Conference of the Parties (COP22) in Marrakech. For more information on these or our other projects, please email us.
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The economics of biomass in UK power generation: The Natural Resources Defence Council (NRDC) asked us to investigate scenarios of the UK electricity system and the economics of biomass for power generation. We found that it is unlikely that further biomass is part of the least cost pathways to meeting carbon or security of supply needs on the UK power system. In replacing retiring coal fired power stations, our estimates show that each of solar and wind is likely to be comparable in cost or cheaper than biomass, even in scenarios that do not fully account for biomass carbon emissions. Find out more on the NRDC’s blog, or in the issue brief here.
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2016 Status Report - Business Contribution to Global Climate Action: The United Nations Global Compact team and its partners commissioned us to draft the inaugural 2016 Status Report, representing an attempt to assess the contribution of business-focused initiatives of the Global Climate Action Agenda to achieving climate goals and the Sustainable Development Goals (SDGs). A myriad of businesses and investor groups have started to join a range of private sector-focused climate action initiatives, representing a carbon emissions reduction of several gigatonnes per year. The report, launched at a high-level event with business leaders at COP22 in Marrakech, suggests a way forward for tracking the impact of business action on climate and the SDGs.
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Water resources and extreme events in the Awash basin - economic effects and policy implications: Our report for the Global Green Growth Institute explores the economic impacts of water-related extreme events in Ethiopia’s Awash basin. Under current economic conditions, we reported that the consequences of hydrological variability are severe. Plausible future hydrological conditions drawn from global climate models, applied to the Growth and Transition Planning period (GTP) from 2011-15, lead to swings in basin GDP of 5-20 per cent. Furthermore, as the economy is projected to grow sharply in coming years so is the degree of water scarcity. Our findings indicate that unless rapid and very substantial policy changes are enacted to mitigate this sensitivity, these estimates are at the lower end of future impacts.
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Galvanising low carbon innovation through international collaboration: International collaboration should seek to fill gaps and expand the ambition of private sector and national-level innovation efforts. Private sector investment in innovation has already become a significant force for international knowledge sharing, and a number of competitive national efforts have helped drive down the costs of critical low carbon technologies. Nevertheless, private efforts remain focussed on nearer-to-market technologies, while national innovation programmes often lack the required scale and resources – only around 0.03–0.04 per cent of GDP in International Energy Agency (IEA) member countries is devoted to public RD&D for low-carbon energy. Critically, the lower and middle income countries most in need of “leapfrogging” technologically lack the fundamental innovation capacity to do so. If international collaboration is to catalyse greater innovation, and not crowd-out existing efforts, it must focus on technology areas that require international scale and that remain too risky for private investment; and it must seek to encourage greater national commitments, and to build innovation capacity in lower and middle income countries.
These findings are in low carbon innovation report, prepared in collaboration with New Climate Economy. It further identifies the high priority fields for international cooperation that are critical to avoiding the long-term and costly lock-in of carbon-intensive infrastructure (especially in the built environment, electricity networks and transport systems), delivering development and climate priorities together (notably in agriculture), and enabling longer-term options for deep decarbonisation (such as carbon capture, storage and usage, energy storage, and bioenergy).
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