Wednesday, February 6, 2013

The Price of Carbon and the Cost of Inaction

Probabilistic cost estimates for climate change mitigation(Abstract, Joeri Rogelj, David L. McCollum, Andy Reisinger, Malte Meinshausen & Keywan Riahi, Nature, Jan. 2, 2013)

Also discussed here: Carbon price of $30 needed to avoid 2°C climate target(Ed King, RTCC, Jan. 3, 2013)

Today we review a report from the highly respected International Institute for Applied Systems Analysis (IIASA) that looks at the relationship between the price put on carbon consumption and the resulting global temperature increase that follows because of atmospheric greenhouse gas emissions. An analysis of the climate impacts and instability that result from more than 2 degrees C warming, starting with”extreme heat waves with severe societal impacts” and leading to “global mass extinctions” indicates the need to have a carbon price that would limit warming to that amount. However, continued inaction by political leaders for another decade, the factor seen to be the dominant one, to increase the carbon price from $10/ton leaves the chances of staying below 2 deg C as next to impossible. Even $30/ton has only a 60% chance of success. The role of cities, especially large ones, in reducing carbon emissions is clear as is the link between carbon pricing and road pricing to reduce emissions from transportation.

cl ch carbon price  

Key Quotes:

 “A global price of $30 per tonne of carbon dioxide needs to be introduced urgently if the world’s governments are serious about avoiding a 2°C warming target…a $30 price signal would give a 60% chance of limiting warming below the agreed UN limit of 2°C warming above pre-industrial levels”

 “the price would rise to $100 per tonne of carbon dioxide by 2020 if no effective mitigation action is taken between now and the end of the decade.”

“There is some movement but it is really critical to achieve some agreement over the next year otherwise the long term objective which has been agreed by most countries will be out of reach.”

 “If we delay for twenty years, the likelihood of limiting temperature rise to 2°C becomes so small that the geophysical uncertainties don’t play a role anymore.”

 “We find that political choices that delay mitigation have the largest effect on the cost–risk distribution, followed by geophysical uncertainties, social factors influencing future energy demand and, lastly, technological uncertainties surrounding the availability of greenhouse gas mitigation options.”
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