Comparison of top-down and bottom-up estimates of sectoral and regional greenhouse gas emission reduction potentials

The Fourth Assessment Report of IPCC reports that greenhouse gas emissions can be reduced by about 30-50% in 2030 at costs below 100 US$/tCO2 based on an assessment of both bottom-up and top-down studies. Here, we have looked in more detail into the outcomes of specific models and also analyzed the economic potentials at the sectoral and regional level. At the aggregated level, the findings of the IPCC report are confirmed. However, substantial differences are found at the sectoral level. At the same time, there seems to be no systematic difference in the reduction potential reported by top-down and bottom-up approaches. The largest reduction potential as a response to carbon prices exists in the energy supply sector. Reduction potential in the building sector may carry relatively low costs. Although uncertainties are considerable, the modeling results and the bottom-up analyses all suggest that at the global level around 50% of greenhouse gas emissions may be reduced at carbon price (costs) below 100$/tCO2-eq--but with a wide range of 30-60%. At a carbon price (costs) less than 20$/tCO2-eq, still 10-35% of emissions may be abated. The variation of results is higher at low carbon-price levels than at high levels.