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Time to act now? Assessing the costs of delaying climate measures and benefits of early action

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  • Michael Jakob

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  • Gunnar Luderer
  • Jan Steckel
  • Massimo Tavoni
  • Stephanie Monjon

Abstract

This paper compares the results of the three state of the art climate-energy-economy models IMACLIM-R, ReMIND-R, and WITCH to assess the costs of climate change mitigation in scenarios in which the implementation of a global climate agreement is delayed or major emitters decide to participate in the agreement at a later stage only. We find that for stabilizing atmospheric GHG concentrations at 450 ppm CO 2 -only, postponing a global agreement to 2020 raises global mitigation costs by at least about half and a delay to 2030 renders ambitious climate targets infeasible to achieve. In the standard policy scenario—in which allocation of emission permits is aimed at equal per-capita levels in the year 2050—regions with above average emissions (such as the EU and the US alongside the rest of Annex-I countries) incur lower mitigation costs by taking early action, even if mitigation efforts in the rest of the world experience a delay. However, regions with low per-capita emissions which are net exporters of emission permits (such as India) can possibly benefit from higher future carbon prices resulting from a delay. We illustrate the economic mechanism behind these observations and analyze how (1) lock-in of carbon intensive infrastructure, (2) differences in global carbon prices, and (3) changes in reduction commitments resulting from delayed action influence mitigation costs. Copyright Springer Science+Business Media B.V. 2012

Suggested Citation

  • Michael Jakob & Gunnar Luderer & Jan Steckel & Massimo Tavoni & Stephanie Monjon, 2012. "Time to act now? Assessing the costs of delaying climate measures and benefits of early action," Climatic Change, Springer, vol. 114(1), pages 79-99, September.
  • Handle: RePEc:spr:climat:v:114:y:2012:i:1:p:79-99 DOI: 10.1007/s10584-011-0128-3
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    References listed on IDEAS

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    1. Carlo Carraro & Valentina Bosetti & Alessandra Sgobbi & Massimo Tavoni, 2008. "Delayed Action and Uncertain Targets. How Much Will Climate Policy Cost?," Working Papers 2008_27, Department of Economics, University of Venice "Ca' Foscari".
    2. Beccherle, Julien & Tirole, Jean, 2011. "Regional initiatives and the cost of delaying binding climate change agreements," Journal of Public Economics, Elsevier, vol. 95(11), pages 1339-1348.
    3. Olivier Sassi & Renaud Crassous & Jean-Charles Hourcade & Vincent Gitz & Henri Waisman & Celine Guivarch, 2010. "IMACLIM-R: a modelling framework to simulate sustainable development pathways," International Journal of Global Environmental Issues, Inderscience Enterprises Ltd, vol. 10(1/2), pages 5-24.
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    7. Valentina Bosetti, Carlo Carraro, Marzio Galeotti, Emanuele Massetti, Massimo Tavoni, 2006. "A World induced Technical Change Hybrid Model," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 13-38.
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    Cited by:

    1. Henri Waisman & Céline Guivarch & Fabio Grazi & Jean Hourcade, 2012. "The I maclim-R model: infrastructures, technical inertia and the costs of low carbon futures under imperfect foresight," Climatic Change, Springer, vol. 114(1), pages 101-120, September.
    2. Iyer, Gokul C. & Clarke, Leon E. & Edmonds, James A. & Hultman, Nathan E. & McJeon, Haewon C., 2015. "Long-term payoffs of near-term low-carbon deployment policies," Energy Policy, Elsevier, vol. 86(C), pages 493-505.
    3. repec:spr:climat:v:144:y:2017:i:2:d:10.1007_s10584-017-2027-8 is not listed on IDEAS
    4. Thomas Love & Cindy Isenhour, 2016. "Energy and economy: Recognizing high-energy modernity as a historical period," Economic Anthropology, Wiley Blackwell, vol. 3(1), pages 6-16, January.
    5. repec:eee:enepol:v:108:y:2017:i:c:p:435-450 is not listed on IDEAS
    6. Ottmar Edenhofer & Carlo Carraro & Jean-Charles Hourcade, 2012. "On the economics of decarbonization in an imperfect world," Climatic Change, Springer, vol. 114(1), pages 1-8, September.
    7. Rasmus Lema & Björn Johnson & Allan Dahl Andersen & Bengt-Åke Lundvall & Ankur Chaudhary (ed.), 2014. "Low-Carbon Innovation and Development," Globelics Thematic Reviews, Globelics - Global Network for Economics of Learning, Innovation, and Competence Building Systems, Aalborg University, Department of Business and Management, number low-carbon.
    8. Ottmar Edenhofer & Susanne Kadner & Christoph von Stechow & Gregor Schwerhoff & Gunnar Luderer, 2014. "Linking climate change mitigation research to sustainable development," Chapters,in: Handbook of Sustainable Development, chapter 30, pages 476-499 Edward Elgar Publishing.
    9. Gunnar Luderer & Valentina Bosetti & Michael Jakob & Marian Leimbach & Jan Steckel & Henri Waisman & Ottmar Edenhofer, 2012. "The economics of decarbonizing the energy system—results and insights from the RECIPE model intercomparison," Climatic Change, Springer, vol. 114(1), pages 9-37, September.
    10. Annemiek K. Admiraal & Andries F. Hof & Michel G. J. Elzen & Detlef P. Vuuren, 2016. "Costs and benefits of differences in the timing of greenhouse gas emission reductions," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 21(8), pages 1165-1179, December.
    11. Paroussos, Leonidas & Fragkos, Panagiotis & Capros, Pantelis & Fragkiadakis, Kostas, 2015. "Assessment of carbon leakage through the industry channel: The EU perspective," Technological Forecasting and Social Change, Elsevier, vol. 90(PA), pages 204-219.
    12. Iyer, Gokul & Hultman, Nathan & Eom, Jiyong & McJeon, Haewon & Patel, Pralit & Clarke, Leon, 2015. "Diffusion of low-carbon technologies and the feasibility of long-term climate targets," Technological Forecasting and Social Change, Elsevier, vol. 90(PA), pages 103-118.
    13. Steckel, Jan Christoph & Brecha, Robert J. & Jakob, Michael & Strefler, Jessica & Luderer, Gunnar, 2013. "Development without energy? Assessing future scenarios of energy consumption in developing countries," Ecological Economics, Elsevier, vol. 90(C), pages 53-67.
    14. Elmar Kriegler & Ioanna Mouratiadou & Gunnar Luderer & Jae Edmonds & Ottmar Edenhofer, 2016. "Introduction to the RoSE special issue on the impact of economic growth and fossil fuel availability on climate protection," Climatic Change, Springer, vol. 136(1), pages 1-6, May.
    15. Luderer, Gunnar & Pietzcker, Robert C. & Kriegler, Elmar & Haller, Markus & Bauer, Nico, 2012. "Asia's role in mitigating climate change: A technology and sector specific analysis with ReMIND-R," Energy Economics, Elsevier, vol. 34(S3), pages 378-390.
    16. Kriegler, Elmar & Riahi, Keywan & Bauer, Nico & Schwanitz, Valeria Jana & Petermann, Nils & Bosetti, Valentina & Marcucci, Adriana & Otto, Sander & Paroussos, Leonidas & Rao, Shilpa & Arroyo Currás, T, 2015. "Making or breaking climate targets: The AMPERE study on staged accession scenarios for climate policy," Technological Forecasting and Social Change, Elsevier, vol. 90(PA), pages 24-44.
    17. Geoffrey Blanford & Elmar Kriegler & Massimo Tavoni, 2014. "Harmonization vs. fragmentation: overview of climate policy scenarios in EMF27," Climatic Change, Springer, vol. 123(3), pages 383-396, April.
    18. Gunnar Luderer & Enrica DeCian & Jean-Charles Hourcade & Marian Leimbach & Henri Waisman & Ottmar Edenhofer, 2012. "On the regional distribution of mitigation costs in a global cap-and-trade regime," Climatic Change, Springer, vol. 114(1), pages 59-78, September.
    19. Marcucci, Adriana & Turton, Hal, 2015. "Induced technological change in moderate and fragmented climate change mitigation regimes," Technological Forecasting and Social Change, Elsevier, vol. 90(PA), pages 230-242.
    20. Gunnar Luderer & Christoph Bertram & Katherine Calvin & Enrica De Cian & Elmar Kriegler, 2015. "Implications of Weak Near-term Climate Policies on Long-term Mitigation Pathways," Working Papers 2015.05, Fondazione Eni Enrico Mattei.
    21. repec:spr:masfgc:v:23:y:2018:i:1:d:10.1007_s11027-016-9726-8 is not listed on IDEAS
    22. Andreas A. Papandreou, 2015. "The Great Recession and the transition to a low-carbon economy," Working papers wpaper88, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    23. Nico Bauer & Lavinia Baumstark & Marian Leimbach, 2012. "The REMIND-R model: the role of renewables in the low-carbon transformation—first-best vs. second-best worlds," Climatic Change, Springer, vol. 114(1), pages 145-168, September.

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