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Economic impacts of alternative greenhouse gas emission metrics: a model-based assessment

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  • Jessica Strefler
  • Gunnar Luderer
  • Tino Aboumahboub
  • Elmar Kriegler

Abstract

In this paper we study the impact of alternative metrics on short- and long-term multi-gas emission reduction strategies and the associated global and regional economic costs and emissions budgets. We compare global warming potentials with three different time horizons (20, 100, 500 years), global temperature change potential and global cost potentials with and without temperature overshoot. We find that the choice of metric has a relatively small impact on the CO 2 budget compatible with the 2° target and therefore on global costs. However it substantially influences mid-term emission levels of CH 4 , which may either rise or decline in the next decades as compared to today’s levels. Though CO 2 budgets are not affected much, we find changes in CO 2 prices which substantially affect regional costs. Lower CO 2 prices lead to more fossil fuel use and therefore higher resource prices on the global market. This increases profits of fossil-fuel exporters. Due to the different weights of non-CO 2 emissions associated with different metrics, there are large differences in nominal CO 2 equivalent budgets, which do not necessarily imply large differences in the budgets of the single gases. This may induce large shifts in emission permit trade, especially in regions where agriculture with its high associated CH 4 emissions plays an important role. Furthermore it makes it important to determine CO 2 equivalence budgets with respect to the chosen metric. Our results suggest that for limiting warming to 2 °C in 2100, the currently used GWP100 performs well in terms of global mitigation costs despite its conceptual simplicity. Copyright Springer Science+Business Media Dordrecht 2014

Suggested Citation

  • Jessica Strefler & Gunnar Luderer & Tino Aboumahboub & Elmar Kriegler, 2014. "Economic impacts of alternative greenhouse gas emission metrics: a model-based assessment," Climatic Change, Springer, vol. 125(3), pages 319-331, August.
  • Handle: RePEc:spr:climat:v:125:y:2014:i:3:p:319-331
    DOI: 10.1007/s10584-014-1188-y
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    References listed on IDEAS

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    1. Daniel Johansson, 2012. "Economics- and physical-based metrics for comparing greenhouse gases," Climatic Change, Springer, vol. 110(1), pages 123-141, January.
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    Cited by:

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    2. Mathijs Harmsen & Oliver Fricko & Jérôme Hilaire & Detlef P. Vuuren & Laurent Drouet & Olivier Durand-Lasserve & Shinichiro Fujimori & Kimon Keramidas & Zbigniew Klimont & Gunnar Luderer & Lara Alelui, 2020. "Taking some heat off the NDCs? The limited potential of additional short-lived climate forcers’ mitigation," Climatic Change, Springer, vol. 163(3), pages 1443-1461, December.
    3. Morgan R. Edwards & Jessika E. Trancik, 2022. "Consequences of equivalency metric design for energy transitions and climate change," Climatic Change, Springer, vol. 175(1), pages 1-27, November.
    4. Mathijs J. H. M. Harmsen & Maarten Berg & Volker Krey & Gunnar Luderer & Adriana Marcucci & Jessica Strefler & Detlef P. Van Vuuren, 2016. "How climate metrics affect global mitigation strategies and costs: a multi-model study," Climatic Change, Springer, vol. 136(2), pages 203-216, May.
    5. Bukvić, Rajko, 2015. "Рыночные Механизмы Сокращения Выбросов Парниковых Газов И Активности И Перспективы России [Market mechanisms of reduction of greenhouse gases emissions and actions and perspectives of Russia]," MPRA Paper 71616, University Library of Munich, Germany, revised 2015.
    6. Bukvić, Rajko, 2017. "Ефекат Стакленика, Глобално Загревање И Кјотски Протокол [Greenhouse Effect, Global Warming and Kyoto Protocol]," MPRA Paper 83953, University Library of Munich, Germany, revised 2017.
    7. Zach Dorner & Suzi Kerr, 2015. "Methane and Metrics: From global climate policy to the NZ farm," Working Papers 15_11, Motu Economic and Public Policy Research.
    8. John Lynch & Tara Garnett, 2021. "Policy to Reduce Greenhouse Gas Emissions: Is Agricultural Methane a Special Case?," EuroChoices, The Agricultural Economics Society, vol. 20(2), pages 11-17, August.
    9. Bukvić, Rajko & Petrović, Dragan, 2017. "Парниковый Эффект И Рыночные Механизмы Киотского Протокола [Greenhouse Effect and Mechanisms of Kyoto Protocol]," MPRA Paper 76451, University Library of Munich, Germany, revised 2017.

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