How Can Technology Significantly Contribute to Climate Change Mitigation?

This paper highlights how technology can contribute to reaching the COP21 goals of net zero CO2 emissions and global warming below 2 C at the end of the century. It uses the ACCL model, particularly adapted to quantify the consequences of energy price shocks and technology improvements on CO2 emissions, temperature changes, climate damage and GDP. Our simulations show that without climate policies, i.e. a business as usual scenario, the warming may be +4 to +5 C in 2100, with considerable climate damage. We also find that an acceleration in usual technical progress - not targeted at reducing greenhouse gas intensity - makes global warming and climate damage worse than the business as usual scenario. According to our estimates, the world does not achieve climate goals in 2100 without technological changes to avoid CO2 emissions. To hit such climatic targets, intervening only through the relative price of different energy types, e.g. via a carbon tax, requires challenging hypotheses of international coordination and price increase for polluting energies. We assess a multi-lever climate strategy, associating diverse price and technology measures. This mix combines energy efficiency gains, carbon sequestration, and a decrease of 3% per year in the relative price of non-carbon-emitting electricity with a 1 to 1.5% annual rise in the relative price of our four polluting energy sources (corresponding to a relatively low but achievable carbon tax scenario). None of these components alone is sufficient to reach climate objectives. Our last and most important finding is that our composite scenario achieves the climate goals.