Climate Change 2007 Update

8. What actions can be taken to reduce greenhouse gas emissions?

• 8.1 What is the cost of mitigation?
• 8.2 How can changes in lifestyle and behaviour patterns contribute?
• 8.3 What are the co-benefits of mitigation?
• 8.4 How can different sectors reduce emissions?
• 8.5 What are the longer term implications of mitigation actions?

8.1 What is the cost of mitigation?

The source document for this Digest states:

C. MITIGATION IN THE SHORT AND MEDIUM TERM (UNTIL 2030)

Box SPM-2. Mitigation potential and analytical approaches.

The concept of “mitigation potential” has been developed to assess the scale of GHG reductions that could be made, relative to emission baselines, for a given level of carbon price (expressed in cost per unit of carbon dioxide equivalent emissions avoided or reduced). Mitigation potential is further differentiated in terms of “market potential” and “economic potential

Market potential is the mitigation potential based on private costs and private discount rates which might be expected to occur under forecast market conditions, including policies and measures currently in place, noting that barriers limit actual uptake [2.4].

Economic potential is the mitigation potential, which takes into account social costs and benefits and social discount rates, assuming that market efficiency is improved by policies and measures and barriers are removed [2.4].

Studies of market potential can be used to inform policy makers about mitigation potential with existing policies and barriers, while studies of economic potentials show what might be achieved if appropriate new and additional policies were put into place to remove barriers and include social costs and benefits. The economic potential is therefore generally greater than the market potential.

Mitigation potential is estimated using different types of approaches. There are two broad classes – “bottom-up” and “top-down” approaches, which primarily have been used to assess the economic potential.

Bottom-up studies are based on assessment of mitigation options, emphasizing specific technologies and regulations. They are typically sectoral studies taking the macro-economy as unchanged. Sector estimates have been aggregated, as in the TAR, to provide an estimate of global mitigation potential for this assessment.

Top-down studies assess the economy-wide potential of mitigation options. They use globally consistent frameworks and aggregated information about mitigation options and capture macro- economic and market feedbacks.

Bottom-up and top-down models have become more similar since the TAR as top-down models have incorporated more technological mitigation options and bottom-up models have incorporated more macroeconomic and market feedbacks as well as adopting barrier analysis into their model structures.

However, current bottom-up and top-down studies of economic potential have limitations in considering life-style choices, and in including all externalities such as local air pollution. They have limited representation of some regions, countries, sectors, gases, and barriers. The projected mitigation costs do not take into account potential benefits of avoided climate change.

Box SPM-3. Assumptions in studies on mitigation portfolios and macro-economic costs.

Studies on mitigation portfolios and macro-economic costs assessed in this report are based on top-down modelling. Most models use a global least cost approach to mitigation portfolios and with universal emissions trading, assuming transparent markets, no transaction cost, and thus perfect implementation of mitigation measures throughout the 21^st century. Costs are given for a specific point in time.

Global modelled costs will increase if some regions, sectors (e.g. land-use), options or gases are excluded. Global modelled costs will decrease with lower baselines, use of revenues from carbon taxes and auctioned permits, and if induced technological learning is included. These models do not consider climate benefits and generally also co-benefits of mitigation measures, or equity issues.

5. Both bottom-up and top-down studies indicate that there is substantial economic potential for the mitigation of global GHG emissions over the coming decades, that could offset the projected growth of global emissions or reduce emissions below current levels (high agreement, much evidence).

Uncertainties in the estimates are shown as ranges in the tables below to reflect the ranges of baselines, rates of technological change and other factors that are specific to the different approaches. Furthermore, uncertainties also arise from the limited information for global coverage of countries, sectors and gases.

Bottom-up studies:

• In 2030, the economic potential estimated for this assessment from bottom-up approaches (see Box SPM-2) is presented in Table SPM-1 below and Figure SPM-5A. For reference: emissions in 2000 were equal to 43 GtCO₂-eq. [11.3].
• Studies suggest that mitigation opportunities with net negative costs have the potential to reduce emissions by around 6 GtCO₂-eq/yr in 2030. Realizing these requires dealing with implementation barriers [11.3].
• No one sector or technology can address the entire mitigation challenge. All assessed sectors contribute to the total (see Figure SPM-6). The technologies with the largest economic potential for the respective sectors are shown in Table SPM-3 [4.3, 4.4, 5.4, 6.5, 7.5, 8.4, 9.4, 10.4].

Table SPM-1. Global economic mitigation potential in 2030 estimated from bottom-up studies.

Top-down studies:

Top-down studies calculate an emission reduction for 2030 as presented in Table SPM-2 below and Figure SPM-5B. The global economic potentials found in the top-down studies are in line with bottom-up studies (see Box SPM-2), though there are considerable differences at the sectoral level [3.6].

The estimates in Table SPM-2 were derived from stabilization scenarios, i.e., runs towards long-run stabilization of atmospheric GHG concentration [3.6].

Table SPM-2: Global economic mitigation potential in 2030 estimated from top-down studies.

Economic mitigation potential

Table SPM-3. Key mitigation technologies and practices by sector.

6. In 2030 macro-economic costs for multi-gas mitigation, consistent with emissions trajectories towards stabilization between 445 and 710 ppm CO₂-eq, are estimated at between a 3% decrease of global GDP and a small increase, compared to the baseline (see Table SPM-4). However, regional costs may differ significantly from global averages (high agreement, medium evidence) (see Box SPM-3 for the methodologies and assumptions of these results).

Table SPM-4: Estimated global macro-economic costs in 2030 for least-cost trajectories towards different long-term stabilization levels.

• The majority of studies conclude that reduction of GDP relative to the GDP baseline increases with the stringency of the stabilization target.

• Depending on the existing tax system and spending of the revenues, modelling studies indicate that costs may be substantially lower under the assumption that revenues from carbon taxes or auctioned permits under an emission trading system are used to promote low-carbon technologies or reform of existing taxes [11.4].
• Studies that assume the possibility that climate change policy induces enhanced technological change also give lower costs. However, this may require higher upfront investment in order to achieve costs reductions thereafter [3.3, 3.4, 11.4,11.5, 11.6].
• Although most models show GDP losses, some show GDP gains because they assume that baselines are non-optimal and mitigation policies improve market efficiencies, or they assume that more technological change may be induced by mitigation policies. Examples of market inefficiencies include unemployed resources, distortionary taxes and/or subsidies [3.3, 11.4].
• A multi-gas approach and inclusion of carbon sinks generally reduces costs substantially compared to CO₂ emission abatement only. [3.3]
• Regional costs are largely dependent on the assumed stabilization level and baseline scenario. The allocation regime is also important, but for most countries to a lesser extent than the stabilization level [11.4, 13.3].

Source & ©: IPCC (WGIII) IPCC Climate Change 2007: Mitigation,
Summary for Policymakers (2007) , p.9-11

8.2 How can changes in lifestyle and behaviour patterns contribute?

The source document for this Digest states:

7. Changes in lifestyle and behaviour patterns can contribute to climate change mitigation across all sectors. Management practices can also have a positive role. (high agreement, medium evidence)

• Lifestyle changes can reduce GHG emissions. Changes in lifestyles and consumption patterns that emphasize resource conservation can contribute to developing a low-carbon economy that is both equitable and sustainable [4.1, 6.7].
• Education and training programmes can help overcome barriers to the market acceptance of energy efficiency, particularly in combination with other measures [Table 6.6].
• Changes in occupant behaviour, cultural patterns and consumer choice and use of technologies can result in considerable reduction in CO₂ emissions related to energy use in buildings [6.7].
• Transport Demand Management, which includes urban planning (that can reduce the demand for travel) and provision of information and educational techniques (that can reduce car usage and lead to an efficient driving style) can support GHG mitigation [5.1].
• In industry, management tools that include staff training, reward systems, regular feedback, documentation of existing practices can help overcome industrial organization barriers, reduce energy use, and GHG emissions [7.3].

Source & ©: IPCC (WGIII) IPCC Climate Change 2007: Mitigation,
Summary for Policymakers (2007) , p.12

8.3 What are the co-benefits of mitigation?

The source document for this Digest states:

8. While studies use different methodologies, in all analyzed world regions near-term health co-benefits from reduced air pollution as a result of actions to reduce GHG emissions can be substantial and may offset a substantial fraction of mitigation costs (high agreement, much evidence).

• Including co-benefits other than health, such as increased energy security, and increased agricultural production and reduced pressure on natural ecosystems, due to decreased tropospheric ozone concentrations, would further enhance cost savings [11.8].
• Integrating air pollution abatement and climate change mitigation policies offers potentially large cost reductions compared to treating those policies in isolation [11.8].

9. Literature since TAR confirms that there may be effects from Annex I countries action on the global economy and global emissions, although the scale of carbon leakage remains uncertain (high agreement, medium evidence).

Fossil fuel exporting nations (in both Annex I and non-Annex I countries) may expect, as indicated in TAR, lower demand and prices and lower GDP growth due to mitigation policies. The extent of this spill over depends strongly on assumptions related to policy decisions and oil market conditions [11.7]. Critical uncertainties remain in the assessment of carbon leakage. Most equilibrium modelling support the conclusion in the TAR of economy-wide leakage from Kyoto action in the order of 5-20%, which would be less if competitive low-emissions technologies were effectively diffused [11.7].

Source & ©: IPCC (WGIII) IPCC Climate Change 2007: Mitigation,
Summary for Policymakers (2007) , p.12

8.4 How can different sectors reduce emissions?

The source document for this Digest states:

10. New energy infrastructure investments in developing countries, upgrades of energy infrastructure in industrialized countries, and policies that promote energy security, can, in many cases, create opportunities to achieve GHG emission reductions compared to baseline scenarios. Additional co-benefits are country- specific but often include air pollution abatement, balance of trade improvement, provision of modern energy services to rural areas and employment (high agreement, much evidence).

• Future energy infrastructure investment decisions, expected to total over 20 trillion US$ between now and 2030, will have long term impacts on GHG emissions, because of the long life-times of energy plants and other infrastructure capital stock. The widespread diffusion of low-carbon technologies may take many decades, even if early investments in these technologies are made attractive. Initial estimates show that returning global energy-related CO₂ emissions to 2005 levels by 2030 would require a large shift in the pattern of investment, although the net additional investment required ranges from negligible to 5-10% [4.1, 4.4, 11.6].
• It is often more cost-effective to invest in end-use energy efficiency improvement than in increasing energy supply to satisfy demand for energy services. Efficiency improvement has a positive effect on energy security, local and regional air pollution abatement, and employment [4.2, 4.3, 6.5, 7.7, 11.3, 11.8].
• Renewable energy generally has a positive effect on energy security, employment and on air quality. Given costs relative to other supply options, renewable electricity, which accounted for 18% of the electricity supply in 2005, can have a 30-35% share of the total electricity supply in 2030 at carbon prices up to 50 US$/tCO₂-eq [4.3, 4.4, 11.3, 11.6, 11.8].
• The higher the market prices of fossil fuels, the more low-carbon alternatives will be competitive, although price volatility will be a disincentive for investors. Higher priced conventional oil resources, on the other hand, may be replaced by high carbon alternatives such as from oil sands, oil shales, heavy oils, and synthetic fuels from coal and gas, leading to increasing GHG emissions, unless production plants are equipped with CCS [4.2, 4.3, 4.4, 4.5].
• Given costs relative to other supply options, nuclear power, which accounted for 16% of the electricity supply in 2005, can have an 18% share of the total electricity supply in 2030 at carbon prices up to 50 US$/tCO₂-eq, but safety, weapons proliferation and waste remain as constraints [4.2, 4.3, 4.4]
• CCS in underground geological formations is a new technology with the potential to make an important contribution to mitigation by 2030. Technical, economic and regulatory developments will affect the actual contribution [4.3, 4.4, 7.3].

11. There are multiple mitigation options in the transport sector, but their effect may be counteracted by growth in the sector. Mitigation options are faced with many barriers, such as consumer preferences and lack of policy frameworks (medium agreement, medium evidence).

• Improved vehicle efficiency measures, leading to fuel savings, in many cases have net benefits (at least for light-duty vehicles), but the market potential is much lower than the economic potential due to the influence of other consumer considerations, such as performance and size. There is not enough information to assess the mitigation potential for heavy-duty vehicles. Market forces alone, including rising fuel costs, are therefore not expected to lead to significant emission reductions [5.3, 5.4].
• Biofuels might play an important role in addressing GHG emissions in the transport sector, depending on their production pathway. Biofuels used as gasoline and diesel fuel additives/substitutes are projected to grow to 3% of total transport energy demand in the baseline in 2030. This could increase to about 5-10%, depending on future oil and carbon prices, improvements in vehicle efficiency and the success of technologies to utilise cellulose biomass [5.3, 5.4].
• Modal shifts from road to rail and inland waterway shipping and from low- occupancy to high-occupancy passenger transportation, as well as land-use, urban planning and non-motorized transport offer opportunities for GHG mitigation, depending on local conditions and policies [5.3, 5.5].
• Medium term mitigation potential for CO₂ emissions from the aviation sector can come from improved fuel efficiency, which can be achieved through a variety of means, including technology, operations and air traffic management. However, such improvements are expected to only partially offset the growth of aviation emissions. Total mitigation potential in the sector would also need to account for non-CO₂ climate impacts of aviation emissions [5.3, 5.4].
• Realizing emissions reductions in the transport sector is often a co-benefit of addressing traffic congestion, air quality and energy security [5.5].

12. Energy efficiency options for new and existing buildings could considerably reduce CO₂ emissions with net economic benefit. Many barriers exist against tapping this potential, but there are also large co-benefits (high agreement, much evidence).

• By 2030, about 30% of the projected GHG emissions in the building sector can be avoided with net economic benefit [6.4, 6.5].
• Energy efficient buildings, while limiting the growth of CO₂ emissions, can also improve indoor and outdoor air quality, improve social welfare and enhance energy security [6.6, 6.7].
• Opportunities for realising GHG reductions in the building sector exist worldwide. However, multiple barriers make it difficult to realise this potential. These barriers include availability of technology, financing, poverty, higher costs of reliable information, limitations inherent in building designs and an appropriate portfolio of policies and programs [6.7, 6.8].
• The magnitude of the above barriers is higher in the developing countries and this makes it more difficult for them to achieve the GHG reduction potential of the building sector [6.7].

13. The economic potential in the industrial sector is predominantly located in energy intensive industries. Full use of available mitigation options is not being made in either industrialized or developing nations (high agreement, much evidence).

• Many industrial facilities in developing countries are new and include the latest technology with the lowest specific emissions. However, many older, inefficient facilities remain in both industrialized and developing countries. Upgrading these facilities can deliver significant emission reductions [7.1, 7.3, 7.4].
• The slow rate of capital stock turnover, lack of financial and technical resources, and limitations in the ability of firms, particularly small and medium-sized enterprises, to access and absorb technological information are key barriers to full use of available mitigation options [7.6].

14. Agricultural practices collectively can make a significant contribution at low cost to increasing soil carbon sinks, to GHG emission reductions, and by contributing biomass feedstocks for energy use (medium agreement, medium evidence).

• A large proportion of the mitigation potential of agriculture (excluding bioenergy) arises from soil carbon sequestration, which has strong synergies with sustainable agriculture and generally reduces vulnerability to climate change [8.4, 8.5, 8.8].
• Stored soil carbon may be vulnerable to loss through both land management change and climate change [8.10].
• Considerable mitigation potential is also available from reductions in methane and nitrous oxide emissions in some agricultural systems [8.4, 8.5].
• There is no universally applicable list of mitigation practices; practices need to be evaluated for individual agricultural systems and settings [8.4].
• Biomass from agricultural residues and dedicated energy crops can be an important bioenergy feedstock, but its contribution to mitigation depends on demand for bioenergy from transport and energy supply, on water availability, and on requirements of land for food and fibre production. Widespread use of agricultural land for biomass production for energy may compete with other land uses and can have positive and negative environmental impacts and implications for food security [8.4, 8.8].

15. Forest-related mitigation activities can considerably reduce emissions from sources and increase CO₂ removals by sinks at low costs, and can be designed to create synergies with adaptation and sustainable development (high agreement, much evidence)

• About 65% of the total mitigation potential (up to 100 US$/tCO₂-eq) is located in the tropics and about 50% of the total could be achieved by reducing emissions from deforestation [9.4].
• Climate change can affect the mitigation potential of the forest sector (i.e., native and planted forests) and is expected to be different for different regions and sub-regions, both in magnitude and direction [9.5].
• Forest-related mitigation options can be designed and implemented to be compatible with adaptation, and can have substantial co-benefits in terms of employment, income generation, biodiversity and watershed conservation, renewable energy supply and poverty alleviation [9.5, 9.6, 9.7].

16. Post-consumer waste is a small contributor ti global GHG emissions (<5%), but the waste sector can positively contribute to GHG mitigation at low cost and promote sustainable development (high agreement, much evidence).

• Existing waste management practices can provide effective mitigation of GHG emissions from this sector: a wide range of mature, environmentally effective technologies are commercially available to mitigate emissions and provide co- benefits for improved public health and safety, soil protection and pollution prevention, and local energy supply [10.3, 10.4, 10.5].
• Waste minimization and recycling provide important indirect mitigation benefits through the conservation of energy and materials [10.4].
• Lack of local capital is a key constraint for waste and wastewater management in developing countries and countries with economies in transition. Lack of expertise on sustainable technology is also an important barrier [10.6].

17. Geo-engineering options, such as ocean fertilization to remove CO₂ directly from the atmosphere, or blocking sunlight by bringing material into the upper atmosphere, remain largely speculative and unproven, and with the risk of unknown side-effects. Reliable cost estimates for these options have not been published (medium agreement, limited evidence) [11.2].

Source & ©: IPCC (WGIII) IPCC Climate Change 2007: Mitigation,
Summary for Policymakers (2007) , p.12-15

8.5 What are the longer term implications of mitigation actions?

The source document for this Digest states:

D. MITIGATION IN THE LONG TERM (AFTER 2030)

18. In order to stabilize the concentration of GHGs in the atmosphere, emissions would need to peak and decline thereafter. The lower the stabilization level, the more quickly this peak and decline would need to occur. Mitigation efforts over the next two to three decades will have a large impact on opportunities to achieve lower stabilization levels (see Table SPM-5, and Figure SPM-8) (high agreement, much evidence).

• Recent studies using multi-gas reduction have explored lower stabilization levels than reported in TAR.
• Assessed studies contain a range of emissions profiles for achieving stabilization of GHG concentrations. Most of these studies used a least cost approach and include both early and delayed emission reductions (Figure SPM-7) [Box SPM-2]. Table SPM-5 summarizes the required emissions levels for different groups of stabilization concentrations and the associated equilibrium global mean temperature increase using the ‘best estimate’ of climate sensitivity (see also Figure SPM-8 for the likely range of uncertainty). Stabilization at lower concentration and related equilibrium temperature levels advances the date when emissions need to peak, and requires greater emissions reductions by 2050.

Table SPM-5: Characteristics of post-TAR stabilization scenarios

Stabilization in mitigation scenarios

19. The range of stabilization levels assessed can be achieved by deployment of a portfolio of technologies that are currently available and those that are expected to be commercialised in coming decades. This assumes that appropriate and effective incentives are in place for development, acquisition, deployment and diffusion of technologies and for addressing related barriers (high agreement, much evidence).

• The contribution of different technologies to emission reductions required for stabilization will vary over time, region and stabilization level.
  
• • Energy efficiency plays a key role across many scenarios for most regions and timescales.
  • For lower stabilization levels, scenarios put more emphasis on the use of low-carbon energy sources, such as renewable energy and nuclear power, and the use of CO₂ capture and storage (CCS). In these scenarios improvements of carbon intensity of energy supply and the whole economy need to be much faster than in the past.
  • Including non-CO₂ and CO₂ land-use and forestry mitigation options provides greater flexibility and cost-effectiveness for achieving stabilization. Modern bioenergy could contribute substantially to the share of renewable energy in the mitigation portfolio.
  • For illustrative examples of portfolios of mitigation options, see Figure SPM-9 [3.3, 3.4].
• Investments in and world-wide deployment of low-GHG emission technologies as well as technology improvements through public and private Research, Development &D) would be required for achieving stabilization targets as well as cost reduction. The lower the stabilization levels, especially those of 550 ppm CO₂-eq or lower, the greater the need for more efficient RD&D efforts and investment in new technologies during the next few decades.
• Appropriate incentives could address these barriers and help realize the goals across a wide portfolio of technologies. This requires that barriers to development, acquisition, deployment and diffusion of technologies are effectively addressed. [2.7, 3.3, 3.4, 3.6, 4.3, 4.4, 4.6].

Emission reductions for various mitigation measures

20. In 2050 global average macro-economic costs for multi-gas mitigation towards stabilization between 710 and 445 ppm CO₂-eq, are between a 1% gain to a 5.5% decrease of global GDP (see Table SPM-6). For specific countries and sectors, costs vary considerably from the global average. (See Box SPM-3 and SPM-4 for the methodologies and assumptions and paragraph 5 for explanation of negative costs) (high agreement, medium evidence).

Table SPM-6. Estimated global macro-economic costs in 2050 relative to the baseline for least-cost trajectories towards different long-term stabilization targets

21. Decision-making about the appropriate level of global mitigation over time involves an iterative risk management process that includes mitigation and adaptation, taking into account actual and avoided climate change damages, co- benefits, sustainability, equity, and attitudes to risk. Choices about the scale and timing of GHG mitigation involve balancing the economic costs of more rapid emission reductions now against the corresponding medium-term and long-term climate risks of delay (high agreement, much evidence).

• Limited and early analytical results from integrated analyses of the costs and benefits of mitigation indicate that these are broadly comparable in magnitude, but do not as yet permit an unambiguous determination of an emissions pathway or stabilization level where benefits exceed costs [3.5].
• Integrated assessment of the economic costs and benefits of different mitigation pathways shows that the economically optimal timing and level of mitigation depends upon the uncertain shape and character of the assumed climate change damage cost curve. To illustrate this dependency:
  
  • if the climate change damage cost curve grows slowly and regularly, and there is good foresight (which increases the potential for timely adaptation), later and less stringent mitigation is economically justified;
  • alternatively if the damage cost curve increases steeply, or contains non-linearities (e.g. vulnerability thresholds or even small probabilities of catastrophic events), earlier and more stringent mitigation is economically justified [3.6].
• Climate sensitivity is a key uncertainty for mitigation scenarios that aim to meet a specific temperature level. Studies show that if climate sensitivity is high then the timing and level of mitigation is earlier and more stringent than when it is low [3.5, 3.6].
• Delayed emission reductions lead to investments that lock in more emission- intensive infrastructure and development pathways. This significantly constrains the opportunities to achieve lower stabilization levels (as shown in Table SPM-5) and increases the risk of more severe climate change impacts [3.4, 3.1, 3.5, 3.6]

Box SPM-4. Modelling induced technological change

Relevant literature implies that policies and measures may induce technological change. Remarkable progress has been achieved in applying approaches based on induced technological change to stabilisation studies; however, conceptual issues remain. In the models that adopt these approaches, projected costs for a given stabilization level are reduced; the reductions are greater at lower stabilisation levels.

Source & ©: IPCC (WGIII) IPCC Climate Change 2007: Mitigation,
Summary for Policymakers (2007) , p.15-18