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Proposals Copenhagen: 10% short for reaching the 2 °C climate objective

Press release | 07-10-2009

The current proposals for Copenhagen by the developed countries, including those by the United States, to reduce emissions do not yet suffice to limit global warming to a rise of 2°C. This target has been acknowledged by the G8, last July. It would require a reduction of 25 to 40% in greenhouse gas emissions in 2020, compared with 1990 levels, whereas the current proposals would lead to a reduction of 10 to 15%. Developed countries as a group would need to increase their reduction targets for 2020 by at least 6 to 10%, in order to keep the 2°C objective within reach. The global costs would be limited to 0.2% of GDP in 2020. These are the conclusions of ‘Pledges and Actions, a scenario analysis of mitigation costs and carbon market impacts for developed and developing countries’, by the Netherlands Environmental Assessment Agency (PBL), published today.

The 2˚C objective

According to the EU and G8, global warming should be limited to 2˚C, compared to pre-industrial levels. The current proposals by the EU, the United States and Japan are about 5 to 15 % lower than required to meet this objective, Canada’s pledges are 25% lower and those of Russia and the Ukraine are even over 35% lower than required. The United States have not yet submitted a formal reduction proposal. Based on the Climate Security Act, the study assumes an emission cap of 0 to 3%, by 2020, below 1990 levels.

Carbon market and mitigation costs

Under the current proposals, the estimated annual mitigation costs, including financing the reduction of emissions from deforestation and forest degradation in developing countries, for the developed region would vary between 18 and 38 billion US$ in 2020. Assuming a 4 to 8% reduction, below baseline levels, by 2020, developing countries would gain 3 to 5 billion US$. For meeting the 2°C target, the costs would be 138 billion US$ for developed countries and 40 billion US$ for developing countries. Under the current proposals, as well as in the scenario aimed at the 2°C, developing countries will still be able to benefit from carbon trade, with estimated revenues of 15 to 60 billion US$. If the economic crisis would be taken into account, the mitigation costs would be considerably lower.

Deforestation and forest degradation

Deforestation is one of the main sources of CO2 emissions and leads to loss of biodiversity and soil degradation. Financing the reduction in emissions from deforestation and forest degradation in developing countries (UN programme ‘REDD’) is meant to protect the forests. At the same time, this helps to limit mitigation costs for developed countries, as it is relatively cheap, and generates income for developing countries. Given the assumption that developed countries would finance 80% of REDD activities in developing countries at REDD market prices, the costs would be around 18 billion US$ for developed countries, while developing countries would earn around 4 billion US$ by 2020, despite of their own contribution of 20%. This would lead to a halving of the emissions from deforestation, and would help substantially to bridge the gap between current proposals and what is needed to meet the 2°C target.

Hot air

Estimated 2020 emissions in Russia and the Ukraine are lower than the regions’ pledges for the upcoming Copenhagen meeting. This means they could sell a surplus of emission credits without reducing any greenhouse gas emissions. This surplus is called ‘hot air’. If sold, it would lead to a lower carbon price, but not to any actual reductions in greenhouse gas emissions. If Russia and the Ukraine would not trade their ‘hot air’, the overall reductions by developed countries would increase from between 10 and 15%, to between 14 and 19%, below 1990 levels, by 2020.

Comparable Effort Scenario to meet 2°C target

These data are calculated by the Netherlands Environmental Assessment Agency with the aid of a scenario. This so-called comparable effort scenario assumes comparable efforts by countries in similar circumstances, to reach the 2˚C objective. In this scenario, the emissions by developed countries as a group would have to be 30% lower in 2020, compared with 1990. More advanced developing countries would have to reduce their emissions by 20% below baseline (without climate policy) and those on a lower development level by 10%. The least-developed countries would be exempt from any legally binding emission reduction efforts, up to 2020. The mitigation costs for developed countries would be 0.24% of GDP in 2020, and for developing countries this would be 0.18%, excluding possible additional financing.

Consistent

The Netherlands Environmental Assessment Agency’s findings are consistent with last week’s analysis by the International Institute for Applied Systems Analysis (IIASA), and say that even if pledges are interpreted in the most optimistic way, the proposals collectively fall short of the 25 to 40% reduction target that was agreed on in Bali.

The Energy Research Centre of the Netherlands has made valuable contributions to this report.

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