Climate policy after Kyoto – Analytical insights into key issues in the climate negotiations

18-11-2011 | Publication

Limiting global warming to 2 °C above pre-industrial levels is the objective agreed on in international climate negotiations. Due to upward revisions of greenhouse gas emission projections in emerging economies, such as India, Brazil, Mexico and China, achieving this objective has become more difficult.

Higher expected economic growth leads to higher emission levels

Limiting global warming to 2 °C above pre-industrial levels is the objective agreed on in international climate negotiations. For this purpose, countries have made proposals to reduce their greenhouse gas emissions by 2020. For developed countries these reductions are based on their 1990 emission levels, whereas for developing countries these are based on projected levels without climate policy. In recent climate talks (in Bangkok in April 2011 and Bonn in June 2011) some emerging countries presented upward revisions of emission projections without climate policy. This has caused the reduction proposal of Brazil, for instance, to decrease from 37-39% to 17-21% below their original emission projections without climate policy. At the same time, international institutions increased the projected growth of emissions in China, as this country seems less affected by the current crisis than developed countries.

Limiting global warming to 2 °C very difficult with current pledges

PBL calculations in the report Climate Policy after Kyoto show that the sum of all reduction proposals would lead to a greenhouse gas emission level of 51 to 52 billion tonnes of CO2 equivalent by 2020. This compares to an earlier estimate of 49 to 50 billion tonnes, and to an expected 56 billion tonnes without climate policy. Although the proposals do lead to reductions in greenhouse gas emissions, limiting global warming to 2 °C will be very difficult with the currently projected emission levels for 2020.

Delaying action would also mean that the costs of emission reductions later in the century would increase, substantially. Moreover, much would depend on future technological developments, such as bio-energy combined with carbon capture and storage.

Costs to achieve pledges for the EU are higher than average

Model calculations show that, for the EU to achieve their conditional 2020 reduction target of 30%, the related emission reduction costs (between about 0.1% and 0.3% of GDP would be well above the average of those of other developed countries (by about 0.05% to 0.15% of GDP, if these countries also were to implement their most ambitious emission reduction pledges. This is partly due to Russia and the Ukraine having pledged emission targets above their business-as-usual emission projections.

Financing climate policy in developing countries

A number of proposals tabled in the negotiations to fill a so-called Green Climate Fund (which has been established to support climate policies in developing countries) would lead to unpredictable revenues, as these would depend on the ambition level of climate policy. A global carbon tax would lead to more predictable funding, but seems very unrealistic in the present negotiations.

Surplus allowances could seriously undermine reduction targets

Countries for which emission levels are below their Kyoto target have surplus allowances (‘hot air’), which under the Kyoto protocol may be carried over to a following commitment period. This is especially the case in the former Soviet Union and Eastern European countries, but also in some EU15 Member States. If these surplus allowances could be used without restrictions for meeting the 2020 reduction pledges, the environmental effectiveness of reduction targets could be seriously undermined.

EU target to halve deforestation by 2020 is considered ambitious

The EU target of reducing deforestation by 50% in developing countries by 2020 is technically possible, but should be regarded as ambitious if implementation barriers would be taken into account. Such barriers may, for instance, be due to insufficient capacity to measure forest areas and carbon stocks, and a lack of experience in environmental markets, and could be related to established practices and institutional capacity.

Some options to limit global warming to 2 °C are critical

Model projections show that there is sufficient technical potential to reduce emissions by increasing energy efficiency, changing energy supply, implementing end-off-pipe measures and land-use change, in order to limit global warming to 2 °C. Some of these options are more critical than others, such as improving efficiency and bio-energy, combined with carbon capture and storage CCS. Estimates of the costs are uncertain, but most studies have found annual investment numbers of between 1% and 2% of GDP.

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