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1.
Coral reefs are highly vulnerable to the impacts of rising marine temperatures and marine heatwaves. Mitigating dangerous climate change is essential and urgent, but many reef systems are already suffering on current levels of warming. Geoengineering options are worth exploring to protect the Great Barrier Reef (GBR) from extreme warming conditions, but we contend that they require strong governance and public consultation from the outset. Australian governments are currently funding feasibility testing of three geoengineering proposals for the GBR. Each proposal involves manipulating ocean or atmospheric conditions to lower water temperatures and thereby reduce the threat of mass coral bleaching events. Innovative strategies to protect the GBR and field testing of these is essential, but current laws do not guarantee robust governance for field testing of these technologies. Nor do they provide the foundation for a more coherent national policy on climate intervention technologies more generally. Responsible governance frameworks, including detailed risk assessment and early public consultation, are necessary for geoengineering research to build legitimacy and promote scientific progress.

Key policy insights

  • Marine heatwaves pose a serious threat to coral reefs, including Australia’s iconic Great Barrier Reef.

  • Australian governments have recognized the threats of warming waters, and are funding research of geoengineering options for the Great Barrier Reef.

  • The limited earlier field testing of geoengineering demonstrates the need for specific governance to manage risks, build legitimacy and maintain public support.

  • Australia requires a framework to govern geoengineering research and development before deployment of such technologies.

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2.
This paper examines power relations, coalitions and conflicts that drive and hinder institutional change in South African climate policy. The analysis finds that the most contested climate policies are those that create distributional conflicts where powerful, non-poor actors will potentially experience real losses to their fossil fuel-based operations. This finding opposes the assumption of competing objectives between emissions and poverty reduction. Yet, actors use discourse that relates to potentially competing objectives between emissions reductions, jobs, poverty reduction and economic welfare.

The analysis relates to the broader questions on how to address public policy problems that affect the two objectives of mitigating climate change and simultaneously boosting socio-economic development. South Africa is a middle-income country that represents the challenge of accommodating simultaneous efforts for emissions and poverty reduction.

Institutional change has been constrained especially in the process towards establishing climate budgets and a carbon tax. The opposing coalitions have succeeded in delaying the implementation of these processes, as a result of unequal power relations. Institutional change in South African climate policy can be predominantly characterized as layering with elements of policy innovation. New policies build on existing regulations in all three cases of climate policy examined: the climate change response white paper, the carbon tax and the renewable energy programme. Unbalanced power relations between coalitions of support in government and civil society and opposition mainly from the affected industry result in very fragile institutional change.

Key policy insights

  • The South African government has managed to drive institutional change in climate policy significantly over the past 7 years.

  • Powerful coalitions of coal-related industries and their lobbies have constrained institutional change and managed to delay the implementation of carbon pricing measures.

  • A successfully managed renewable energy programme has started to transform a coal- and nuclear-powered electricity sector towards integrating sustainable energy technologies. The programme is vulnerable to intergovernmental opposition and requires management at the highest political levels.

  • Potential conflict with poverty reduction measures is not a major concern that actively hinders institutional change towards climate objectives. Predominantly non-poor actors frequently use poverty-related discourse to elevate their interests to issues of public concern.

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3.
Russia has significant potential for reducing its carbon emissions. However, investment in new low-carbon technologies has significant risks. Ambiguous energy and climate policy in Russia, along with deterioration of the country's investment climate, create investment barriers that are well described in qualitative terms in the literature. This paper attempts to provide a quantitative analysis of these barriers. For this numerical experiment, we apply the RU-TIMES model. Using a real options methodology, we estimate the risk-adjusted cost of capital in the Russian energy sector (including energy production and consumption technologies represented in the TIMES framework) to be approximately 43% (including a risk-free interest rate) and demonstrate the high risk of investment into energy-efficient and low-carbon technologies. Any future low-carbon emissions pathway depends on the ability of the Russian government to reduce climate and energy policy uncertainties, and to reduce financial risks through improvements of the general investment climate.

Key policy insights

  • The high cost of capital investment into Russian energy production and consumption may prevent the adoption of new energy-efficient and low-carbon technologies.

  • These investment risks, if not addressed, will delay Russia's low-carbon transition for the coming decades.

  • Adopting a clear and unambiguous long-term climate and energy policy is important to reduce these risks and alleviate some of the barriers to the new technologies.

  • The first step could be ratification of the Paris Agreement and adoption of a long-term emission target for the period up to 2050.

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4.
Climate engineering has received increasing attention, but its discussion has remained on the sidelines of mainstream climate policy. The policy relevance of this previously exotic option is poised to rise because of the gap between the temperature goals of the Paris Agreement and slow global mitigation efforts. It is therefore crucial to understand the risks and benefits of the proposed schemes, and the social implications of policy choices. Assessment of the risks and benefits of solar geoengineering strongly depends on scenarios, but previous scenarios have not reflected the full range of social choices. In light of concerns over risks, a newer set of scenarios is desirable, which represents both uncertainties and social choices more fully. Borrowing and extending lessons from recent literature on the new community climate scenario process, we envision a possible scenario-building process that combines interdisciplinary scholarship with the involvement of stakeholders and citizens. The resultant scenarios would better characterize uncertainties of, and policy choices for, solar geoengineering, and foster critical appraisal of its risks and benefits. Such societal choices might include not only total ban and large-scale deployment, but also limited deployment, which has received less attention in the scenario literature. The interaction between scenario and governance research would be able to highlight the central issues at stake, including ethical, social, and political dimensions.

Key policy insights

  • A more comprehensive assessment of solar geoengineering is necessary to evaluate its risks and benefits, necessitating new scenario research

  • It is crucial to reflect the full span of policy choices and uncertainties with interdisciplinary collaboration in such scenarios

  • Such societal choices might include not only total ban and large-scale deployment, but also limited deployment, which has received less attention in the scenario literature

  • Participatory scenario research would enable incorporating the concerns and opinions of stakeholders and citizens in scenario creation

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5.
This paper explores policies for Negative Emissions Technologies (NETs), in an attempt to move beyond the supply-side focus of the majority of NETs research, as well as the current dominance of carbon pricing as the main NETs policy proposal. The paper identifies a number of existing policies from four key areas – energy/transport, agriculture, sub-soil, and oceans – which will have an impact on three NETs: Bioenergy with Carbon Capture and Storage (BECCS), Direct Air Capture (DAC), and terrestrial Enhanced Rock Weathering (ERW). We propose that non-climate co-benefits may be valuable in terms of the policy ‘demand pull’ for NETs; in particular, we find that ERW may provide multiple co-benefits which can be mandated through existing policy structures. However, interaction with numerous policy areas may also create barriers, particularly where there is tension between the priorities of different government departments. On the basis of existing and analogous policies from a range of geographical contexts and scales, this paper proposes four options for NETs policy that could be reasonably implemented in the near-term. We also argue that ERW demonstrates the importance of scale and framing, because the policy environment depends on whether it is framed as a soil amendment at local scales or as a climate stabilization technique at international scale.

Key policy insights

  • Co-benefits may assist the ‘demand pull’ for novel technologies by providing multiple policy angles for incentivisation rather than relying on a ‘fix-all’ policy such as a high carbon price.

  • DAC with storage might be overly reliant on a high carbon price, because it only provides one core benefit – that of atmospheric carbon reduction.

  • ERW may provide multiple co-benefits which can be mandated through existing policy structures, but should focus on using waste rock rather than mining virgin material.

  • We propose four near-term options for NETs policy: funding for small-scale BECCS demonstration and an international biomass certification mechanism; small-scale loans for ERW on farms and promotion of locally-sourced rock residues; amendment of fertilizer subsidy schemes to include silicate rock; and a clearer framework for licensing sub-soil access for CO2 storage.

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6.
Africa is growing rapidly both in terms of population size and economically. It is also becoming increasingly clear that fossil fuels impose a high price on society through local environmental pollution and Africa’s particular vulnerability to climate change. At the same time, Africa has an excellent renewable energy potential and prices for renewable energy are reaching the price range of fossil fuels. Comparing results from state-of-the-art Integrated Assessment Models we find different options for achieving a sustainable energy supply in Africa. They have in common, however, that strong economic development is considered compatible with the 2°C climate target. Taking both challenges and appropriate solutions into account, some models find that a complete switch to renewable energy in electricity production is possible in the medium term. The continental analysis identifies important synergy effects, in particular the exchange of electricity between neighbouring countries. The optimal energy mix varies considerably between African countries, but there is sufficient renewable energy for each country. The intermittency and higher capital intensity of renewable energy are important challenges, but proven solutions are available for them. In addition, we analyse the political economy of a sustainable energy transition in Africa.

Key policy insights

  • An almost complete shift towards renewable energy (RE) is considered feasible and affordable in Africa.

  • By 2050, electricity generation could be sourced largely from solar, wind and hydro power.

  • Prices for RE in Africa are now within the price range of fossil fuels, partly due to the excellent RE potential.

  • The optimal energy mix varies strongly between countries, but RE is sufficiently available everywhere.

  • Addressing intermittency is possible, but requires investments and cooperation on the grid.

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7.
Although climate change is an urgent problem, behavioural and policy responses have not yet been sufficient to either reduce the volume of greenhouse gas emissions or adapt to a disrupted climate system. Significant efforts have been made to raise public awareness of the dangers posed by climate change. One reason why these efforts might not be sufficient is rooted in people’s need to feel efficacy to solve complex problems; the belief that climate change is unstoppable might thwart action even among the concerned. This paper tests for the effect of fatalistic beliefs on behavioural change and willingness to pay to address climate change using two cross-national surveys representing over 50,000 people in 48 nations.

Key policy insights

  • The perception that climate change poses a risk or danger increases the likelihood of behavioural change and willingness to pay to address climate change.

  • The belief that climate change is unstoppable reduces the behavioural and policy response to climate change and moderates risk perception.

  • Communicators and policy leaders should carefully frame climate change as a difficult, yet solvable, problem to circumvent fatalistic beliefs.

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8.
Brianna Craft 《Climate Policy》2018,18(9):1203-1209
The Paris Agreement establishes a global goal on adaptation which will be assessed through the global stocktake, the first attempt by the international climate change regime to measure collective progress on adaptation. This policy analysis identifies four main challenges to designing a meaningful assessment. These are: designing a system that can aggregate results; managing the dual mandate of reviewing collective progress and informing the enhancement of national level actions; methodological challenges in adaptation; and political challenges around measurement. We propose a mixed-methods approach to addressing these challenges, combining short-term needs for reporting with longer-term aims of enhancing national adaptation actions.

Key policy insights

  • Broad domains of adaptation activity could be identified within each of the objectives of the adaptation goal and progress could be measured and aggregated through simple scorecards.

  • The goal should have both process and outcome indicators as well as some narrative linking activities to outcomes over time.

  • Reporting could be a compilation of national data using qualitative and quantitative sources, aligning with the global stocktake’s aim of enhancing national actions over time and reducing immediate reporting burdens.

  • There would be a complementary role at least in the short term for an expert assessment of priority areas.

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9.
The increasing number of coastal floods in recent years in France has resulted in the design of new adaptation principles for the most endangered coastal areas. The aim of the government is to reduce the vulnerability of these areas by relocating property and infrastructure. These measures have, however, come up against considerable opposition from the population concerned. Using a survey of 421 inhabitants of Hyères, a coastal town in the South of France, this article proposes the study of resistance to relocation through the creation of an index for resistance that incorporates attachment to place, residential mobility and risk perception. The results show a correlation for the index and distance from the sea that highlights the existence of conflicting interests with adaptation measures depending upon population categories.

Key policy insights

  • In France, although coastal flooding risk is a key issue in numerous populated coastal areas, coastal dwellers show little willingness to relocate.

  • Resistance to relocation can be assessed through a composite index integrating place attachment, residential mobility and risk perception.

  • Application of such an index shows a correlation between willingness to relocate and distance from the sea.

  • Conflicts of interest with adaptation measures also depend on the age of the dwellers, their standard of living and on home ownership.

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10.
The majority of emissions of nitrous oxide – a potent greenhouse gas (GHG) – are from agricultural sources, particularly nitrogen fertilizer applications. A growing focus on these emission sources has led to the development in the United States of GHG offset protocols that could enable payment to farmers for reducing fertilizer use or implementing other nitrogen management strategies. Despite the development of several protocols, the current regional scope is narrow, adoption by farmers is low, and policy implementation of protocols has a significant time lag. Here we utilize existing research and policy structures to propose an ‘umbrella’ approach for nitrogen management GHG emissions protocols that has the potential to streamline the policy implementation and acceptance of such protocols. We suggest that the umbrella protocol could set forth standard definitions common across multiple protocol options, and then modules could be further developed as scientific evidence advances. Modules could be developed for specific crops, regions, and practices. We identify a policy process that could facilitate this development in concert with emerging scientific research and conclude by acknowledging potential benefits and limitations of the approach.

Key policy insights

  • Agricultural greenhouse gas market options are growing, but are still underutilized

  • Streamlining protocol development through an umbrella process could enable quicker development of protocols across new crops, regions, and practices

  • Effective protocol development must not compromise best available science and should follow a rigorous pathway to ensure appropriate implementation

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11.
Renewable energy curtailment is a critical issue in China, impeding the country’s transition to clean energy and its ability to meet its climate goals. This paper analyzes the impacts of more flexible coal-fired power generation and improved power dispatch towards reducing wind power curtailment. A unit commitment model for power dispatch is used to conduct the analysis, with different scenarios demonstrating the relative impacts of more flexible coal-fired generation and improved power dispatch. Overall, while we find both options are effective in reducing wind power curtailment, we find that improved power dispatch is more effective: (1) the effect of ramping down coal-fired generators to reduce wind power curtailment lessens as the minimum output of coal-fired generation is decreased; and (2) as a result, at higher wind capacity levels, wind curtailment is much more significantly reduced with improved power dispatch than with decreased minimum output of coal-fired generation.

Key policy insights

  • China should emphasize both coal power flexibility and dispatch in its policies to minimize renewable power curtailment and promote clean energy transition.

  • China should accelerate the process of implementing spot market and marginal cost-based economic dispatch, while making incremental improvements to the existing equal share dispatch in places not ready for spot market.

  • A key step in improving of dispatch is incorporating renewable power forecasts into the unit commitment process and updating the daily unit commitment based on the latest forecast result.

  • China should expand the coal power flexibility retrofit programme and promote the further development of the ancillary service market to encourage more flexibility from coal-fired generation.

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12.
Globally, adaptation policies and programmes are being formulated to address climate change issues. However, in the agricultural sector, and particularly in least developed countries (LDCs), concerns remain as to whether these policies and programmes are consistent with farmers’ preferences. This study empirically investigates Nepalese farmers’ willingness to support the implementation of adaptation programmes. To this end, we first developed suggested adaptation programmes in accordance with the adaptation measures identified by LDCs in their National Adaptation Programmes of Actions. We then employed a choice experiment framework to estimate farmers’ willingness to pay (WTP) for adaptation benefits. The findings indicate that the substantial benefits of the adaptation programmes for farmers result in a sizeable WTP to participate, which would appear to justify the programmes’ widespread implementation.

Key policy insights

  • Farmers are willing to participate in, and contribute to, the suggested adaptation programmes in the form of increased access to climate adaptive crop species and varieties, improved soil quality and irrigation and the provision of training in climate adaptive farming.

  • Key socio-economic factors influence farmers’ support of adaptation programmes. Older farmers, those households closer to government extension services, larger land holders, those involved in household labour exchange, farmers located in drought and flood-prone regions and those who perceive that the climate has changed are more likely to participate.

  • The more farmers are aware of climate change impacts, the greater their preference for adaptation programmes. Increasing farmer awareness prior to implementation of such programmes is therefore an obvious means of further raising participation rates.

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13.
Carbon pricing, including carbon taxes and emissions trading, has been adopted by different kinds of polities worldwide. Yet, beyond the increasing adoption over time, little is known about what polities – countries as well as sub- and supranational entities – adopt carbon pricing and why. This paper explores patterns of adoption (both implemented policies and those scheduled to be) through cluster analysis, with the purpose of investigating factors that could explain polities’ decisions to adopt carbon pricing. The study contributes empirically by studying carbon taxes and emissions trading together and by ordering the polities adopting carbon pricing into clusters. It also contributes theoretically, by exploring constellations of variables that drive the adoption of carbon pricing within individual clusters. We investigated 66 adopted policies of carbon pricing, which were divided into five clusters: early adopters, North-American subnational entities, Chinese pilot provinces, second-wave developed polities, and second-wave developing polities. The analysis indicates that the reasons for adopting carbon pricing have shifted over time. While international factors (climate commitments or influences from polities within the same region) are increasingly salient, domestic factors (including crises and income levels) were more important for the early adopters.

Key policy insights

  • Carbon pricing has become a global mainstream policy instrument.

  • Economic and fiscal crises provide windows of opportunity for promoting carbon pricing.

  • The international climate regime can support the adoption of carbon pricing through mitigation commitments and international financial and technical assistance.

  • Learning between polities from the same region is a useful tool for promoting carbon pricing.

  • Carbon intensive economies tend to prefer emissions trading over carbon taxes.

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14.
Climate policy uncertainty significantly hinders investments in low-carbon technologies, and the global community is behind schedule to curb carbon emissions. Strong actions will be necessary to limit the increase in global temperatures, and continued delays create risks of escalating climate change damages and future policy costs. These risks are system-wide, long-term and large-scale and thus hard to diversify across firms. Because of its unique scale, cost structure and near-term availability, Reducing Emissions from Deforestation and forest Degradation in developing countries (REDD+) has significant potential to help manage climate policy risks and facilitate the transition to lower greenhouse gas emissions. ‘Call’ options contracts in the form of the right but not the obligation to buy high-quality emissions reduction credits from jurisdictional REDD+ programmes at a predetermined price per ton of CO2 could help unlock this potential despite the current lack of carbon markets that accept REDD+ for compliance. This approach could provide a globally important cost-containment mechanism and insurance for firms against higher future carbon prices, while channelling finance to avoid deforestation until policy uncertainties decline and carbon markets scale up.

Key policy insights

  • Climate policy uncertainty discourages abatement investments, exposing firms to an escalating systemic risk of future rapid increases in emission control expenditures.

  • This situation poses a risk of an abatement ‘short squeeze,’ paralleling the case in financial markets when prices jump sharply as investors rush to square accounts on an investment they have sold ‘short’, one they have bet against and promised to repay later in anticipation of falling prices.

  • There is likely to be a willingness to pay for mechanisms that hedge the risks of abruptly rising carbon prices, in particular for ‘call’ options, the right but not the obligation to buy high-quality emissions reduction credits at a predetermined price, due to the significantly lower upfront capital expenditure compared to other hedging alternatives.

  • Establishing rules as soon as possible for compliance market acceptance of high-quality emissions reductions credits from REDD+ would facilitate REDD+ transactions, including via options-based contracts, which could help fill the gap of uncertain climate policies in the short and medium term.

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15.
Stable forests – those not already significantly disturbed nor facing predictable near-future risks of anthropogenic disturbance – may play a large role in the climate solution, due to their carbon sequestration and storage capabilities. Their importance is recognized by the Paris Agreement, but stable forests have received comparatively little attention through existing forest protection mechanisms and finance. Instead, emphasis has been placed on targeting locations where deforestation and forest degradation are happening actively. Yet stopping deforestation and forest degradation does not guarantee durable success, especially outside the geographic scope of targeted efforts. As a result, today’s stable forests may be at risk without additional efforts to secure their long-term conservation.

We synthesize the gaps in existing policy efforts that could address the climate-related benefits derived from stable forests, noting several barriers to action, such as uncertainty around the level of climate services that stable forests provide and difficulties describing the real level of threat posed. We argue that resource and finance allocation for stable forests should be incorporated into countries’ and donors’ comprehensive portfolios aimed at tackling deforestation and forest degradation as well as resulting emissions. A holistic and forward-looking approach will be particularly important, given that success in tackling deforestation and forest degradation where it is currently happening will need to be sustained in the long term.

Key policy insights

  • Climate policies, finance, and implementation have tended to focus on areas of recent forest loss and near-term threats of anthropogenic disturbance, resulting in an imbalance of effort that fails to adequately address stable forests.

  • In some contexts, policy measuresintended to secure the climate-related benefits of stable forests have competed poorly against more urgent threats. Policymakers and finance mechanisms should view stable forests as a complementary element within a holistic, long-term approach to resource management.

  • International mechanisms and national frameworks should be adjusted and resourced to promote the long-term sustainability and permanence of stable forests.

  • Beyond additional resources, the climate benefits of stable forests may be best secured by pro-actively designing implementing policies that recognize the rights and interests of stakeholders who are affected by land management decisions.

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16.
States will disagree about deployment of solar geoengineering, technologies that would reflect a small portion of incoming sunlight to reduce risks of climate change, and most disagreements will be grounded in conflicting interests. States that object to deployment will have many options to oppose it, so states favouring deployment will have a powerful incentive to meet their objections. Objections rooted in opposition to the anticipated unequal consequences of deployment may be met through compensation, yet climate policy is inhospitable to compensation via liability. We propose that multilateral parametric climate risk insurance might be a useful tool to facilitate agreement on solar geoengineering deployment. With parametric insurance, predetermined payouts are triggered when climate indices deviate from set ranges. We suggest that states favouring deployment could underwrite reduced-rate parametric climate insurance. This mechanism would be particularly suited to resolving disagreements based on divergent judgments about the outcomes of proposed implementation. This would be especially relevant in cases where disagreements are rooted in varying levels of trust in climate model predictions of solar geoengineering effectiveness and risks. Negotiations over the pricing and terms of a parametric risk pool would make divergent judgments explicit and quantitative. Reduced-rate insurance would provide a way for states that favour implementation to demonstrate their confidence in solar geoengineering by underwriting risk transfer and ensuring compensation without the need for attribution. This would offer a powerful incentive for states opposing implementation to moderate their opposition.

Key policy insights

  • States favouring deployment of solar geoengineering will need to address other states’ objections—unilateralism is implausible in practice

  • This might be partially achieved using parametric climate risk insurance based on objective indicators

  • A sovereign risk pool offering reduced-rate parametric insurance underwritten by states backing deployment could facilitate cooperation on solar geoengineering deployment

  • States favouring deployment would demonstrate their confidence in solar geoengineering by supporting the risk pool

  • Opposing states would be insured against solar geoengineering risks and proposing states would be incentivized to guard against overconfidence

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17.
Erin D. Baker 《Climate Policy》2019,19(9):1132-1143
Calculating the cost effectiveness of projects and policies with respect to reducing carbon emissions provides a simple way for local government agencies to consider the climate impacts of their actions. Yet, defining a metric for cost-effectiveness in relation to climate change is not straightforward for several reasons. In this paper, we focus primarily on dynamics, reflecting the time value of money and how the benefits of reducing carbon emissions may change over time. We define a cost-effectiveness metric called Levelized Cost of Carbon (LCC) that carefully accounts for these dynamics. We also investigate the theoretical and practical implications and limitations of using a cost-effectiveness metric as an approach to rank projects. We apply our metric to a set of transportation projects to illustrate the insights that can be gained by such a process.

Key policy insights:

  • Levelized Cost of Carbon (LCC) provides a simple way for local governments to consider climate change mitigation in decision making.

  • LCC is a cost-effectiveness metric that carefully accounts for the time value of money and possible changes in the value of reducing emissions through time, thus helping local governments to make better decisions.

  • LCC can be used to rank projects, with some caveats, even in the absence of a specific value for the benefits of reducing GHG emissions, thus providing flexibility in the face of uncertainty and political constraints.

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18.
Energy and climate policies may have significant economy-wide impacts, which are regularly assessed based on quantitative energy-environment-economy models. These tend to vary in their conclusions on the scale and direction of the likely macroeconomic impacts of a low-carbon transition. This paper traces the characteristic discrepancies in models’ outcomes to their origins in different macro-economic theories, most importantly their treatment of technological innovation and finance. We comprehensively analyse the relevant branches of macro-innovation theory and group them into two classes: ‘Equilibrium’ and ‘Non-equilibrium’. While both approaches are rigorous and self-consistent, they frequently yield opposite conclusions for the economic impacts of low-carbon policies. We show that model outcomes are mainly determined by their representations of monetary and finance dimensions, and their interactions with investment, innovation and technological change. Improving these in all modelling approaches is crucial for strengthening the evidence base for policy making and gaining a more consistent picture of the macroeconomic impacts of achieving emissions reductions objectives. The paper contributes towards the ongoing effort of enhancing the transparency and understanding of sophisticated model mechanisms applied to energy and climate policy analysis. It helps tackle the overall ‘black box’ critique, much-cited in policy circles and elsewhere.

Key policy insights

  • Quantitative models commissioned by policy-makers to assess the macroeconomic impacts of climate policy generate contradictory outcomes and interpretations.

  • The source of the differences in model outcomes originates primarily from assumptions on the workings of the financial sector and the nature of money, and of how these interact with processes of low-carbon energy innovation and technological change.

  • Representations of innovation and technological change are incomplete in energy-economy-environment models, leading to limitations in the assessment of the impacts of climate-related policies.

  • All modelling studies should state clearly their underpinning theoretical school and their treatment of finance and innovation.

  • A strong recommendation is given for modellers of energy-economy systems to improve their representations of money and finance.

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19.
Current country-level commitments under the Paris Agreement fall short of putting the world on a required trajectory to stay below a 2°C temperature increase compared to pre-industrial levels by the end of the century. Therefore, the timing of increased ambition is hugely important and as such this paper analyses the impact of both the short and long-term goals of the Paris Agreement on global emissions and economic growth. Using the hybrid TIAM-UCL-MSA model we consider the achievement of a 2°C target against a baseline of the Nationally Determined Contributions (NDCs) while also considering the timing of increased ambition of the NDCs by 2030 and the impacts of cost reductions of key low-carbon technologies. We find that the rate of emissions reduction ambition required between 2030 and 2050 is almost double when the NDCs are achieved but not ratcheted up until 2030, and leads to lower levels of economic growth throughout the rest of the century. However, if action is taken immediately and is accompanied by increasingly rapid low-carbon technology cost reductions, then there is almost no difference in GDP compared to the path suggested by the current NDC commitments.

Key policy insights

  • Delaying the additional action needed to achieve the 2°C target until 2030 is shown to require twice the rate of emissions reductions between 2030 and 2050.

  • Total cumulative GDP over the century is lower when additional action is delayed to 2030 and therefore has an overall negative impact on the economy, even without including climate change damages.

  • Increased ratcheting of the NDC commitments should therefore be undertaken sooner rather than later, starting in conjunction with the 2023 Global Stocktake.

  • Early action combined with cost reductions in key renewable energy technologies can reduce GDP losses to minimal levels (<1%).

  • A 2°C future with technological advancements is clearly possible for a similar cost as a 3.3°C world without these advances, but with lower damages and losses from climate change.

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20.
While carbon pricing is widely seen as a crucial element of climate policy and has been implemented in many countries, it also has met with strong resistance. We provide a comprehensive overview of public perceptions of the fairness of carbon pricing and how these affect policy acceptability. To this end, we review evidence from empirical studies on how individuals judge personal, distributional and procedural aspects of carbon taxes and cap-and-trade. In addition, we examine preferences for particular redistributive and other uses of revenues generated by carbon pricing and their role in instrument acceptability. Our results indicate a high concern over distributional effects, particularly in relation to policy impacts on poor people, in turn reducing policy acceptability. In addition, people show little trust in the capacities of governments to put the revenues of carbon pricing to good use. Somewhat surprisingly, most studies do not indicate clear public preferences for using revenues to ensure fairer policy outcomes, notably by reducing its regressive effects. Instead, many people prefer using revenues for ‘environmental projects’ of various kinds. We end by providing recommendations for improving public acceptability of carbon pricing. One suggestion to increase policy acceptability is combining the redistribution of revenue to vulnerable groups with the funding for environmental projects, such as on renewable energy.

Key policy insights

  • If people perceive carbon pricing instruments as fair, this increases policy acceptability and support.

  • People’s satisfaction with information provided by the government about the policy instrument increases acceptability.

  • While people express high concern over uneven distribution of the policy burden, they often prefer using carbon pricing revenues for environmental projects instead of compensation for inequitable outcomes.

  • Recent studies find that people’s preferences shift to using revenues for making policy fairer if they better understand the functioning of carbon pricing, notably that relatively high prices of CO2-intensive goods and services reduce their consumption.

  • Combining the redistribution of revenue to support both vulnerable groups and environmental projects, such as on renewable energy, seems to most increase policy acceptability.

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