This report describes the results of the economic costs of mitigation from research conducted in the first year of the AVOID programme. It should be read along with the AVOID reports Costs of different paths toward a low carbon world (AV/WS2/D1/R4).
Key outcomes / non-technical summary
- The economic models used in the AVOID project suggest that it is possible to achieve emissions trajectories consistent with around a 50:50 chance of keeping the global temperature change to 2°C or less. The cost estimates are moderate but, on the whole, higher than suggested by the Stern Review, not least because the trajectories with the biggest emissions reductions are more demanding than considered in Stern.
- Most suggest that trajectories that peak earlier and therefore allow more gradual reductions subsequently are cheaper than peaking later, supporting the argument for early action.
- The models generate different projections for the price of carbon, particularly towards the end of the century, reflecting both different theoretical approaches to the determination of carbon prices and different assessments of the difficulties of decarbonisation. But they all suggest that policies should be implemented now and ramped up for some time.
- There is scope for more comparison of the likely costs and benefits of raising – and of lowering – the policy ceiling.
- Comparing the work for AVOID with other studies examining tough emission reduction goals, the results are broadly in line with some of them, but there are others that suggest that the most demanding trajectories would be considerably more expensive to attain or even unfeasible. The differences reflect, among other factors, different assumptions about business-as-usual emissions, technologies, fossil-fuel prices and the substitutability of low-carbon for high-carbon products in production and consumption.
- There are some major differences in the theoretical approaches taken by the economic models used in the AVOID project. Each has its strengths and weaknesses.
AVOID WS2 Deliverable 1 Report 09