Geoscience Reference
In-Depth Information
tries join the effort. The costs rise very quickly for temperature targets
below 4°C. The reason is simple: If half the countries make no efforts
to reduce emissions, substantial warming will be inevitable even if the
other half of countries make maximum efforts. This calculation also in-
dicates that delayed participation of a substantial part of the world will
make it virtually impossible—not just costly—to meet the Copenhagen
objective of 2°C.
Finally, consider ineffi cient policies. I discuss the effi cient design of
policies in later chapters, but the basic idea is that the marginal costs of
emissions reductions should be equal in all sectors and countries. If this
is a bit mysterious, I will explain it carefully in short order.
This further case is relevant because no country comes close to pass-
ing the effi ciency test. Policies are generally a hodgepodge of regulations,
energy taxes, and green subsidies. For example, the United States regu-
lates the fuel effi ciency of automobiles, but the regulations apply only to
new cars. The U.S. government has proposed regulating CO
2
emissions
from new power plants, but the CO
2
emissions of existing power plants
are not regulated. Many European countries tax carbon emissions, but
they also exempt or give special breaks to export industries and small
businesses.
As a result of the inconsistent treatment of different industries, the
costs of meeting temperature objectives are higher than the effi cient
level shown in Figure 26. I do not provide a graphic here, but readers
can easily draw one for themselves. A typical fi nding is that using inef-
fi cient regulations or approaches will double the costs of meeting envi-
ronment objectives. Put this fi nding together with the assumption of a
50 percent participation rate. Then the cost curve in Figure 26 would
shift upward by a factor of 2. You can pencil in this new curve and label
it “Mitigation cost: 50 percent participation and ineffi cient regulations.”
The cost of meeting the 3
1
⁄
2
°C target would rise from 1.5 percent of in-
come to 3 percent of income; the cost of meeting a 3
1
⁄
4
°C target would
rise from 4 percent of income to 8 percent of income; and so forth.
This simplifi ed example emphasizes the importance of designing
policies effi ciently. Poor design and limited participation can raise the
cost sharply and can even make our objectives infeasible.
