Will U.S. Forests Continue to Be a Carbon Sink?

This paper develops structural dynamic methods to project future carbon fluxes in forests. These methods account for land management changes on both the intensive and extensive margins, both of which are critical components of future carbon fluxes. When implemented, the model suggests that U.S. forests remain a carbon sink through most of the coming century, sequestering 128 Tg C y-1. Constraining forestland to its current boundaries and constraining management to current levels reduce average sequestration by 25 to 28 Tg C y-1. An increase in demand leads to increased management and greater sequestration in forests. The results are robust to climate change. (JEL Q23, Q54).

Net-Zero CO2 by 2050 Scenarios for the United States in the Energy Modeling Forum 37 Study.

The Energy Modeling Forum (EMF) 37 study on deep decarbonization and high electrification analyzed a set of scenarios that achieve economy-wide net-zero carbon dioxide (CO2) emissions in North America by mid-century, exploring the implications of different technology evolutions, policies, and behavioral assumptions affecting energy supply and demand. For this paper, 16 modeling teams reported resulting emissions projections, energy system evolution, and economic activity. This paper provides an overview of the study, documents the scenario design, provides a roadmap for complementary forthcoming papers from this study, and offers an initial summary and comparison of results for net-zero CO2 by 2050 scenarios in the United States. We compare various outcomes across models and scenarios, such as emissions, energy use, fuel mix evolution, and technology adoption. Despite disparate model structure and sources for input assumptions, there is broad agreement in energy system trends across models towards deep decarbonization of the electricity sector coupled with increased end-use electrification of buildings, transportation, and to a lesser extent industry. All models deploy negative emissions technologies (e.g., direct air capture and bioenergy with carbon capture and storage) in addition to land sinks to achieve net-zero CO2 emissions. Important differences emerged in the results, showing divergent pathways among end-use sectors with deep electrification and grid decarbonization as necessary but not sufficient conditions to achieve net zero. These differences will be explored in the papers complementing this study to inform efforts to reach net-zero emissions and future research needs.

Ratcheting of climate pledges needed to limit peak global warming.

The new and updated emission reduction pledges submitted by countries ahead of COP26 represent a meaningful strengthening of global ambition compared to the 2015 Paris pledges1,2. Yet, limiting global warming below 1.5°C this century will require countries to ratchet ambition for 2030 and beyond2-6. We explore a suite of emissions pathways in which countries ratchet and achieve ambition through a combination of increasing near-term ambition through 2030, accelerating post-2030 decarbonization, and advancing the dates for national net-zero pledges. We show that ratcheting near-term ambition through 2030 will be crucial to limiting peak temperature changes. Delaying ratcheting ambition to beyond 2030 could still deliver end-of-century temperature change of less than 1.5°C, but that would result in higher temperature overshoot over many decades with the potential for adverse consequences. Ratcheting near-term ambition would also deliver benefits from enhanced non-CO2 mitigation and facilitate faster transitions to net-zero emissions systems in major economies.

Global Health Impacts for Economic Models of Climate Change: A Systematic Review and Meta-Analysis.

Rationale: Avoiding excess health damages attributable to climate change is a primary motivator for policy interventions to reduce greenhouse gas emissions. However, the health benefits of climate mitigation, as included in the policy assessment process, have been estimated without much input from health experts. Objectives: In accordance with recommendations from the National Academies in a 2017 report on approaches to update the social cost of greenhouse gases (SC-GHG), an expert panel of 26 health researchers and climate economists gathered for a virtual technical workshop in May 2021 to conduct a systematic review and meta-analysis and recommend improvements to the estimation of health impacts in economic-climate models. Methods: Regionally resolved effect estimates of unit increases in temperature on net all-cause mortality risk were generated through random-effects pooling of studies identified through a systematic review. Results: Effect estimates and associated uncertainties varied by global region, but net increases in mortality risk associated with increased average annual temperatures (ranging from 0.1% to 1.1% per 1°C) were estimated for all global regions. Key recommendations for the development and utilization of health damage modules were provided by the expert panel and included the following: not relying on individual methodologies in estimating health damages; incorporating a broader range of cause-specific mortality impacts; improving the climate parameters available in economic models; accounting for socioeconomic trajectories and adaptation factors when estimating health damages; and carefully considering how air pollution impacts should be incorporated in economic-climate models. Conclusions: This work provides an example of how subject-matter experts can work alongside climate economists in making continued improvements to SC-GHG estimates.

ENERGY INTENSIVE MANUFACTURING INDUSTRIES AND GHG EMISSIONS.

This paper analyzes changes in U.S. energy-intensive, trade-exposed (EITE) manufacturing over the past decade, through the lens of previously proposed climate policy measures. The American Clean Energy and Security Act of 2009 defined measures and thresholds for EITE eligibility and proposed compensatory allowances designed to reduce negative competitive impacts to domestic industry and to prevent emissions leakage. We undertook a retrospective analysis of the 2009 eligibility criteria, using the same methods with more recent data to examine trends over the 2004-2017 period. We find that energy intensity, emissions intensity, output, and emissions have fluctuated with economic conditions, and defining measures and thresholds that remain informative is challenging. Had ACES been enacted as written and not revised, the number of sectors qualifying for rebates would have decreased from 39 to 26, after adjustment for the changes in North American Industry Classification System definitions. Emissions from the eligible sectors fell 26% across the three periods of analysis, while emissions from manufacturing as a whole fell 5%. We decompose the changes in emissions into scale and intensity measures based on a hybrid measure derived from Grossman and Krueger [(1993). Environmental impacts of a North American free trade agreement. In The US-Mexico Free Trade Agreement, PM Garber (ed.). Cambridge, MA: MIT Press] and Kaya and Yokoburi [(1997). Environment, Energy, and Economy: Strategies for Sustainability. Tokyo: United Nations University Press]. As an alternative, we perform the same analyses using the EPA's Greenhouse Gas Reporting Program data. These data, not available when ACES was written, offer annual greenhouse gas estimates for facilities that emit more than 25,000 tons CO2e annually. Finally, we draw some recommendations for future policy including (1) using measures that make price level adjustments straightforward or unnecessary, (2) keeping EITE policy focused on a small group of industries to minimize sectoral reclassification problems, (3) identifying industries prone to emissions leakage rather than just changes in output and (4) consider spatial heterogeneity of emissions and trade patterns.

Deep mitigation of CO2 and non-CO2 greenhouse gases toward 1.5 °C and 2 °C futures.

Stabilizing climate change well below 2 °C and towards 1.5 °C requires comprehensive mitigation of all greenhouse gases (GHG), including both CO2 and non-CO2 GHG emissions. Here we incorporate the latest global non-CO2 emissions and mitigation data into a state-of-the-art integrated assessment model GCAM and examine 90 mitigation scenarios pairing different levels of CO2 and non-CO2 GHG abatement pathways. We estimate that when non-CO2 mitigation contributions are not fully implemented, the timing of net-zero CO2 must occur about two decades earlier. Conversely, comprehensive GHG abatement that fully integrates non-CO2 mitigation measures in addition to a net-zero CO2 commitment can help achieve 1.5 °C stabilization. While decarbonization-driven fuel switching mainly reduces non-CO2 emissions from fuel extraction and end use, targeted non-CO2 mitigation measures can significantly reduce fluorinated gas emissions from industrial processes and cooling sectors. Our integrated modeling provides direct insights in how system-wide all GHG mitigation can affect the timing of net-zero CO2 for 1.5 °C and 2 °C climate change scenarios.

Can updated climate pledges limit warming well below 2°C?

Increased ambition and implementation are essential.

INTRODUCTION TO THE EMF 32 STUDY ON U.S. CARBON TAX SCENARIOS.

This paper is an introduction to, "The EMF 32 Study on U.S. Carbon Tax Scenarios," part of the Stanford Energy Modeling Forum (EMF) Model Inter-comparison Project (MIP) number 32. Eleven modeling teams participated in this study examining the economic and environmental impacts of various carbon tax trajectories and differing uses of carbon tax revenues. This special issue of Climate Change Economics documents the results of this study with four crosscutting papers that summarize results across models, and ten papers from individual modeling teams.

POLICY INSIGHTS FROM THE EMF 32 STUDY ON U.S. CARBON TAX SCENARIOS.

The Stanford Energy Modeling Forum exercise 32 (EMF 32) used 11 different models to assess emissions, energy, and economic outcomes from a plausible range of economy-wide carbon price policies to reduce carbon dioxide (CO2) emissions in the United States. Here we discuss the most policy-relevant results of the study, mindful of the strengths and weaknesses of current models. Across all models, carbon prices lead to significant reductions in CO2 emissions and conventional pollutants, with the vast majority of the reductions occurring in the electricity sector. Importantly, emissions reductions do not significantly depend on the rebate or tax cut used to return revenues to the economy. Expected economic costs, as modeled by either GDP or welfare, are modest, but vary across models. These costs are offset by benefits from avoided climate damages and health benefits from reductions in conventional air pollution. Using revenues to reduce preexisting capital or labor taxes reduces costs in most models relative to lump-sum rebates, but the size of the cost reductions varies significantly. Devoting at least some revenue to household rebates can significantly reduce adverse impacts on low income households. Carbon prices at $25/ton or even lower levels cause significant shifts away from coal as an energy source with responses of other energy sources highly dependent upon technology cost assumptions. Beyond 2030, we conclude that model uncertainties are too large to make quantitative results useful for near-term policy design. We close by describing recommendations for policymakers on interacting with model results in the future.

OVERVIEW OF THE EMF 32 STUDY ON U.S. CARBON TAX SCENARIOS.

The Energy Modeling Forum (EMF) 32 study on carbon tax scenarios analyzed a set of illustrative policies in the United States that place an economy-wide tax on fossil-fuel-related carbon dioxide (CO2) emissions, a carbon tax for short. Eleven modeling teams ran these stylized scenarios, which vary by the initial carbon tax rate, the rate at which the tax escalates over time, and the use of the revenues. Modelers reported their results for the effects of the policies, relative to a reference scenario that does not include a carbon tax, on emissions, economic activity, and outcomes within the U.S. energy system. This paper explains the scenario design, presents an overview of the results, and compares results from the participating models. In particular, we compare various outcomes across the models, such as emissions, revenue, gross domestic product, sectoral impacts, and welfare.