Limited emission reductions from fuel subsidy removal except in energy-exporting regions.

Hopes are high that removing fossil fuel subsidies could help to mitigate climate change by discouraging inefficient energy consumption and levelling the playing field for renewable energy. In September 2016, the G20 countries re-affirmed their 2009 commitment (at the G20 Leaders' Summit) to phase out fossil fuel subsidies and many national governments are using today's low oil prices as an opportunity to do so. In practical terms, this means abandoning policies that decrease the price of fossil fuels and electricity generated from fossil fuels to below normal market prices. However, whether the removal of subsidies, even if implemented worldwide, would have a large impact on climate change mitigation has not been systematically explored. Here we show that removing fossil fuel subsidies would have an unexpectedly small impact on global energy demand and carbon dioxide emissions and would not increase renewable energy use by 2030. Subsidy removal would reduce the carbon price necessary to stabilize greenhouse gas concentration at 550 parts per million by only 2-12 per cent under low oil prices. Removing subsidies in most regions would deliver smaller emission reductions than the Paris Agreement (2015) climate pledges and in some regions global subsidy removal may actually lead to an increase in emissions, owing to either coal replacing subsidized oil and natural gas or natural-gas use shifting from subsidizing, energy-exporting regions to non-subsidizing, importing regions. Our results show that subsidy removal would result in the largest CO2 emission reductions in high-income oil- and gas-exporting regions, where the reductions would exceed the climate pledges of these regions and where subsidy removal would affect fewer people living below the poverty line than in lower-income regions.

Mitigation implications of midcentury targets that preserve long-term climate policy options.

Midcentury targets have been proposed as a guide to climate change policy that can link long-term goals to shorter-term actions. However no explicit mitigation analyses have been carried out of the relationship between midcentury conditions and longer-term outcomes. Here we use an integrated assessment modeling framework with a detailed representation of the energy sector to examine the dependence of climate change outcomes in 2100 on emissions levels, atmospheric concentrations, and technology characteristics in 2050. We find that midcentury conditions are crucial determinants of longer-term climate outcomes, and we identify feasibility thresholds describing conditions that must be met by midcentury to keep particular long-term options open. For example, to preserve the technical feasibility of a 50% likelihood of keeping global average temperature at < 2 degrees C above preindustrial in 2100, global emissions must be reduced by about 20% below 2000 levels by 2050. Results are sensitive to several assumptions, including the nature of future socio-economic development. In a scenario with high demand for energy and land, being below 2 degrees C with 50% likelihood requires a 50% reduction in emissions below 2000 levels by 2050, which is only barely feasible with known technologies in that scenario. Results suggest that a greater focus on midcentury targets could facilitate the development of policies that preserve potentially desirable long-term options.