A research and development investment strategy to achieve the Paris climate agreement.

Climate stabilization requires the deployment of several low-carbon options, some of which are still not available at large scale or are too costly. Governments will have to make important decisions on how to incentivize Research and Development (R&D). Yet, current assessments of climate neutrality typically do not include research-driven innovation. Here, we link two integrated assessment models to study R&D investment pathways consistent with climate stabilization and suggest a consistent financing scheme. We focus on five low-carbon technologies and on energy efficiency measures. We find that timely R&D investment in these technologies lowers mitigation costs and induces positive employment effects. Achieving 2 °C (1.5 °C) requires a global 18% (64%) increase in cumulative low-carbon R&D investment relative to the reference scenario by mid-century. We show that carbon revenues are sufficient to both finance the additional R&D investment requirements and generate economic benefits by reducing distortionary taxation, such as payroll taxes, thus enhancing job creation.

Updated nationally determined contributions collectively raise ambition levels but need strengthening further to keep Paris goals within reach.

By January 2022, 156 countries had submitted new or updated nationally determined contributions (NDCs) under the Paris Agreement. This study analyses the greenhouse gas (GHG) emissions and macroeconomic impacts of the new NDCs. The total impact of the updated unconditional and conditional NDCs of these countries on global emission levels by 2030 is an additional reduction of about 3.8 and 3.9 GtCO2eq, respectively, compared to the previously submitted NDCs as of October 2020. However, this total reduction must be about three times greater to be consistent with keeping global temperature increase to well below 2 °C, and even seven times greater for 1.5 °C. Nine G20 economies have pledged stronger emission reduction targets for 2030 in their updated NDCs, leading to additional aggregated GHG emission reductions of about 3.3 GtCO2eq, compared to those in the previous NDCs. The socio-economic impacts of the updated NDCs are limited in major economies and largely depend on the emission reduction effort included in the NDCs. However, two G20 economies have submitted new targets that will lead to an increase in emissions of about 0.3 GtCO2eq, compared to their previous NDCs. The updated NDCs of non-G20 economies contain further net reductions. We conclude that countries should strongly increase the ambition levels of their updated NDC submissions to keep the climate goals of the Paris Agreement within reach. Supplementary Information: The online version contains supplementary material available at 10.1007/s11027-022-10008-7.

Taking stock of national climate policies to evaluate implementation of the Paris Agreement.

Many countries have implemented national climate policies to accomplish pledged Nationally Determined Contributions and to contribute to the temperature objectives of the Paris Agreement on climate change. In 2023, the global stocktake will assess the combined effort of countries. Here, based on a public policy database and a multi-model scenario analysis, we show that implementation of current policies leaves a median emission gap of 22.4 to 28.2 GtCO2eq by 2030 with the optimal pathways to implement the well below 2 °C and 1.5 °C Paris goals. If Nationally Determined Contributions would be fully implemented, this gap would be reduced by a third. Interestingly, the countries evaluated were found to not achieve their pledged contributions with implemented policies (implementation gap), or to have an ambition gap with optimal pathways towards well below 2 °C. This shows that all countries would need to accelerate the implementation of policies for renewable technologies, while efficiency improvements are especially important in emerging countries and fossil-fuel-dependent countries.

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.