Climate Change 2001:
Synthesis Report
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Studies examined in the TAR suggest substantial technological and other opportunities for lowering mitigation costs. National mitigation responses to climate change can be more effective if deployed as a portfolio of policy instruments to limit or reduce net greenhouse gas emissions. The costs of mitigation are strongly affected by development paths, with those paths involving substantial increases in greenhouse gas emissions requiring more mitigation to reach a stabilization target, and hence higher costs. These costs can be substantially reduced or even turned into net benefits with a portfolio of policy instruments (including those that help to overcome barriers) to the extent that policies can exploit "no-regrets" opportunities in the following areas:

  • Technological options: Technological options may achieve global emissions reductions of 1.9 to 2.6 Gt Ceq yr-1 by year 2010 and 3.6 to 5.0 Gt Ceq yr-1 by year 2020. Half of these reductions may be realized with one component of their economic cost (net capital, operating, and maintenance costs) with direct benefits exceeding direct costs, and the other half with that component of their economic cost ranging from US$0 to US$100 per t Ceq. 26 Depending on the emissions scenario, global emissions could be reduced below year 2000 levels over the 2010 to 2020 time frame. Key uncertainties are the identification, extent, and nature of any barriers that impede adoption of promising low-emission technologies, and the estimation of the costs of overcoming the barriers.
  • Ancillary benefits: Depending on factors (such as location of the greenhouse gas emissions, the prevailing local climate, and the population density, composition, and health) the magnitude of the ancillary benefits of mitigation may be comparable to the costs of the mitigating policies and measures. Key uncertainties are the magnitude and location of these benefits involving the scientific assessment and valuation of health risks of air pollution, particularly those involving fine aerosols and particles.
  • Double dividends: Instruments (such as taxes or auctioned permits) provide revenues to the government. If used to finance reductions in existing distortionary taxes ("revenue recycling"), these revenues reduce the economic cost of achieving greenhouse gas reductions. The magnitude of this offset depends on the existing tax structure, type of tax cuts, labor market conditions, and method of recycling. Under some circumstances, it is possible that the economic benefits may exceed the costs of mitigation. Key uncertainties regarding the overall net costs of mitigation vary between countries, depending on the existing tax structure, the extent of the distortion, and the type of tax cuts that are acceptable.
Q7.6-7, Q7.14-15, Q7.20, & Q7.23, & Q7 Box 7-1

Modeling studies show that emissions trading reduces costs of mitigation for those participating in the trading. Global modeling studies, with results depending strongly upon assumptions, project that costs of mitigation based on Kyoto targets are likely to be reduced by full carbon-permit trading within the Annex B27 group of countries. Annex I OECD28 countries may expect aggregate costs to be reduced by about half through full permit trading. Annex I economies in transition are projected to be unaffected or to gain several percent increase in GDP. Oil-exporting, non-Annex I countries may also expect similar reductions in costs under such trading. The aggregate effects of trading are expected to be positive for other non-Annex I countries. Those countries that may expect a loss or gain without Annex I trading may expect a smaller change with trading. A key uncertainty is the extent of the underlying costs, which vary widely across countries, and how these cost estimates will be changed (a) when methods are improved and (b) when some of the assumptions of the models are relaxed. Such assumptions are concerned with:

  • Allowance for exemptions in the emission-permit trading in concert with other policies and measures
  • Consideration of various market imperfections
  • Allowance for induced technical change
  • Inclusion of ancillary benefits
  • Opportunities for double dividends
  • Inclusion of policies for non-CO2 greenhouse gases and non-energy sources of all greenhouse gases (e.g., CH4 from agriculture)
  • Offsets from sinks.
9.37 Although model projections indicate that long-term global growth paths of GDP are not significantly affected by mitigation actions towards stabilization, these do not show the larger variations that occur over some shorter time periods, sectors, or regions.

9.38 Unexpected public policies ("quick fixes") with sudden short-term effects may cost economies much more than expected policies with gradual effects. A key uncertainty in the magnitude of the costs lies in the existence of well-designed contingency plans in the event of policy shifts (e.g., as a result of a sudden shift in public perception of the climate change). Other key uncertainties for costs lie in the possibilities of the rapid short-term effects including, or leading to, abrupt reductions in costs of low-carbon processes and products, shifts towards low-emission technologies, and/or changes towards more sustainable lifestyles.

Q7.24 & Q7.31
9.39 Near-term action in mitigation and adaptation would reduce risks. Because of the long time lags associated both with the climate system (e.g., ~100 years for atmospheric CO2) and with human response, near-term action in mitigation and adaptation would reduce risks. Inertia in the interacting climate, ecological, and socio-economic systems is a major reason why anticipatory adaptation and mitigation actions are beneficial.

Q5.19 & Q5.24
9.40 Adaptation can complement mitigation in a cost-effective strategy to reduce climate change risks; together they can contribute to sustainable development objectives. Some future paths that focus on the social, economic, and environmental elements of sustainable development may result in lower greenhouse gas emissions than other paths, so that the level of additional policies and measures required for a particular level of stabilization and any associated costs can also be lower. A key uncertainty is the lack of appropriate knowledge on the interactions between climate change and other environmental issues and the related socio-economic implications. A related issue is the pace of change in integrating the main global conventions and protocols associated with climate change (e.g., those involving world trade, transboundary pollution, biodiversity, desertification, stratospheric ozone depletion, health, and food security). It is also uncertain at which rate individual countries will integrate sustainable development concepts into policy-making processes.

Q1.9 & Q8.21-28
9.41 Development paths that meet sustainable development objectives may result in lower levels of greenhouse gas emissions. Key choices about future development paths and the future of the climate are being made now in both developed and developing countries. Information is available to help decision makers evaluate benefits and costs from adaptation and mitigation over a range of options and sustainable development pathways. Anticipated adaptation could be much less costly than reactive adaptation. Mitigation of climate change can reduce and postpone the impacts, lowering the damages and giving human societies as well as animals and plants more time to adapt.

Q5.22, Q7.25, & Q8.26
  Further Work


Significant progress has been made in the TAR in many aspects of the knowledge required to understand climate change and the human response to it. However, there remain important areas where further work is required, in particular:

  • The detection and attribution of climate change
  • The understanding and prediction of regional changes in climate and climate extremes
  • The quantification of climate change impacts at the global, regional, and local levels
  • The analysis of adaptation and mitigation activities
  • The integration of all aspects of the climate change issue into strategies for sustainable development
  • Comprehensive and integrated investigations to support the judgment as to what constitutes "dangerous anthropogenic interference with the climate system."

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