The economics of climate change mitigation: policies and options for global action beyond 2012
The document also assesses the costs, environmental consequences and competitiveness implications of an incomplete mitigation policy coverage (e.g. exempting energy-intensive industries). The implications of the inclusion of forest protection into the international climate policy framework are discussed along with some of the issues arising from its implementation.
It also identifies key steps towards a global carbon market, namely: a) removing environmentally-harmful energy subsidies, b) linking and harmonising carbon markets, c) expanding the role of crediting mechanisms, d) sectoral approach, and e) the regulation of the carbon markets. The role of pricing GHG emissions and policies upon the boosting of climate-friendly R&D is analysed. The authors expect that R&D may reduce the costs of mitigation by 50% in 2050. The report uses modelling analysis techniques to identify the size of coalitions of countries for achieving environmentally effective and economically feasible targets.
The document recommends that:
- specific policies aimed at boosting climate-friendly R&D are needed in addition to carbon pricing for major breakthroughs in low-carbon technologies to occur
- multilateral funds and bilateral funds should be rationalised and targeted primarily at those emission sources and/or market imperfections not covered by other market-based financing mechanisms
- there is a need to remove policies that work against mitigation efforts (such as barriers to trade and foreign direct investment)
- climate-related R&D should be iincluded in the portfolio of activities of existing multilateral funds
- adaptation financing could be increased through a mix of domestic policy reforms, such as adequate pricing of water and ecosystems, and through international and national financing for relevant local public goods, including sea walls, flood defences, and disaster relief.