Leading Partners in Science Cost-effectiveness and implications of GWPs and GTPs under alternative policy goals Andy Reisinger 1 Keywan Riahi 2 Oscar van Vliet 2 1 New Zealand Agricultural Greenhouse Gas Research Centre 2 International Institute for Applied Systems Analysis (IIASA) Manuscript submitted to Climatic Change Work funded by NZ Ministry of Agriculture and various EU-FP7 programs Copyright © 2010 New Zealand Agricultural Greenhouse Gas Research Centre19 OCTOBER 2015 |1

Leading Partners in Science In a nutshell 100-year GWPs are not a cost-effective way of comparing GHGs if the main policy goal is to limit long-term climate change. Few studies have explored the cost and climate policy implications if other physically-based metrics were to replace GWPs. 1.Determine the global cost-effectiveness of different metrics for the main policy goal of limiting radiative forcing in 2100 to 450 or 550ppm CO 2 -equivalent 2.Evaluate influence of metrics on additional policy goals (realised warming, GDP, timing of CO 2 emissions peak) Copyright © 2010 New Zealand Agricultural Greenhouse Gas Research Centre19 OCTOBER 2015 |2

Leading Partners in Science Copyright © 2010 New Zealand Agricultural Greenhouse Gas Research Centre19 OCTOBER 2015 |3 Evaluated alternative metrics: GWPs, fixed and time-dependent GTPs CH 4 N 2 O

Leading Partners in Science Sensitivity tests: technology/policy assumptions Assumed policy goal is to limit radiative forcing in 2100:  450 ppm CO 2 -eq (~2.7 Wm -2 )  550 ppm CO 2 -eq (~3.8 Wm -2 ) Rate of improvement of agricultural mitigation potential  No improvement / rapid improvement  Additional technology from 2030 or 2070 to mitigate CH 4 from enteric fermentation Policy treatment of agricultural GHG emissions  Fully included in global mitigation efforts / fully excluded / excluded until 2050 Use integrated assessment model MESSAGE to determine cost-minimising abatement pathways over 21 st century Copyright © 2010 New Zealand Agricultural Greenhouse Gas Research Centre19 OCTOBER 2015 |4

Leading Partners in Science Copyright © 2010 New Zealand Agricultural Greenhouse Gas Research Centre19 OCTOBER 2015 |5 Radiative forcing paths – all metrics/assumptions

Leading Partners in Science Copyright © 2010 New Zealand Agricultural Greenhouse Gas Research Centre19 OCTOBER 2015 |6 Global agricultural marginal abatement costs from Beach et al. (2008) CO 2 and CH 4 emissions – all metrics/assumptions

Leading Partners in Science Copyright © 2010 New Zealand Agricultural Greenhouse Gas Research Centre19 OCTOBER 2015 |7 fixed 100-year GTPs: less CH 4 mitigation time-dependent GTPs: less CH 4 mitigation initially, more CH 4 mitigation by 2100 Global agricultural marginal abatement costs from Beach et al. (2008) CH 4 emissions – detailed examples

Leading Partners in Science Global agricultural CH 4 emission pathways 8 MESSAGE results 450ppm 550ppm Global net costs CH 4 mitigation determines ‘atmospheric space’ for CO 2 emissions and hence total mitigation costs

Leading Partners in Science Global agricultural CH 4 emission pathways 9 Global discounted net present value mitigation costs ( ) Example for 550ppm CO 2 -eq stabilisation

Leading Partners in Science Global cost-effectiveness of metrics Fixed GTPs result in higher CO 2 prices and higher total mitigation costs than GWPs, but lower prices/costs on CH 4 Time-dependent GTPs (focusing on year 2100) result in lower CO 2 prices and lower total mitigation costs than GWPs; prices and costs for CH 4 are lower initially but (much) higher later Assumptions about agriculture mitigation potential have a larger effect on global costs than alternative metrics Different long-term stabilisation targets have a much larger effect than alternative metrics Excluding agriculture globally is by far the most costly ‘metric’ Copyright © 2010 New Zealand Agricultural Greenhouse Gas Research Centre19 OCTOBER 2015 |10

Leading Partners in Science What about other relevant policy goals? Realised amount of warming and overshoot GDP impacts Timing of cost-effective CO 2 emissions peak Regional implications Copyright © 2010 New Zealand Agricultural Greenhouse Gas Research Centre19 OCTOBER 2015 |11

Leading Partners in Science Copyright © 2010 New Zealand Agricultural Greenhouse Gas Research Centre19 OCTOBER 2015 |12 Global agricultural marginal abatement costs from Beach et al. (2008) Realised warming – rate and peak Peak: °C Rate ( ): °C / decade Most of the differences are due to alternative assumptions, not alternative metrics Peak: °C Rate ( ): °C / decade Most of the differences are due to alternative assumptions, not alternative metrics

Leading Partners in Science Copyright © 2010 New Zealand Agricultural Greenhouse Gas Research Centre19 OCTOBER 2015 |13 Global agricultural marginal abatement costs from Beach et al. (2008) GDP impacts Time-dependent GTPs result in lower aggregate costs, but greater GDP losses relative to BAU towards 2100 than GWPs

Leading Partners in Science Copyright © 2010 New Zealand Agricultural Greenhouse Gas Research Centre19 OCTOBER 2015 |14 Global agricultural marginal abatement costs from Beach et al. (2008) Timing of cost-effective CO 2 emissions peak Different metrics and assumptions allow the CO 2 emissions peak to be delayed by almost 15 years But most of the delay comes from different assumptions; metrics have a smaller influence Different metrics and assumptions allow the CO 2 emissions peak to be delayed by almost 15 years But most of the delay comes from different assumptions; metrics have a smaller influence All pathways shown result in radiative forcing of 450ppm CO2-eq in 2100, but the timing of CO 2 mitigation differs due to metrics and other assumptions

Leading Partners in Science Copyright © 2010 New Zealand Agricultural Greenhouse Gas Research Centre19 OCTOBER 2015 |15 Conclusions GWPs are not the most cost-effective metric to compare GHGs IF the main goal is to limit long-term radiative forcing in 2100, and to do so via cost-minimising global abatement pathways Fixed 100-year GTPs are even less cost-effective (+ 5 to 10%) time-dependent GTPs would be more cost-effective (- 4 to 5%) Cost implications of alternative metrics: smaller than alternative assumptions about future agricultural mitigation potential, and much smaller than choices of long-term target Other policy goals: different equivalent metrics do not result in equivalent other environmental outcomes – but differences are again smaller than those arising from other assumptions Regional implications: regional effect of metrics on production systems and land-use change – see second presentation please!

Leading Partners in Science Copyright © 2010 New Zealand Agricultural Greenhouse Gas Research Centre19 OCTOBER 2015 |16 Questions to the policy community  How important is it for the policy process to have a metric that is optimal for a particular policy goal but, almost by definition, will do a poorer job for other policy goals?  How sustainable is the implementation of a metric that implies escalating cost of CH 4 emissions globally?  What are the social/policy benefits and costs of continuously updating a metric to achieve optimality (however defined)?  Are tests of metrics useful that assume full global and sectoral participation at full price levels?  What are the implications of different metrics for regional and sectoral engagement to climate change?