C. Mitigation in the short and medium term (until 2030)

5. Both bottom-up and top-down studies indicate that there is substantial economic potential for the mitigation of global GHG emissions over the coming decades, that could offset the projected growth of global emissions or reduce emissions below current levels (high agreement, much evidence).

Uncertainties in the estimates are shown as ranges in the tables below to reflect the ranges of baselines, rates of technological change and other factors that are specific to the different approaches. Furthermore, uncertainties also arise from the limited information for global coverage of countries, sectors and gases.

Bottom-up studies:

• In 2030, the economic potential estimated for this assessment from bottom-up approaches (see Box SPM.2) is presented in Table SPM.1 below and Figure SPM.5A. For reference: emissions in 2000 were equal to 43 GtCO₂-eq. [11.3]:
• Studies suggest that mitigation opportunities with net negative costs^[15] have the potential to reduce emissions by around 6 GtCO₂-eq/yr in 2030. Realizing these requires dealing with implementation barriers [11.3].
• No one sector or technology can address the entire mitigation challenge. All assessed sectors contribute to the total (see Figure SPM.6). The key mitigation technologies and practices for the respective sectors are shown in Table SPM.3 [4.3, 4.4, 5.4, 6.5, 7.5, 8.4, 9.4, 10.4].

Top-down studies:

• Top-down studies calculate an emission reduction for 2030 as presented in Table SPM.2 below and Figure SPM.5B. The global economic potentials found in the top-down studies are in line with bottom-up studies (see Box SPM.2), though there are considerable differences at the sectoral level [3.6].
• The estimates in Table SPM.2 were derived from stabilization scenarios, i.e., runs towards long-run stabilization of atmospheric GHG concentration [3.6].

Figure SPM.5A (left): Global economic mitigation potential in 2030 estimated from bottom-up studies (data from Table SPM.1)

Figure SPM.5B (right): Global economic mitigation potential in 2030 estimated from top-down studies (data from Table SPM.2)

Figure SPM.6: Estimated sectoral economic potential for global mitigation for different regions as a function of carbon price in 2030 from bottom-up studies, compared to the respective baselines assumed in the sector assessments. A full explanation of the derivation of this figure is found in Section 11.3.

Notes:

1. The ranges for global economic potentials as assessed in each sector are shown by vertical lines. The ranges are based on end-use allocations of emissions, meaning that emissions of electricity use are counted towards the end-use sectors and not to the energy supply sector.

2. The estimated potentials have been constrained by the availability of studies particularly at high carbon price levels.

3. Sectors used different baselines. For industry the SRES B2 baseline was taken, for energy supply and transport the WEO 2004 baseline was used; the building sector is based on a baseline in between SRES B2 and A1B; for waste, SRES A1B driving forces were used to construct a waste specific baseline, agriculture and forestry used baselines that mostly used B2 driving forces.

4. Only global totals for transport are shown because international aviation is included [5.4].

5. Categories excluded are: non-CO₂ emissions in buildings and transport, part of material efficiency options, heat production and cogeneration in energy supply, heavy duty vehicles, shipping and high-occupancy passenger transport, most high-cost options for buildings, wastewater treatment, emission reduction from coal mines and gas pipelines, fluorinated gases from energy supply and transport. The underestimation of the total economic potential from these emissions is of the order of 10-15%.

6. In 2030 macro-economic costs for multi-gas mitigation, consistent with emissions trajectories towards stabilization between 445 and 710 ppm CO₂-eq, are estimated at between a 3% decrease of global GDP and a small increase, compared to the baseline (see Table SPM.4). However, regional costs may differ significantly from global averages (high agreement, medium evidence) (see Box SPM.3 for the methodologies and assumptions of these results).

• The majority of studies conclude that reduction of GDP relative to the GDP baseline increases with the stringency of the stabilization target.
• Depending on the existing tax system and spending of the revenues, modelling studies indicate that costs may be substantially lower under the assumption that revenues from carbon taxes or auctioned permits under an emission trading system are used to promote low-carbon technologies or reform of existing taxes [11.4].
• Studies that assume the possibility that climate change policy induces enhanced technological change also give lower costs. However, this may require higher upfront investment in order to achieve costs reductions thereafter (see Box SPM.4) [3.3, 3.4, 11.4, 11.5, 11.6].
• Although most models show GDP losses, some show GDP gains because they assume that baselines are non-optimal and mitigation policies improve market efficiencies, or they assume that more technological change may be induced by mitigation policies. Examples of market inefficiencies include unemployed resources, distortionary taxes and/or subsidies [3.3, 11.4].
• A multi-gas approach and inclusion of carbon sinks generally reduces costs substantially compared to CO₂ emission abatement only [3.3].
• Regional costs are largely dependent on the assumed stabilization level and baseline scenario. The allocation regime is also important, but for most countries to a lesser extent than the stabilization level [11.4, 13.3].

7. Changes in lifestyle and behaviour patterns can contribute to climate change mitigation across all sectors. Management practices can also have a positive role (high agreement, medium evidence).

• Lifestyle changes can reduce GHG emissions. Changes in lifestyles and consumption patterns that emphasize resource conservation can contribute to developing a low-carbon economy that is both equitable and sustainable [4.1, 6.7].
• Education and training programmes can help overcome barriers to the market acceptance of energy efficiency, particularly in combination with other measures [Table 6.6].
• Changes in occupant behaviour, cultural patterns and consumer choice and use of technologies can result in considerable reduction in CO₂ emissions related to energy use in buildings [6.7].
• Transport Demand Management, which includes urban planning (that can reduce the demand for travel) and provision of information and educational techniques (that can reduce car usage and lead to an efficient driving style) can support GHG mitigation [5.1].
• In industry, management tools that include staff training, reward systems, regular feedback, documentation of existing practices can help overcome industrial organization barriers, reduce energy use, and GHG emissions [7.3].

8. While studies use different methodologies, in all analyzed world regions near-term health co-benefits from reduced air pollution as a result of actions to reduce GHG emissions can be substantial and may offset a substantial fraction of mitigation costs (high agreement, much evidence).

• Including co-benefits other than health, such as increased energy security, and increased agricultural production and reduced pressure on natural ecosystems, due to decreased tropospheric ozone concentrations, would further enhance cost savings [11.8].
• Integrating air pollution abatement and climate change mitigation policies offers potentially large cost reductions compared to treating those policies in isolation [11.8].

9. Literature since TAR confirms that there may be effects from Annex I countries’ action on the global economy and global emissions, although the scale of carbon leakage remains uncertain (high agreement, medium evidence).

• Fossil fuel exporting nations (in both Annex I and non-Annex I countries) may expect, as indicated in TAR^[16], lower demand and prices and lower GDP growth due to mitigation policies. The extent of this spill over^[17] depends strongly on assumptions related to policy decisions and oil market conditions [11.7].
• Critical uncertainties remain in the assessment of carbon leakage^[18]. Most equilibrium modelling support the conclusion in the TAR of economy-wide leakage from Kyoto action in the order of 5-20%, which would be less if competitive low-emissions technologies were effectively diffused [11.7] .

10. New energy infrastructure investments in developing countries, upgrades of energy infrastructure in industrialized countries, and policies that promote energy security, can, in many cases, create opportunities to achieve GHG emission reductions^[19] compared to baseline scenarios. Additional co-benefits are country-specific but often include air pollution abatement, balance of trade improvement, provision of modern energy services to rural areas and employment (high agreement, much evidence).

• Future energy infrastructure investment decisions, expected to total over 20 trillion US$^[20] between now and 2030, will have long term impacts on GHG emissions, because of the long life-times of energy plants and other infrastructure capital stock. The widespread diffusion of low-carbon technologies may take many decades, even if early investments in these technologies are made attractive. Initial estimates show that returning global energy-related CO₂ emissions to 2005 levels by 2030 would require a large shift in the pattern of investment, although the net additional investment required ranges from negligible to 5-10% [4.1, 4.4, 11.6].
• It is often more cost-effective to invest in end-use energy efficiency improvement than in increasing energy supply to satisfy demand for energy services. Efficiency improvement has a positive effect on energy security, local and regional air pollution abatement, and employment [4.2, 4.3, 6.5, 7.7, 11.3, 11.8].
• Renewable energy generally has a positive effect on energy security, employment and on air quality. Given costs relative to other supply options, renewable electricity, which accounted for 18% of the electricity supply in 2005, can have a 30-35% share of the total electricity supply in 2030 at carbon prices up to 50 US$/tCO₂-eq [4.3, 4.4, 11.3, 11.6, 11.8].
• The higher the market prices of fossil fuels, the more low-carbon alternatives will be competitive, although price volatility will be a disincentive for investors. Higher priced conventional oil resources, on the other hand, may be replaced by high carbon alternatives such as from oil sands, oil shales, heavy oils, and synthetic fuels from coal and gas, leading to increasing GHG emissions, unless production plants are equipped with CCS [4.2, 4.3, 4.4, 4.5].
• Given costs relative to other supply options, nuclear power, which accounted for 16% of the electricity supply in 2005, can have an 18% share of the total electricity supply in 2030 at carbon prices up to 50 US$/tCO₂-eq, but safety, weapons proliferation and waste remain as constraints [4.2, 4.3, 4.4]^[21].
• CCS in underground geological formations is a new technology with the potential to make an important contribution to mitigation by 2030. Technical, economic and regulatory developments will affect the actual contribution [4.3, 4.4, 7.3].

11. There are multiple mitigation options in the transport sector^[19], but their effect may be counteracted by growth in the sector. Mitigation options are faced with many barriers, such as consumer preferences and lack of policy frameworks (medium agreement, medium evidence).

• Improved vehicle efficiency measures, leading to fuel savings, in many cases have net benefits (at least for light-duty vehicles), but the market potential is much lower than the economic potential due to the influence of other consumer considerations, such as performance and size. There is not enough information to assess the mitigation potential for heavy-duty vehicles. Market forces alone, including rising fuel costs, are therefore not expected to lead to significant emission reductions [5.3, 5.4].
• Biofuels might play an important role in addressing GHG emissions in the transport sector, depending on their production pathway. Biofuels used as gasoline and diesel fuel additives/substitutes are projected to grow to 3% of total transport energy demand in the baseline in 2030. This could increase to about 5-10%, depending on future oil and carbon prices, improvements in vehicle efficiency and the success of technologies to utilise cellulose biomass [5.3, 5.4].
• Modal shifts from road to rail and to inland and coastal shipping and from low-occupancy to high-occupancy passenger transportation^[22], as well as land-use, urban planning and non-motorized transport offer opportunities for GHG mitigation, depending on local conditions and policies [5.3, 5.5].
• Medium term mitigation potential for CO₂ emissions from the aviation sector can come from improved fuel efficiency, which can be achieved through a variety of means, including technology, operations and air traffic management. However, such improvements are expected to only partially offset the growth of aviation emissions. Total mitigation potential in the sector would also need to account for non-CO₂ climate impacts of aviation emissions [5.3, 5.4].
• Realizing emissions reductions in the transport sector is often a co-benefit of addressing traffic congestion, air quality and energy security [5.5].

12. Energy efficiency options^[19] for new and existing buildings could considerably reduce CO₂ emissions with net economic benefit. Many barriers exist against tapping this potential, but there are also large co-benefits (high agreement, much evidence).

• By 2030, about 30% of the projected GHG emissions in the building sector can be avoided with net economic benefit [6.4, 6.5].
• Energy efficient buildings, while limiting the growth of CO₂ emissions, can also improve indoor and outdoor air quality, improve social welfare and enhance energy security [6.6, 6.7].
• Opportunities for realising GHG reductions in the building sector exist worldwide. However, multiple barriers make it difficult to realise this potential. These barriers include availability of technology, financing, poverty, higher costs of reliable information, limitations inherent in building designs and an appropriate portfolio of policies and programs [6.7, 6.8].
• The magnitude of the above barriers is higher in the developing countries and this makes it more difficult for them to achieve the GHG reduction potential of the building sector [6.7].

13. The economic potential in the industrial sector^[19] is predominantly located in energy intensive industries. Full use of available mitigation options is not being made in either industrialized or developing nations (high agreement, much evidence).

• Many industrial facilities in developing countries are new and include the latest technology with the lowest specific emissions. However, many older, inefficient facilities remain in both industrialized and developing countries. Upgrading these facilities can deliver significant emission reductions [7.1, 7.3, 7.4].
• The slow rate of capital stock turnover, lack of financial and technical resources, and limitations in the ability of firms, particularly small and medium-sized enterprises, to access and absorb technological information are key barriers to full use of available mitigation options [7.6].

14. Agricultural practices collectively can make a significant contribution at low cost^[19] to increasing soil carbon sinks, to GHG emission reductions, and by contributing biomass feedstocks for energy use (medium agreement, medium evidence).

• A large proportion of the mitigation potential of agriculture (excluding bioenergy) arises from soil carbon sequestration, which has strong synergies with sustainable agriculture and generally reduces vulnerability to climate change [8.4, 8.5, 8.8].
• Stored soil carbon may be vulnerable to loss through both land management change and climate change [8.10].
• Considerable mitigation potential is also available from reductions in methane and nitrous oxide emissions in some agricultural systems [8.4, 8.5].
• There is no universally applicable list of mitigation practices; practices need to be evaluated for individual agricultural systems and settings [8.4].
• Biomass from agricultural residues and dedicated energy crops can be an important bioenergy feedstock, but its contribution to mitigation depends on demand for bioenergy from transport and energy supply, on water availability, and on requirements of land for food and fibre production. Widespread use of agricultural land for biomass production for energy may compete with other land uses and can have positive and negative environmental impacts and implications for food security [8.4, 8.8].

15. Forest-related mitigation activities can considerably reduce emissions from sources and increase CO₂ removals by sinks at low costs^[19], and can be designed to create synergies with adaptation and sustainable development (high agreement, much evidence)^[23].

• About 65% of the total mitigation potential (up to 100 US$/tCO₂-eq) is located in the tropics and about 50% of the total could be achieved by reducing emissions from deforestation [9.4].
• Climate change can affect the mitigation potential of the forest sector (i.e., native and planted forests) and is expected to be different for different regions and sub-regions, both in magnitude and direction [9.5].
• Forest-related mitigation options can be designed and implemented to be compatible with adaptation, and can have substantial co-benefits in terms of employment, income generation, biodiversity and watershed conservation, renewable energy supply and poverty alleviation [9.5, 9.6, 9.7].

16. Post-consumer waste^[24] is a small contributor to global GHG emissions^[25] (<5%), but the waste sector can positively contribute to GHG mitigation at low cost^[19]

and promote sustainable development (high agreement, much evidence).

• Existing waste management practices can provide effective mitigation of GHG emissions from this sector: a wide range of mature, environmentally effective technologies are commercially available to mitigate emissions and provide co-benefits for improved public health and safety, soil protection and pollution prevention, and local energy supply [10.3, 10.4, 10.5].
• Waste minimization and recycling provide important indirect mitigation benefits through the conservation of energy and materials [10.4].
• Lack of local capital is a key constraint for waste and wastewater management in developing countries and countries with economies in transition. Lack of expertise on sustainable technology is also an important barrier [10.6].

17. Geo-engineering options, such as ocean fertilization to remove CO₂ directly from the atmosphere, or blocking sunlight by bringing material into the upper atmosphere, remain largely speculative and unproven, and with the risk of unknown side-effects. Reliable cost estimates for these options have not been published (medium agreement, limited evidence) [11.2].