WG III Mitigation - Summary for Policy Makers

Climate Change 2001: Mitigation

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Ways and Means for Mitigation 17. The successful implementation of greenhouse gas mitigation options needs to overcome many technical, economic, political, cultural, social, behavioural and/or institutional barriers which prevent the full exploitation of the technological, economic and social opportunities of these mitigation options. The potential mitigation opportunities and types of barriers vary by region and sector, and over time. This is caused by the wide variation in mitigation capacity. The poor in any country are faced with limited opportunities to adopt technologies or change their social behaviour, particularly if they are not part of a cash economy, and most countries could benefit from innovative financing and institutional reform and removing barriers to trade. In the industrialized countries, future opportunities lie primarily in removing social and behavioural barriers; in countries with economies in transition, in price rationalization; and in developing countries, in price rationalization, increased access to data and information, availability of advanced technologies, financial resources, and training and capacity building. Opportunities for any given country, however, might be found in the removal of any combination of barriers (Sections 1.5, 5.3, 5.4).

18. National responses to climate change can be more effective if deployed as a portfolio of policy instruments to limit or reduce greenhouse gas emissions. The portfolio of national climate policy instruments may include - according to national circumstances - emissions/carbon/energy taxes, tradable or non-tradable permits, provision and/or removal of subsidies, deposit/refund systems, technology or performance standards, energy mix requirements, product bans, voluntary agreements, government spending and investment, and support for research and development. Each government may apply different evaluation criteria, which may lead to different portfolios of instruments. The literature in general gives no preference for any particular policy instrument. Market based instruments may be cost-effective in many cases, especially where capacity to administer them is developed. Energy efficiency standards and performance regulations are widely used, and may be effective in many countries, and sometimes precede market based instruments. Voluntary agreements have recently been used more frequently, sometimes preceding the introduction of more stringent measures. Information campaigns, environmental labelling, and green marketing, alone or in combination with incentive subsidies, are increasingly emphasized to inform and shape consumer or producer behaviour. Government and/or privately supported research and development is important in advancing the long-term application and transfer of mitigation technologies beyond the current market or economic potential (Section 6.2).

19. The effectiveness of climate change mitigation can be enhanced when climate policies are integrated with the non-climate objectives of national and sectorial policy development and be turned into broad transition strategies to achieve the long-term social and technological changes required by both sustainable development and climate change mitigation. Just as climate policies can yield ancillary benefits that improve wellbeing, non-climate policies may produce climate benefits. It may be possible to significantly reduce greenhouse gas emissions by pursuing climate objectives through general socio-economic policies. In many countries, the carbon intensity of energy systems may vary depending on broader programmmes for energy infrastructure development, pricing, and tax policies. Adopting state-of-the-art environmentally sound technologies may offer particular opportunity for environmentally sound development while avoiding greenhouse gas intensive activities. Specific attention can foster the transfer of those technologies to small and medium size enterprises. Moreover, taking ancillary benefits into account in comprehensive national development strategies can lower political and institutional barriers for climate-specific actions (Sections 2.2.3, 2.4.4, 2.4.5, 2.5.1, 2.5.2, 10.3.2, 10.3.4).

20. Co-ordinated actions among countries and sectors may help to reduce mitigation cost, address competitiveness concerns, potential conflicts with international trade rules, and carbon leakage. A group of countries that wants to limit its collective greenhouse gas emissions could agree to implement well-designed international instruments. Instruments assessed in this report and being developed in the Kyoto Protocol are emissions trading; Joint Implementation (JI); the Clean Development Mechanism (CDM); other international instruments also assessed in this report include co-ordinated or harmonized emission/carbon/energy taxes; an emission/carbon/ energy tax; technology and product standards; voluntary agreements with industries; direct transfers of financial resources and technology; and co-ordinated creation of enabling environments such as reduction of fossil fuel subsidies. Some of these have been considered only in some regions to date (Sections 6.3, 6.4.2, 10.2.7, 10.2.8).

21. Climate change decision-making is essentially a sequential process under general uncertainty. The literature suggests that a prudent risk management strategy requires a careful consideration of the consequences (both environmental and economic), their likelihood and society's attitude toward risk. The latter is likely to vary from country to country and perhaps even from generation to generation. This report therefore confirms the SAR finding that the value of better information about climate change processes and impacts and society's responses to them is likely to be great. Decisions about near-term climate policies are in the process of being made while the concentration stabilization target is still being debated. The literature suggests a step-by-step resolution aimed at stabilizing greenhouse gas concentrations. This will also involve balancing the risks of either insufficient or excessive action. The relevant question is not "what is the best course for the next 100 years", but rather "what is the best course for the near term given the expected long-term climate change and accompanying uncertainties" (Section 10.4.3).

22. This report confirms the finding in the SAR that earlier actions, including a portfolio of emissions mitigation, technology development and reduction of scientific uncertainty, increase flexibility in moving towards stabilization of atmospheric concentrations of greenhouse gases. The desired mix of options varies with time and place. Economic modelling studies completed since the SAR indicate that a gradual near-term transition from the world's present energy system towards a less carbon-emitting economy minimizes costs associated with premature retirement of existing capital stock. It also provides time for technology development, and avoids premature lock-in to early versions of rapidly developing low-emission technology. On the other hand, more rapid near-term action would decrease environmental and human risks associated with rapid climatic changes.

It would also stimulate more rapid deployment of existing low-emission technologies, provide strong near-term incentives to future technological changes that may help to avoid lock-in to carbon-intensive technologies, and allow for later tightening of targets should that be deemed desirable in light of evolving scientific understanding (Sections 2.3.2, 2.5.2, 8.4.1, 10.4.2, 10.4.3).

23. There is an inter-relationship between the environmental effectiveness of an international regime, the cost-effectiveness of climate policies and the equity of the agreement. Any international regime can be designed in a way that enhances both its efficiency and its equity. The literature assessed in this report on coalition formation in international regimes presents different strategies that support these objectives, including how to make it more attractive to join a regime through appropriate distribution of efforts and provision of incentives. While analysis and negotiation often focus on reducing system costs, the literature also recognizes that the development of an effective regime on climate change must give attention to sustainable development and non-economic issues (Sections 1.3, 10.2).

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