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Economic damages from on-going climate change imply deeper near-term emission cuts

Author

Listed:
  • Schultes, Anselm
  • Piontek, Franziska
  • Soergel, Bjoern
  • Rogelj, Joeri
  • Baumstark, Lavinia
  • Kriegler, Elmar
  • Edenhofer, Ottmar
  • Luderer, Gunnar
Abstract
Current analyses of pathways limiting global warming to well below 2°C, as called for in the Paris Agreement, do not consider the climate impacts already occurring below 2°C. Here we show that accounting for these damages significantly increases the near-term ambition of transformation pathways. We use econometric estimates of climate damages on GDP growth and explicitly model the uncertainty in the time that damages persist and in the climate sensitivity. We find that carbon prices in 2030 are higher compared to the case where only the 2°C is considered; the median value is $115 per tonne of CO2. The long-term persistence of damages, while highly uncertain, is a main driver of optimal near-term climate policy. Accounting for damages on economic growth increases the gap between the currently pledged nationally determined contributions and the welfare-optimal 2030 emissions for 2°C by two thirds, compared to pathways considering the 2°C limit only.

Suggested Citation

  • Schultes, Anselm & Piontek, Franziska & Soergel, Bjoern & Rogelj, Joeri & Baumstark, Lavinia & Kriegler, Elmar & Edenhofer, Ottmar & Luderer, Gunnar, 2020. "Economic damages from on-going climate change imply deeper near-term emission cuts," MPRA Paper 103655, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:103655
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    References listed on IDEAS

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    More about this item

    Keywords

    Climate change; Climate change mitigation; Climate change impacts; Climate policy; International climate policy; Paris Agreement; Transformation pathways;
    All these keywords.

    JEL classification:

    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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