The Effectiveness of the International Emissions Trading under the Paris Agreement
Under the Paris Agreement, parties would set and implement their own emissions targets as nationally determined contributions (NDCs) to tackle climate change risk. The international carbon emissions trading (ET) is expected to reduce global mitigation cos
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The Effectiveness of the International Emissions Trading under the Paris Agreement Shinichiro Fujimori, Izumi Kubota, Hancheng Dai, Kiyoshi Takahashi, Tomoko Hasegawa, Jing-Yu Liu, Yasuaki Hijioka, Toshihiko Masui, and Maho Takimi
Abstract Under the Paris Agreement, parties would set and implement their own emissions targets as nationally determined contributions (NDCs) to tackle climate change risk. The international carbon emissions trading (ET) is expected to reduce global mitigation costs. Here we show the benefit of ET under both NDCs. The results show that the global welfare loss, which was measured based on estimated household consumption change in 2030, decreased by 80% (from 0.5 to 0.1%), as a consequence of achieving the NDCs through ET. These results indicate that ET is a valuable option for the international system, enabling the NDCs to be costeffectively achieved and more ambitious targets. Keywords Emissions trading • Paris Agreement • Computable general equilibrium model • Welfare change
S. Fujimori (*) • T. Hasegawa Center for Social and Environmental Systems Research, National Institute for Environmental Studies (NIES), 16–2 Onogawa, Tsukuba, Ibaraki 305–8506, Japan International Institute for Applied Systems Analysis, Schlossplatz-1, Laxenburg 2361, Austria e-mail: [email protected] I. Kubota • K. Takahashi • J.-Y. Liu • Y. Hijioka • T. Masui Center for Social and Environmental Systems Research, National Institute for Environmental Studies (NIES), 16–2 Onogawa, Tsukuba, Ibaraki 305–8506, Japan H. Dai College of Environmental Sciences and Engineering, Peking University, Room 426, Environment Building, Beijing 100871, China M. Takimi Mizuho Information & Research Institute, Inc., 2–3 Kanda-Nishikicho, Chiyoda-ku, Tokyo 101–8443, Japan © Springer Nature Singapore Pte Ltd. 2017 S. Fujimori et al. (eds.), Post-2020 Climate Action, DOI 10.1007/978-981-10-3869-3_5
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Abbreviations AIM CES CGE COP ET INDCs NDCs OECD PA UNFCCC
5.1
Asia-Pacific Integrated Model Constant elasticity of substitution Computable general equilibrium Conference of the Parties Emissions trading Intended nationally determined contributions Nationally determined contributions Organisation for Economic Co-operation and Development Paris Agreement United Nations Framework Convention on Climate Change
Introduction
In 2015, the Conference of the Parties (COP) 21 to the United Nations Framework Convention on Climate Change (UNFCCC) adopted the Paris Agreement (PA) (United Nations Framework Convention on Climate Change, (UNFCCC) 2015). The PA provides a framework for global actions to address climate change in the period after 2020. The objective of the agreement was to maintain the increase in global temperatures well below 2 C above preindustrial levels, while making efforts to limit the increase to 1.5 C. The PA requires parties to prepare nationally determined contributions (NDCs), indicating an individual country’s emissions reduction commitments, the measures to be taken to achieve th
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