Plausible policy pathways to Paris

The Paris agreement commits nations to pursuing efforts to limit the global temperature rise to 1.5 degrees. This represents a level of transformation of the socio-economic and energy systems that substantially exceeds the scenarios that have been found using conventional integrated assessment models (IAMs). Such models generally ignore economic disequilibrium effects such as unemployment, which could become important under conditions of radical economic transformation, and neglect key dynamic processes that control the rate of uptake of new technologies. Rapid reductions in greenhouse gas emissions also potentially violate the simple scaling assumptions used to derive environmental impacts in IAMs because of the slow response of some parts of the climate system such as the ocean, as compared to the land. We plan to develop a set of more realistic dynamic pathways to reach the 1.5 degree target using a new, fully dynamic IAM that does not rely on equilibrium or pattern scaling assumptions. The assessment will identify policy options and the degree of negative emissions required and will quantify the resulting spatial patterns of climate change and the associated uncertainty resulting from incomplete knowledge of climate, carbon-cycle and socio-economic parameters.

The princial beneficiaries of the proposed research are public-sector policymakers involved with the formulation of national and international-level environmental policy in all areas with that impact the possibility of meeting the high-ambition Paris goals. This involves policy formulation in all high-emission sectors, most notably the energy sector, but also transport, construction and agriculture sectors amongst others.

The most important UK actors in this category include the Committee on Climate Change (CCC), currently in the process of producing a report on the Paris targets, and the former Department of Energy and Climate Change, now part of the newly created Department of Business, Energy and Industrial Strategy. But a range of other departments are implicated.

Public policymakers will benefit from the research in developing the capacity to make better informed decisions on which combinations of policies might be effective in achieving the Paris goals and to what extent radical approaches are needed in such areas as incentivisation of energy efficiency gains and alternative consumptions patterns, early retiring of fossil-intensive energy and transport infrastructure and the development and deployment of low-emissions and negative emissions technologies.

Private sector organisations, most particularly energy and transportation companies, but also any large companies with substantial energy use and large carbon footprints, as well as large companies and SMEs developing new energy technologies also have a large stake in the specific composition of policy frameworks to incentivise high-ambition climate goals. For instance, the implications of changes in the balance of tax, subsidy and regulatory regimes can easily have existential implications for renewables and energy industry firms.

Such organisations might benefit from understanding the most plausible composition of baskets of policies designed to meet high-ambition climate goals, by making appropriate investment and research and development choices to position themselves for possible changes in policy.

Financial investors with with signficant exposure to fossil fuel investments, or indeed any climate-sensitive industry stocks, that could be impacted either negatively or positively by sustantial changes in mitigation policy frameworks, could benefit from an appreciation of plausible changes in policy. This is most important where there is a potential for so-called stranded assets, such as fossil resources or infrastructure, that become effectively unusable in high-mitigation scenarios.

Such investors might benefit from the ability to make better informed choices of investment strategy and investment pricing or development of hedging strategies.

Non-governmental organisations play an important intermediary role in promoting the interests of under-represented groups and concerns including the environment and social groups and nations most vulnerable to climate change.

Such organisations need to know which policy options are genuinely effective in achieving environmental targets and what the regional and societal distributional effects of such policies are so that their actions and activism can be correctly targeted.

Ultimately, however, it is the general public who stand to benefit from more efficient and effective policymaking through more environmentally and societally desirable outcomes.