DP12757 Learning from Nationally Determined Contributions

Author(s): Keigo Akimoto, Joseph Aldy, Lara Aleluia Reis, Carlo Carraro, Billy Pizer, Massimo Tavoni
Publication Date: February 2018
Keyword(s): comparability of effort, Emissions mitigation, international environmental agreements, modeling analysis, nationally determined contributions
JEL(s):
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=12757

National governments have submitted emission mitigation pledges under the Paris Agreement that vary considerably in their form, level of required emission mitigation, elaboration of non-emission goals, and implementation strategies. As a result, domestic emission mitigation programs necessary to deliver on the Paris pledges will diverge in the degree to which that mitigation will be achieved at least cost. This paper explores both what we learn from how national determined contributions (NDCs) diverge from least-cost policies and the implications for comparing mitigation effort. The NDCs can reveal a country's preferences over climate policy, economic development, and other priorities. Modeling analysis of the NDCs can highlight opportunities for (i) measuring the revealed cost of institutional and political constraints that limit least cost implementation; (ii) mitigating climate change alongside other policy objectives; (iii) policy learning over time. We undertake two case studies based on global energy-economic models to illustrate how implementation of NDCs may deviate from least-cost implementation. In the first case study, we employ the WITCH model to assess how the non-emissions goals in NDCs may constrain implementation in a way that increases costs related to cost-effective emissions abatement. In the second case study, we employ the DNE21+ model to assess how countries' stated domestic implementation policies may diverge from a cost-effective domestic mitigation policy. These modelling analyses serve to illustrate how comparing mitigation implementation can then be represented by a bounding exercise that develops both conservative and generous estimates of mitigation effort.