4. Climate Mitigation

4.1 Economic Reasons for Mitigation

The “social cost of carbon” (SCC) measures the damages associated with climate change resulting from increased carbon dioxide emissions and converts it into a monetary value. It is expressed as a cost in U.S. dollars per ton of CO₂ emitted. It considers impacts on human health, property damage from flooding and storms, changes to agricultural productivity, the value of ecosystems, and other impacts. In this way, a monetary value is given to climate change consequences allowing government agencies to incorporate the social benefits of reducing CO₂ emissions into cost-benefit analyses of greenhouse gas mitigation policies. There is a net benefit for a climate policy if the economic cost of emissions reductions (mitigation costs) is less than the value of the damages those emissions would cause (the SCC). An example of how this is used is in setting fuel economy standards. The costs associated with enacting higher fuel economy standards are significant, from manufacturing changes, resource changes, permitting changes, etc. However, these are relatively short-term cost increases and are outweighed by the long-term benefits, which include easily seen monetary benefits such as reductions in fuel costs by vehicle owners but more importantly, and more economically significant, the less tangible benefit of reduced emissions leading to fewer health issues, less ecosystem damage, and so on. Using the SCC to set policies on carbon price, such as a carbon tax, would force businesses and households to consider the social costs of greenhouse gas emissions when deciding how to produce goods or what to consume, thereby making decisions that are more consistent with addressing anthropogenic emissions.

Calculating the SCC is as complex a task as understanding all the interconnections in the climate system itself. For this reason, a range of SCCs might be calculated by different groups at different times and for different regions. Calculated SCC values range from 10$/ton to $1,000/ton with a median value between $150-$200/ton. The SCC set by the U.S. federal government in late 2023 for use in policy decisions was $190 per ton of CO₂ emitted. This was much higher than what had been set under the previous administration ($5/ton) and leads to cost-benefit analyses that will allow for significant changes to be made in environmental policies to combat climate change.

Estimates of how much it will cost to enact mitigation efforts to keep temperature rise to 1.5°C vary considerably, but as of 2021 the World Resources Institute estimated global finances put towards climate change actions would need to rise to 5 trillion dollars by 2030 and remain at that level every year through 2050. Current financing is around 0.64 trillion dollars per year. Multiple avenues could be used to reach the 5 trillion-dollar target including a significant increase from private finance, but also by increasing carbon pricing or carbon taxes on transportation fuels and coal, reducing government subsidies for fossil fuels, changing financial institution policies to reduce the tax burden for money spent on climate mitigation efforts, etc.

Anthropogenic CO₂ emissions continue to rise, and in 2022 they were 37.15 billion tons. Using the median SCC value that the U.S. has put into policy, this equates to a social carbon cost of 7.06 trillion dollars, which will rise by about 1% every year if emissions follow current trends (Figure 3D.4.1). Clearly this cost is much higher than the 5 trillion dollars it is estimated to take to combat anthropogenic emissions, so investing in climate mitigation efforts makes sense both in the short term and in the long term.

4.2 Mitigation Efforts

Efforts to mitigate anthropogenic emissions are focused on two broad categories: reducing emissions and increasing carbon removal from the atmosphere. In both areas, efforts thus far are behind target to keep projected temperature rise to 1.5°C by 2100.

Reducing emissions can take multiple forms. This includes increasing the percentage of renewable, non-greenhouse gas emitting energy sources in place of fossil fuels while at the same time increasing the electrification of buildings and vehicles. This also means retrofitting older buildings to be more energy efficient and incorporating energy efficiency into new buildings and appliances. Many industrial operations are major greenhouse gas emitters, cement and steel production are notable among them, so increasing the energy efficiency of these sectors is another focus. Agriculture is responsible for almost 25% of global greenhouse gas emissions, when considering emissions from production and those associated with land-use changes. As population grows, food production must grow as well, so finding ways to produce crops and raise animals for meat more efficiently with increased yields using less land is an agricultural focus. Encouraging a decrease in meat consumption, particularly in high consuming nations, will also decrease emissions.

Increasing carbon removal from the atmosphere can be done both naturally and with man-made technology. Naturally, requires decreasing the amount of deforestation while increasing reforestation and the land area of wetlands and other marshlands. Current technologies to remove carbon from the atmosphere include carbon capture and storage – a method for removing CO₂ and storing it underground in rock formations. Technologies like this are quite expensive, but increased private funding and increasing the market for products created using stored CO₂ can help offset these costs and promote this and the development of other technologies.

Current global mitigation efforts are not on track to meet the climate goals set by the Paris Agreement. It is estimated that by 2030, greenhouse gas emissions must be cut to 43% below 2019 levels to limit temperature rise to 1.5°C by 2100. Findings in 2023 suggest that current mitigation efforts will reduce emissions to 2% below 2019 levels by 2030.  So, while the world is projected to reach peak emissions at some point this decade, emissions will not drop as quickly as needed to meet the Paris Agreement goal unless more mitigation efforts are enacted.

As the world moves forward and works to combat climate change, it is important that mitigation efforts are implemented in a way that is compatible with improving human welfare and promoting sustainable development. The unequal impacts of climate change must be addressed as part of the mitigation efforts.

References

Boehm, S., Lebling, K., Levin, K., Fekete, H., Jaeger, J., Wilson, R., Geiges, A., Schumer, C., & World Resources Institute. (2021). State of Climate Action 2021: Systems transformations required to limit global warming to 1.5°C. World Resources Institute. https://files.wri.org/d8/s3fs-public/2021-10/state_climate_action_2021.pdf?VersionId=QBSICe3wSlKmOHc1rYyhdx3j3iSCqual

Rennert, K., Errickson, F., Prest, B. C., Rennels, L., Newell, R. G., Pizer, W. A., Kingdon, C., Wingenroth, J., Cooke, R., Parthum, B., Smith, D. J., Cromar, K., Diaz, D., Moore, F. C., Müller, U. K., Plevin, R. J., Raftery, A. E., Ševčíková, H., Sheets, H., . . . Anthoff, D. (2022). Comprehensive evidence implies a higher social cost of CO2. Nature, 610(7933), 687–692. https://doi.org/10.1038/s41586-022-05224-9