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Putting a price tag on the 2° climate target
Date:7/2/2014

area of large uncertainty. By comparing the results from multiple models, the scientists were able to better define the costs of addressing climate change.

"Nearly all countries say that they're on board with the 2 target; some have even made commitments to reduce their greenhouse gas emissions. But until now, it hasn't been very clear how to get to that point, at least from an investment point of view. It's high time we think about how much capital is needed for new power plants, biofuel refineries, efficient vehicles, and other technologiesand where those dollars need to flowso that we get the emissions reductions we want," says McCollum.

IIASA Energy Program Director Keywan Riahi, another study co-author and project leader, says, "Given that energy-supply technologies and infrastructure are characterized by long lifetimes of 30 to 60 years or more, there's a considerable amount of technological inertia in the system that could impede a rapid transformation. That's why the energy investment decisions of the next several years are so important: because they will shape the direction of the energy transition path for many years to come."

The study shows that the greatest investments will be needed in rapidly developing countries, namely in Asia, Latin America, and Sub-Saharan Africa.

"Energy investment in these countries is poised to increase substantially anyway. But if we're serious about addressing climate change, we must find ways to direct more investment to these key regions. Clever policy designs, including carbon pricing mechanisms, can help." says Massimo Tavoni, researcher at the Fondazione Eni Enrico Mattei, a climate research center in Italy, and overall coordinator of the LIMITS project, of which the new study is a part.

The researchers note that their analysis of future investment costs does not attempt to quantify the potentially major fuel savings from switching from fossil fuels to renewable sources, such as wind and solar energy.
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Contact: Katherine Leitzell
leitzell@iiasa.ac.at
43-223-680-7316
International Institute for Applied Systems Analysis
Source:Eurekalert

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