The Economics of 1.5°C Climate Change

The economic case for limiting warming to 1.5°C is unclear, due to manifold uncertainties. However, it cannot be ruled out that the 1.5°C target passes a cost-benefit test. Costs are almost certainly high: The median global carbon price in 1.5°C scenarios implemented by various energy models is more than US$100 per metric ton of CO2 in 2020, for example. Benefits estimates range from much lower than this to much higher. Some of these uncertainties may reduce in the future, raising the question of how to hedge in the near term. Maintaining an option on limiting warming to 1.5°C means targeting it now. Setting off with higher emissions will make 1.5°C unattainable quickly without recourse to expensive large-scale carbon dioxide removal (CDR), or solar radiation management (SRM), which can be cheap but poses ambiguous risks society seems unwilling to take. Carbon pricing could reduce mitigation costs substantially compared with ramping up the current patchwork of regulatory instruments. Nonetheless, a mix of policies is justified and technology-specific approaches may be required. It is particularly important to step up mitigation finance to developing countries, where emissions abatement is relatively cheap

Energy for Transport

Global transportation energy use is steeply rising, mainly as a result of increasing population and economic activity. Petroleum fuels remain the dominant energy source, reflecting advantages such as high energy density, low cost, and market availability. The movement of people and freight makes a major contribution to economic development and social well-being, but it also negatively impacts climate change, air quality, health, social cohesion, and safety. Following a review published 20 years ago in the Annual Review of Environment and Resources (then named the Annual Review of Energy and the Environment) by Lee Schipper, we examine current trends and potential futures, revising several major global transport/energy reports. There are significant opportunities to slow travel growth and improve efficiency. Alternatives to petroleum exist but have different characteristics in terms of availability, cost, distribution, infrastructure, storage, and public acceptability. The transition to low-carbon equitable and sustainable transport will take time but can be fostered by numerous short- and medium-term strategies that would benefit energy security, health, productivity, and sustainability