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The Role of Non-CO2 GHGs in Climate Policy: Analysis Using the MIT IGSM

First steps toward a broad climate agreement, such as the Kyoto Protocol, have focused on less than global geographic coverage. We consider instead a policy that is less comprehensive in term of greenhouse gases (GHGs), including only the non-CO2 GHGs, but is geographically comprehensive. Abating non-CO2 GHGs may be seen as less of a threat to economic development and therefore it may be possible to involve developing countries in such a policy even though they have resisted limits on CO2 emissions. The policy we consider involves a GHG price of about $15 per ton carbon-equivalent (tce) levied only on the non-CO2 GHGs and held at that level through the century. We estimate that such a policy would reduce the global mean surface temperature in 2100 by about 0.55° C; if only methane is covered that alone would achieve a reduction of 0.3° to 0.4° C. We estimate the Kyoto Protocol in its current form would achieve a 0.25° C reduction in 2100 if Parties to it maintained it as is through the century. Furthermore, we estimate the costs of the non-CO2 policies to be a small fraction of the Kyoto policy. Whether as a next step to expand the Kyoto Protocol, or as a separate initiative running parallel to it, the world could well make substantial progress on limiting climate change by pursuing an agreement to abate the low cost non-CO2 GHGs. The results suggest that it would be useful to proceed on global abatement of non-CO2 GHGs so that lack of progress on negotiations to limit CO2 does not allow these abatement opportunities to slip away.

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Energy Specializations: Energy Modeling – Other; Energy and the Environment – Air Emissions (other than greenhouse gases)

JEL Codes:
C59 - Econometric Modeling: Other
Q52 - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

Keywords: Non-CO2 greenhouse gases, Climate policy, MIT IGSM model, Economic costs of mitigation policy

DOI: 10.5547/ISSN0195-6574-EJ-VolSI2006-NoSI3-26

Published in Multi-Greenhouse Gas Mitigation and Climate Policy, Special Issue #3 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.