The accountability imperative for quantifying the uncertainty of emission forecasts: evidence from Mexico

Governmental climate change mitigation targets are typically developed with the aid of forecasts of greenhouse-gas (GHG) emissions. The robustness and credibility of such forecasts depends, among other issues, on the extent to which forecasting approaches can reflect prevailing uncertainties. We apply a transparent and replicable method to quantify the uncertainty associated with projections of gross domestic product growth rates for Mexico, a key driver of GHG emissions in the country. We use those projections to produce probabilistic forecasts of GHG emissions for Mexico. We contrast our probabilistic forecasts with Mexico’s governmental deterministic forecasts. We show that, because they fail to reflect such key uncertainty, deterministic forecasts are ill-suited for use in target-setting processes. We argue that (i) guidelines should be agreed upon, to ensure that governmental forecasts meet certain minimum transparency and quality standards, and (ii) governments should be held accountable for the appropriateness of the forecasting approach applied to prepare governmental forecasts, especially when those forecasts are used to derive climate change mitigation targets.

POLICY INSIGHTS

• No minimum transparency and quality standards exist to guide the development of GHG emission scenario forecasts, not even when these forecasts are used to set national climate change mitigation targets.

• No accountability mechanisms appear to be in place at the national level to ensure that national governments rely on scientifically sound processes to develop GHG emission scenarios.

• Using probabilistic forecasts to underpin emission reduction targets represents a scientifically sound option for reflecting in the target the uncertainty to which those forecasts are subject, thus increasing the validity of the target.

• Setting up minimum transparency and quality standards, and holding governments accountable for their choice of forecasting methods could lead to more robust emission reduction targets nationally and, by extension, internationally.

     

Empirical calibration of climate policy using corporate solvency: a case study of the UK’s carbon price support

Emission reductions improve the chances that dangerous anthropogenic climate change will be averted, but could also cause some firms financial distress. Corporate failures, especially if they are unnecessary, add to the social cost of abatement. Social value can be permanently destroyed by the dissolution of organizational capital, deadweight losses paid to liquidators, and unemployment. This article proposes using measures of corporate solvency as an objective tool for policy makers to calibrate the optimal stringency of climate change policies, so that they can deliver the least loss of corporate solvency for a given level of emission reductions. They could also be used to determine the generosity of any compensation to address losses to corporate solvency. We demonstrate this approach using a case study of the UK’s Carbon Price Support (a carbon tax).

Key policy insights

• Solvency metrics could be used to empirically calibrate the optimal stringency of climate policies.

• An idealized solvency trajectory for firms affected by climate change policy would cause corporate solvency to initially decline – approaching but not exceeding ‘distressed’ levels – and then gradually improve to a new ‘steady state’ once the low-carbon transition had been achieved.

• In terms of the UK’s Carbon Price Support, corporate solvency of energy-intensive industries was found to be stable subsequent to its introduction. Therefore, the available evidence does not support its later weakening.

     

Including animal to plant protein shifts in climate change mitigation policy: a proposed three-step strategy

Strong and rapid greenhouse gas (GHG) emission reductions, far beyond those currently committed to, are required to meet the goals of the Paris Agreement. This allows no sector to maintain business as usual practices, while application of the precautionary principle requires avoiding a reliance on negative emission technologies. Animal to plant-sourced protein shifts offer substantial potential for GHG emission reductions. Unabated, the livestock sector could take between 37% and 49% of the GHG budget allowable under the 2°C and 1.5°C targets, respectively, by 2030. Inaction in the livestock sector would require substantial GHG reductions, far beyond what are planned or realistic, from other sectors. This outlook article outlines why animal to plant-sourced protein shifts should be taken up by the Conference of the Parties (COP), and how they could feature as part of countries’ mitigation commitments under their updated Nationally Determined Contributions (NDCs) to be adopted from 2020 onwards. The proposed framework includes an acknowledgment of ‘peak livestock’, followed by targets for large and rapid reductions in livestock numbers based on a combined ‘worst first’ and ‘best available food’ approach. Adequate support, including climate finance, is needed to facilitate countries in implementing animal to plant-sourced protein shifts.

Key policy insights

• Given the livestock sector’s significant contribution to global GHG emissions and methane dominance, animal to plant protein shifts make a necessary contribution to meeting the Paris temperature goals and reducing warming in the short term, while providing a suite of co-benefits.

• Without action, the livestock sector could take between 37% and 49% of the GHG budget allowable under the 2°C and 1.5°C targets, respectively, by 2030.

• Failure to implement animal to plant protein shifts increases the risk of exceeding temperate goals; requires additional GHG reductions from other sectors; and increases reliance on negative emissions technologies.

• COP 24 is an opportunity to bring animal to plant protein shifts to the climate mitigation table.

• Revised NDCs from 2020 should include animal to plant protein shifts, starting with a declaration of ‘peak livestock’, followed by a ‘worst first’ replacement approach, guided by ‘best available food’.

     

The levelized cost of carbon: a practical,if imperfect,method to compare CO2 abatement projects*

Calculating the cost effectiveness of projects and policies with respect to reducing carbon emissions provides a simple way for local government agencies to consider the climate impacts of their actions. Yet, defining a metric for cost-effectiveness in relation to climate change is not straightforward for several reasons. In this paper, we focus primarily on dynamics, reflecting the time value of money and how the benefits of reducing carbon emissions may change over time. We define a cost-effectiveness metric called Levelized Cost of Carbon (LCC) that carefully accounts for these dynamics. We also investigate the theoretical and practical implications and limitations of using a cost-effectiveness metric as an approach to rank projects. We apply our metric to a set of transportation projects to illustrate the insights that can be gained by such a process.

Key policy insights:

• Levelized Cost of Carbon (LCC) provides a simple way for local governments to consider climate change mitigation in decision making.

• LCC is a cost-effectiveness metric that carefully accounts for the time value of money and possible changes in the value of reducing emissions through time, thus helping local governments to make better decisions.

• LCC can be used to rank projects, with some caveats, even in the absence of a specific value for the benefits of reducing GHG emissions, thus providing flexibility in the face of uncertainty and political constraints.

     

Policy options to streamline the carbon market for agricultural nitrous oxide emissions

The majority of emissions of nitrous oxide – a potent greenhouse gas (GHG) – are from agricultural sources, particularly nitrogen fertilizer applications. A growing focus on these emission sources has led to the development in the United States of GHG offset protocols that could enable payment to farmers for reducing fertilizer use or implementing other nitrogen management strategies. Despite the development of several protocols, the current regional scope is narrow, adoption by farmers is low, and policy implementation of protocols has a significant time lag. Here we utilize existing research and policy structures to propose an ‘umbrella’ approach for nitrogen management GHG emissions protocols that has the potential to streamline the policy implementation and acceptance of such protocols. We suggest that the umbrella protocol could set forth standard definitions common across multiple protocol options, and then modules could be further developed as scientific evidence advances. Modules could be developed for specific crops, regions, and practices. We identify a policy process that could facilitate this development in concert with emerging scientific research and conclude by acknowledging potential benefits and limitations of the approach.

Key policy insights

• Agricultural greenhouse gas market options are growing, but are still underutilized

• Streamlining protocol development through an umbrella process could enable quicker development of protocols across new crops, regions, and practices

• Effective protocol development must not compromise best available science and should follow a rigorous pathway to ensure appropriate implementation

     

Challenges to addressing non-CO2 greenhouse gases in China’s long-term climate strategy

Under the Paris Agreement, countries are encouraged to submit long-term low greenhouse gas emissions development strategies. Such strategies will merge emissions goals with socio-economic objectives and enable countries to increase their ambition over time, thus offering an opportunity to close the gap between the current emissions trajectory and the Agreement’s ‘well below 2°C’ target. China is in the process of preparing its own long-term strategy. We argue in this article that non-CO₂ greenhouse gases (NCGGs) should be an essential component of China’s long-term low-emissions strategy. To incorporate NCGGs into China’s long-term low-emissions development strategy, key scientific and institutional challenges should be addressed, such as uncertainty about the accuracy of NCGG emissions inventories; uncertainty about future projections of NCGG emissions; and institutional coordination deficits and imbalanced policy approaches. Overcoming these barriers will have significant implications for climate change mitigation and can open a path for the development of concrete follow-up actions.

Key policy insights

• Non-CO₂ greenhouse gases (NCGGs) make up around 17% of China’s GHG emissions, but China has no quantified target to limit or reduce these gases.

• NCGG emissions mitigation should be an essential component of China's long-term low-emissions strategy, which is currently under development.

• Considerable uncertainty exists over both historical NCGG emissions data and forecasts. This poses challenges to developing a comprehensive multi-gas strategy.

• Institutional challenges must also be addressed, such as fragmentation of responsibility for NCGGs.

     

Securing the climate benefits of stable forests

Stable forests – those not already significantly disturbed nor facing predictable near-future risks of anthropogenic disturbance – may play a large role in the climate solution, due to their carbon sequestration and storage capabilities. Their importance is recognized by the Paris Agreement, but stable forests have received comparatively little attention through existing forest protection mechanisms and finance. Instead, emphasis has been placed on targeting locations where deforestation and forest degradation are happening actively. Yet stopping deforestation and forest degradation does not guarantee durable success, especially outside the geographic scope of targeted efforts. As a result, today’s stable forests may be at risk without additional efforts to secure their long-term conservation.

We synthesize the gaps in existing policy efforts that could address the climate-related benefits derived from stable forests, noting several barriers to action, such as uncertainty around the level of climate services that stable forests provide and difficulties describing the real level of threat posed. We argue that resource and finance allocation for stable forests should be incorporated into countries’ and donors’ comprehensive portfolios aimed at tackling deforestation and forest degradation as well as resulting emissions. A holistic and forward-looking approach will be particularly important, given that success in tackling deforestation and forest degradation where it is currently happening will need to be sustained in the long term.

Key policy insights

• Climate policies, finance, and implementation have tended to focus on areas of recent forest loss and near-term threats of anthropogenic disturbance, resulting in an imbalance of effort that fails to adequately address stable forests.

• In some contexts, policy measuresintended to secure the climate-related benefits of stable forests have competed poorly against more urgent threats. Policymakers and finance mechanisms should view stable forests as a complementary element within a holistic, long-term approach to resource management.

• International mechanisms and national frameworks should be adjusted and resourced to promote the long-term sustainability and permanence of stable forests.

• Beyond additional resources, the climate benefits of stable forests may be best secured by pro-actively designing implementing policies that recognize the rights and interests of stakeholders who are affected by land management decisions.

     

Measuring the adaptation goal in the global stocktake of the Paris Agreement

The Paris Agreement establishes a global goal on adaptation which will be assessed through the global stocktake, the first attempt by the international climate change regime to measure collective progress on adaptation. This policy analysis identifies four main challenges to designing a meaningful assessment. These are: designing a system that can aggregate results; managing the dual mandate of reviewing collective progress and informing the enhancement of national level actions; methodological challenges in adaptation; and political challenges around measurement. We propose a mixed-methods approach to addressing these challenges, combining short-term needs for reporting with longer-term aims of enhancing national adaptation actions.

Key policy insights

• Broad domains of adaptation activity could be identified within each of the objectives of the adaptation goal and progress could be measured and aggregated through simple scorecards.

• The goal should have both process and outcome indicators as well as some narrative linking activities to outcomes over time.

• Reporting could be a compilation of national data using qualitative and quantitative sources, aligning with the global stocktake’s aim of enhancing national actions over time and reducing immediate reporting burdens.

• There would be a complementary role at least in the short term for an expert assessment of priority areas.

     

Escaping the climate policy uncertainty trap: options contracts for REDD+

Climate policy uncertainty significantly hinders investments in low-carbon technologies, and the global community is behind schedule to curb carbon emissions. Strong actions will be necessary to limit the increase in global temperatures, and continued delays create risks of escalating climate change damages and future policy costs. These risks are system-wide, long-term and large-scale and thus hard to diversify across firms. Because of its unique scale, cost structure and near-term availability, Reducing Emissions from Deforestation and forest Degradation in developing countries (REDD+) has significant potential to help manage climate policy risks and facilitate the transition to lower greenhouse gas emissions. ‘Call’ options contracts in the form of the right but not the obligation to buy high-quality emissions reduction credits from jurisdictional REDD+ programmes at a predetermined price per ton of CO₂ could help unlock this potential despite the current lack of carbon markets that accept REDD+ for compliance. This approach could provide a globally important cost-containment mechanism and insurance for firms against higher future carbon prices, while channelling finance to avoid deforestation until policy uncertainties decline and carbon markets scale up.

Key policy insights

• Climate policy uncertainty discourages abatement investments, exposing firms to an escalating systemic risk of future rapid increases in emission control expenditures.

• This situation poses a risk of an abatement ‘short squeeze,’ paralleling the case in financial markets when prices jump sharply as investors rush to square accounts on an investment they have sold ‘short’, one they have bet against and promised to repay later in anticipation of falling prices.

• There is likely to be a willingness to pay for mechanisms that hedge the risks of abruptly rising carbon prices, in particular for ‘call’ options, the right but not the obligation to buy high-quality emissions reduction credits at a predetermined price, due to the significantly lower upfront capital expenditure compared to other hedging alternatives.

• Establishing rules as soon as possible for compliance market acceptance of high-quality emissions reductions credits from REDD+ would facilitate REDD+ transactions, including via options-based contracts, which could help fill the gap of uncertain climate policies in the short and medium term.

     

Climate change and the agricultural sector in Ireland: examining farmer awareness and willingness to adopt new advisory mitigation tools

Agriculture is responsible for the bulk of Ireland’s greenhouse gas (GHG) emissions. However, the potential to mitigate some of these emissions through the adoption of more efficient farm management practices may be hampered by farmers’ awareness and attitude towards climate change and agriculture’s role in contributing to GHG emissions. This paper presents results from a survey of 746 Irish farmers in 2014, with a view to understanding farmers’ awareness of, and attitudes to, climate change and GHG emissions. Survey results show that there was a general uncertainty towards a number of questions related to agricultural GHG emissions, e.g. if tilling of land causes GHG emissions, and that farmers were reluctant to take action to reduce GHG emissions on their farm. To further explore farmers’ attitudes towards climate change, a multinomial logit model was used to examine the socio-economic factors that affect farmers’ willingness to adopt an advisory tool that would show the potential reduction in GHG emissions from the adoption of new technologies. Results show that farmers’ awareness of human-induced global climate change was positively related to the tool’s adoption.

Key policy insights

• Irish farmers are generally not sufficiently aware of the impact of their activities on climate change.

• A quarter of farmers believed that climate change will only impact on their business in the long-term; such an attitude may lead to a reluctance amongst these farmers to adopt management practices that reduce GHG emissions.

• Awareness of climate change affects positively the adoption of new tools to reduce GHG emissions on farmers’ farms.

• IT literacy affects willingness to adopt new tools to address GHG emissions.

• Reception of agri-environmental advice can have a positive influence on farmers’ willingness to adopt new GHG emission abatement tools.

• Farmers in receipt of environmental subsidies are more likely to adopt new abatement tools, either because they are more environmentally conscious or because the subsidy raised their environmentally consciousness.

• Willingness to adopt differs between different farm enterprises; operating dairy enterprise increases the willingness to adopt new advisory mitigation tools.

     

The differentiated impact of emissions trading system based on company size

Most countries implementing an emissions trading system (ETS), such as EU member states, California in the US, or South Korea, are generally targeting large sized companies, which consume energy above a specific threshold. However, previous studies using computable general equilibrium (CGE) models have analyzed climate policies without considering company size. This may have led to inaccurate results because the impacts of climate policy would differ depending on the coverage of regulated companies. Accordingly, this study examines the environmental and economic impacts of greenhouse gas emission reduction policies, assuming policy results vary by firm size, as covered by the Korean emission trading system. To this end, a CGE model with a separate social accounting matrix based on company size is used to compare three scenarios that reflect different types of carbon pricing methods. The results show that greenhouse gases will be reduced to a lower extent and utility will decrease more if mitigation policies are only imposed to large companies.

Key policy insights

• Carbon pricing policies should consider the different impacts on companies of different sizes and industry sectors.

• Without considering the different sizes of companies covered by an ETS, the expected carbon price and its economic impact will be underestimated.

• Small and medium-sized companies will face more negative impacts than large companies in some industry sectors under an ETS, even if the mitigation burden is only faced by large companies.

     

Interaction between CO2 emissions trading and renewable energy subsidies under uncertainty: feed-in tariffs as a safety net against over-allocation

We study the interactions between a CO₂ emissions trading system (ETS) and renewable energy subsidies under uncertainty over electricity demand and energy costs. We develop an analytical model and a numerical model applied to the European Union electricity market in which renewable energy subsidies are justified only by CO₂ abatement. We confirm that in this context, when uncertainty is small, renewable energy subsidies are not welfare-improving, but we show that when uncertainty is large enough, these subsidies increase expected welfare because they provide CO₂ abatement even in the case of over-allocation, i.e. when the cap is higher than the emissions which would have occurred without the ETS. The source of uncertainty is important when comparing the various types of renewable energy subsidies. Under uncertainty over electricity demand, renewable energy costs or gas prices, a feed-in tariff brings higher expected welfare than a feed-in premium because it provides a higher subsidy when it is actually needed i.e. when the electricity price is low. Under uncertainty over coal prices, the opposite result holds true.

Key policy insights

• Due to the possibility of over-allocation in an ETS, subsidies to renewable energies can increase expected welfare, even when climate change mitigation is the only benefit from renewables taken into account.

• In most cases studied, a feed-in tariff brings a higher expected welfare than a feed-in premium.

• The European Commission guidelines on State aid for energy, which incentivize member States to replace feed-in tariffs by feed-in premiums, should be reconsidered based on these results.

     

Telling stories with models and making policy with stories: an exploration

Narrative research is in vogue in the social sciences. A current debate in philosophy of economics concerns the role of storytelling in economic modelling, and a growing research programme in policy studies investigates the influence of stories on policy outcomes. These two streams of research have yet to be connected in an investigation of how scientific models, in addition to delivering numerical results, also shape policy through the stories that are told with them. This article addresses that gap, arguing that stories produced with integrated assessment models of global climate change are particular types of policy narratives. An analytical framework for studying their composition and content is suggested. The narrative analysis of modelled stories illuminates some of the models' underpinning values and beliefs. These values and beliefs influence the normative, policy-relevant conclusions generated with the models. For illustration, the framework is applied to the analysis of two variations of the Dynamic Integrated Climate Economy model that are used to tell different stories about climate justice and climate policy.

Key policy insights

• IAMs consist of mathematical structures and the stories told by manipulating these structures.

• There is an intricate but not fully deterministic relationship between IAM structures and stories.

• Examining both these elements contributes to our understanding of the models' role in climate governance.

• Appreciation of modelled stories may facilitate more effective use of IAMs in the policy process.

     

Next steps in geoengineering scenario research: limited deployment scenarios and beyond

Climate engineering has received increasing attention, but its discussion has remained on the sidelines of mainstream climate policy. The policy relevance of this previously exotic option is poised to rise because of the gap between the temperature goals of the Paris Agreement and slow global mitigation efforts. It is therefore crucial to understand the risks and benefits of the proposed schemes, and the social implications of policy choices. Assessment of the risks and benefits of solar geoengineering strongly depends on scenarios, but previous scenarios have not reflected the full range of social choices. In light of concerns over risks, a newer set of scenarios is desirable, which represents both uncertainties and social choices more fully. Borrowing and extending lessons from recent literature on the new community climate scenario process, we envision a possible scenario-building process that combines interdisciplinary scholarship with the involvement of stakeholders and citizens. The resultant scenarios would better characterize uncertainties of, and policy choices for, solar geoengineering, and foster critical appraisal of its risks and benefits. Such societal choices might include not only total ban and large-scale deployment, but also limited deployment, which has received less attention in the scenario literature. The interaction between scenario and governance research would be able to highlight the central issues at stake, including ethical, social, and political dimensions.

Key policy insights

• A more comprehensive assessment of solar geoengineering is necessary to evaluate its risks and benefits, necessitating new scenario research

• It is crucial to reflect the full span of policy choices and uncertainties with interdisciplinary collaboration in such scenarios

• Such societal choices might include not only total ban and large-scale deployment, but also limited deployment, which has received less attention in the scenario literature

• Participatory scenario research would enable incorporating the concerns and opinions of stakeholders and citizens in scenario creation

     

Overcoming barriers to climate change information management in small island developing states: lessons from pacific SIDS

We live in a rapidly advancing digital information age where the ability to discover, access and utilize high-quality information in a reliable and timely manner is often assumed to be the norm. However, this is not always the experience of researchers, practitioners and decision makers responding to the challenges of a rapidly changing climate, despite the billions now being made available for investment in climate change adaptation initiatives throughout the world and particularly in developing countries. In recognition of the importance of information in adaptation planning, Article 7.7 of the Paris Agreement sets out clear guidance for parties to develop, share, manage and deliver climate change knowledge, information and data as a means to strengthening cooperation and action on adaptation. This article provides some key lessons and insights on climate change information and knowledge management (IKM) in small island developing States (SIDS) from the perspective of Pacific SIDS. A situation analysis of current climate change IKM practices in Fiji, Tonga and Vanuatu was conducted and key barriers to effective climate change IKM identified. The outcome of this article is a range of pragmatic policy considerations for overcoming common barriers to climate change IKM in the Pacific, which may be of value to SIDS more widely.

Key policy insights

• The partnership approach of co-investigating climate change IKM barriers in collaboration with Pacific SIDS generated considerable trust, a shared purpose and therefore rich IKM lessons and insights.

• Turning climate change IKM aspirations into practice is significantly more complicated than expected, and requires a long-term commitment from both national governments and development partners.

• Pacific SIDS need to establish national guiding climate change IKM Frameworks that leverage rather than duplicate growing national investments in whole-of-government IKM.

• Reframing climate change IKM in the Pacific towards demand and user needs will be critical to ensuring widespread ownership and participation in IKM solutions that lead to greater adaptation and resilience outcomes.

• It is also critical that IKM activities in SIDS support the development of national capacity to scope, develop, deploy and maintain decision support systems.

• Federated IKM systems are ideal for encouraging greater IKM collaboration.

     

Developing Africa’s energy mix

Africa is growing rapidly both in terms of population size and economically. It is also becoming increasingly clear that fossil fuels impose a high price on society through local environmental pollution and Africa’s particular vulnerability to climate change. At the same time, Africa has an excellent renewable energy potential and prices for renewable energy are reaching the price range of fossil fuels. Comparing results from state-of-the-art Integrated Assessment Models we find different options for achieving a sustainable energy supply in Africa. They have in common, however, that strong economic development is considered compatible with the 2°C climate target. Taking both challenges and appropriate solutions into account, some models find that a complete switch to renewable energy in electricity production is possible in the medium term. The continental analysis identifies important synergy effects, in particular the exchange of electricity between neighbouring countries. The optimal energy mix varies considerably between African countries, but there is sufficient renewable energy for each country. The intermittency and higher capital intensity of renewable energy are important challenges, but proven solutions are available for them. In addition, we analyse the political economy of a sustainable energy transition in Africa.

Key policy insights

• An almost complete shift towards renewable energy (RE) is considered feasible and affordable in Africa.

• By 2050, electricity generation could be sourced largely from solar, wind and hydro power.

• Prices for RE in Africa are now within the price range of fossil fuels, partly due to the excellent RE potential.

• The optimal energy mix varies strongly between countries, but RE is sufficiently available everywhere.

• Addressing intermittency is possible, but requires investments and cooperation on the grid.

     

Governance of bioenergy with carbon capture and storage (BECCS): accounting,rewarding, and the Paris agreement

Studies show that the ‘well below 2°C’ target from the Paris Agreement will be hard to meet without large negative emissions from mid-century onwards, which means removing CO₂ from the atmosphere and storing the carbon dioxide in biomass, soil, suitable geological formations, deep ocean sediments, or chemically bound to certain minerals. Biomass energy combined with Carbon Capture and Storage (BECCS) is the negative emission technology (NET) given most attention in a number of integrated assessment model studies and in the latest IPCC reports. However, less attention has been given to governance aspects of NETs. This study aims to identify pragmatic ways forward for BECCS, through synthesizing the literature relevant to accounting and rewarding BECCS, and its relation to the Paris Agreement. BECCS is divided into its two elements: biomass and CCS. Calculating net negative emissions requires accounting for sustainability and resource use related to biomass energy production, processing and use, and interactions with the global carbon cycle. Accounting for the CCS element of BECCS foremost relates to the carbon dioxide capture rate and safe underground storage. Rewarding BECCS as a NET depends on the efficiency of biomass production, transport and processing for energy use, global carbon cycle feedbacks, and safe storage of carbon dioxide, which together determine net carbon dioxide removal from the atmosphere. Sustainable biomass production is essential, especially with regard to trade-offs with competing land use. Negative emissions have an added value compared to avoided emissions, which should be reflected in the price of negative emission ‘credits’, but must be discounted due to global carbon cycle feedbacks. BECCS development will depend on linkages to carbon trading mechanisms and biomass trading.

Key policy insights

• A standardized framework for sustainable biomass should be adopted.

• Countries should agree on a standardized framework for accounting and rewarding BECCS and other negative emission technologies.

• Early government support is indispensable to enable BECCS development, scale-up and business engagement.

• BECCS projects should be designed to maximize learning across various applications and across other NETs.

• BECCS development should be aligned with modalities of the Paris Agreement and market mechanisms.

     

Quantifying barriers to decarbonization of the Russian economy: real options analysis of investment risks in low-carbon technologies

Russia has significant potential for reducing its carbon emissions. However, investment in new low-carbon technologies has significant risks. Ambiguous energy and climate policy in Russia, along with deterioration of the country's investment climate, create investment barriers that are well described in qualitative terms in the literature. This paper attempts to provide a quantitative analysis of these barriers. For this numerical experiment, we apply the RU-TIMES model. Using a real options methodology, we estimate the risk-adjusted cost of capital in the Russian energy sector (including energy production and consumption technologies represented in the TIMES framework) to be approximately 43% (including a risk-free interest rate) and demonstrate the high risk of investment into energy-efficient and low-carbon technologies. Any future low-carbon emissions pathway depends on the ability of the Russian government to reduce climate and energy policy uncertainties, and to reduce financial risks through improvements of the general investment climate.

Key policy insights

• The high cost of capital investment into Russian energy production and consumption may prevent the adoption of new energy-efficient and low-carbon technologies.

• These investment risks, if not addressed, will delay Russia's low-carbon transition for the coming decades.

• Adopting a clear and unambiguous long-term climate and energy policy is important to reduce these risks and alleviate some of the barriers to the new technologies.

• The first step could be ratification of the Paris Agreement and adoption of a long-term emission target for the period up to 2050.

     

Reducing wind power curtailment in China: comparing the roles of coal power flexibility and improved dispatch

Renewable energy curtailment is a critical issue in China, impeding the country’s transition to clean energy and its ability to meet its climate goals. This paper analyzes the impacts of more flexible coal-fired power generation and improved power dispatch towards reducing wind power curtailment. A unit commitment model for power dispatch is used to conduct the analysis, with different scenarios demonstrating the relative impacts of more flexible coal-fired generation and improved power dispatch. Overall, while we find both options are effective in reducing wind power curtailment, we find that improved power dispatch is more effective: (1) the effect of ramping down coal-fired generators to reduce wind power curtailment lessens as the minimum output of coal-fired generation is decreased; and (2) as a result, at higher wind capacity levels, wind curtailment is much more significantly reduced with improved power dispatch than with decreased minimum output of coal-fired generation.

Key policy insights

• China should emphasize both coal power flexibility and dispatch in its policies to minimize renewable power curtailment and promote clean energy transition.

• China should accelerate the process of implementing spot market and marginal cost-based economic dispatch, while making incremental improvements to the existing equal share dispatch in places not ready for spot market.

• A key step in improving of dispatch is incorporating renewable power forecasts into the unit commitment process and updating the daily unit commitment based on the latest forecast result.

• China should expand the coal power flexibility retrofit programme and promote the further development of the ancillary service market to encourage more flexibility from coal-fired generation.

     

Unstoppable climate change? The influence of fatalistic beliefs about climate change on behavioural change and willingness to pay cross-nationally

Although climate change is an urgent problem, behavioural and policy responses have not yet been sufficient to either reduce the volume of greenhouse gas emissions or adapt to a disrupted climate system. Significant efforts have been made to raise public awareness of the dangers posed by climate change. One reason why these efforts might not be sufficient is rooted in people’s need to feel efficacy to solve complex problems; the belief that climate change is unstoppable might thwart action even among the concerned. This paper tests for the effect of fatalistic beliefs on behavioural change and willingness to pay to address climate change using two cross-national surveys representing over 50,000 people in 48 nations.

Key policy insights

• The perception that climate change poses a risk or danger increases the likelihood of behavioural change and willingness to pay to address climate change.

• The belief that climate change is unstoppable reduces the behavioural and policy response to climate change and moderates risk perception.

• Communicators and policy leaders should carefully frame climate change as a difficult, yet solvable, problem to circumvent fatalistic beliefs.