This study provides alternative estimates of the costs of greenhouse gas
abatement through 2050 that would be necessary to limit CO2 atmospheric
concentrations to approximately 450 parts per million and limiting
warming to 2°C. Specific estimates are provided for 25 major economies
(with the European Union as a single economy). Business as usual
baselines are first developed, based on US Department of Energy
projections through 2030 and on maintenance of country-specific trends
in GDP growth, energy efficiency growth, and carbon-efficiency of energy
growth thereafter. The central policy simulation then involves a
"Copenhagen Convergence" path, in which major economies meet their
Copenhagen (December 2009) pledges for 2020, and thereafter emissions
per capita decline along a path that by 2050 results in equal per capita
emissions in all countries.
Three abatement cost functions are used for calculating the resulting
abatement costs: a model based on McKinsey & Co. estimates for 2030; the
Nordhaus RICE model cost functions; and a set of summary cost
regressions calculated from the Stanford Energy Modeling Forum (EMF-22)
survey of abatement models. It is found that abatement costs should be
moderate, reaching about one-fourth to two-thirds of one percent of GDP
by 2030 and 1 to 2 percent of GDP by 2050. Costs can be reduced by
international trading, but by less than generally perceived. A more
ambitious early start on abatement than pledged at Copenhagen could
reduce full-period costs. The study calculates corresponding magnitudes
of investment for abatement as well as adaptation costs for developing
countries, and identifies a benchmark of about $80 billion annually
(excluding China) by 2020, lending support to the $100 billion target
pledged for industrial country financial support by that year.
