Transcribed
Regional real income impacts, 450 Core versus 450 Delayed Action scenarios
Figure 3.22. Regional real income impacts, 450 Core versus 450 Delayed Action scenarios Panel A: % change from Baseline, 2020 1450 ppm Core 1450 ppm delayed action 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% Panel B: % change from Baseline, 2050 1450 ppm Core 1450 ppm delayed action 5% 0% -5% -10% -15% -20% -25% -30% Source: OECD Environmental Outiook projections; output from ENV-Linkages.
Regional real income impacts, 450 Core versus 450 Delayed Action scenarios
shared by W.E.R.I on Jul 14
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As by assumption until 2020 international permit trading is not allowed in the 450 Delayed Action
scenario, many low-cost mitigation options remain unexploited until 2020, driving up global costs.
Fig...
ure 3.22 clearly illustrates that domestic policies are not the only, and sometimes not even the main,
determinant of the macroeconomic costs of the policies. Fossil fuel exporters, such as Russia and the
Middle East region, are projected to have higher income losses, despite having hardly or no costs from
domestic mitigation efforts. Panel A of Figure 3.22 also shows how international financing of mitigation
action (assumed to take place in South Africa, Brazil and Mexico, see Annex 3.A1) can help to limit the
costs of domestic action. Combined with the opportunity to sell credits on the offset market, the “Rest of
BRIICS” group have only very small income losses in the 450 Delayed Action scenario.
In the longer run (2050), the 450 Delayed Action scenario requires more ambitious mitigation efforts
to bring concentration levels back down to the 450 ppm target before the end of the century. As these
efforts occur later than in the 450 Core scenario, it is not surprising that income losses are again higher in
the 450 Delayed Action scenario (Figure 3.22, Panel B). By 2050 in both the 450 Core and Delayed Action
scenarios a global carbon market has formed with permit allocations based on population; thus the larger
income losses reflect the additional costs resulting from inadequate mitigation efforts in the earlier
decades. There is both a direct effect – stemming from the increased mitigation efforts required in 2050 to
limit concentrations – and an indirect effect from the lack of structural reform in the energy sector in the
earlier decades.
Source
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