Impacts of complementing goals besides emission targets on CO2 mitigation cost: A model-based analysis

Global temperature responses to the stock of greenhouse gases (GHG) in the atmosphere, rather than to the flow. However, Nationally Determined Contributions as submitted under the Paris Agreement, suggest that a large share of policies still focusses on year-specific GHG targets, which do not full comply with the stock problem. A literature review performed for this paper supports that those politically set caps are taken over by energy system models. However, due to a higher flexibility in the choice of mitigation options, a time-spanning carbon budget can achieve the same cumulated emission reduction than year-specific caps - but at lower average mitigation cost. In this paper we demonstrate in a first step that the introduction of a second policy besides year-specific caps can lead – counterintuitively – to lower average mitigation cost than a cap alone. The reason is that the second policy induces a mitigation pathway, that approaches the carbon budget solution. In a second step, reasons behind this effect are demonstrated in a generic mitigation cost curve analysis. The application of two models with different regional and thematic foci emphasizes that this is not a case-specific effect, but can occur under various circumstances. We conclude that using a scenario with a budget constraint on GHG emissions more frequently - in addition to widespread cap or price scenarios - supports policy-makers to identify pathways at lowest mitigation cost. As a second benefit, the generic demonstration of mitigation cost curves in this paper helps modellers to gain a better understanding of model results under various political constraints.