Future Regional Contributions for Climate Change Mitigation: Insights from Energy Investment Gap and Policy Cost

Abstract

Mitigating climate change and ensuring regional equity development is equitable are matters of global concern. Systematic and in-depth research into theseissues is seldom conducted. In this research we combine qualitative and quantitative studies and use six state-of-the-art energy-economy analysis models and four long term scenarios to explore the distribution of regional contributions for climate change mitigation in the future. We focus on the energy investment gap and policy cost. The study’s conclusion is that, under the assumption of carbon tax as a source of energy investment from 2025, the global positive energy investment gap in the climate change mitigation scenario will not appear until around 2035–2040. Asia and OECD90+EU (Countries from the OECD 1990, EU and its candidates) are the regions that will have a significant direct impact on the global energy investment gap under climate policies in the future. However, from the perspective of the relative value (the percentage of the energy investment gap relative to the energy investment in the Current Policies (CPol) scenario), Asia will contribute the most to the global energy investment gap under the climate stability policies. Under the Nationally Determined Contributions (NDC) scenario, Asia will contribute the most in the near term and REF will contribute the most in the medium term.The findings show that OECD90+EUwill bear more cost in the pledges scenario, and Asia will bear more cost in the climate stability scenarios in the medium term. Contrary to the common sense expectation, the developed regions will contribute the least in terms of the proportion of the policy cost to the respective economic aggregates under the climate stability scenarios in the medium and long term, but the opposite is true in the developing regions. By and large, from the perspective of the current climate change mitigation policies, the developed regions and developing regions will achieve a win-win situation in the long run, but the relative contribution of the developed regions is not as great as was previously expected. These novel findings should prove to be useful to policy makers when developing transition strategies for climate change mitigation.