At a time when "carbon neutrality" is the central theme of international climate conferences, a team of economists is studying ways that could make this goal a reality.
In 2015, 196 stakeholders committed to fighting global warming through the Paris Agreement. Two carbon neutrality objectives were defined: zero net CO2 emissions, and an increase in the average global temperature of less than 2°C by 2100 compared with the pre-industrial era.
In 2023, the average annual global temperature rose by 1.2°C, and the Intergovernmental Panel on Climate Change (IPCC) predicts a possible increase of up to 5°C by 2100. A disaster scenario for the planet and its inhabitants. According to the IPCC, to limit global warming to 1.5°C, we need to cut emissions today and reduce them by almost 43% by 2030.
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In their study "How Can Technology Significantly Contribute to Climate Change Mitigation ?" published in July 2023 in the journal Applied Economics, researchers Claire Alestra, Gilbert Cette, Valérie Chouard and Rémy Lecat examined the parameters that would enable these objectives to be achieved. Using the scenario simulation tool that they built (Advanced Climate Change Long-term model or "ACCL"), they have obtained results that encourage the introduction of ambitious environmental policies.
The results of their study conclude that in order to achieve the IPCC's climate objectives, four strategic levers need to be activated immediately throughout the world : the introduction of a carbon tax on 'dirty' energies (coal, oil, gas and electricity that emit CO2), and the development of green technologies to reduce energy consumption, capture CO2 and develop renewable energies. This scenario needs to be qualified, since in practice the combination of these four tools depends on the resources and context of each country.
Combining carbon taxation with the development of green technologies
The ACCL simulation tool can be used to study the relationship between Gross Domestic Product (GDP) and its various economic components, energy consumption (emitting or non-emitting) and climate-related variables (CO2 emissions and stock, temperature rise and damage). In this way, it can simulate climate policy measures such as increasing the price of fossil fuels through a carbon tax, or reducing the price of 'clean' energies by encouraging innovation with subsidies.
A previous study by the same authors showed that if countries were to continue unchanged, in a scenario known as "business as usual", the temperature would rise by +5°C by 2100, with considerable damage to the climate. These results are probably optimistic, as they do not take into account all the possible consequences, such as the worsening of extreme climatic events, like floods and cyclones, or the effects of climate runaway, with irreversible "points of no return" being reached, like the melting of the Arctic permafrost, releasing considerable quantities of greenhouse gases.
Article originally published in Dialogues Economiques on May 8, 2024.
Reference: Alestra C., Cette, G., Chouard V., Lecat R. (2023) "How can technology significantly contribute to climate change mitigation?" Applied Economics. 1-13
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