The world can take a major step to meeting the goals of the Paris Climate Accord by focusing on 63 cases where climate policies have had the most impact, new research has revealed. The findings have been published today in Science.
The study, led by Climate Econometricians at the Potsdam Institute for Climate Impact Research (PIK), the Mercator Research Institute on Global Commons and Climate Change (MCC) and the University of Oxford, analysed 1,500 observed policies documented in a novel, high quality, OECD climate policy database for effectiveness. It is the first time a global dataset of policies has been compared and ranked in this way.
Using a methodology developed by Climate Econometrics at The Institute for New Economic Thinking at the Oxford Martin School (INET Oxford), the researchers measured ‘emission breaks’ that followed policy interventions. The break detection methodology, called indicator saturation estimation, developed at Climate Econometrics, allows break indicators for all possible dates to be examined objectively using a variant of machine learning.
The results were sobering: Across four sectors, 41 countries, two decades and 1,500 policies, only 63 successful policy interventions with large effects were identified, which reduced total emissions between 0.6 and 1.8 Gt CO2.
However, the authors said the good news was that policymakers could learn from the 63 effective cases where climate policies had led to meaningful reductions to get back on track.
The researchers have made the data available to policy-makers across the world, and have produced a sector by sector, country by country data visualisation in a dashboard.
What works: Examples from the UK and USA
The country by country analysis showed that the UK has made very successful progress in the electricity sector, with two adjacent breaks detected following the mid-2013 introduction of a carbon price floor that imposed a minimum price for UK power producers. However, in no other UK sector do we find any major emission reductions following a policy intervention beyond what would be expected based on long-term economic and population dynamics.
The US has managed to reduce carbon emissions in the transport sector following actions taken in the aftermath of the financial crisis. While successful policy implementation in the transport sector is generally difficult and hence can be viewed as a positive example for climate policy globally, the lack of any further climate policy successes in other sectors points to huge remaining challenges in the power sector or industry.
Pathway to Paris
Overall, the Team concluded:
- Climate policies are more effective as part of a mix: In the majority of cases, effect sizes of climate policies are larger if a policy instrument is part of a policy mix rather than implemented alone – so for example combining carbon pricing with a subsidy.
- Developed and developing countries have different climate policy needs: In developed countries, carbon pricing stands out, whereas in developing countries, regulation is the most powerful policy.
- The Paris emissions gap can be closed: Focusing on the 63 cases of effective climate policies would close the emissions gap by 26% - 41%: a significant contribution to meeting Paris Targets.
Study co-author Ebba Mark, researcher at the Calleva Project at the Institute for New Economic Thinking at the Oxford Martin School and Smith School of Enterprise and Environment, said the world needed to get back on track to meeting the Paris Climate Accord targets.
“Meeting the Paris Climate objectives necessitates decisive policy action and this research shows the way.
“Data from the UN estimates that there remains a median emissions gap of 23 billion tonnes of CO2 equivalent by 2030.
“The persistence of this emissions gap is caused not only by an ambition gap but also a gap in the outcomes that adopted policies achieve in terms of emissions reductions.”
Co-author Dr Moritz Schwarz, Research Fellow at the Technical University of Berlin and the Potsdam Institute for Climate Impact Research as well as an Associate at the Climate Econometrics Programme at the University of Oxford, said that identifying effective policies is crucial to guide policymakers in designing the most meaningful interventions.
“Our results inform contentious policy debates in three main ways.
“First, we show evidence for the effectiveness of policy mixes. These include popular subsidy schemes and regulatory instruments such as bans, building codes, energy efficient mandates and labels for which we find that combining these instruments achieve larger reduction effects compared to stand-alone implementation.
“Second our findings highlight that successful policy mixes vary across sectors and that policy-makers should focus on sector-specific best practices.
“Third our results stress that effective policies vary with economic development. For instance, in sharp contrast to developed economies, we do not find any successful pricing intervention with large emission reductions in the electricity sector of developing economies, even though around 13% of analysed policies are pricing interventions.”
Co-author Prof Felix Pretis, Co-Director of the Climate Econometrics Programme at Nuffield College, University of Oxford and Professor at the University of Victoria, said that the research and data would be instructive to policymakers across the world.
“Scaling up good practice policies identified in this study to other sectors and other parts of the world can in the short term be a powerful climate mitigation strategy.
“Our results provide a clear and sobering perspective on the policy effort necessary for closing the remaining emissions gap of 23 Gt CO2 equivalent by 2030.
“Using the effect sizes of the detected breaks, we show that we could achieve emission reductions in the order of 26% to 41% of the 2030 emissions gap if all 41 countries in our sample implement known policies at least once before 2030. This would be a highly significant contribution.
“The dashboard that we make available to policy-makers provides an accessible platform to conduct country-by-country, sector-by-sector comparisons and to find a suitable policy mix for different situations.”
Dr Anupama Sen, Head of Policy Engagement at the Oxford Smith School of Enterprise and the Environment said:
"In order to meet its net zero goals, UK policymaking must shift from focusing solely on the upfront costs of the climate transition, and start accounting for the considerable benefits that will accrue over years to come. In more than 80% of investments the total lifetime cost of a clean technology is considerably lower than that of a fossil technology. While the new UK government’s policies are moving in the right direction, they need to go further and faster to unlock these lower costs. New Oxford research now provides evidence that an optimal mix of policies can achieve this, and rapidly lower a country’s emissions. The accompanying Climate Policy Explorer, released today, can be confidently leveraged as a tool to craft an efficient transition for the UK.”