Carbon Pricing after Paris: Overview of Results from EMF 36

Anthropogenic climate change is one of the most important global challenges. The Paris agreement of 2015 is the central international agreement to deal with this challenge. Against this background, a multi-model study in the context of the Energy Modeling Forum (EMF) is conducted with the objective of providing a thorough economic impacts assessment for the implementation of national greenhouse gas emission reduction targets that countries submitted to the United Nations Framework Convention on Climate Change (UNFCCC) in the context of the Paris agreement as their Nationally Determined Contributions (NDCs). The analysis is based on a systematic cross-comparison of around 15 internationally established energy-economy models. Carbon pricing is commonly regarded as a central policy instrument to meet the Paris targets at relatively low costs and is at the core of the analyzed scenarios. The analysis focuses on two key aspects of future climate policies: First, the global and regional economic cost of implementing NDCs, as well as implications of different degrees of international cooperation and coalition building; Second, the incidence of carbon pricing on the household level for different carbon prices and different policy designs. The first round of results indicates substantial variation in results across models, hinting at the great significance of differing calibration procedures to hit the streamlined baselines, in particular w.r.t. explicit and implicit CO2 prices, energy prices, and key elasticity parameters.