The costs of “costless” climate mitigation

The IPCC and leading economic models have different ideas about emissions reduction costs How much will it cost to meaningfully reduce greenhouse gas (GHG) emissions on a global scale? The answer is critical for assessments of how to address climate change—affecting public support, political will, and policy choices. We find that the “bottom-up” estimation approach emphasized by the United Nations Intergovernmental Panel on Climate Change (IPCC) reports considerably lower costs for emission reductions than leading “top-down” economic models. We also find that one core feature explains the vast majority of the difference: The bottom-up estimates include substantial reductions that appear to come at zero cost, or even at a savings, whereas the economic models assume no such “free lunch.” The fact that different methodological approaches produce different results may not be surprising. But that nearly all of the discrepancy loads on how much mitigation is seemingly costless raises important challenges for understanding and communicating the actual costs of reducing emissions.