Climate Policy

Amid much uncertainty about the future of the global climate and efforts aimed at preventing its most damaging impacts, graduate students affiliated with the MIT Joint Program on the Science and Policy of Global Change are hard at work exploring some of the challenges and possible solutions that lie ahead. They are also sharing their knowledge with the MIT community.

Many economists across the political spectrum agree that carbon pricing could provide a cost-effective strategy to accelerate a transition to a low-carbon economy and reduce carbon emissions that play a key role in global climate change. Drawing on their research, legislators in several states are now working to enact bills that impose a per-ton fee on carbon emitters, but it’s no easy task to win political support for such measures.

MIT Joint Program research assistant Arun Singh, a master’s degree student in the Institute for Data, Systems and Society’s Technology and Policy Program (TPP), has analyzed climate policy options for India by building and applying a model of the Indian economy with detailed representation of the electricity sector.

Developed with his advisors, MIT Sloan School of Management Assistant Professor Valerie Karplus and MIT Joint Program Principal Research Scientist Niven Winchester, the model enables researchers to gauge the cost-effectiveness and efficiency of different technology and policy choices designed to transition India to a low-carbon energy system. Singh used the model to assess the economic, energy, and emissions impacts of implementing India’s Nationally Determined Contribution (NDC) to the Paris Agreement — which aims to reduce carbon dioxide emissions intensity by 33 to 35 percent from 2005 levels and increase non-fossil based electric power to about 40 percent of installed capacity by 2030.

Singh determined that compared to a no-policy scenario in 2030, the average cost per unit of emissions reduced is lowest under a carbon dioxide (CO2) pricing regime. Adding a renewable portfolio standard (RPS) to simulate electricity capacity targets increases the cost by more than ten times. Projected electricity demand in 2030 decreases by 8% under the CO2 price, while introducing an RPS further suppresses electricity demand. Importantly, a reduction in the costs of wind and solar power induced by favorable policies may result in cost convergence across instruments, paving the way for more aggressive decarbonization policies in the future.

How might climate change affect the acidification of the world’s oceans or air quality in China and india in the coming decades, and what climate policies could be effective in minimizing such impacts? To answer such questions, decision-makers routinely rely on science-based projections of physical and economic impacts of climate change on selected regions and economic sectors. But the projections they obtain may not be as reliable or useful as they appear: today’s gold standard for climate impact assessments—model intercomparison projects (MIPs)—fall short in many ways.

MIPs, which use detailed climate and impact models to assess environmental and economic effects of different climate-change scenarios, require international coordination among multiple research groups, and use a rigid modeling structure with a fixed set of climate-change scenarios. This highly dispersed, inflexible modeling approach makes it difficult to produce consistent and timely climate impact assessments under changing economic and environmental policies. In addition, MIPs focus on a single economic sector at a time and do not represent feedbacks among sectors, thus degrading their ability to produce accurate projections of climate impacts and meaningful comparisons of those impacts across multiple sectors.

To overcome these drawbacks, researchers at the MIT Joint Program on the Science and Policy of Global Change propose an alternative method that only a handful of other groups are now pursuing: a self-consistent modeling framework to assess climate impacts across multiple regions and sectors. They describe the Joint Program’s implementation of this method and provide illustrative examples in a new study published in Nature Communications.

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