GMPA-Methodology
What is mitigation potential?
The concept of “mitigation potential” has been developed to assess the scale of GHG reductions that could be made, relative to emission baselines, for a given level of carbon price (expressed in cost per unit of carbon dioxide equivalent emissions avoided or reduced).1 Mitigation potential is further differentiated in terms of “market potential” and “economic potential”.
‘Market potential’ indicates the amount of GHG mitigation that might be expected to occur under forecast market conditions, including policies and measures in place at the time. It is based on private unit costs and discount rates, as they appear in the base year and as they are expected to change in the absence of any additional policies and measures. In other words market potential is the conventional assessment of the mitigation potential at current market price, with all barriers, hidden costs, etc. in place. The baseline is usually
historical emissions or model projections, assuming zero social cost of carbon and no additional mitigation policies. However, if action is taken to improve the functioning of the markets, to reduce barriers and create opportunities (e.g. policies of market transformation to raise standards of energy efficiency via labelling), then mitigation potentials will become higher.
In order to bring in social costs, and to show clearly that this potential includes both market and non-market costs, ‘economic potential’ is defined as the potential for cost- effective GHG mitigation when non-market social costs and benefits are included with market costs and benefits in assessing the options for particular levels of carbon prices in US$/ tCO2 and US$/tCO2e (as affected by mitigation policies) and when using social discount rates instead of private ones. This includes externalities (i.e. non-market costs and benefits such as environmental co-benefits).
Note that estimates of economic potential do not normally assume that the underlying structure of consumer preferences has changed. This is the proper theoretical definition of the economic potential, however, as used in most studies, it is the amount of GHG mitigation that is cost-effective for a given carbon price, based on social cost pricing and discount rates (including energy savings but without most externalities) (IPCC, 2001,
Chapters 3, 8 and 9).
The ‘technical potential’ is the amount by which it is possible to reduce greenhouse gas emissions or improve energy efficiency by implementing a technology or practice that has already been demonstrated. There is no specific reference to costs here, only to ‘practical constraints’, although in some cases implicit economic considerations are taken into account.
Finally the ‘physical potential’ is the theoretical (thermodynamic) and sometimes, in practice, rather uncertain upper limit to mitigation, which also relies on the development of new technologies.
Estimating Mitigation potential at national level
Estimating mitigation potential of international collaboration
Data source and assumptions
Framework of national policy mapping
Main objective of baseline policy mapping is to incorporate information on potential levers for accelerating action and barriers that need to be overcome at the national level. This will inform what are the additional policies needed to harness full mitigation potential of various interventions and an important step to link with case study analysis.
Nascimento et al (2021)2 presents a useful framework for mitigation policy mapping at the
national level. Please find below the framework from that paper.
Analytical approach:
- Identify and collect relevant climate policies.
- Categorise the policies according to sectors and instruments.
- Define a matrix of policy options as a comprehensive policy package per sector.
Policy options:
Climate change mitigation policy instruments have long been grouped into three main categories – (i) economic instruments, (ii) regulatory instruments, and (iii) other instruments (IPCC, 2022)3.
Please find below policy options that can be presented in the policy matrix in more detail in the country context. These options can be further grouped into the sectoral policies and analyse cross-sectoral linkages.
Table 1 policy instruments database to be considered for the baseline mapping
(Image here of complete table, Umbraco doesn't support table like the one in box document)
Analytical framework for case study library
To develop a comprehensive database of illustrative case studies, we have followed several key steps. Initially, a selection of global case studies has been identified, with a primary focus on interventions within the electricity and transport sectors during the pilot phase. These case studies should encompass diverse policies implemented in various economies to provide a well-rounded compilation that considers regional and socio-economic differences.
These case studies should be linked to additional policy needs at the national level, aligning them with the estimated mitigation potential for various mitigation options determined by the modelling results. This holistic approach ensures that the database serves as a valuable resource for informed policy decisions and effective mitigation strategies.
1. Selection of case studies
When selecting case studies, focus on policies with the primary objective of climate change mitigation. This can include:
- Regulatory instruments such as energy efficiency standards, emission standards, and
land-use controls. - Economic instruments such as carbon taxes, emissions trading, and subsidies.
- Education, institutional support and other instruments.
2. Framework for developing library of case studies
The proposed framework for developing illustrative case studies has been adopted from IPCC AR6 (IPCC, 2022).
- Objective of the policy: This should capture the intended (sector) outcome of the
policy. - Policy package: This should identify a well-coordinated mix of policy instruments
and governance actions. - Impact of the policy package: Assess the effectiveness of the policy, categorizing it
as high impact, limited impact, or no impact. - Governance context: This should highlight the importance of context-specific
governance factors both as enabler and barrier. - Recommendation: This should highlight what is needed to close the policy gap at
national level.
To be added-
1. Concept of path dependency
2. Feedback
Add all reference utilized in developing this framework