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Title:
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Balancing the carbon market - Overview of carbon prices estimates
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Author(s):
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Published by:
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Publication date:
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ECN
Policy Studies
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11-8-2009
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ECN report number:
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Document type:
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ECN-B--09-007
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Book
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Number of pages:
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Full text:
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54
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Download PDF
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Published in:.
Abstract:
The costs associated with climate policy are of high interest to both governments and economic agents in developed and in developing countries. When a clear climate target is set, the carbon price should reflect the marginal costs associated with implementing the mitigation measures that will stabilize the concentration of greenhouse gases to the level specified by the target.
One of the main conclusions of this study, performed within the framework of the Scientific Assessment and Policy Analysis programme for climate change (WAB) program, is that little modeling work has been done on very ambitious greenhouse gas reduction targets, which is of most relevance for climate policy. The few studies that do address the implications of achieving low stabilization levels (around 450 Parts per million by volume, ppmv, CO2-equivalent) on average estimate a carbon price of 52 $/tCO2, while those analyzing the costs of stabilization around 550 ppmv CO2-equivalent come to an average figure of 48 $/tCO2. The high standard deviation around the average estimate testifies to the large model and parameter uncertainties inherent to the modelling process and calls for cautious interpretation of modelling results, both when comparing the outcomes of different models and in their individual use.
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