47, Wageningen 6700 AA, The Netherlands c 3 PBL Netherlands Environmental Assessment Agency, PO Box 303,

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1 This article was downloaded by: [Niklas Höhne] On: 01 November 2013, At: 07:50 Publisher: Taylor & Francis Informa Ltd Registered in England and Wales Registered Number: Registered office: Mortimer House, Mortimer Street, London W1T 3JH, UK Climate Policy Publication details, including instructions for authors and subscription information: Regional GHG reduction targets based on effort sharing: a comparison of studies Niklas Höhne ab, Michel Den Elzen c & Donovan Escalante a a 1 Ecofys, Am Wassermann 36, Cologne 50829, Germany b 2 Environmental Systems Analysis Group, Wageningen University, PO Box 47, Wageningen 6700 AA, The Netherlands c 3 PBL Netherlands Environmental Assessment Agency, PO Box 303, Bilthoven 3720 AH, The Netherlands Published online: 31 Oct To cite this article: Niklas Höhne, Michel Den Elzen & Donovan Escalante, Climate Policy (2013): Regional GHG reduction targets based on effort sharing: a comparison of studies, Climate Policy, DOI: / To link to this article: PLEASE SCROLL DOWN FOR ARTICLE Taylor & Francis makes every effort to ensure the accuracy of all the information (the Content ) contained in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon and should be independently verified with primary sources of information. Taylor and Francis shall not be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use of the Content. This article may be used for research, teaching, and private study purposes. Any substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any form to anyone is expressly forbidden. Terms & Conditions of access and use can be found at

2 B synthesis article Regional GHG reduction targets based on effort sharing: a comparison of studies NIKLAS HÖHNE 1,2 *, MICHEL DEN ELZEN 3, DONOVAN ESCALANTE 1 1 Ecofys, Am Wassermann 36, Cologne 50829, Germany 2 Environmental Systems Analysis Group, Wageningen University, PO Box 47, Wageningen 6700 AA, The Netherlands 3 PBL Netherlands Environmental Assessment Agency, PO Box 303, Bilthoven 3720 AH, The Netherlands Over 40 studies that analyse future GHG emissions allowances or reduction targets for different regions based on a wide range of effort-sharing approaches and long-term concentration stabilization levels are compared. This updates previous work undertaken for the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. Regional reduction targets differ significantly for each effort-sharing approach. For example, in the Organisation for Economic Co-operation and Development (OECD) 1990 region, new proposals that emphasize the equity principles of responsibility, capability, and need, and those based on equal cumulative per capita emissions (carbon budgets), lead to relatively stringent emissions reduction targets. In order to reach a low concentration stabilization level of 450 ppm CO 2 e, the allowances under all effort sharing approaches in OECD1990 for 2030 would be approximately half of the emissions of 2010 with a large range, roughly two-thirds in the Economies in Transition (EIT), roughly at the 2010 emissions level or slightly below in Asia, slightly above the 2010 level in the Middle East and Africa and well below the 2010 level in Latin America. For 2050, allowances in OECD1990 and EIT would be a fraction of today s emissions, approximately half of 2010 emission levels in Asia, and possibly less than half of the 2010 level in Latin America. Policy relevance The concept of equity and the stringency of future national GHG reduction targets are at the heart of the current debate on the new international climate change agreement to be adopted in Policy insights gained from an analysis of over 40 studies, which have quantitatively analysed the proposed GHG reduction targets, are presented. It is found that the outcome of effortsharing approaches is often largely determined by the way the equity principle is implemented and that the distributional impacts of such approaches can be significantly different depending on the criteria used, the stabilization level and shape of the global emissions pathway. However, the current literature only covers a small proportion of the possible allocation approaches. There should thus be an in-depth modelling comparison to ensure consistency and comparability of results and inform decision making regarding the reduction of GHG emissions. Keywords: allowance allocation; burden sharing; climate change mitigation; equity; UNFCCC 1. Introduction With the Cancun Agreements (United Nations Framework Convention on Climate Change [UNFCCC], 2010), the international community agreed to limit the average global temperature increase to 2 8C above pre-industrial levels and to consider strengthening this to 1.5 8C. To have a B *Corresponding author. n.hoehne@ecofys.com # 2013 Taylor & Francis

3 2 Höhne et al. medium (i.e %) chance of meeting the 2 8C target, GHG concentrations need to be stabilized at ppm CO 2 e according to the Fourth Assessment Report (AR4) of the Intergovernmental Panel on Climate Change (Fisher et al., 2007). The international climate change negotiations have to consider the level of action that each country would need to undertake to achieve this objective. Several studies in the scientific literature aim to support this process by calculating possible emissions reduction targets for countries or regions based on so-called effort sharing or burden sharing approaches. Most of these studies first define a global level of GHG emissions in a certain year or period, one that is consistent with meeting a longterm climate objective (e.g ppm CO 2 e, as used in many recent studies), then apply rules or criteria to allocate efforts to countries or regions with the aim of meeting the global emissions level. Some studies also provide a distribution of emissions if global emissions were reduced to the same level in the most cost-efficient manner, i.e. where the mitigation costs are lowest. The initial allocation based on effort sharing and a cost-effective distribution is not normally the same for most countries. Studies then assume that emissions allowances are traded or that financial transfers occur, so that reduction targets are achieved, emissions are sufficiently reduced globally, and costs are minimized, all at the same time. The main focus of this article is to compare these initial allocations and cost-effective distributions from a wide range of effort-sharing studies. In order to achieve the stabilization target of ppm CO 2 e, the AR4 indicated that the initial allocation of emissions allowances for developed countries as a group would need to be 25 40% below 1990 levels by 2020, assuming that developing countries also deviate substantially from their baseline levels (Box 13.7 in Gupta et al., 2007). This assertion was based on a literature review of effort-sharing studies that analysed how to allocate future reduction targets to the various regions (e.g. using contraction and convergence, multi-stage or the Brazilian proposal; i.e. on the basis of historical responsibility). Each study made different assumptions about the global emissions pathway, the specific national efforts required, the equity principles, and other variables (den Elzen & Höhne, 2008). Den Elzen and Höhne (2008, 2010), who authored Box 13.7 of AR4, elaborated further on the issue of substantial deviation from the (up-to-date) baseline levels by analysing the underlying studies and the literature that became available after the completion of the AR4 itself. Den Elzen and Höhne (2008) analysed 10 studies and concluded that to meet the target of 450 ppm CO 2 e, developing countries as a group would be allocated emissions allowances 15 30% lower than the baseline levels by 2020, and that developed countries as a group would be allocated emissions allowances 25 40% below 1990 levels. Den Elzen and Höhne (2010) updated this analysis with nine new studies, and the earlier allocation ranges for most of the studies were confirmed. However, some studies showed allocations beyond the original ranges depending on the assumed global emissions cap by These allocation ranges, as reported by the AR4 and den Elzen and Höhne (2008, 2010), have been presented and discussed many times during the climate change negotiations. Many countries have accepted these findings as input to the negotiations in Copenhagen, Cancún, and Doha, and they have been included in the final decisions. For example, the decision on the second commitment period of the Kyoto Protocol states that countries should increase their ambition by 2014 in line with an aggregate reduction of greenhouse gas emissions...by Parties included in Annex I of at least 25 to 40 per cent below 1990 levels by 2020 (UNFCCC, 2012). The conclusions of the Council of the EU (2012) also adopted these findings (see docs/pressdata/en/envir/ pdf).

4 Mitigation targets based on effort sharing 3 The earlier analysis of den Elzen and Höhne (2008, 2010) is updated and complemented here. Comparison is made of the GHG emissions allowances or reduction targets for different regions from studies that analyse effort-sharing approaches to meeting long-term concentration or radiative forcing targets. This update includes a larger number of studies, comprising a wider range of the effort-sharing approaches that have been proposed and analysed by developed- and developing-country experts, more categories of approaches, and a comparison of the results with cost-effective distributions of emissions as a reference. Since 2010, there have been several new developments. First, as the climate change negotiations are now focused on a new 2015 agreement with possible reduction targets applicable after 2020, the focus has changed from 2020 towards 2030 (and even beyond this). Therefore, the focus will be on reduction targets for 2020, 2030, and Second, new studies have become available for the Fifth Assessment Report (AR5), which are based on other emissions allocation approaches (e.g. equal costs from integrated assessment models; e.g. Kriegler et al., In press; Tavoni et al., In press), equal cumulative per capita emissions, or new approaches based on responsibility, capability, and sustainable development (Jayaraman, Kanitkar, & Dsouza, 2011; Winkler, Letete, & Marquard, 2011). Finally, some new studies have used the reduction pledges for 2020, as summarized in the Cancún agreements, as a starting point for the calculations of effort sharing and global emission pathways towards 2 8C (den Elzen et al., 2013; Tavoni et al., In press). Some studies have not quantified allowances and are therefore not included here (Wicke, Schellnhuber, & Klingenfeld, 2010). 2. Methodology The data from studies on emissions allocations often needs to be categorized and harmonized to enable adequate comparison. Comparing regimes and studies is quite complex due to the fact that the studies covering the various regimes differ substantially, use different regional definitions and timescales, use different measurements for reduction targets to assess emission allowances for CO 2 only or as CO 2 - equivalent (Kyoto gases) relative to baseline or business-as-usual (BAU) and to 2005 emissions, and provide different coverage of recent economic developments (e.g. the economic crisis of ). The methodology used in this study is described in the following Data collection Data on emission allowances from studies on national or regional allocations, under different effortsharing regimes, were first collected as a follow-up to earlier work (den Elzen & Höhne, 2008, 2010; van Ruijven et al., 2012). The focus was on peer-reviewed literature, and the use of grey literature was minimized. Data were required for several dimenions: B Effort-sharing approaches (e.g. per capita convergence, equal costs, staged participation) 1 B Stabilization levels (e.g. based on the Representative Concentration Pathways [RCPs] or stabilization levels (see Table 1 and B Years (e.g. 2020, 2030, and 2050) B Regions/countries covered

5 4 Höhne et al. TABLE 1 Stabilization levels Category RCP CO 2 equivalent concentration (ppm CO 2 e) 0,425 (400) 1 RCP (450) (500) (550) 4 RCP (650) 2.2. Categorization of effort-sharing approaches The large number of effort-sharing approaches can be categorized using equity principles, i.e. general concepts of distributive justice or fairness (Rose, Stevens, Edmonds, & Wise, 1998). Many different categorizations of these principles can be found in the literature (Aldy et al., 2003; Ringius, Torvanger, & Underdal, 2002; Rose et al., 1998). The studies and their scenarios were grouped according to the categories depicted in Figure 1 to allow the comparison of the substantially different proposals to allocate emission allowances. It was found that the studies have often shared efforts based on one or more basic dimensions: responsibility, capability, equality, and cost-effectiveness. Figure 1 Seven categories for effort-sharing approaches

6 Mitigation targets based on effort sharing 5 B B B B Responsibility. This concerns the historical contribution to global emissions or warming. It is included in many approaches as one element, and its origin is often taken to be Article 3 of the UNFCCC (which states that countries should take action on the basis of common but differentiated responsibilities and respective capabilities, CBDR-RC). Capability. This is sometimes also called capacity or ability to pay for mitigation. Its origin is also often taken to be the reference in Article 3 of the UNFCCC to CBDR-RC. The basic needs principle, also known as the right to development, was also considered in this category because it could be considered a special expression of the capability principle the least capable countries could have a less ambitious reduction effort to secure their basic needs. Equality. Many approaches are based on equal rights per person, which translates into equal emission allowances per person, immediately or over time. Cost effectiveness. Some approaches allocate emissions reduction targets (in part) based on mitigation potential or costs effectiveness. For example, emissions could be reduced in each country to the extent that the marginal costs of further reductions are the same everywhere (applying an equal carbon tax in an economic model). The triptych approach (Phylipsen, Bode, Blok, Merkus, & Metz, 1998) contains elements of cost effectiveness in that those with high specific emissions (i.e. high potential for reductions) have to reduce more. It was used as a basis to share the emissions reductions of the first commitment period for the Kyoto Protocol within the EU. The first three of these dimensions are explicitly equity principles: Table 1 lists the categorization of the various proposals according to the principles on which they are based. Many of the approaches are based on only one of the key equity dimensions of responsibility, capability, and equality. In addition to the four dimensions listed above, two additional categories that combine two of the four dimensions were included. Equal cumulative per capita emissions, which is sometimes derived from a carbon budget, combines equality (per capita) with responsibility (cumulative accounting for historical emissions). Approaches in the category Responsibility, capability, and need put much emphasis on historical responsibility and, at the same time, on capability plus the need for sustainable development. Finally, a further category, staged approaches, includes those that already constitute a compromise over several principles. Calculations that are solely based on globally cost-effective distribution of emissions across countries were also included. These are used as a reference to compare the initial allocation to the most cost-efficient solution, globally. The seven categories help explain the consequences of choosing one or another approach. They cover all major effort-sharing proposals (and also those that combine more than one principle) and provide distinctly different results. Alternative options for presenting the results are possible, although these would not be better than the option chosen here. For example, studies could not be differentiated by categories, and the average and percentiles over all studies could be shown. However, a disadvantage would be that the average would be driven by the number of studies, which may not be representative of the spectrum of approaches. The numerous studies on cost-effectiveness would dominate the few studies based on equal per capita cumulative emissions. An aggregation taking the full range of each of the seven categories of effort-sharing approaches could be shown and they could be weighted differently. The

7 6 Höhne et al. advantage of this method would be that it gives reasonable weight to each of the categories, although the exact weighting given could be questioned Harmonization of emission allowances A three-step algorithm was applied to harmonize the emissions allocation data to make it comparable Regional aggregation The data of the studies were aggregated to 5 and 10 regions based on the regional definition of the RCP database ( Data from a study were only taken into account if a significant number of countries were reported for that region (Table 3) Missing emissions As some studies only calculated emissions allowances for CO 2 or only included the energy sector, emissions allowances were adjusted with emissions of (1) non-co 2 GHGs and (2) land-use CO 2 emissions from 1990 to 2100 for the 10 regions, based on the standard dataset for historical emissions for the AR5 (see the Working Group III History Database, and extrapolated into the future using the growth rates from the MATCH dataset (Höhne et al., 2011). Any missing international transport emissions or process CO 2 emissions were not adjusted here but were covered through harmonization (see Section 2.3.3). For effort-sharing approaches, the reduction percentage below the study s BAU from the covered sectors was also applied to the new BAU of the sectors not covered. If a study did not provide a BAU, the time series of the effort-sharing results were simply scaled upwards, so that the last available historic year matched. Adding these emissions has two implications. First, the emissions of non-co 2 gases and forestry are more uncertain than energy-related CO 2 emissions, so the overall results are more uncertain. Second, for countries with a large share of these emissions, the outcomes of some studies (e.g. those using carbon budgets) would have been different if these emissions had been included initially. However, it is considered essential that the results of the approaches are compared Harmonization Each time series of emissions allowances was harmonized to a standard dataset of historical emissions based on the AR5 for the 10 regions, separately. The year of harmonization depended on the study and is the last year that was based on historical emissions. The factor between the actual values in 2010 and the standard value for 2010 was applied to actual emissions for all years of the time series. The full dataset is available as supplementary material online. 3. Results Figures 2 and 3 shows the results of the analysis for the regional groups of countries. To analyse the impact of each effort-sharing approach, Figure 2 shows the results by effort-sharing category, with the cost-effective distribution and baseline as a reference. This only includes data for the stabilization

8 TABLE 2 Categories of effort sharing approaches Studies Categories Responsibility Capability Equality Description Stabilization level (ppm CO 2 e) References Responsibility X The proposal to use historical emissions to X Berk and den Elzen (2001) a derive emission targets was first directly suggested by Brazil in the run-up to the X den Elzen, Lucas, and van Vuuren (2005) Kyoto negotiations (UNFCCC, 1997), X X den Elzen and Lucas (2005) without allocations. Allowances based only on this principle were quantified by only a few studies Capability X Has been frequently used for allocation, X X den Elzen and Lucas (2005) relating reduction targets or reduction costs to gross domestic product or human X Jacoby, Babiker, Paltsev, and Reilly (2010) development index. This also includes approaches that are focused exclusively X Knopf, Kowarsch, Lüken, Edenhofer, and Luderer (2012) a on basic needs X Miketa and Schrattenholzer (2006) X Kriegler et al. (In press); Tavoni et al. (In press) b Continued Mitigation targets based on effort sharing 7

9 TABLE 2 Categories Continued Responsibility Capability Equality Description Studies Stabilization level (ppm CO 2 e) References 8 Höhne et al. Equality X A multitude of studies have provided X Berk and den Elzen (2001) a allocations based on immediate or X Böhringer and Welsch (2006) converging per capita emissions (Agarwal X Bows and Anderson (2008) & Narain, 1991; Meyer, 2000). Later studies X X X X Chakravarty et al. (2009) have also refined the approach using per X X Criqui et al. (2003) capita distributions within countries X X den Elzen and Lucas (2005) (Chakravarty et al., 2009) X den Elzen et al. (2005) X X X den Elzen and Meinshausen (2006) X X den Elzen, Lucas, and van Vuuren (2008b) X X Edenhofer, den Elzen, and van Vuuren (2010) X X Hof, den Elzen, and van Vuuren (2010) X X X Höhne and Moltmann (2008) X Höhne and Moltmann (2009) X X Knopf et al. (2009) X Knopf et al. (2012) a X Kuntsi-Reunanen and Luukkanen (2006) X Miketa and Schrattenholzer (2006) X Peterson and Klepper (2007) X Onigkeit, Anger, and Brouns (2009) X van Vuuren et al. (2009) X X van Vuuren, Isaac, den Elzen, Stehfest, and van Vliet (2010) X Kriegler et al. (In press); Tavoni et al. (In press) b Continued

10 TABLE 2 Continued Studies Categories Responsibility Capability Equality Description Stabilization level (ppm CO 2 e) References Responsibility, X X Recent studies have explicitly used X X Baer et al. (2008); Baer (2013) capability, and responsibility and capability as a basis, X X X Höhne and Moltmann (2008) need e.g. Greenhouse Development Rights X Höhne and Moltmann (2009) (Baer, Athanasiou, Kartha, & Kemp- Benedict, 2008); or responsibility, capability and sustainable development (Winkler et al., 2011) X Winkler et al. (2011) Equal cumulative X X Several studies have allocated equal X Bode (2004) per capita cumulative per capita emission rights X Nabel et al. (2011) emissions based on a global carbon budget (Pan, X Jayaraman et al. (2011) 2005, 2008). Studies have diverged on how X X WBGU (2009) they assign the resulting budget for a country to individual years Continued Mitigation targets based on effort sharing 9

11 TABLE 2 Continued Stabilization level Studies 10 Höhne et al. (ppm CO 2 e) Categories Responsibility Capability Equality Description References Staged approaches X X X A suite of studies have proposed or X Berk and den Elzen (2001) a analysed approaches where countries take X Böhringer and Welsch (2006) differentiated commitments in various X Bosetti and Frankel (2011) a stages. Approaches based on allocation X X Criqui et al. (2003) for sectors, such as the triptych approach X X den Elzen and Lucas (2005) (Phylipsen et al., 1998) or sectoral X X X den Elzen and Meinshausen (2006) approaches, are also included here. X den Elzen et al. (2005) Categorization to a stage and the respective commitments are determined X X X den Elzen, Höhne, Brouns, Winkler, and Ott (2007) by indicators using all four equity principles. Finally, studies using equal X X den Elzen, Höhne, and Moltmann (2008a) percentage reduction targets, also called X X den Elzen et al. (2008b) grandfathering, are also placed in this category X den Elzen, Hof, Mendoza Beltran, Van Ruijven, and Van Vliet (2013) X Groenenberg, Block, and van der Sluijs (2004) X X Hof et al. (2010) X Hof and den Elzen (2010) X X X Höhne and Moltmann (2008) X Höhne and Moltmann (2009) X Knopf et al. (2012) a X Peterson and Klepper (2007) X Vaillancourt and Waaub (2004) a Continued

12 TABLE 2 Categories Continued Cost-effectiveness (for reference) Responsibility Capability Equality Description Modelling studies have often used equal marginal abatement cost as a reference case for globally cost-effective mitigation Stabilization level (ppm CO 2 e) Studies References X Peterson and Klepper (2007) X van Vuuren et al. (2009) X Kriegler et al. (In press); Tavoni et al. (In press) b a Not included in the quantitative results, because they are either too old or pending clarification of the data. b This is a model comparison study of seven integrated assessment models as part of the LIMITS research project: PBL, IIASA, FEEM, ECN, PIK a, PNNL a, and NIES a. Each of these models represents one data point. Some of these model studies are more extensively described in Kober, van der Zwaan, and Rösler (In press). Notes: LIMITS, Low climate IMpact scenarios and the Implications of required Tight emission control Strategies; PBL, Planbureau voor de Leefomgeving (PBL Netherlands Environmental Assessment Agency); IIASA, International Institute for Applied Systems Analysis; FEEM, Fondazione Eni Enrico Mettei; ECN, Energieonderzoek Centrum Nederlands; PIK, Potsdam Institute for Climate Impact Research; PNNL, Pacific Northwest National Laboratory; NIES, National Institute for Environmental Studies. Mitigation targets based on effort sharing 11

13 12 Höhne et al. TABLE 3 Regional aggregation Ten regions Five regions Two regions North America (US, Canada) NAM OECD1990 Developed Western Europe a WEU OECD1990 Developed Japan, Australia, New Zealand JPAUNZ OECD1990 Developed EIT (incl. Eastern Europe, Russian Federation) a EIT EIT Developed Latin America and Caribbean LAM LAM Developing Sub-Saharan Africa SSA MAF b Developing Middle East and North Africa MNA MAF Developing South Asia (incl. India, Bangladesh, Pakistan) SAS ASIA Developing East Asia (incl. China, Korea, Mongolia) EAS ASIA Developing South-East Asia and Pacific PAS ASIA Developing a Some member states of the EU are included in WEU, some in EIT. b Middle East and Africa. level Category 1, i.e. about 450 ppm CO 2 e(table 1). It shows the results for 2030 as changes from the emission levels in Table 4 includes the range over all effort-sharing categories. Comparison across categories is difficult as no single study provided data for all categories shown in Figure 2. The number of studies per category was small and studies used different starting points for the calculations (see Table 2). For example, the studies included in Figure 2 allocated a significantly different level of global emissions to countries and regions in 2030, ranging from 30 to 45 GtCO 2 e. The studies assumed different pathways of global emissions to reach the same long-term stabilization. The approaches in the category Equal cumulative per capita show an even lower global level in Some of these studies only provided an emissions budget for a period of years rather than for a single year (which was interpreted as allocating the same average level of allowances in all years of that period). Some general observations can be made from Figure 2 are that: B The way the principle was often implemented to a large extent determines the outcome, rather than the equity principle itself. Even within specific categories of effort sharing, the range of allowances TABLE 4 Emissions allowances over all allocation categories for Category 1 in 2030 relative to 2010 and 1990 emissions 2 OECD1990 EIT ASIA MAF LAM As change from % 2 75% 2 28% 2 53% 7% 2 33% 24% 2 7% 2 15% 2 49% As change from % 2 74% 2 52% 2 69% 100% 25% 159% 95% 2 3% 2 41% Notes: Including the studies for cost-effectiveness would change the results (in particular for the OECD), towards 2 32% to 2 60% relative to 2010, instead of 2 37% to 75%.

14 Mitigation targets based on effort sharing 13 Figure 2 Emission allowances by allocation category for Category 1 Notes: Category 1 is ppm CO 2 e in 2030, relative to 2010 emissions (see Table 1); minimum, 20th percentile, 80th percentile, maximum. Number of data points is given in brackets. GHG emissions (all gases and sectors) in GtCO 2 e in 1990 and 2010, respectively, were as follows: OECD90, 13.4, 14.2; EIT, 8.4, 5.6; ASIA, 10.7, 19.9; MAF, 3.0, 6.2; LAM, 3.3, 3.8; NAM, 6.7, 7.3; WEU, 4.8, 4.9; JPAUNZ, 1.9, 2.0; SSA, 3.3, 3.7; MNA, 1.3, 2.9; SAS, 1.7, 3.3; EAS, 4.5, 12.2; PAS, 2.8, 4.0. For reporting reasons, the emissions allowances compared to 2010 levels are shown. This does not imply a preference for a specific base-year, which could also be, e.g or For the category Responsibility, capability, need the emissions allowances in 2030 were 2 106% to 2 128% (20th to 80th percentile) for OECD, 2 103% to 2 120% for NAM, 2 110% to 2 139% for WEU, and 2 106% to 2 132% for JPNUNZ below the 2010 level (therefore not shown here). MAF, MNA, and SSA have no data for equal cumulative per cap as the original studies had a different regional aggregation.

15 14 Höhne et al. Figure 3 Emission allowances for various concentration levels in 2050 relative to 2010 emissions Notes: minimum, 20th percentile; maximum, 80th percentile. Number of data points in brackets. GHG emissions (all gases and sectors) in GtCO 2 e in 1990 and 2010, respectively, were: OECD90, 13.4, 14.2; EIT, 8.4, 5.6; ASIA, 10.7, 19.9; MAF, 3.0, 6.2; LAM, 3.3, 3.8; NAM, 6.7, 7.3; WEU, 4.8, 4.9; JPAUNZ, 1.9, 2.0; SSA, 3.3, 3.7; MNA, 1.3, 2.9; SAS, 1.7, 3.3; EAS, 4.5, 12.2; PAS, 2.8, 4.0.

16 Mitigation targets based on effort sharing 15 was substantial. This was mainly a result of the different parameters, data, and methods assumed to implement the effort-sharing approach. For example, the results in the category equality showed a large range, as many of the studies evaluated different ways to allocate allowances based on per capita emissions. Convergence of per capita emission allowances by 2030 leads to relatively low allocations to countries with currently high per capita emissions and would allow more allowances than baseline emissions for countries with currently low per capita emissions. However, convergence by 2100 would result in the opposite: low allocations to countries with low per capita emissions, i.e. not allowing growth, and relatively high allocations to countries with high per capita emissions. For some effort-sharing categories, the ranges were smaller because only a few studies were found. B Distributional impacts differed significantly depending on the underlying criteria for effort sharing. For the Organisation for Economic Co-operation and Development (OECD) 1990 region, for example, proposals in the category Responsibility, capability, and need (negative allowances in 2030 of 2 106% to 2 128% change from 2010 level) and those based on Equal per capita accumulative emissions (2 82% to 2 85%) lead to relatively low allocations, assigning significantly less emission allowances compared to the approaches in the other categories. These approaches put a heavy weight on the larger responsibility and capability of developed countries. In comparison, the cost-effective distribution led to relatively low emissions for, e.g. the ASIA region, assuming significant mitigation potential in that region, irrespective of its responsibility and capability. B In particular for low stabilization levels, the effort-sharing approaches differed in the extent to which they incentivize financial transfers between countries. If the cost-effective case was taken as reference, any approach with higher allocations would mean that a country could receive support for reductions or sell emission allowances in the international carbon market if it were to reduce its domestic emissions towards the globally cost-effective level. An approach with lower allocations would mean that the country could buy emissions allowances for compliance or support other countries directly. If countries were to only reduce domestic emissions towards the globally costeffective level, they could gain from the lower costs in other countries. Such financial transfers could be particularly high for some regions for the categories Equal per capita cumulative emissions and Responsibility, capability, and need in general, and for Staged approaches for some studies. Transfers through emissions allowances were also particularly high if the carbon price was high, which is typically the case for stabilization at more ambitious levels. B Overall, for effort-sharing approaches, OECD1990 would receive initial allocations for Category 1, i.e ppm CO 2 e, in 2030 on the order of half of the emissions of 2010 ( 2 37% to 2 75%; see Table 4). For Economies in Transition (EIT) the value was roughly two-thirds ( 2 28% to 2 53%). Allocations for the ASIA group in 2030 would be roughly at the 2010 emission level or slightly below ( + 7% to 2 33%), with significant differences for South Asia, East Asia, and Pacific Asia. Allocations for MAF would be slightly above the 2010 level ( + 24% to 2 7%), and for LAM well below the 2010 level ( 2 15% to 2 49%). Results for countries within a region can vary substantially. B The choice of effort-sharing approach matters most for countries that differ from the global average for the indicators used for allocation and participation. If the global emissions limit to be shared stays constant, the level of allowances will always the same for the average over all countries. Therefore, allowances for major emitting countries that significantly contribute to the average were less sensitive to the effort-sharing approaches than countries with relatively low emissions. Also,

17 16 Höhne et al. allowances for countries with particular emissions profiles or other relevant circumstances were sensitive to the effort-sharing approach. Figure 3 presents emissions allocations in 2050 for regional groups for different stabilization levels, as a percentage of 2010 emissions. All effort-sharing proposals from the six categories are shown in one column and can be compared to the baseline. The cost-effectiveness case is not shown in Figure 3, because most recent model comparison studies included here (e.g. LIMITS) focused on 450 and 550 ppm CO 2 e (Categories 1 and 3). It is expected that the pattern observed for 2030 will also hold for 2050 the range from the cost-effective category (not shown) would be within the 20th/80th percentile range over all effort-sharing categories (shown in Figure 3). Comparison across stabilization categories was difficult, because no single study provided data points for all items on the x-axis shown in Figure 3. Some general observations can be made: B B B B B The range of results for a selected year and stabilization level was relatively large due to the fundamentally different effort-sharing approaches and other varying assumptions of the studies. This dimension was analysed above (Figure 2). The choice of stabilization level was of significant importance to the resulting level of emission allowances in regions. For example, according to the analysis of the studies, the OECD1990 region would receive very little allowances or negative allocations in 2050 for stabilization at 400 ppm CO 2 e, but would receive significantly more allowances for 650 ppm CO 2 e. For many regions, the choice of the stabilization level was of equal or larger importance for the resulting emissions allowances than the choice of the effort-sharing approach, in particular for For the low concentration stabilization levels under any of the effort-sharing approaches analysed here, allowances in OECD1990 and EIT were a fraction of today s emissions in 2050, for Asia approximately half of 2010 emission levels, and for Latin America possibly also less than half of the 2010 level in This held for all of the fundamentally different effort-sharing approaches included in the analysed studies. For higher stabilization scenarios, most studies also showed a significant decline in allowances for OECD1990 and EIT by Most studies showed a decline in allowances from 2010 levels for the Latin America region, with mostly increasing allowances for the Middle East and Africa region, and an inconsistent picture for ASIA. Only in some cases effort-sharing approaches allocated more allowances than the baseline emissions. In general, this applied only to the higher stabilization levels and recent years, e.g. to ASIA and LAM until 2020 or AME until 2030 for some approaches. 4. Discussion 4.1. Comparison to ranges shown in AR4 Figure 4 provides the results for developed countries for 2020 in comparison to the range of 25 40% as presented in Box 13.7 as in Gupta et al. (2007). Many categories are in this range, but some allocate

18 Mitigation targets based on effort sharing 17 Figure 4 Emission allowances by effort sharing for Category 1 compared to 1990 emissions in 2020 for developed countries (OECD90 plus EIT) Note: Number of data points in brackets. more (and some allocate significantly less) allowances. For the Category 1 stabilization level (around 450 ppm CO 2 e), studies based on capability and equality showed a wide range of results, some of which were in the range. The cost-effectiveness case used as a reference showed less ambitious reduction targets for the developed countries as a group compared to the AR4 reduction target range of 25 40% below 1990 levels by For studies based on regimes that assumed an accumulated per capita emissions convergence approach, allocation on income distribution within a country showed lower allocations for developed countries than the 25 40% range. For developing countries, a similar comparison to a range of 15 30% below baseline by 2020 was not possible, because of the significantly different baselines used in the studies collected here. The emissions range of an increase in level from 70% (about the 2006 level) and 120% above 1990 levels could be used, which is similar according to the earlier analysis of den Elzen and Höhne (2010).

19 18 Höhne et al Trade-off reduction targets developed vs. developing countries A different approach to illustrating the implications for developing countries is used. Figure 5 shows the trade-off in relative and absolute reduction targets and emissions allowance levels in 2020 for developed and developing countries to achieve the 28 C climate goal with a medium and likely chance. The reduction targets for non-annex I countries are relative to the median value of the UNEP (2012) BAU emissions projection by This is based on the following assumptions: Rogelj et al. (2011) concluded, based on the results of many cost-optimal mitigation pathways, that a global GHG emission level of 44 GtCO 2 e (range of GtCO 2 e) by 2020 would be consistent with a likely (i.e. greater than 66%) chance of limiting the global temperature increase to below 2 8C during the 21st century. When accepting a medium chance (50 66%) of achievement, the total global GHG emissions level by 2020 would have to be 46 GtCO 2 e (range of GtCO 2 e). The emissions level for the non- Annex I countries (as a group) needed to achieve the 2 8C climate goal can now simply be calculated as the global emissions level minus the emissions from the developed countries and international aviation and marine BAU emissions projections by The latter amounts to about 1.55 GtCO 2 e by 2020, of which about 0.55 GtCO 2 e is from international aviation (Owen & Lee, 2005) and 1.0 GtCO 2 e from international shipping (based on the average of the low and high BAU projections of the International Maritime Organisation GHG 2009 study; see Buhaug et al., 2009). For example, in order to achieve the 2 8C goal with a medium chance and assuming that emissions from Annex I countries would be 25 40% below 1990 levels (based on AR4; Gupta et al., 2007), emissions from non-annex I countries would have to be 13 20% below BAU levels (median estimate of Figure 5 The trade-off in reduction targets and actions in 2020, between developed and developing countries (as groups), for a likely and medium chance of achieving the 2 8C goal Notes: The AR4 Annex I allocation ranges for 2020 are also included (grey column). The BAU emissions estimate for developing countries is based on the median of 10 model studies from UNEP (2012). Other estimates would affect the reduction targets relative to BAU levels, but not the total emissions. Source: Updated from den Elzen and Höhne (2010).

20 Mitigation targets based on effort sharing 19 UNEP, 2012), assuming the central estimate for the global level. For the range of global emissions level, the range would be 5 22%. For a likely chance, non-annex I emissions would have to be 18 26% below BAU levels (full range: 14 35%). This means a return to the approximate level of emissions in 2010, i.e. 5% above and 5% below 2010 levels (full range: 9% to 2 18%). By comparison, the last UNEP (2012) Gap report showed that if countries fully implemented targets and actions pledged, the reductions required might be 13 18% below 1990 levels by 2020 for developed countries, and 8 11% below BAU levels for developing countries. To illustrate the dependency on the BAU levels of developing countries, the median estimate of the UNEP (2010) Gap report of 2010 of about 34 GtCO 2 e by 2020 could be used instead of the 38 GtCO 2 e from UNEP (2012). This would not change the absolute numbers shown in Figure 5, but would lead to lower reduction targets below the baseline level for the developing countries for the horizontal axis. For a likely chance of meeting the 2 8C goal, non-annex I emissions would have to be 8 17% below BAU levels for UNEP (2010), instead of the 18 26% below BAU levels for UNEP (2012). In conclusion, due to increased BAU emissions projections, mainly from the developing countries, over the last years, the required reduction targets below BAU for the developing countries have increased by around 10 percentage points if Annex I emission allowances are within the 25 40% allocation range, whereas the required absolute emission levels remain the same. Figure 6 illustrates how the reduction targets proceed in time for developed and developing countries, although it is recognized that a rigid distinction between the groups decreases in time due to income development. The calculations were similar, using the same sources for 2030 and An ongoing emission growth by 2%/year for the period and, after that, 1.5%/year until 2040 and 1%/year until 2050, was only assumed for the BAU emissions for developing countries. For example, to achieve the 2 8C goal with a likely chance and assuming that emissions from Annex I countries would be 80 95% below 1990 levels, based on AR4 (Gupta et al., 2007), emissions from non-annex I countries would be around 70% below BAU levels (median estimate of UNEP, 2012), which is about 40% below 2010 emission levels Early vs. later studies The studies took recent developments into account as a function of when they were published. This relates to three elements: the choice of global emissions level assumed for stabilization at a particular level in a particular year; the historical emissions development and associated baseline emissions in the future; and the extent to which newly implemented policies are included in the baseline. As global GHG emissions in the past 10 years have increased significantly, the assumed level of emissions necessary for stabilization at a particular level in the short term (2020) was higher for recent studies compared to earlier studies. For example, the studies allocated a significantly different level of global emissions to countries and regions in 2030, ranging from 30 to 45 GtCO 2 e. This may have altered the results for allowances by the same order of magnitude. Also due to the faster growth in emissions in the last decade than that anticipated in early studies, it can be seen that newer studies have a higher historical and BAU emissions trend, especially for the major emerging economies. For some countries, in particular China, the BAU projections for 2020 of many studies published before 2005 are actually below or only slightly above the emissions data

21 20 Höhne et al. Figure 6 The trade-off in reduction targets and actions in 2030 and 2050, between developed and developing countries as groups, for a likely and medium chance of achieving the 2 8C goal Note: The AR4 Annex I allocation ranges for 2050 are also included, whereas for 2030 an assumed 40 60% allocation range was included (grey columns). from recent years. Van Ruijven et al. (2012) have concluded, based on their assessment of the literature of effort-sharing studies for China and India, that analysis of regimes on the basis of a higher BAU for China allows for more emissions allowances in absolute terms, but involves similar efforts compared to the baseline. We draw the same conclusion from the data presented here (Figure 7).

22 Mitigation targets based on effort sharing 21 Figure 7 Baseline for ASIA in 2020 as a function of the year the study was published Finally, as more policies are implemented, more policies are also taken into account in the BAU emissions projections. For example, BAU emissions projections in the International Energy Agency World Energy Outlook in recent years already account for currently implemented policies. Therefore, any effort-sharing approach based on a reduction below BAU will yield different results if more policies are assumed to be already included in the baseline. This is particularly true for the EU, where significant policies have been implemented, and China, who claims that its CO 2 emissions in 2020 would have been 4 GtCO 2 higher if it had not implemented its policies (Government of China, 2012). It seems better to focus on the absolute emission levels that need to be achieved than on reductions below BAU levels Starting point where allocation deviates from baseline The studies differ significantly in the years at which emissions are fixed as a base year and allowances begin to be allocated (i.e. deviate from the baseline). Most studies chose a recent historical year in which the allocation mechanism was to be applied (a year between 2000 and 2010). A large share of studies made assumptions about meeting the Kyoto targets up to 2012, and only then started the allocation mechanism. The more recent studies (den Elzen et al., 2013; Kriegler et al., In press; Tavoni et al., In press) have used the pledges of countries for 2020 as the starting point. The impact of the assumed starting point will be most relevant for countries in which the Kyoto targets are overachieved (e.g. EIT region) or underachieved (e.g. North America region), where emissions reduction pledges for 2020 will be over- or underachieved, or in those where emissions have changed significantly in recent years (e.g. China, India). The effect in 2020 may be several percentage points for these countries. The effect will be almost irrelevant by Conclusions This survey of studies has found that many new studies have provided regional allowances for 2020, 2030, and 2050, representing a wide range of the effort-sharing approaches that have been proposed

23 22 Höhne et al. and analysed by developed- and developing-country experts. Within specific categories of effort sharing, the range of allowances can be substantial. The outcome is often (and to a larger extent) determined by the way the equity principle is implemented rather than anything to do with the equity principle itself. For some effort-sharing categories, the ranges are smaller because only a few studies were found. Distributional impacts differed significantly with underlying criteria for effort sharing, despite the ranges within a category. For the OECD1990 region, for example, proposals in the category Responsibility, capability, and need and those based on Equal per capita cumulative emissions might lead to relatively low allocations, assigning significantly less emissions allowances to them compared to the approaches in the other categories, and might assign negative allowances. For the lowest stabilization level (i.e ppm CO 2 e), studies based on these regimes showed less allowances for developed countries than the AR4 reduction target range of 25 40% below 1990 levels in By way of comparison, the studies that assessed globally cost-effective distribution showed less ambitious reductions for the developed countries as a group, compared to the range of 25 40% below 1990 levels by The choice of effort-sharing approach matters most for countries that differ from the global average for the indicators used. In 2030, OECD1990 would receive initial allocations (over all effort-sharing categories) for Category 1, i.e ppm CO 2 e, on the order of half of the emissions of 2010, EIT roughly two-thirds (Table 3). Allocations for the ASIA group in 2030 would be approximately at the 2010 emissions level or slightly below, with significant differences for South Asia, East Asia, and Pacific Asia. Allocations for MAF would be slightly above the 2010 level, while those for LAM would be below the 2010 level. Results for countries within a region can vary substantially. For the reasons reported above, the emissions allowances compared to 2010 levels were shown, but this should not be taken to imply a preference for a specific base-year level, which could be 1990 or 2005, for example. The stabilization level and the shape of the global emissions pathway had a significant influence on the results for all regions. For many regions, the choice of stabilization level was of equal or greater importance for the resulting emission allowances than the choice of effort-sharing approach, in particular for For the low concentration stabilization levels under all of the effort-sharing approaches analysed here, allowances in OECD1990 and EIT were a fraction of today s emissions in 2050, for Asia approximately half of 2010 emission levels, and for Latin America possibly also less than half of the 2010 level in This result holds for all of the fundamentally different effortsharing approaches included in the analysis. Also, for higher stabilization scenarios, most studies showed a significant decline in allowances for OECD90 and EIT by Most studies showed a decline in allowances from 2010 levels for the Latin America region, but mostly increasing for the Middle East and Africa region. There was an inconsistent picture for ASIA. The comparison showed that significantly more studies are available than before. Nevertheless, coverage of all stabilization scenarios, effort-sharing categories, starting points, and emissions covered is limited. A modelling comparison exercise to ensure consistency and comparability of results should thus be initiated. This would allow an even more comprehensive picture to be drawn of the possible ranges of allocations from approaches to share the effort to reduce GHG emissions. Such an exercise would include consistent treatment of non-co 2 emissions and forestry, data sources and uncertainties of historical emissions, the global carbon budgets that are the basis for the allocation, and the options for accounting for historical responsibility and capability. It would also afford more insight into the