Decoupling the cost estimations and equity implications of decarbonisation from carbon pricing

Abstract

Existing long-term climate mitigation scenarios typically rely on carbon pricing to estimate macroeconomic impacts and equity implications of decarbonisation, often projecting adverse distributional outcomes. However, substantial emissions reduction can also be achieved through non-carbon-pricing measures, raising concerns about the insights of these scenarios. Here, we decoupled the cost and equity assessment of decarbonisation from carbon pricing by developing decarbonisation scenarios independent of carbon pricing. We found that while the macroeconomic cost mainly comes from the system transition, the distributional effects indicated in conventional carbon-price-based scenarios are mainly caused by carbon prices, contributing to increases on poverty, hunger risks, and domestic income inequality by 86%, 84%, and 90%, respectively. Our findings indicate the great potential to moderate the concerns on the equity implications of climate change mitigation associated with carbon pricing and the need for improved policy representations in scenarios to better inform equitable and sustainable decarbonisation transitions.