A new scenario framework for climate change research: the concept of shared climate policy assumptions

Climate policies can be characterized in terms of their attributes, such as the stringency of policy targets, the set of climate policy instruments employed to achieve the targets , and the time and place in which climate policy instruments are deployed. Following a proposal by Kriegler et al. (2012), we define Shared Climate Policy Assumptions as capturing key characteristics of mitigation and adaptation policies up to the global and century scale. The latter requirement emerges from the fact that SPAs should relate to the global scenario framework. At the same time they should be flexible enough to allow for regional differentiation of policies.

Concretely, SPAs should describe three attributes of climate policies (Kriegler et al. 2012). The first attribute is the global (collection of) “climate policy goals” such as emissions reductions targets, or different levels of ambition in limiting residual climate damages, e.g. in terms of development indicators that should not be jeopardized by climate change. However, there is a clear overlap of mitigation policy goals with the forcing (RCP) dimension of the scenario matrix, and of adaptation policy goals linked to achieving sustainable development and other societal goals described in the SSPs. RCP forcing levels can be used to directly describe long term mitigation targets (although not how to achieve those targets), and in any case have strong implications for the admissible global outcome of regional emissions reduction targets.

Thus, we have to distinguish two types of SPAs: a full SPA that includes all mitigation and adaptation policy targets, and thus embeds the forcing (RCP) dimension and possibly aspects of an SSP in it. And a reduced SPA that excludes the mitigation policy goals, at least as far as they relate to emissions reductions and global concentration and forcing outcomes, and the adaptation policy goals as far as they relate to development goals, and therefore is orthogonal to both the forcing (RCP) and the SSP axis of the matrix framework. Thus, the reduced SPA has to be used if variations of policy assumptions for a given RCP-SSP combination are to be explored. In this way, it adds a third axis to the scenario matrix. Both concepts—reduced and full SPA—can be entertained simultaneously. A full SPA may simply be the combination of a reduced SPA and an RCP forcing level. Or, if the mitigation targets are to be specified in terms of regional emissions reductions commitments, the RCP forcing level would determine the global cumulative amount of permitted emissions (and possibly some properties of the global emissions pathway), while the reduced SPA is free to include any distribution of these emissions permits across regions that adds up to the global total. Similarly, for adaptation policy goals, a full SPA would embed SSPs elements, such as development goals that are relevant for adaptation policies, while a reduced SPA would focus purely on the adaptation policy aspect. We note that this differentiation of full and reduced SPAs to ensure orthogonality of the SPA, SSP, and forcing (RCP) axes goes beyond what was proposed in Kriegler et al. (2012).

Second, the shared climate policy assumption should describe the characteristics of the global (collection of) “policy regimes and measures” introduced to reach the policy goals- On the mitigation side, such policy measures could be globally harmonized or regionally differentiated carbon taxes, an international emissions trading scheme with a particular burden sharing mechanism, a mix of different policy instruments ranging from emissions pricing to low carbon technology subsidies to regulatory policies, or a mix of different approaches in different sectors, e.g. including transport policies and schemes to protect tropical forest. SPAs may also relate to mitigation policy dimensions that are often not considered by model studies, but elsewhere in the literature. An example is how particular policies would be financed in practice (Clapp et al. 2012; Winkler et al. 2009). On the adaptation side, the SPA package may include, for example, the type of adaptation measures that are implemented (e.g. more efficient irrigation techniques or water recycling technologies) and the availability of various amounts of international support for adaptation in developing countries.

Third, a shared climate policy assumption should include the “implementation limits and obstacles” to the extent they are considered and are not part of an SSP. Those obstacles could be specified in terms of the exclusion of several policy options for some regions and sectors where they do not appear to be feasible. Such conditions could evolve over time such that initial limits might dissipate or intensify. For example, several land pools may be excluded from carbon pricing due to practical constraints of implementing such a pricing policy. Or a group of regions may be assumed to remain outside an international climate policy regime until some point in time. Likewise, adaptation effectiveness may differ in a model where behavioral biases in risk perceptions are accounted for, or where political economy or enforcement constraints makes it impossible to implement some policies (e.g., land-use regulations aiming at reducing disaster losses are difficult to implement in areas without official land tenure such as informal settlements).

Care needs to be taken to separate implementation limits and obstacles that are attributes of a SPA, and climate policy obstacles that are inherent in the socioeconomic reference environment described in an SSP. The latter can include market distortions, e.g. in energy and labor markets. Babiker and Eckaus (2007) and Guivarch et al. (2011) show that taking into account unemployment and friction in labor market adjustments can change in a significant way the assessment of mitigation costs. In developing countries in particular, existing economic distortions cannot be disregarded in the design of climate policies. The high level of unemployment (often over 25 %), the large share of the informal economy, and the difficulty to enforce regulation (e.g., in terms of land-use planning) and raise taxes create specific difficulties for climate policy. To the extent that such elements are considered, they will be part of an SSP rather than a reduced SPA. However, they could be added to a full SPA that aims to provide a complete picture on the three attributes of climate policy, i.e. goals, instruments, and obstacles.

The formulation of SPAs on a global and century scale can become complex. However, the goal of SPAs should not be to describe the climate policy landscape in every conceivable detail, but rather to summarize and make explicit the central policy assumptions that have to be made anyway by individual studies to produce climate policy scenarios. Seen through this lens, SPAs have been used for quite some time, for example, in integrated assessment model inter-comparison studies (e.g. Clarke et al. 2009; Riahi et al. 2014; Kriegler et al. 2014a) that needed to harmonize their climate policy assumptions in order to make results comparable. It is more and more recognized that such harmonization does not only involve the specification of a long term climate target as would be captured by the RCPs, but also, e.g., the basket of greenhouse gases and sectors to become subject to emissions pricing, the degree of global cooperation and the degree of overshoot of long term targets (Blanford et al. 2014).

A controlled variation of key climate policy assumptions, but not of all the details, will be required to make the scenario matrix approach fully operational. Knowledge about what type of SPAs have been used in modeling will be required to make appropriate comparisons across model analyses or other studies that explore a given combination of SSP and radiative forcing target (RCP). For instance, mitigation cost assessments by two models cannot be compared directly, if these two models make different assumptions on practical obstacles to policy implementation (e.g., if one model assumes a globally integrated carbon market and the other a regionally fragmented mitigation regime). Furthermore, the choice of SPAs will interact with the socioeconomic challenges to mitigation and adaptation that are engrained in the SSPs (O’Neill et al. 2014). For example, whether or not global coverage of emissions reductions can be achieved will affect the ability to reach a prescribed RCP forcing level. Likewise, whether or not a global adaptation fund is put in place will affect the ability of individual regions to adapt to climate change.

Shared Climate Policy Assumptions can contain qualitative and quantitative information. The qualitative information consists of a narrative that describes the world of climate policies and their evolution over time and across space (Hallegatte et al. 2011). A key characteristic of mitigation policies is the number of countries that participate in an international climate policy regime over time and the stringency of their commitments and actions. IAM studies often distinguish a benchmark case of fully cooperative action starting immediately with more plausible policy scenarios that include regionally and sectorally fragmented climate policies, staged accession to a global climate regime, and non-participation (Clarke et al. 2009; Blanford et al. 2014; Kriegler et al. 2014b; Luderer et al. 2014). Thus, the SPA narrative should include information on the different timing of participation of regions and nations in emissions mitigation regimes, as well as being explicit whether mitigation stringency is globally uniform or differentiated across regions and countries. It could also contain information about the nature of climate policies—e.g., preferences for fiscal as opposed to regulatory policies, differences in the nature of policies to mitigate fossil fuel and land-use change emissions, and emphasis on behavioral changes, efficiency and demand-side measures vs focusing mitigation more on upstream technology solutions for energy supply. In addition, SPA narratives could take into account information about the constraints and obstacles for mitigation policy.

SPAs will in general also contain quantitative information. As far as full SPAs are concerned, the long term mitigation target as determined by the long term forcing in an RCP will be a central part of this information. In principle, the target could be specified in a number of ways, ranging from a global temperature target, to a climate forcing target to a cumulative emissions budget for the entire world. It may also include some constraints on the pathway of climate forcing or global emissions. The RCPs will be a determining factor for globally aggregate descriptors of mitigation effort even if no global mitigation target is assumed. For example, they will strongly influence (together with the choice of SSP) the global level of a carbon tax path that could be assumed instead of a target (Calvin et al. 2012). Quantitative information that would be part of a reduced SPA, and thus would need to be complementary to information constrained by the RCPs can include, e.g., the allocation of emissions permits to different regions in terms of shares of global emissions (Tavoni et al. 2014), carbon price differentials between regions, sectors and land pools, a timetable for staged accession to a global climate policy regime (Clarke et al. 2009), regional low carbon technology targets (Kriegler et al. 2014b), and land use related policies such as forest protection and bioenergy constraints (Calvin et al. 2014). Quantitative assumptions on adaptation policy can include, for example, adaptation targets such as protection against 100 year flood or drought events, timetables for implementing regional adaptation plans, and the size of an international adaptation fund that is set up to assist countries that are most affected by climate change.

In summary, the SPAs should contain information that is instructive to both the integrated assessment modeler trying to develop a climate mitigation scenario, and an IAV researcher trying to analyse the vulnerability to climate change, the costs and benefit of adaptation measures and the residual climate impacts. The level of detail to which it is useful to specify information in the SPAs will depend on the application. Obviously, SPAs at the global and century scale have to be very generic by construction, since a detailed formulation of the global climate policy landscape in 2050 would carry little meaning. As for the case of the SSPs, there is an inherent tension between establishing comparability of different studies and comprehensive coverage of plausible SPAs (compare O’Neill et al. 2014). It may be useful to distinguish between basic SPAs that only include high level information on the scope of mitigation and adaptation actions and thus can summarize a larger set of climate policy studies, and extended SPAs that allow to better control climate policy assumptions as for example adopted in IAM comparison projects. Furthermore, the connection between global studies and mitigation and adaptation analysis conducted at the national level needs further attention. Global SPAs should be flexible enough to be adapted and changed when applied to more short-term and more local/national analysis, much in the same way as global SSPs should allow their adaptation to studies on a local/national level. National SPAs could, for example, be taken up in SPA extensions. However, a set of basic SPAs on the global level will be most useful if it is limited in number, generic in character and broad enough to allow a comprehensive exploration of the climate change scenario space.

As discussed above, climate policy assumptions will not be included in SSPs by their definition in terms of socioeconomic reference assumptions. Thus, assumptions about climate policies, even if they correspond to currently planned legislation, should always be part of an SPA rather than an SSP. The dividing line between assumptions on climate policies to be included in SPAs and broader development policies to be included in SSPs will be difficult to draw in many cases. In general it is the motivation for the policy intervention and not the policy itself that determines whether the policy is a climate policy or a policy directed toward another end. As a consequence a policy may be included as a non-climate policy in the SSP, but tightening of the policy in support of greenhouse emissions mitigation, for example, could be included in the SPA. A renewable energy portfolio standard, for example could occur in a reference scenario in support of improved energy security, and a more stringent implementation might be included in an SPA. In the end the test is, would the policy and its stringency be expected to be enacted in the reference, no-climate-policy scenario? If the answer is yes, it belongs in the SSP. To the extent that the policy is deployed and/or tightened only in the mitigation scenario, it belongs in the SPA.

For example, any policy that directly constrains or taxes the emissions of greenhouse gases falls into a SPA. The same holds for any policy that directly addresses adaptation to climate change such as the implementation of an international adaptation fund. In contrast, most development policies such as improving energy access, urban planning, infrastructure, health services, and education are motivated in their own right, and thus are not climate policies. Those policies are part of the socioeconomic reference scenario, and their outline should be included in the SSPs. Such policies may, of course, affect climate policies, or be affected by them, which reinforces the case for their inclusion in SSPs. Care must be taken when combining SPAs with SSPs to ensure consistency of the full policy package (see below). For example, development policy assumptions in the SSPs may have to be adjusted when being combined with an SPA. However, this also holds true for other variables in the SSPs, such as land and energy use patterns that will be affected by climate policy.

There are also borderline cases due to the fact that policies are often motivated by multiple objectives (Linnér et al. 2012; Winkler et al. 2008). Is a renewable portfolio standard motivated by concerns about climate change or energy security or both? Does increased disaster preparedness stem from a concern about the increased frequency or magnitude of such disasters in a changing climate, or does it stem from the objective to decrease the vulnerability of the society to present climate variability? Such cases cannot fully be decided, and one may have to resort to ad hoc judgments on a case-by-case basis. The main point is that the relevant policy assumptions underlying the socioeconomic reference and climate policy scenarios are clearly allocated to either an SSP or a SPA. A clear separation of policies with respect to the climate and non-climate objectives in the SSPs and SPAs will make the framework also useful for the assessment of potential synergies and tradeoff between climate and other non-climate policies (McCollum et al. 2011).

Another important question is how to deal with climate policies and measures that are already implemented and affect the socioeconomic development on a larger scale. The price on greenhouse gas emissions in Europe, imposed directly via the European Emissions Trading System (EU ETS), or implicitly via sectoral measures aiming to reach the targets under the Kyoto Protocol, are a case in point. If such implemented climate policy measures are excluded from the socioeconomic reference scenario, it would have already diverged from reality. In order to avoid this, existing climate policies may be collected in a minimal “existing policy” SPA that can be combined with an SSP when developing the reference scenario. Seen in this way, any socioeconomic scenario, including the reference case, would be based on some SSP and SPA. Only a counterfactual no climate policy scenario would not require the adoption of a SPA, or, put differently, adopt an empty SPA.

The idea of a minimal “existing policy” SPA immediately raises the question of what is an existing climate policy: measures in effect like the EU ETS; or a policy foreseeing future measures that is coded into law like the EU Climate and Energy Package? And how should such policies be projected into the future in a policy reference case defined as continuation of current levels of ambition (Blanford et al. 2014; Kriegler et al. 2014b, Luderer et al. 2014)? These questions will need to be further addressed during the construction and testing of SSPs and SPAs, and their use in the development of socioeconomic scenarios. They are closely related to the long-standing discussion in many fields and applications of what should count as the baseline or reference case, against which actual policy proposals are measured. SPAs provide the flexibility to include different interpretations of “baseline” in the analysis.

When combining SSPs and SPAs to derive a socioeconomic climate policy scenario, care needs to be taken that their combination is consistent. First, SSPs will contain reference assumptions that are affected by climate policies, and those would need to be adjusted to take into account the information in the SPA. Second, some reference assumptions in an SSP, e.g. development policies, will have implications for climate policy, and consistency between a SSP and a SPA would need to be ensured. For example, a narrative describing a regionalized development in a fragmented world can hardly be paired with the assumption of a global carbon market. Likewise, implementation obstacles, e.g. in terms of land pools that can or cannot become subject to carbon pricing, can be more or less consistent with different SSP. It therefore will be the case that not all SPAs can be combined consistently with all SSPs.² It is important that at least one SPA be developed so as to be consistent with each SSP.

The explicit introduction of a climate policy dimension as captured in the SPAs offers the flexibility to explore adaptation and mitigation policies for different combinations of SSP, RCP and reduced SPAs. For example, Fig. 1 shows the combination of RCPs with reduced SPAs describing different types of mitigation policies for a given SSP. Mitigation costs do not only vary with the stringency of mitigation targets (RCP levels), but also with the degree of global cooperation on mitigation policy. See also the conceptualization of mitigation SPAs in a scenario matrix setting in Knopf et al. (2011; Figure 6).

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The adaptation policy assumptions can also be varied across SPAs. Figure 2 shows the example of three different reduced SPAs with no, moderate and aggressive adaptation policies. In general, a SPA will include a consistent set of assumptions on mitigation and adaptation policies specifying, e.g., the degree of coordination of regional and sectoral mitigation efforts and the aggressiveness of adaptation measures. Combining the information in Figs. 1 and 2 will allow to compare total climate policy costs with residual climate damages for a given combination of SSP, RCP and SPA, and also will allow the exploration of interactions of adaptation and mitigation policies because the extent of efforts required to adapt later in the century will depend on mitigation policies implemented in the near term

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As discussed in O’Neill et al. (2014), shared socioeconomic reference pathways should be chosen in a way to cover different levels of socioeconomic challenges to mitigation and adaptation. Here we want to point out that SPAs will play an important role in translating those challenges into costs, benefits and obstacles to climate policy. For example, a SPA that foresees a group of countries that never adopt mitigation policies throughout the 21st century, can imply a greater difficulty to reach global mitigation targets than a SPA with global participation in a climate mitigation regime for the same SSP with given challenges to mitigation. Similarly, a SPA that restricts adaptation to domestic action will have a more limited scope for adaptation action than a SPA that allows for international pooling of adaptation resources. In many cases, the challenges to mitigation and adaptation in SSPs and the obstacles to mitigation and adaptation in SPAs will be correlated by the requirement that SPAs need to be consistent with the underlying SSPs (see above). For example, an SSP describing a fragmented world with regional blocks neutralizing each other can hardly give rise to global cooperative action on climate change, and therefore would exclude SPAs characterized by a large degree of international cooperation. In this situation, the challenges to mitigation and adaptation in the SSP would be augmented by the obstacles from the non-cooperative nature of the SPA.