CCXG Forum, September 2021, Sha Yu

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This presentation discusses how Article 6 of the Paris Agreement could help countries achieve net zero emissions pathways through international cooperation. It uses the Global Change Assessment Model (GCAM) to simulate scenarios with and without Article 6 cooperation. The key findings are: 1) Article 6 has the potential to allow countries to meet net zero targets more cost-effectively through a global carbon price and joint implementation of commitments. 2) Land use plays a major role in emissions reductions, especially in the near term, with increased carbon sinks through cooperation. 3) Article 6 could accelerate the phase-out of fossil fuels in developing countries and improve air quality and health, while also shifting investment and incentives toward renewable energy and low-carbon

Environment

An Overview of GCAM
Global Coverage
384 Land
Regions
32 Energy &
Economy
Regions
235 Water
Basins
GCAM: 32 geopolitical regions
GCAM-USA: 50 states + D.C. in the U.S.
Flexible Scale
Community Model
http://jgcri.github.io/gcam-doc/toc.html
Flexible Time Scale
GCAM Core runs at 5 years; capability to run at one year;
ancillary models run at finer scale
Market Equilibrium
Solution
Reduced-
Form ESM
(Hector)
2

Current Commitments Net Zero 2050 Divergent Net Zero
Scenarios
DRAFT PRESENTATION—COMMENTS WELCOME
3

Divergent Net Zero
Scenarios
• Without Article 6
• Independent implementation of
net-zero pledges
• Different regional carbon prices
• With Article 6
• Cooperative implementation of
net-zero pledges to achieve
global net-zero targets
• Global carbon price
• Same global emissions as
Without Article 6 scenario
Net-Zero Year GCAM Region
2045 Australia_NZ*
Brazil*
Canada*
EU-12*
EU-15*
European Free Trade Association*
Japan*
South Africa*
South Korea*
USA*
2050 Argentina
Colombia
Europe_Eastern
Europe_Non_EU
Mexico
Middle East
Russia
South America_Southern
2055 China*
Africa_Northern
Central Asia
Indonesia
2060 India
Southeast Asia
2065 Central America and Caribbean
2080 Pakistan
South Asia
2085 Africa_Eastern
Africa_Western
2090 Africa_Southern
2125 South America_Northern
* Regions with net-zero pledges
4

100%
97%
86%
48%
33%
after 2060
2060
2055
2050
2045
Share of Global CO2 Emissions Covered by
Net-Zero Targets
Net-Zero Year GCAM Region
2045 Australia_NZ*
Brazil*
Canada*
EU-12*
EU-15*
European Free Trade Association*
Japan*
South Africa*
South Korea*
USA*
2050 Argentina
Colombia
Europe_Eastern
Europe_Non_EU
Mexico
Middle East
Russia
South America_Southern
2055 China*
Africa_Northern
Central Asia
Indonesia
2060 India
Southeast Asia
2065 Central America and Caribbean
2080 Pakistan
South Asia
2085 Africa_Eastern
Africa_Western
2090 Africa_Southern
2125 South America_Northern
5

100%
97%
86%
48%
33%
after 2060
2060
2055
2050
2045
Share of Global CO2 Emissions Covered
by Net-Zero Targets
DRAFT PRESENTATION—COMMENTS WELCOME
6

Market size by 2050: $1 trillion/year
DRAFT PRESENTATION—COMMENTS WELCOME
7

Major Buyers
 USA
 EU
 OECD Asia
 Middle East
Major Sellers
 Latin America
 Africa
 Asia
 Canada
 Russia
DRAFT PRESENTATION—COMMENTS WELCOME
8

Land use plays a major role, especially in
earlier periods
Without Article 6 With Article 6
LULUCF Emissions in 2030 -2.9 GtCO2 -5.2 GtCO2
Forest stock in 2030 30,500 thous km2 31,500 thous km2
DRAFT PRESENTATION—COMMENTS WELCOME
9

Rapid RE
deployment in all
regions to reach
net zero
2040 generation if
following historical annual
additions
2030 generation if
following historical annual
additions
DRAFT PRESENTATION—COMMENTS WELCOME
10

Rapid RE
deployment in all
regions to reach
net zero
2040 deployment if
following historical growth
2030 deployment if
following historical growth
DRAFT PRESENTATION—COMMENTS WELCOME
11

Article 6 can help accelerate fossil fuel phaseout in
developing countries and improve air quality and
health outcomes
DRAFT PRESENTATION—COMMENTS WELCOME
12

Takeaways
• Article 6 holds the potential to allow countries to achieve net-zero
targets with greater economic efficiency.
• Land sinks play an important role in emissions trading and achieving
net-zero targets, especially in the near term.
• Article 6 has important implications for both mitigation and
sustainable development. In addition to lowering mitigation costs,
Article 6 could shift capital investment toward selling regions, affect
local air quality and other sustainability metrics for both buyers and
sellers, and shift costs and potentially incentives for technological
innovation.
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