Editing IPCC:AR6/WGIII/Chapter-13 (section)

=== 13.6.1 Taxonomy and Overview of Mitigation Policies ===

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==== 13.6.1.1 Taxonomy of Mitigation Policies ====

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A large number of policies and policy instruments can affect GHG emissions and/or sequestration, whether their primary purpose is climate change mitigation or not. Consequently, consistent with the approach in this chapter, this section adopts a broad interpretation to what is considered mitigation policy. Also, the section recognises the multiplicity of policies that overlap and interact.

Environmental policy instruments, including for climate change mitigation, have long been grouped into three main categories – (i) economic instruments, (ii) regulatory instruments, and (iii) other instruments – although the specific terms differ across disciplines and additional categories are common ( [[#Kneese--1975|Kneese and Schultze 1975]] ; [[#Jaffe--1995|Jaffe and Stavins 1995]] ; [[#Nordhaus--2013|Nordhaus 2013]] ; [[#Wurzel--2013|Wurzel et al. 2013]] ). Examples of common policies in each category are shown in Table 13.1, but this is not a comprehensive list. Principles of and empirical experience with the various instruments are synthesised in Sections 13.6.3 to 13.6.5, international interactions are covered in [[#13.6.6|Section 13.6.6]] .

'''Table 13.1 | Classification of mitig''' '''ation policies.'''

{| class="wikitable"
|-
! '''Category'''

! '''Examples of common types of mitigation policy instruments'''

|-
| Economic instruments

| Carbon taxes, GHG emissions trading, fossil fuel taxes, tax credits, grants, renewable energy subsidies, fossil fuel subsidy reductions, offsets, R&amp;D subsidies, loan guarantees

|-
| Regulatory instruments

| Energy efficiency standards, renewable portfolio standards, vehicle emission standards, ban on SF 6 uses, biofuel content mandates, emission performance standards, methane regulations, land-use controls

|-
| Other instruments

| Information programmes, voluntary agreements, infrastructure, government technology procurement policies, corporate carbon reporting

|}

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==== 13.6.1.2 Coverage of Mitigation Policies ====

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An increasing share of global emissions sources is subject to mitigation policies, though coverage is still incomplete ( [[#Eskander--2020|Eskander and Fankhauser 2020]] ; [[#Nascimento--2021|Nascimento et al. 2021]] ).

While consistent information on global prevalence of policies is not available, in G20 countries the use of various policy instruments has increased steadily over the past two decades ( [[#Nascimento--2021|Nascimento et al. 2021]] ). The share of countries that had mitigation policy instruments in place rose across all sectoral categories, albeit to different extents in different sectors and for different policy instruments (Figure 13.4). Among G20 countries the electricity and heat generation has the greatest number of policies in place, and the agriculture and forestry sector the fewest ( [[#Nascimento--2021|Nascimento et al. 2021]] ).

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[[File:0c0b71193b43d78339edc252f3e82090 IPCC_AR6_WGIII_Figure_13_4.png]]

'''Figure 13.4 | Share of countries that adopted different policy instruments in different sectors, 2000–2020 (three year moving average).''' Source: reproduced with permission from [[#Nascimento--2021|Nascimento et al. (2021)]] '''.'''

The mix of policies has shifted towards more regulatory instruments and carbon pricing relative to information policies and voluntary action ( [[#Schmidt--2018|Schmidt and Fleig 2018]] ; [[#Eskander--2020|Eskander and Fankhauser 2020]] ).

The IEA database, which tracks renewable energy and energy efficiency policies at the national and sub-national levels for about 160 countries, indicates an average of about 225 new renewable energy and energy efficiency policies annually from 2010 through 2019 with a peak in the number of new renewable energy policies in 2011 ( [[#IEA--2021|IEA 2021]] ).

While an increasing share of CO 2 emissions from fossil fuel combustion is subject to mitigation policies, there remain many countries and sectors where no dedicated mitigation policies apply to fuel combustion. Fossil fuel use is subject to energy taxes in the majority but not all jurisdictions, and in some instances, it is subsidised.

The main gaps in current mitigation policy coverage are non-CO 2 emissions and CO 2 emissions associated with production of industrial materials and chemical feedstocks, which are connected to broader questions of shifting to cleaner production systems ( [[#Bataille--2018a|Bataille et al. 2018a]] ; [[#Davis--2018|Davis et al. 2018]] ). Sequestration policies focus mainly on forestry and carbon capture and storage (CCS) with limited support for other carbon dioxide removal and use options ( [[#Geden--2019|Geden et al. 2019]] ; [[#Vonhedemann--2020|Vonhedemann et al. 2020]] ).

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==== 13.6.1.3 Stringency and Overall Effectiveness of Mitigation Policies ====

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The stringency of mitigation policies varies greatly by country, sector and policy (Box 13.9). Stringency can be increased through sequential changes to policies ( [[#Pahle--2018|Pahle et al. 2018]] ).

Estimates of the effective carbon price (as an estimate of overall stringency across policy instruments) differ greatly between countries and sectors ( [[#World%20Bank--2021a|World Bank 2021a]] ). Countries with higher overall effective carbon prices tend to have lower carbon intensity of energy supply and lower emissions intensity of the economy, as shown in an analysis of 42 G20 and OECD countries ( [[#OECD--2018|OECD 2018]] ). The carbon price that prevails under a carbon tax or ETS is not directly a measure of policy stringency across an economy, as the carbon prices typically only cover a share of total emissions, and rebates or free allowance allocations can limit effectiveness ( [[#OECD--2018|OECD 2018]] ). At low emissions prices, mitigation incentives are small; as of April 2021, seventeen jurisdictions with a carbon pricing policy had a tax rate or allowance price less than USD5 per tCO 2 ( [[#World%20Bank--2021a|World Bank 2021a]] ).

Other policies, such as fossil fuel subsidies, may provide incentives to increase emissions thus limiting the effectiveness of the mitigation policy ( [[#13.6.3.6|Section 13.6.3.6]] ). Those effects may be complex and difficult to identify. In most countries trade policy provides an implicit subsidy to CO 2 emissions ( [[#Shapiro--2020|Shapiro 2020]] ). The analysis of emissions from energy use in buildings in [[IPCC:Wg3:Chapter:Chapter-9|Chapter 9]] illustrates the factors that support and counteract mitigation policies.

Furthermore, emissions pricing policies encourage reduction of emissions whose marginal abatement cost is lower than the tax/allowance price, so they have limited impact on emissions with higher abatement costs such as industrial process emissions ( [[#Bataille--2018a|Bataille et al. 2018a]] ; [[#Davis--2018|Davis et al. 2018]] ). EU ETS emission reductions have been achieved mainly through implementation of low cost measures such as energy efficiency and fuel switching rather than more costly industrial process emissions.

Estimating the overall effectiveness of mitigation policies is difficult because of the need to identify which observed changes in emissions and their drivers are attributable to policy effort and which to other factors. Cross-Chapter Box 10 in [[IPCC:Wg3:Chapter:Chapter-14|Chapter 14]] brings together several lines of evidence to indicate that mitigation policies have had a discernible impact on mitigation for specific countries, sectors and technologies and led to avoided global emissions to date by several billion tonnes CO 2 -eq annually ( ''medium evidence'' , ''medi'' ''um agreement'' ).

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