Editing IPCC:AR6/SR15/Chapter-2 (section)

=== 2.6.2 Integrated Assessment Approaches ===

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IAMs attempt to be as broad as possible in order to explore interactions between various societal subsystems, like the economy, land, and energy system. They hence include stylized and simplified representations of these subsystems. Climate damages, avoided impacts and societal co-benefits of the modelled transformations remain largely unaccounted for and are important knowledge gaps. Furthermore, rapid technological changes and uncertainties about input data present continuous challenges.

The IAMs used in this report do not account for climate impacts (Section 2.1), and similarly, none of the Gross Domestic Product (GDP) projections in the mitigation pathway literature assessed in this chapter included the feedback of climate damages on economic growth (Section 2.3). Although some IAMs do allow for climate impact feedbacks in their modelling frameworks, particularly in their land components, such feedbacks were by design excluded in pathways developed in the context of the SSP framework. The SSP framework aims at providing an integrative framework for the assessment of climate change adaptation and mitigation. IAMs are typically developed to inform the mitigation component of this question, while the assessment of impacts is carried out by specialized impact models. However, the use of a consistent set of socio-economic drivers embodied by the SSPs allows for an integrated assessment of climate change impacts and mitigation challenges at a later stage. Further integration of these two strands of research will allow a better understanding of climate impacts on mitigation studies.

Many of the IAMs that contributed mitigation pathways to this assessment include a process-based description of the land system in addition to the energy system, and several have been extended to cover air pollutants and water use. These features make them increasingly fit to explore questions beyond those that touch upon climate mitigation only. The models do not, however, fully account for all constraints that could affect realization of pathways (Section 2.1).

While the representation of renewable energy resource potentials, technology costs and system integration in IAMs has been updated since AR5, bottom-up studies find higher mitigation potentials in the industry, buildings, and transport sector in that realized by selected pathways from IAMs, indicating the possibility to strengthen sectoral decarbonization strategies compared to the IAM 1.5°C pathways assessed in this chapter (Section 2.1).

Studies indicate that a major shift in investment patterns is required to limit global warming to 1.5°C. This assessment would benefit from a more explicit representation and understanding of the financial sector within the modelling approaches. Assumptions in modelling studies imply low-to-zero transaction costs for market agents and that regulatory oversight mechanisms and fiduciary duty need to be highly robust to guarantee stable and credible financial markets in the long term. This area can be subject to high uncertainty, however. The heterogeneity of actors (e.g., banks, insurance companies, asset managers, or credit rating agencies) and financial products also needs to be taken into account, as does the mobilization of capital and financial flows between countries and regions (Section 2.5).

The literature on interactions between 1.5˚C mitigation pathways and SDGs is an emergent field of research (Section 2.3.5, 2.5 and Chapter 5). Whereas the choice of mitigation strategies can noticeably affect the attainment of various societal objectives, there is uncertainty regarding the extent of the majority of identified interactions. Understanding climate–SDG interactions helps inform the choice of mitigation options that minimize trade-offs and risks and maximize synergies towards sustainable development objectives and the 1.5°C goal (Section 2.5).

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