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==== 4.2.1.1 Challenges and Opportunities for Mitigation Along the Reviewed Pathways ====

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'''Greater scale, speed and change in investment patterns'''

There is agreement in the literature reviewed by Chapter 2 that staying below 1.5°C would entail significantly greater transformation in terms of energy systems, lifestyles and investments patterns compared to 2°C-consistent pathways. Yet there is  ''limited evidence''  and  ''low agreement''  regarding the magnitudes and costs of the investments (Sections 2.5.1, 2.5.2 and 4.4.5). Based on the IAM literature reviewed in Chapter 2, climate policies in line with limiting warming to 1.5°C would require a marked upscaling of supply-side energy system investments between now and mid-century, reaching levels of between 1.6–3.8 trillion USD yr <sup>−1</sup>  globally with an average of about 3.5 trillion USD yr <sup>−1</sup>  over 2016–2050 (see Figure 2.27). This can be compared to an average of about 3.0 trillion USD yr <sup>−1</sup>  over the same period for 2°C-consistent pathways (also in Figure 2.27).

Not only the level of investment but also the type and speed of sectoral transformation would be impacted by the transitions associated with 1.5°C-consistent pathways. IAM literature projects that investments in low-emission energy would overtake fossil fuel investments globally by 2025 in 1.5°C-consistent pathways (Chapter 2, Section 2.5.2). The projected low-emission investments in electricity generation allocations over the period 2016–2050 are: solar (0.09–1.0 trillion USD yr <sup>−1</sup> ), wind (0.1–0.35 trillion USD yr <sup>−1</sup> ), nuclear (0.1–0.25 trillion USD yr <sup>−1</sup> ), and transmission, distribution, and storage (0.3–1.3 trillion USD yr <sup>−1</sup> ). In contrast, investments in fossil fuel extraction and unabated fossil electricity generation along a 1.5°C-consistent pathway are projected to drop by 0.3–0.85 trillion USD yr <sup>−1</sup>  over the period 2016–2050, with investments in unabated coal generation projected to halt by 2030 in most 1.5°C-consistent pathways (Chapter 2, Section 2.5.2). Estimates of investments in other infrastructure are currently unavailable, but they could be considerably larger in volume than solely those in the energy sector (Section 4.4.5).

'''Greater policy design and decision-making implications'''

The 1.5°C-consistent pathways raise multiple challenges for effective policy design and responses to address the scale, speed, and pace of mitigation technology, finance and capacity building needs. These policies and responses would also need to deal with their distributional implications while addressing adaptation to residual climate impacts (see Chapter 5). The available literature indicates that 1.5°C-consistent pathways would require robust, stringent and urgent transformative policy interventions targeting the decarbonization of energy supply, electrification, fuel switching, energy efficiency, land-use change, and lifestyles (Chapter 2, Section 2.5, 4.4.2, 4.4.3). Examples of effective approaches to integrate mitigation with adaptation in the context of sustainable development and to deal with distributional implications proposed in the literature include the utilization of dynamic adaptive policy pathways (Haasnoot et al., 2013; Mathy et al., 2016) <sup>[[#fn:r29|29]]</sup> and transdisciplinary knowledge systems (Bendito and Barrios, 2016) <sup>[[#fn:r30|30]]</sup> .

Yet, even with good policy design and effective implementation, 1.5°C-consistent pathways would incur higher costs. Projections of the magnitudes of global economic costs associated with 1.5°C-consistent pathways and their sectoral and regional distributions from the currently assessed literature are scant, yet suggestive. For example, IAM simulations assessed in Chapter 2 project (with a probability greater than 50%) that marginal abatement costs, typically represented in IAMs through a carbon price, would increase by about 3–4 times by 2050 under a 1.5°C-consistent pathway compared to a 2°C-consistent pathway (Chapter 2, Section 2.5.2, Figure 2.26). Managing these costs and distributional effects would require an approach that takes account of unintended cross-sector, cross-nation, and cross-policy trade-offs during the transition (Droste et al., 2016; Stiglitz et al., [[IPCC:Sr15:About:Error-protocol:#errata1|Pollitt, 2018;]] 2017; Sands, 2018; Siegmeier et al., 2018) <sup>[[#fn:r31|31]]</sup> .

'''Greater sustainable development implications'''

Few studies address the relations between the Shared Socio-Economic Pathways (SSPs) and the Sustainable Developments Goals (SDGs) (O’Neill et al., 2015; Riahi et al., 2017) <sup>[[#fn:r32|32]]</sup> . Nonetheless, literature on potential synergies and trade-offs between 1.5°C-consistent mitigation pathways and sustainable development dimensions is emerging (Chapter 2, Section 2.5.3, Chapter 5, Section 5.4). Areas of potential trade-offs include reduction in final energy demand in relation to SDG 7 (the universal clean energy access goal) and increase of biomass production in relation to land use, water resources, food production, biodiversity and air quality (Chapter 2, Sections 2.4.3, 2.5.3). Strengthening the institutional and policy responses to deal with these challenges is discussed in Section 4.4 together with the linkage between disruptive changes in the energy sector and structural changes in other infrastructure (transport, building, water and telecommunication) sectors. A more in-depth assessment of the complexity and interfaces between 1.5°C-consistent pathways and sustainable development is presented in Chapter 5.

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