On the optimality of 2°C targets and a decomposition of uncertainty

Determining international climate mitigation response strategies is a complex task. Integrated Assessment Models support this process by analyzing the interplay of the most relevant factors, including socio-economic developments, climate system uncertainty, damage estimates, mitigation costs, and discount rates. This paper develops a meta-model disentangling the uncertainties of these factors using full literature ranges. This allows for a comparison of insights from cost-minimizing and cost-benefit modeling communities. The analysis shows that focusing on minimum-cost pathways achieving the Paris Agreement without accounting for damages could double the initial carbon price. In a full cost-benefit setting, the optimal temperature target does not exceed 2.5 °C with medium damages and low discount rates, even with high mitigation costs. With low mitigation costs, the optimal temperature change drops to 1.5 °C or less. The damage function is the most important factor determining the optimal temperature, accounting for 50% of the uncertainty.

Kaj-lvar van der Wijst, Andries F. Hof, Detlef P. van Vuuren