Multi-gas Emission Reduction for Climate Change Policy: an Application of Fund

The costs of greenhouse gas emission reduction are investigated with abatement of carbon dioxide, methane, and nitrous oxide using the FUND model. The central policy scenario keeps anthropogenic radiative forcing below 4.5 Wm. If CO2 emission reduction were the only possibility to meet this target, the net present value of consumption losses would be $45 trillion; with abatement of the other gases added, costs fall to $33 trillion. The bulk of these costs savings can be ascribed to nitrous oxide. Because nitrous oxide is so much more important than methane, the choice of equivalence metric between the greenhouse gases does not matter much. Sensitivity analyses show that the shape of the cost curves for CH4 and N2O emission reduction matters, and that the inclusion of SO2 and sulphate aerosols make policy targets substantially harder to achieve. The costs of emission reduction vary greatly with the choice of stabilisation target. A target of 4.5 Wm is not justified by our current knowledge of the damage costs of climate change.