Using the first real-world policy making simulator to reduce the uncertainty of policy factors in forecasting, the Potsdam-Institute for Climate Impact Research brings out the distortions of phase out initiatives
PIK study on policies to really say goodbye to coal
With current policies, there is less than 5% chance of completing the coal phase out before 2050. And then to be able to keep global warming below the levels set by the Paris Agreement. The problem? Once the promise is made, the loophole is also found. This is what is happening to the countries that are part of the Powering Past Coal Alliance, the initiative to promote the phase out of coal from the energy sector launched during COP23 in 2017. This is supported by a study by the Potsdam-Institute for Climate Impact Research (PIK) just appeared on Nature Climate Change.
Simulate political decisions to understand coal phase out
To investigate the effectiveness of the initiative, which brings together 166 states, regions, cities and other bodies, PIK scientists have used the first simulation of real-world policy making, Dynamic Policy Evaluation. A tool that helps reduce political uncertainty in emission forecasts.
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“We were able to determine that commitments for coal exit often depend on certain national preconditions, which allowed us to eliminate some of the uncertainty about the impact of emissions. Our new approach is therefore the first to consistently simulate the adoption of policies in future scenarios, also in line with historical data”, explains Jessica Jewell, co-author of the study.
We need broad policies
The main problem is that the initiative only commits countries to clean up the electricity mix from coal. With the risk that the excess of coal ends up in other sectors of the economy, such as steel, cement or chemical production. The PIK simulation, in fact, shows that this risk of leakage remains very high, especially among members of the initiative, if the policies on the phase out of coal remain limited to the electricity sector.
“Unregulated industries can take advantage of falling coal prices at home and use more coal than they would otherwise,” says co-author Nico Bauer. Which emphasizes the most effective policies to avoid this scenario. “Carbon pricing would be the most effective tool to fill gaps in national regulations, while coal extraction and export restrictions would be the most effective tool to discourage parasitism abroad,” Bauer continues.
