2.4.3 Mitigation potentials and related costs
Chapters 3-11 report the costs of climate change mitigation at global, regional, sectoral, and technology level and, in order to ensure consistency and transparency across the cost estimates reported in these chapters, it has been agreed to use a number of key concepts and definitions that are outlined in this section. Furthermore, the following paragraphs also outline how the concepts relate to mitigation cost concepts that have been used in previous IPCC reports, in order to allow different cost estimates to be compared and eventual differences to be understood.
A commonly used output format for climate change mitigation cost studies means reporting the GHG emission reduction in quantitative terms that can be achieved at a given cost. The potential terminology is often used in a very ‘loose’ way, which makes it difficult to compare numbers across studies. The aim of the following is to overcome such lack of transparency in cost results based on a definition of major cost and GHG emission reduction variables to be used when estimating potentials.
The term ‘potential’ is used to report the quantity of GHG mitigation compared with a baseline or reference case that can be achieved by a mitigation option with a given cost (per tonne) of carbon avoided over a given period. The measure is usually expressed as million tonnes carbon- or CO2-equivalent of avoided emissions, compared with baseline emissions. The given cost per tonne (or ‘unit cost’) is usually within a range of monetary values at a particular location (e.g. for wind-generated electricity), such as costs less than x US$ per tonne of CO2- or carbon-equivalent reduction (US$/tC-eq). The monetary values can be defined as private or social unit costs: private unit costs are based on market prices, while social unit costs reflect market prices, but also take externalities associated with the mitigation into consideration. The prices are real prices adjusted for inflation rates.