UNEP greenhouse gas abatement costing studies. Analysis of abatement costing issues and preparation of a methodology to undertake national greenhouse gas abatement costing studies. Phase two. Part 1: Main report : Analysis of abatement costing issues and preparation of a methodology to undertake national greenhouse gas abatement costing studies. Phase one report

The UNEP (United Nations Environment Programme) programme of Greenhouse Gas Abatement Costing Studies is intended to clarify the economic issues involved in assessing the costs of limiting emissions of greenhouse gases and to propose approaches to comparable costing studies. Phase 1 has consisted of a workshop on the methodological requirements for costing analysis, reviews of the key issues and studies, and a set of preliminary national studies.

It was concluded that a description of possible costs imposed by climate change and of measures to adapt to it are needed in addition to assessment of costs of limiting emissions. Issues raised in this respect vary greatly according to country, status of development etc. The task can be politically very sensitive.

Assessments should consider implementation, permanent and transitional costs. Macro-economic models are needed for each country. All countries have options for reducing greenhouse gas emissions and energy system costs. Hidden costs exist, and political inertia and opposition from adversely affected groups can prevail.

Cost assessment is also a matter of political judgement. Technological assessments that very large savings (50%) are available with direct economical benefit take no account of market obstacles and hidden costs. It appears that long-term 50% reduction in projected global fossil fuel CO_2 emissions could have a long-term global GDP ranging from insignificant to maximum 2.5% reduction.

There may be benefits from the use of carbon tax revenues for reducing other taxes. Components for assessment are detailed. (AB).