The economic implications of using a truly preindustrial climate baseline

Abstract

The pervasive impacts of climate change can result in scientific decisions having unforeseen societal implications. To demonstrate this, we explore the global and regional economic implications of adopting an earlier preindustrial baseline of 1400-1800 for climate policy targets instead of the commonly used early industrial period of 1850-1900 for which we have observational data. Because of early industrial emissions, the 1400-1800 period was slightly cooler than the 1850-1900 baseline, leaving less headroom before the Paris temperature target is reached and the associated carbon budget is exhausted. While this increases the mitigation costs of cutting emissions, the lower temperature headroom also reduces the expected residual climate impacts, resulting in a mean net economic saving to the world as a whole. The less developed regions in the global South, which have the lowest historic emissions, would see the biggest savings from adopting the earlier preindustrial baseline. Meanwhile, different blocs in the global North are set to experience comparatively small extra costs or no changes at all. Following the IPCC Special Report on the 1.5 °C world, these findings further highlight the need to consider the equity dimension of climate policy.