New to Climate Change?
Targets are the limits that scientists and policymakers set in plans to combat climate change. These targets can take different forms, from goals for limiting the Earth’s warming to hard caps on greenhouse gas emissions. For example, the Paris Agreement set 2 ℃ as a temperature target for global warming, while the state of Massachusetts has a target to reduce emissions to 80% below 1990 levels by 2050.
Finding the right target
Setting targets is complicated. For economists, a target should be set at the point where the marginal benefit of a goal (like reducing warming) is equal to the marginal cost of achieving it (such as the costs of investing in new infrastructure or letting energy costs rise). In forming targets, economists use models that track the climate, the economy, and how they interact. Many of these models exist, including the EPPA model, which is run through the MIT Joint Program on the Science and Policy of Global Change. The models are used to find the ideal targets for temperature or greenhouse gas emissions. While these optimal levels do exist—there is a “right” target— they can be hard to find, given the number of factors at play. Because of this, models often provide a wide range of acceptable targets.
Finding the right policy
Once a target is set, how do we meet it? Nearly all economists agree that a price on carbon, either through a carbon tax or a cap-and-trade program, is the most efficient tool to meet a target, but other actions may also be useful. Both a price on carbon and other policies are being used. For example, the state of California has a cap-and-trade program, which caps the total greenhouse gas emissions allowed in the state and lets companies buy and sell credits to emit within those limits. The United States also has national fuel economy standards for vehicles, which set a target for how fuel-efficient the average car has to be, but are flexible on how car companies hit that target.
Policies can vary between states and industries, while still meeting a single national target. For example, the Clean Power Plan adopted under the Obama administration set both national and state targets, and let states meet their targets through any policies they chose. Governments may also choose different policies for different industries, such as setting a fuel economy standard for transportation but using a cap-and-trade program for electricity.
Once a target or policy is set, how open the target is to adjustment, and for what reasons, matters a lot. Targets are most effective when they are flexible to changing climate and economic models. However, if policymakers relax targets based on pressure from industries, this discourages businesses from making investments to meet those targets. Once targets are set, policymakers must signal that they will be met no matter what.