A scenario assessment of the global mitigation effort in the light of the 2035 climate finance goal
Abstract
The United Nations Framework Convention on Climate Change (UNFCCC) agreed in 2024 to boost finance for climate change in developing countries to USD 300 billion by 2035. In this study, we assess how much mitigation of greenhouse gases (GHGs) is possible by generating this amount of revenues from carbon pricing in industrialized regions. We assess a scenario that considers carbon prices differentiated for industrialized, transition and developing regions. We find that such scenario provides 16% more GHG emissions reductions by 2035 compared to a scenario where the existing national mitigation targets (represented by the nationally determined contributions as of 2022) are achieved. Despite this, a considerable gap remains in terms of the revenues needed to achieve emissions reductions aligned with a pathway securing the climate target of 1.5 °C global warming above pre-industrial levels. Therefore, these outcomes suggest that considerably larger climate mitigation actions are needed beyond the climate finance goal agreed by nations under the UNFCCC. In addition, we highlight by means of additional scenarios the implications (in terms of emissions reductions, carbon price revenues and consumption losses) of the absence in the carbon pricing scheme of the major GHG emitters from industrialized regions (USA) and from developing regions (China).