Effectiveness of a Segmental Approach to Climate Policy

Resistance to adopting a cap on greenhouse gas emissions internationally, and across various national contexts, has encouraged alternative climate change mitigation proposals. These proposals include separately targeting clean energy uptake and demand-side efficiency in individual end-use sectors, an approach to climate change mitigation which we characterize as segmental and technology-centered. A debate has ensued on the detailed implementation of these policies in particular national contexts, but less attention has been paid to the general factors determining the effectiveness of a segmental approach to emissions reduction. We address this topic by probing the interdependencies of segmental policies and their collective ability to control emissions. First, we show for the case of U.S. electricity how the set of suitable energy technologies depends on demand-side efficiency, and changes with the stringency of climate targets. Under a high-efficiency scenario, carbon-free technologies must supply 60-80% of U.S. electricity demand to meet an emissions reduction target of 80% below 1990 levels by midcentury. Second, we quantify the enhanced propensity to exceed any intended emissions target with this approach, even if goals are set on both the supply and demand side, due to the multiplicative accumulation of emissions error. For example, a 10% error in complying with separate policies on the demand and supply side would combine to result in a 20% error in emissions. Third, we discuss why despite these risks, the enhanced planning capability of a segmental approach may help counteract growing infrastructural inertia. The emissions reduction impediment due to infrastructural inertia is significant in the electricity sectors of each of the greatest emitters: China, the U.S., and Europe. Commonly cited climate targets are still within reach but, as we show, would require more than a 50% reduction in the carbon intensity of new power plants built in these regions over the next decade.