This ambition must translate into public and private investments, and more generally measures coming under public and private policy alike. Action must be taken across a broad agenda, but also in the right order, by setting joint priorities, channeling resources towards meaningful initiatives and making the call between swiftly rolling out mature technologies or awaiting new solutions enabled by the innovations in progress.
Putting a monetary value on mitigation activities means recognizing that there is value in taking action, as opposed to doing nothing. It means that human activity must take on board, "internalize" – beyond the "private" benefits – the collective benefits to be reaped from reducing greenhouse gas emissions. It provides a baseline for selecting and ranking the initiatives that are meaningful to the community.
The social value of mitigation activities is referred to as the shadow price of carbon in socioeconomic calculation jargon, as it is decided on by the State. It forms part of a long-term public strategy setting forth a shared vision of action to tackle climate change – in this instance the 2015 Paris Agreement and 2017 Climate Plan.
Carrying on a long-standing French tradition for economic calculation, and in the same vein as the previous commissions chaired by Marcel Boiteux (2001) and Alain Quinet (2008), this report crowns the collaborative efforts of a commission made up of some 20 experts and economists on the environment from academia, international organizations and research centers, the economic and social sphere, non-governmental organizations and the government. To draw up its proposals, the commission called on five modeling teams, interviewed a number of specialists and organized a series of workshops for representatives of the economy's various sectors.
The social value of mitigation activities measures the value, for the community, of initiatives delivering on the net zero GHG emissions target
Through the 2015 Paris Agreement, the Parties have collectively agreed to achieve net zero GHG emissions by the latter half of the 21st century. The Agreement urges developed countries to reach this target before developing countries. This goal is grounded in the assessment by the Intergovernmental Panel on Climate Change (IPCC) of a shrinking of the carbon budget – i.e. the residual margins available for emitting greenhouses gases – if we wish to keep global warming to below 2°C. Based on past trends, we only have three decades' worth of emissions at our disposal: after that, we will be out of options – running the risk of serious and irreversible damage.
Action to tackle climate change and the resulting benefits for the community are not automatically factored into public and private stakeholders' financial profitability calculations. The shadow price of carbon makes up for this market failing: it gives an idea of the distance we still have to cover and, as such, expresses the value that society must attach to the public and private decarbonization initiatives we need to roll out to get there. These are the two sides of the same coin.