Analytical Work to Support and Inform Policy Decisions

The Policy Analysis Work Program was launched to support countries’ efforts to determine post-2020 mitigation scenarios and identify packages of effective and cost-efficient policies—including carbon pricing instruments—to achieve climate change mitigation. 

The first phase of the Upstream Policy Work demonstrated that carrying out economic and policy analysis is critical for informing decisions surrounding the selection and introduction of carbon pricing instruments. In addition, the experience showed that a common challenge faced by the countries is how to address the interactions between carbon pricing and other policies, reinforcing each of the policy objectives. Finally, while this work facilitated several Implementing Country Participants’ efforts in preparing their mitigation component for INDCs under the UNFCCC process, the experience demonstrated that the provision of systematic and long-term support to countries in strengthening their modeling capacity is critical in the years to come. 

Two Groups of Activties

For these reasons, the Policy Analysis Work Program continues to provide support to countries around the following two groups of activities: 

(1) Modeling and analytical work aimed at identifying a suitable package–including carbon pricing instruments–of policies and measures, understanding their impacts and potential barriers, and achieving effective policy design 

(2) Analytical work and capacity building aimed at advancing the understanding of policy makers on how to best integrate carbon pricing in their existing sectoral (including energy, transport, etc.) and national policy landscapes 

Activities at Two Levels

The Policy Analysis Work Program supports activities at two levels: (1) country-specific support is tailored to a particular country’s needs and is carried out after a formal request from the country and subsequent PA approval (2) program-level activities address analytical and modeling topics and issues with strong international dimensions and cross-country implications.

Ten countries have received support for policy analysis.

Overview of Country Policy Analytical Work and Modelling

Example of Cross-Country Analytical Work to Develop a Common Methodology and Framework

The PMR has developed the Checklist on Establishing Post-2020 Emissions Pathways as a common methodology framework for use by PMR and non-PMR countries alike. The “Checklist” includes key components for setting medium- and long-term mitigation scenarios and is intended to facilitate transparency and understanding of the key indicators and assumptions used when constructing INDCs. Countries have found the “checklist” very useful tool in explaining and presenting their INDCs. This tool helps technical experts draw on good practice in constructing mitigation scenarios and communicating analysis to policy makers, as well as facilitates transparency and understanding of the key indicators and assumptions used in constructing scenarios.

The “Checklist” includes four components for setting mitigation scenarios:

- Country Context: analyze and report historical information on emissions and the socio-economic significance of the sectors responsible for those emissions;
- Baseline Pathways: outline four broad options that countries may want to adopt in the development of the baseline pathways;
- Alternative Emissions Pathways: consider different ways in which countries might develop alternative emission pathways with lower emissions than in the baseline pathway; and
- Results Presentation: present the technical analysis of the previous three components.

Case study: Supporting China’s Climate Action

China’s national ETS will be one of the principal tools for achieving its mitigation targets. The PMR supports the design and implementation of the national ETS with an $8 million grant.

Since many aspects of the national ETS design are closely linked with the country’s mid- and long-term mitigation goals, the PMR also provided policy analysis support to China. This support contributed to the development of the country’s INDC and facilitated the process of presenting and disclosing the key indicators, components, and assumptions that are used for the mid- and long-term scenarios.

One of the products of this analytical support, the discussion paper Pursuing an Innovative Development Pathway—Understanding China’s INDC, also helped better understand how China’s INDC could be seen as a powerful vehicle for innovation and help shift the country toward a new development pathway. 

Click here for related blog post by Xueman Wang China: in pursuit of a new development pathway