The
international negotiations concerning climate change, taken place during the
UNFCCC conference in Durban at the end of year 2011, have failed to establish a
new global agreement to reduce global emissions. Therefore, the G8 commitments
on 80% reduction by 2050 seems to be the most realistic climate change mitigation
framework for the time being, enhanced by the political will of the EU and USA
administrations. For the needs of this paper, the G8 80% target is further
extended to cover the whole EU-27 region, where the reduction commitments of
the EU-27 member states are allocated based on the relevant allocation weights
considered for the Kyoto Protocol obligations. This paper examines the
implementation of the EU-27 and USA 80% emissions reduction target using a
macro-economic hybrid model E4M-GAIA
of the global economy, standing for Energy-Economy-Environment-Engineering Model
of the Earth. The E4M-GAIA
model, which adopts similar theoretical background with the “New Economics”
school depicted mainly in the well-established Cambridge University’ E3 models,
is used to implement this target and to compare it with a reference scenario,
where no reduction target is pursued. Both scenarios consider that impact of
the financial crisis, with updated information to the end of 2010. This paper
aims to provide evidence that the proper direction of a portfolio of policies
including: regulation, behavioral shift, revenue recycling, energy investments,
energy and carbon pricing, can lead to double dividend, namely meeting a deep
reduction target and providing gains for the economy.