Staff Climate Notes

How to Cut Methane Emissions

Author/Editor:

Ian W.H. Parry ; Simon Black ; Danielle N Minnett ; Victor Mylonas ; Nate Vernon

Publication Date:

October 31, 2022

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

Limiting global warming to 1.5 to 2°C above preindustrial levels requires rapid cuts in greenhouse gas emissions. This includes methane, which has an outsized impact on temperatures. To date, 125 countries have pledged to cut global methane emissions by 30 percent by 2030. This Note provides background on methane emission sources, presents practical fiscal policy options to cut emissions, and assesses impacts. Putting a price on methane, ideally through a fee, would reduce emissions efficiently, and can be administratively straightforward for extractives industries and, in some cases, agriculture. Policies could also include revenue-neutral ‘feebates’ that use fees on dirtier polluters to subsidize cleaner producers. A $70 methane fee among large economies would align 2030 emissions with 2oC. Most cuts would be in extractives and abatement costs would be equivalent to just 0.1 percent of GDP. Costs are larger in certain developing countries, implying climate finance could be a key element of a global agreement on a minimum methane price.

Series:

Staff Climate Notes

Subject:

Agricultural commodities Agricultural sector Commodities Economic sectors Environment Financial crises Greenhouse gas emissions Natural gas sector

Frequency:

occasional