Name: CP+ (Carbon Pricing Plus) Model
Type: Spreadsheet model
Institutions: Environment for Development (EfD) at Universidad de Los Andes, with Centro de Estudios Manuel Ramirez (CEMR) and Environmental Defense Fund (EDF)
Geographic coverage: Colombia
Description: The model is an Excel-based model that brings the analysis of regulated emissions (via carbon pricing) and unregulated emissions under one umbrella. Using estimated marginal abatement cost (MAC) curves for the regulated sector (energy and industry) and the unregulated sectors (forestry) in Colombia, the model considers scenarios where reduced deforestation may be funded by three different sources: the national budget, a national emissions trading system coupled with a high-intensity (jurisdictional) carbon forest offset mechanism, and international sources of funding. The analysis is being carried out over the seven years from 2024 to 2030.
Questions to be answered/variables considered: The model enables the analysis of emissions and abatement costs in the forestry sector under alternative carbon pricing policies and alternative financing streams for avoiding deforestation.
Strengths: From a policy perspective, greenhouse gas emissions from land use (which clearly dominate those from fossil fuels in the tropics) are particularly difficult to analyze because they are diffuse and unregulated in most countries. This model attempts to begin filling that gap.
Use: An empirical result of the application to Colombia is that if reduced deforestation is linked to a national carbon pricing scheme and international results-based payments, the public funding needed to achieve the deforestation target in Colombia’s NDC in 2030 is about 10 times lower compared with the scenario where only government funding is used.
Development:
- Next steps include generalizing the model so it can be applied to tropical countries other than Colombia.
- The model was shared with modelers from the Ministry of the Environment and the National Planning Department in 2023.