Developing Baselines for Climate Policy Analysis

Sound climate policy-making must be based on robust projections about the future of greenhouse gas emissions and sinks, underpinned by climate and economic modeling.  An important first step is the construction of a “baseline” or “business-as-usual” scenario that forecasts future economic and population growth, climate damages, and other macro-level developments of interest in the event that no serious new climate policy is adopted. Starting from this baseline, it is then possible to examine the likely effects of a proposed climate policy – at a global, regional, national or even local level.

This document contributes to UNEP’s MCA4climate initiative by presenting guidelines for developing baselines for climate policy analysis. These guidelines can help users establish baselines for use in national and regional analysis. Baseline analysis allows users to:
• identify of trends in greenhouse gas emissions by source, including agricultural and land-use sources;
• demonstrate links between emissions and the development of the energy system, especially where greenhouse gas emissions are rising quickly; and
• assist in the assessment of additionality for use in climate policy decisions.

For some countries, appropriate and up-to date baselines constructed by governments and international bodies (e.g. IEA’s annual World Energy Outlook) already exist, but for many others, the appropriate data for creating baselines will not be readily available from international statistics; detailed climate policy analysis, therefore, will require access to or development of national data sources.

These guidelines describe key issues in model design and data inputs, including critical macroeconomic variables to consider; the range of sectors to analyze; the role of the public sector and financial markets; environmental issues; and model boundaries.

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