Finance is vital for the green energy transition, but access to low cost finance is uneven as the cost of capital differs substantially between regions. This study shows how modelled decarbonisation pathways for developing economies are disproportionately impacted by different weighted average cost of capital (WACC) assumptions. For example, representing regionally-specific WACC values indicates 35% lower green electricity production in Africa for a cost-optimal 2 °C pathway than when regional considerations are ignored. Moreover, policy interventions lowering WACC values for low-carbon and high-carbon technologies by 2050 would allow Africa to reach net-zero emissions approximately 10 years earlier than when the cost of capital reduction is not considered. A climate investment trap arises for developing economies when climate-related investments remain chronically insufficient. Current finance frameworks present barriers to these finance flows and radical changes are needed so that capital is more equitably distributed.

A number of recent economic modelling studies have attempted to analyse resource efficiency and the circular economy. However, modelling analysis in this area is relatively underdeveloped. In particular, many CGE models are unable to provide significant insight given their aggregated sectoral coverage. Here we describe the development of the Environmental Global Applied General Equilibrium (ENGAGE-materials) model created to consider the economic and sectoral effects of potential policies on a circular economy and resource efficiency, which affect materials and resources at the stages of extraction, production and recycling. Our policy scope is global with a special emphasis on China and Europe, as both regions have dedicated policies in place and indicate their willingness to take the lead. The case of steel is relevant as it is a key material for all economies across the world and offers a range of interesting features for circularity and sustainability. ENGAGE-materials models iron ore mining, primary production of iron and steel, secondary production of iron and steel, and steel scrap recycling at the global level. We utilise this technology rich framework to provide preliminary results on scenarios comprising economic insights into a saturation effect and straightforward policy such as doubling the availability of secondary steel.

The anthropogenic increases in CO2 atmospheric concentrations are expected to lead to multiple and possibly opposing effects on crop performance with important implications for crop water productivity. The study integrates the global responses to mounting concentrations at three levels - climatic, cropping and economic - to determine the deviations in crop production and irrigation water requirements from a 'no climate change' socioeconomic development storyline. The biophysical effects are considered comprehensively for eight crop classes by taking into account alterations both to rainfed and irrigation yields, and to irrigation water intensities. These changes in crop growing conditions are explored in the 2004-2050 timeframe across two concentrations pathways (RCP2.6 and RCP 8.5) with the inclusion of the CO2 fertilisation effect. The economic responses are determined through a global water CGE model (RESCU-Water) comprising a bottom-up representation of crop systems. Changes in climatic conditions reduce crop output and depress the global water demand for irrigated crops in spite of an increase in irrigation water intensities. Discrepancies in crop production impacts between tropical and temperate regions increase with CO2 concentration levels. Embedding CO2 fertilisation more than offsets these adverse effects by determining a net increase in crop production and a reduction in irrigation water requirements at a regional level. The resulting water savings potential, even in the lower concentrations scenario (RCP2.6), warrant more research with the aim of reducing the different classes of uncertainty regarding the effects of CO2 fertilisation.

Current country-level commitments under the Paris Agreement fall short of putting the world on a required trajectory to stay below a 2°C temperature increase compared to pre-industrial levels by the end of the century. Therefore, the timing of increased ambition is hugely important and as such this paper analyses the impact of both the short and long-term goals of the Paris Agreement on global emissions and economic growth. Using the hybrid TIAM-UCL-MSA model we consider the achievement of a 2°C target against a baseline of the Nationally Determined Contributions (NDCs) while also considering the timing of increased ambition of the NDCs by 2030 and the impacts of cost reductions of key low-carbon technologies. We find that the rate of emissions reduction ambition required between 2030 and 2050 is almost double when the NDCs are achieved but not ratcheted up until 2030, and leads to lower levels of economic growth throughout the rest of the century. However, if action is taken immediately and is accompanied by increasingly rapid low-carbon technology cost reductions, then there is almost no difference in GDP compared to the path suggested by the current NDC commitments. Key policy insights