| Summary: | Following high-profile United Nations climate summits in Glasgow and Paris, sub-national regions and cities are increasingly seeking to set climate targets and policies in line with the Paris Agreement's goals. Downscaled carbon budgets are a useful framework for setting local mitigation targets related to a specific global temperature change. However, doing so presents a range of methodological issues, including: choices on the appropriate goals to set, the scope of emissions and sectors, the allocation approaches to apply, whether offset credits and/or carbon dioxide removals are acceptable and, if so, to what extent. This paper details a novel and transparent methodology for downscaling a Paris-aligned global carbon budget to sub-national areas, focusing on emissions from energy (power, heat, cooling, surface transport and industry). The effects of different global carbon budgets, various net zero targets and allocation methods on the size of sub-national budgets and associated mitigation rates are explored. The resulting budgets and annual emission reduction rates vary significantly, reflecting the implications of both high-level methodological choices and local factors, including economic activity, energy-system structure and population. Recent historical emissions (grandfathering) are found to be more appropriate for allocating national carbon budgets to sub-national areas than capability or egalitarian allocations. In the UK case study presented, adopting a grandfathering approach, the annual mitigation rates range from 7% to 16% between different sub-national areas. The analysis concludes that establishing agreed sub-national allocation approaches and boundaries are crucial to developing coherent national strategies consistent with the Paris Agreement's temperature and equity commitments.
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