The 2015 Paris Agreement includes Intended Nationally Determined Contributions (INDCs) that describe the contribution of different nations to the global target of limiting world average temperature increase to levels well below 2 degrees Celsius (2 degrees C). The current study uses the PROMETHEUS global energy-economy model to assess CO2 emission trajectories and energy system transformation pathways for Reference, INDC and cost-optimal 2 degrees C mitigation scenarios in four major economies (USA, EU, China, India) and globally. The 2 degrees C target implies a drastic reduction of emissions as well as significant transformation of the global energy system away from fossil fuels and towards Renewable Energy Sources (RES), and energy efficiency improvements. Comparison of 2 degrees C mitigation pathways with INDCs shows that in the EU and USA, the projected 2030 INDC emission targets are relatively close to the emissions reduction requirement of the cost-optimal 2 degrees C trajectory; however, in China, India and globally there is a large gap between INDCs and the optimal 2 degrees C pathway. Ambitious climate policies lead to reduced international fossil fuel prices, with bigger decline projected for coal price. National mitigation costs highly depend on the level of ambition of climate policies, but are generally projected to be lower than 2% of GDP over 2010-2050. (C) 2018 Elsevier Ltd. All rights reserved.