Establishment of optimal control areas for acidification, eutrophication and ground level ozone

Transcription

1 Nederlandse Organisatie voor toegepast-natuurwetenschappelijk onderzoek / Netherlands Organisation for Applied Scientific Research TNO-report 2006-A-R0251/B Establishment of optimal control areas for acidification, eutrophication and ground level ozone Laan van Westenenk 501 P.O. Box AH Apeldoorn The Netherlands P F Date August 2006 Authors Michiel Roemer Toon van Harmelen Peter Builtjes Order no Keywords Intended for Optimal control areas Acidification Eutrophication Ozone Trading European Commission DG Environment, Unit ENV.3 Mr. E. Dame BU 5 03/06 B-1049 Brussels Belgium All rights reserved. No part of this publication may be reproduced and/or published by print, photoprint, microfilm or any other means without the previous written consent of TNO. In case this report was drafted on instructions, the rights and obligations of contracting parties are subject to either the Standard Conditions for Research Instructions given to TNO, or the relevant agreement concluded between the contracting parties. Submitting the report for inspection to parties who have a direct interest is permitted TNO

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3 TNO-report 2006-A-R0251/B 3 of 49 Executive Summary S.1 Main Results The main objective of this study is to designate geographically what the optimal control areas would be with regard to the protection of soils, lakes, vegetation from ground-level ozone, acidification and eutrophication. Protection of the European environment is defined by three parameters: AAE for acidification, AAE for eutrophication, and AOT40f, integrated over Europe. Optimal control areas are areas with equivalent effects on one of the three parameters (per tonne emission reduction). Three classes of equivalent effects are defined that are a factor of ten apart. The class effective represents areas of which the effects are more than average, the class less effective represents areas of which the effects are less than average but larger than 10% of the average, and ineffective includes areas of which the effects are less than 10% of the average effectiveness. Average is the average of all grid cells over Europe. The results are: 1) for SO x three optimal control areas emerge (Figure S.1a); 2) for NO x in relation to acidification similar three optimal control areas as for SOx are found (Fig. S.1b), 3) for NO x in relation to eutrophication and AOT40f two optimal control areas are enough, but they are different in shape for the two themes (Fig. S.1c/d).

4 TNO-report 4 of A-R0251/B Figure S.1 Optimal Control Areas. Clusters: effective (orange >1), less effective (0.1>green <1), ineffective (blue <0.1). A: acidification, SO x B: acidification, NO x C: eutrophication, NO x D: AOT40f, NO x. S.2 Approach/method The basis to designate optimal control areas is to determine the effects of local emission reductions on the European ecosystems. So-called equivalency maps were constructed showing how much an emission reduction per unit weight of SO x and NO x in a particular area affects the burden of ecosystems all over Europe. The burden of ecosystems is described by three parameters: the Average Accumulated Exceedances (AAE) for Acidification, the AAE for Eutrophication, and AOT40f.

5 TNO-report 2006-A-R0251/B 5 of 49 To make the equivalency maps the following steps were required. 1. calculate deposition fluxes of sulphur and nitrogen, and concentrations of ozone (AOT40f) on the basis of 2010 baseline emissions (including ships); 2. couple the calculated fluxes to the critical load data to determine AAE for acidification and eutrophication; 3. couple the AOT40f data to forest area data; 4. reduce in a particular block of cells in the European domain the sulphur emissions by a certain percentage, here chosen as 20% and calculate the change in AAE for acidification; determine the change per unit weight of SO x emission reduction; 5. repeat step 4 for all (704) blocks of cells; determine the average response of all blocks of cells; express the response in relation to the average response; 6. reduce in a particular block of cells in the European domain the nitrogen emissions by 20% and calculate the change in AAE for acidification, the change in AAE for eutrophication, and the change in AOT40f; determine the changes per unit weight of NO x emission reduction. 7. repeat step 6 for all (49) blocks of cells; determine the average response of all blocks of cells; express the response in relation to the average response. The area under consideration in this study is Europe confined by the latitude lines 35 N and 70 N and by the longitude lines 10 W and 32 E. The territories of Belorussia and Ukraine are excluded. This study was divided in two phases. Phase 1 focused on SO x and acidification, phase 2 was directed to NO x in relation to acidification, eutrophication and ozone. The approach in phase 1 has been to calculate the AAE for acidification in 2010 following the baseline 2010 emissions, and emissions from ships, and then to determine changes therein as a result of sulphur emission reductions in blocks of 2 x1 longitude-latitude. This produces a map of Europe showing the equivalency of SO x emission reduction in one area as compared to other areas. The baseline 2010 situation was calculated with the LOTOS-EUROS model. The annual deposition fluxes of sulphur and nitrogen were coupled to the critical load data set (50x50 km resolution) provided by RIVM-CCE. The sulphur reduction runs were done by means of a sulphur only version of the model, enabling a large number of calculations. By changing the sulphur deposition and keeping the nitrogen deposition fixed the AAE changes. Integrating these changes all over Europe shows how much improvement in the ecosystems sensitive to acidity is achieved by a reduction in one particular block of 2 x1 longitude-latitude. The approach for nitrogen in phase 2 is similar to the approach in phase 1 with the exception that the emission reduction runs for NO x were carried out with the full chemical model, and therefore emission reductions were applied in larger blocks of 6 x5 longitude-latitude. In the case of nitrogen three different parameters were

6 TNO-report 6 of A-R0251/B considered: AAE for acidification, AAE for eutrophication, and AOT40f weighted by the fraction of forest cover. This led to three maps over Europe showing the equivalencies of NO x emission reduction in one area as compared to other areas. The chemical transport model The model calculations were done with the LOTOS-EUROS model. This is a full chemical transport model that describes the atmospheric chemistry over the lowest about 3 km of the European atmosphere. The horizontal resolution in this study was set at 1.0 x0.5 longitude-latitude. On an hourly basis the model outputs concentrations and deposition fluxes of a large number of components. The concentrations of atmospheric constituents are determined by a number of processes: 1. emissions, 2. transport and dispersion through the atmosphere, 3. atmospheric chemistry, 4. wet and dry deposition. Anthropogenic emissions are the baseline 2010 emissions. These are the emissions of Member States in the year 2010 according to the National Emission Ceilings Directive. Furthermore, emissions from sea-going ships over international routes are included. They are taken from the ENTEC database of 2000, and increased by 30% to represent the expected emissions of the year Biogenic emissions of isoprene and terpenes are described by means of land-use data (different types of forests). Temperature and radiation determine the strength of the emissions. The atmospheric transport and dispersion is determined by meteorological conditions. In this study the meteorological year 1997 was selected. The diagnostic meteorological data were provided by the Free University of Berlin. Impact of species from other parts of the world is incorporated by so-called background concentrations. Background concentrations are based on the output of the global model TM3, also driven by meteorological conditions of The atmosphere contains a huge number of species, interacting with each other through a large number of reactions. To describe the full atmospheric chemistry simplifications are required. In LOTOS-EUROS the gas phase chemistry is represented by the CBM-4 mechanism. Wet deposition is the removal of species that are dissolved in water droplets by means of precipitation. The model describes the uptake of dissolvable components in water droplets, and subsequently the removal by precipitation events. Dry deposition is the removal of species in air at contact with the surface beneath. The rate of removal depends on the properties of the components, on the type of underlying surface, and on the meteorological conditions.

7 TNO-report 2006-A-R0251/B 7 of 49 Critical Load Data The AAE data for acidification and eutrophication on a resolution of 50x50 km were provided by RIVM-CCE. The data are derived from 24 national critical load submissions and from CCE s European background data base. Data from million ecosystems, collated by the CCE in 2004 are utilised. The data are given for forest ecosystems, for semi-natural vegetation, for surface waters and for all ecosystems. The latter was used in this study. Forest cover data are from the land-use data base as it is used in the LOTOS- EUROS model. The land-use data base is the PELINDA data base derived from the NOAA AVHRR NDVI monthly maximum value composites. Optimal control areas Based on the equivalency maps optimal control areas were constructed. An optimal control area represents all grid cells in the domain of which the effectiveness on changing the AAE or AOT40f falls within a certain upper and lower limit. The choice in selecting quantatative upper and lower limits is partly subjective. An important consideration was that the variation of effectiveness within an optimal control area (the upper to lower limit ratio) should be close to the variation of effectiveness within countries under the current NEC-directive in which the country borders are the optimal control areas. The results of SO x provided sufficient detail to determine the variation of effectiveness within countries. Averaged over all countries this appeared to be a factor of ten. This factor was used in determining the number of classes to make optimal control areas, both for SO x and NO x. A choice for less variation in effectiveness within a optimal control area would imply more optimal control areas. A drawback of a relative large number of classes would be that these areas will be scattered over Europe, and that Member States, and in particular the larger countries will be divided over 3 or more optimal control areas. S.3 Results Fluxes and concentrations in 2010 Based on the baseline 2010 emissions and the ship emissions for 2010 deposition fluxes for sulphur and nitrogen were calculated as well as the ozone concentrations for AOT40f (Fig. S2). The largest sulphur deposition flux occurs in the Balkan and Poland, reflecting the presence of large sources in these areas. The contribution of international shipping is clearly seen in the English Channel and in the Mediterranean Sea, north of the African coast. The largest nitrogen deposition fluxes occur in the Benelux, the western part of Germany, Brittany in France and the Po-valley in Italy.

8 TNO-report 8 of A-R0251/B Figure S2 Sulpur deposition flux (eq/ha/yr), nitrogen deposition flux (eq./ha./yr) and AOT40f (ppb.h) in The highest AOT40f values are seen at seas close to areas with high emission density, such as the North Sea. Over land the highest values are found in the south, and the lowest in the north and east of Europe.

9 TNO-report 2006-A-R0251/B 9 of 49 AAE and AOT40f*woodarea Figure S3 AAE-acidification (eq/ha/yr), AAE-eutrophication (eq./ha./yr) and AOT40f*woodarea (ppb.h.km 2 ) in 2010.

10 TNO-report 10 of A-R0251/B The AAE for acidification and eutrophication is calculated by combining the deposition fluxes with the critical load data (Fig. S3). For AAE-acidification it is apparent that large parts of Europe (the south and southeast) have no exceedance at all. Exceedances are found in the north, the northwest and at various other locations north of the Alps. This reflects the location of ecosystems which are the most sensitive to acidity. Ecosystems north of the Alps are (much) more sensitive to acidity than ecosystems south of the Alps. The distribution of AAE for eutrophication is different. The largest values are found in France, the Benelux, Germany, Poland, Austria, and the northern part of Italy. The distribution of AAE-eutrophication is quite different from the AAEacidification distribution. The AOT40f data is combined with the forest area data. Obviously, the highest values are seen in regions with large fractions of forest. Effects per unit weight and Optimal Control Areas The emission reduction runs result in changes in AAE and AOT40f which, when divided by the mass of the reduction, are expressed in changes per unit weight. These are the so-called equivalency maps. The equivalency maps illustrate that effects of local emission reductions depend on the distance to sensitive ecosystems, and to the atmospheric transport, dispersion and transformation characteristics. The equivalency maps shows that, depending on the theme (acidification, eutrophication, AOT40f), Europe can be seen as divided in a number of classes with distinct different effects. The geographically most detailed calculations were performed for SO x. The effects of local SO x emission reductions vary a factor of 1000 ranging from ineffective in South-East Europe to effective in North-West Europe. Also within countries large variations are found. In France, Norway, Sweden and Germany the variations in effects are a factor of For other large countries like Spain, Italy, Romania and Poland the variations are a factor of The average within country variation is close to 10. This factor of variation was then used to define the different zones. For NO x (acidification) the same principle was used. For acidification (SO x and NO x ) three zones or bubbles emerge (Figure S1a,b), classified as effective (more than average), less effective (less than average) and ineffective (less than 10% of average). 1) Effective: southern Norway, southern Sweden, Denmark, the United Kingdom, Republic of Ireland, the Netherlands, Belgium, Luxembourg, northern Germany, northern France. 2) Less effective: Northern Norway, northern Sweden, Finland, Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary, Slovenia, Croatia, Aus-

11 TNO-report 2006-A-R0251/B 11 of 49 tria, Switzerland, southern Germany, southern France, northern Spain, northern Italy. 3) Ineffective: Portugal, southern Spain, southern Italy, Bosnia-Herzegovina, Serbia, Montenegro, FYR Macedonia, Albania, Greece, Malta, Cyprus, Romania, Bulgaria, Moldavia. Less variation of effects within Europe was found for eutrophication (factor 100) and AOT40f (factor 50) which is partly due to the fact that for NO x a coarser approach was taken (see: approach/method). The fact that the geographical distribution of forest and of ecosystems sensitive to eutrophication is more smooth than the rather skewed distribution of ecosystems sensitive to acidity is also responsible for less geographical variation in effects. Two zones seem enough to cover the range of effects (Figure S1c,d). There is not a sharp criterium in selecting the number of zones and the borders of the zones. The principle is to have not more than a factor of 10 of variation within the zones, and to divide zones in more than average effective, less than average, and ineffective. The existence of administrative borders and whether or not zones should match country borders was not considered. NO x, combination of themes The optimal control areas for NO x reduction differ significantly for the three different themes. Since any NO x emission reduction has an effect in all three themes, it was investigated if optimal control areas for a combination of the three themes could be established. This very much depends on weighing factors to be assigned to the themes. Since these weighing factors are unknown, all three were set at 1, giving equal weight to all themes. Optimal control areas for the combination simply follow from multiplying the equivalency maps with each other.

12 TNO-report 12 of A-R0251/B Figure S4 Optimal control areas for NO x emission reduction when acidification, eutrophication and ozone are combined in equal weights. Figure S4 shows that the resulting configuration of optimal control areas for NO x emission reduction when all three themes are combined resembles the configuration of optimal control areas for acidification alone. The reason is that multiplying the configurations of euthrophication and ozone results in a very flat distribution with small gradients. This leaves the acidification configuration as the most visible in the combined configuration. S.4 Optimal control areas in the context of trading To optimal control areas for environment and economy The presented optimal control areas are optimal in the sense that it is assumed that ecosystem impacts are equivalent and interchangeable within Europe, so independent of the exact location. In other words, optimal is used here as environmentally optimal. Within integrated assessment studies, the term optimal refers also to economically optimal, e.g. least cost solutions to reach a designated (environmental) target. In the context of flexible instruments to protect the environment, e.g. emission trading, the marginal costs of abatement have to be included in the analysis. This is important for the design of optimal control areas, since economics will determine which parties in reality will benefit (more) from European ecosystem protection and who will less or not.

13 TNO-report 2006-A-R0251/B 13 of 49 Protect parties by restriction of the trading bubble It is economically most attractive to trade within a trading bubble as large as possible. In one European trading bubble, environment and economy are served best in a trading system of ecosystem protection equivalencies ( exchange rates ). To guarantee a certain level of ecosystem protection to all participating countries, a division into several trading bulbs might be necessary at the costs of overall costeffectiveness. It is unlikely that a bubble that focuses on effective ecosystem protection only will also distribute ecosystem protection equally over European countries. Expected impact of a trading scheme The national emission reduction targets of the Gothenburg protocol have been largely based upon cost-effectiveness of ecosystem protection. Therefore, it is expected that trade in terms of equivalency values would not have a major impact on present national emission reduction plans and hence national ecosystem protection. Trade in terms of tons of SO 2 emissions would have a strong negative impact on the ecosystem protection in terms of acidification, since sensitive ecosystem in terms of acidification have not the same distribution pattern over Europe as costeffective mitigation of SO 2 emissions. This means that European trade of SO 2 emission rights in addition to the Gothenburg protocol would result in large cost savings but at the costs of (strong) deterioration of the ecosystems in Europe. Costeffective mitigation of NO x is distributed over Europe quite equally. Therefore, the impact of NO x trade on both mitigation costs and ecosystem protection is limited. Larger savings can be reached by focusing at one environmental theme but only at the cost of lower ecosystem protection for the other themes. S.5 Recommendations The following actions are recommended: 1. to extend this study with other components: VOC, NH 3 and PM to repeat the NO x calculations on a finer scale, i.e.: the scale at which the SO x calculations are done. 3. to compare national integrated RAINS calculations with the presented grid cell marginal cost-curve approach in a case with realistic national emission reduction ceilings in order to assess the potential impact on ecosystem protection, health and mitigation costs of two trading variants, viz. 3.1 trading of ktonne pollutant emission rights within several environmental optimal control areas with equivalent ecosystem protection effectiveness in Europe and 3.2 trading of ecosystem protection equivalent units within one European bubble.

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15 TNO-report 2006-A-R0251/B 15 of 49 Table of contents Executive Summary...3 S.1 Main Results...3 S.2 Approach/method...4 S.3 Results...7 S.4 Optimal control areas in the context of trading...12 S.5 Recommendations Introduction Approach/Method The model Emissions Background conditions Comparison of sulphur version versus full model More simplifications Critical load data Reduction runs Sulphur Nitrogen Results LOTOS-EUROS runs Calculations of Sulphur Ozone Deposition fluxes in Results Reduction Runs Sulphur Targets for individual countries Effects of emission changes in individual countries A sensitivity experiment Nitrogen Acidification Eutrophication Ozone Optimal control areas...30

16 TNO-report 16 of A-R0251/B 5. Cost effective and eco-system effective options Integrated Results Distribution of sources and effects (sulphur case) Optimal control areas in the context of trading Conclusions and recommendations Conclusions Recommendations References Abbreviations Authentication...49 Annex A Annex B Annex C Tables and Figures Project Description The costs and benefits of European SO 2 emission trading

17 TNO-report 2006-A-R0251/B 17 of Introduction In commission of the EU-DG Environment TNO has done a study to investigate the potential of optimal control areas (or so-called bubbles) approach in designing an abatement strategy after 2010 for acidification, eutrophication and ground level ozone. The Gothenborg Protocol is based on a national approach by which emissions of individual countries are reduced in a cost-optimal way to obtain improvement in protection of ecosystems and human health. The Member States can be seen as bubbles. This concept is not necessarily an optimal strategy. In the past various studies have addressed the issue of combining Member States emission reduction obligations into one zone or bubble by allowing trading of emissions across the border (joint implementation). In the mid 1990s joint implementation schemes were devised in the framework of the NECE/CLRTAP second Sulphur Protocol (Ministry of Environment, 1995; Leutert et al., 1995). Emission trading schemes imply both a environmental component as well as an economic component. The environmental component requires that the total exceedance (of sulphur in Europe) as a result of trading is less or equal to the total exceedance without trading. The economic component is usually expressed by marginal costs of emission reductions. Trading is beneficial if the reductions are carried out in countries with low marginal costs. The US-EPA has extended experience with trading of SO x and NO x emissions across the States. The US-EPA has conducted various studies to examine the effects of regional control strategies in order to help States meet the National Ambient Air Quality Standard for ozone. In a study examining the effects of emission reductions in the OTAG domain (eastern part of the USA) it was concluded that NO x emission reductions in upwind States would contribute in reducing ozone levels in downwind non-attainment areas (US-EPA, 1997). A multi-state cap and trade programme was set up to control NO x emissions. In an evaluation paper over the first years of the programme ( ) it was concluded that significant emission reductions were achieved on a regional scale, and in most local areas (US- EPA, 2004). In the majority of counties actual emissions were below allocated allowances. A few areas showed emissions above the allocated allowances. The conclusion was that the cap and trade programme helped in reducing the NO x emissions, and that adverse local effects were limited in scope. Contributions to acidification for SO 2, NO 2 and NH 3 by individual European Member States have been developed by means of a linear relationships connecting emission changes to area of unprotected ecoystems in Europe (Hettelingh et al., 2005). It shows that some countries contribute significantly whereas others have very small contributions. This depends in the first place on the location of a country to the sensitive ecosystems.

18 TNO-report 18 of A-R0251/B In the study presented here the contribution of grid cells to the European integrated exceedance of ecoystems is examined. For SO x the grid cells are of the order of 120x120 km 2, for NO x they are larger. Based on these contributions equivalency maps over Europe are constructed that show the effect per tonne emission reduction on changing the exceedance in acidification, eutrophication and ozone. Optimal control areas, or bubbles are designed on the basis of these equivalency maps, and consequently represent the term optimal in an environmental protection sense only. An additional analysis is carried out in which costs and environment are combined. It shows the differences between trading in tonnes versus trading in equivalencies. Chapter 2 describes briefly the adopted approach, the LOTOS-EUROS model and the data bases used in this study. In Chapter 3 the results of the LOTOS-EUROS model are discussed, and in chapter 4 the results of the sulphur and nitrogen reduction runs are presented. Costs are presented in chapter 5, and conclusions are given in chapter 6. There are 3 Annexes. Annex A presents the tables and figures, in particular of the model runs. The project description is given in Annex B and in Annex C a more detailed discussion on costs is given.

19 TNO-report 2006-A-R0251/B 19 of Approach/Method There were two phases in this study. Phase 1 focused on SO x and acidification, phase 2 was directed to NO x in relation to acidification, eutrophication and ozone. The reason to start with sulphur is that it is related to acidification only, in contrast to nitrogen which is connected not only to acidification, but to eutrophication and ozone as well. Moreover, computational time was another consideration. From the full chemical transport model LOTOS-EUROS a simplified sulphur only version was derived which required considerably less computational time than the full model enabling a more detailed approach involving more reduction runs than possible for nitrogen with the full model The approach in phase 1 has been to calculate the AAE for acidification in 2010 following the baseline 2010 emissions, and emissions from ships, and then to determine changes therein as a result of sulphur emission reductions in blocks of 2 x1 longitude-latitude. This produces a map of Europe showing the equivalency of SO x emission reduction in one area as compared to other areas. Equivalency is expressed as delta AAE (eq./ha/yr) per tonne. The baseline 2010 situation was calculated with the LOTOS-EUROS model. The annual deposition fluxes of sulphur and nitrogen were coupled to the critical load data set (50x50 km resolution) provided by RIVM-CCE. By changing the sulphur deposition and keeping the nitrogen deposition fixed the AAE changes. Integrating these changes all over Europe shows how much improvement in the ecosystems sensitive to acidity is achieved by a reduction in one particular block of 2 x1 longitude-latitude. The approach for nitrogen in phase 2 is similar to the approach in phase 1 with the exception that the emission reduction runs for NOx were carried out with the full chemical model, and therefore emission reductions had to applied in larger blocks of 6 x5 longitude-latitude. In the case of nitrogen three different parameters were considered: AAE for acidification, AAE for eutrophication, and AOT40f weighted by the fraction of forest cover. This produced three maps of Europe showing the equivalencies of NOx emission reduction in one area as compared to other areas. Equivalencies are expressed either as delta AAE (eq.ha/yr) per tonne or as delta AOT40f*wood cover (ppb.h.km 2 ) per tonne. 2.1 The model The LOTOS-EUROS model is a chemical transport model for the European lower troposphere (Schaap et al., 2005; Schaap et al., 2006.). It covers the European territory from 10 W to 60 E and from 35 N to 70 N. The horizontal resolution is 0.25 latitude by 0.5 longitude, which is equivalent to roughly 30x30 km. In the

20 TNO-report 20 of A-R0251/B vertical there are four dynamic layers: a layer from 0-25 m, a mixing layer, and two reservoir layers. The concentrations are calculated by solving the continuity equation, describing the processes that affect the atmospheric composition: emissions, wet and dry deposition, chemistry, transport and dispersion. The output of the model (concentration and deposition fluxes) is on an hourly basis. The model is driven by analysed meteorological fields based on measurements and made consistent according to an optimal interpolation method (Reimer and Scherer, 1992). The meteorological data sets are provided by the Free University of Berlin. For this study the meteorological year of 1997 was selected. For the sulphur only case the LOTOS-EUROS model was converted into a simplified model that allows the calculation of SO 2 and SO 4 with nearly the same accuracy as in the full chemical model but with a factor of 50 gain in computation time. The emission and transport characteristics are similar in the simplified and the full chemical model. The chemistry and deposition are nearly identical. The chemistry is simplified by working with pre-calculated, fixed OH fields. The OH fields are taken from the full chemical model simulating the baseline 2010 situation. The chemical degradation rates in the simplified model are almost identical to the ones in the full chemical model. The deposition velocity of sulphate depends amongst others on the sulphate to nitrate ratio. This ratio was taken from the full chemical model Emissions The emissions are the baseline 2010 emissions (PRIMES without further climate measures). Ship emissions in 2010 are based on the ENTEC emission data base for 2000, taking into account a decadal increase in emissions by 30%. The model includes biogenic emissions of isoprene and terpenes. These emissions are based on land-use data (coniferous forests, deciduous forests and mixed forests), and on temperature and global radiation Background conditions The transport of components advected from other parts of the world is described by means of so-called background concentrations. Background concentrations for 28 components are provided by TM3, a global model (Dentener et al., 1999). The TM3 model was run for the same meteorological year (1997) as the LOTOS- EUROS model. The background concentrations by TM3 are on a 6-hourly basis.

21 TNO-report 2006-A-R0251/B 21 of Comparison of sulphur version versus full model The sulphur version was compared against the full model for SO 2 and SO 4. The differences in calculated concentrations and deposition fluxes between the two models are very small. For SO 2 it is less than 1%, for SO 4 it is usually less than 2-3%, but for a few grid cells differences up to 8% were found. The larger differences for SO 4 are due to the fact that the sulphate to nitrate ratio in the sulphur version can differ sometimes from this ratio in the full chemical model. This ratio, which is important in determining the sulphate deposition loss rate, is fixed in the sulphur version in contrast to the full chemical model where it varies according to the sulphate and nitrogen concentrations. The differences are small so that it can be concluded that the sulphur version of the model gives a proper simulation of SO 2 and SO More simplifications In order to keep the computational burden for a large number of reduction runs manageable two further steps were taken. The resolution of the sulphur version was reduced with a factor of 2 in both horizontal dimensions from 0.25x0.50 latitudelongitude to 0.5.0x1.0 latitude-longitude which is close to 60x60 km. By doing so, local peak values will be reduced somewhat but the overall pattern is preserved. The concentration and deposition fluxes in the coarse mode are nearly the same as in the fine resolution model. The second simplification is to apply the emission reductions not on each grid cell separately, but on blocks of cells. For the sulphur reduction run this implied blocks of 2x2 grid cells. The calculations in this study are done on a 0.5.0x1.0 latitudelongitude resolution on the entire domain from 10 W till 60 E, whereas the emissions are changed on a 1.0x2.0 latitude-longitude. More than 700 runs were carried out, involving all grid cells in the domain from 10 W till 32 E, which is just east of the Finnish-Russian border. For the nitrogen emission reduction runs blocks of 10x5 cells were selected, equivalent to applying emission reductions of nitrogen in blocks of 5.0x6.0 latitude-longitude. 2.2 Critical load data The critical load data for acidification and eutrophication on a 50x50 km resolution were provided by RIVM-CCE. The critical load data was converted from the EMEP coordinate system into the longitude-latitude system as used in LOTOS-EUROS. Figure A.1 shows the critical load for sulphur. In converting from one system to another a slight loss of gradients is unavoidable, but the differences with the original data are very small.

22 TNO-report 22 of A-R0251/B There are four data sets: for forests, for (semi)-natural vegetation, for surface water, and for all ecosystems. In this study the data set for all ecosystems was used. Forest data were required to connect with the AOT40f and changes therein as a result of nitrogen emission changes. In the land-use data base as employed by the LOTOS-EUROS three types of forest are distinguished: deciduous forest, coniferous forest and mixed forest. LOTOS-EUROS use the Pelinda data base (de Boer et al., 2000). The main data source for the land cover classification in the Pelinda land-use data base is the NOAA AVHRR NDVI monthly maximum value composites. Figure A.2 shows the geographical distribution of the forest cover. 2.3 Reduction runs Sulphur With the full chemical model total deposition fluxes (total: dry and wet) of S- and N-compounds for the 2010 baseline case were determined. Coupling this to the critical load data of acidification produced a map of Europe of average accumulated exceedances for acidification. Each sulphur emission run produced new sulphur deposition fluxes, and in combination with the nitrogen flux of the base case a new map of average accumulated exceedances was created (Fig. 1). critical load S flux N flux Figure 1 Average Accumulated Exceedance for acidification in the base case (red line) and in the sulphur reduction case (green line).

23 TNO-report 2006-A-R0251/B 23 of 49 For each of the reduction runs a change in the AAE is determined. The sum of all local changes (in all grid cells) produces a European integrated change. In integrating the AAE over Europe the European land area west of 32 E is taken with the exception of the territory of Belorussia, Russia, Turkey and the Ukraine. The reduction runs are defined by a 20% reduction of the local sulphur emission in a particular block of cells (of 1.0x0.5 longitude-latitude). The reductions apply on land-based emissions as well as on ship emissions. The change in the AAE integrated over Europe is then weighted by the mass of the reduction. This gives an integrated change in AAE per unit weight of sulphur reduction. This procedure is executed for all 704 blocks of cells (of 2.0x1.0 longitude-latitude) in the domain. This constitutes the equivalency map for sulphur. An average effect per unit weight is determined by averaging the effects of all 704 blocks of cells. Finally, the effects per unit weight are expressed with respect to the European average effect per unit weight Nitrogen The procedure to determine equivalency maps for nitrogen is similar as the procedure for sulphur. There are a few differences. As stated at the beginning of this chapter the nitrogen reduction runs are done with the full chemical model. The emission reductions were therefore applied on larger blocks of cells of 6.0x5.0 longitude-latitude. The other difference with sulphur is that nitrogen is involved in three themes: acidification, eutrophication and ozone. For acidification the procedure in establishing equivalency maps of nitrogen is identical to the procedure for sulphur (Fig. 2).

24 TNO-report 24 of A-R0251/B critical load S flux N flux Figure 2 Average Accumulated Exceedance for acidification in the base case (red line) and in the nitrogen reduction case (green line). For eutrophication the data base is one-dimensional (only nitrogen) but the procedure to establish equivalency maps remains the same. For ozone the AOT40f parameter was selected to express the burden of ozone to vegetation. The AOT40f values were multiplied with the forest area in each grid cell. As with sulphur the equivalency maps of nitrogen are expressed with respect to the average value (over the domain) of the effect per unit weight.

25 TNO-report 2006-A-R0251/B 25 of Results LOTOS-EUROS runs 3.1 Calculations of 2000 Calculations with the full chemical transport LOTOS-EUROS model fed by the baseline 2000 emissions (including ship emissions) were carried out to show how the model performed against measurements. Since the model is driven by 1997 meteorology the model is compared against the 1997 measurements obtained from EMEP. This 3 years difference in emission data is responsible for a small systematic difference, especially for components of which the emissions gradually decrease. The selected stations which are given in Table A1 span a large part of Europe. The condition is that at least 70% of the data is available. For most of the stations, data coverage of more than 90% was obtained Sulphur For SO 2 the ratio of modelled to observed values ranges from a factor of 2 (overestimation by the model) to a factor of 0.1 (underestimation). (See: Fig. A.3.) It is clear that in case of local sources nearby a station a grid model with averaging over 30x30 km or more has problems getting the concentrations right. The observed SO 2 concentrations at the two French stations are the highest in the database, but they are not matched by the model calculations resulting in a strong underestimation. Also at a number of other stations in pristine environments (Norway, Sweden, Finland) serious underestimations are seen. On average the model has a tendency to be about 40% lower than the observations. The correlation coefficients are not particularly high either, ranging from 0.3 to 0.7 for most of the stations (Fig. A.4). For instance the Italian stations seem hard to cover properly with almost no correlation and substantial overestimation. Sulphate is a secondary species and the performance of the model against measurements seems more uniform over the stations than the performance of sulphur dioxide. Again, the model shows lower sulphate than the observations (Fig. A.5). The correlation coefficient is better than for SO 2 ranging between 0.4 and 0.7 for most of the stations (Fig. A.6). From 1997 to 2000 the sulphur emission have decreased by about 14% (Vestreng et al., 2005), resulting in a proportional underestimation by the model compared to the 1997 observations. However, the model underestimates more than that. In previous model inter-comparisons it appeared that the model (then called LOTOS) underestimated SO 2 as much as in this comparison. Similar underestimations were seen for a few other models, including the EMEP model (van Loon et al., 2004). The general conclusion drawn in the van Loon et al study was that the LOTOS

26 TNO-report 26 of A-R0251/B model has a similar model performance as other European CTM s, like the Unified EMEP-model Ozone For ozone the modelled concentrations are in general slightly higher (10%) than the observations (Fig. A.7). The correlation coefficients (based on hourly values) varies between 0.6 and 0.7 (Fig. A.8). 3.2 Deposition fluxes in 2010 Figure A.9 and A.10 show the calculated annual sulphur and nitrogen fluxes in The deposition patterns are quite similar to the patterns calculated by the EMEP model for 2010, albeit that the level of fluxes is somewhat lower than according to EMEP. The EMEP figures can be found at page 25 of the status report 1/2003 (Tarrasón et al., 2003). The main cause of the differences is that the wet fluxes which in LOTOS-EUROS are lower than in the EMEP model. The figure also illustrates the importance of ship emissions, in particular for sulphur emissions. Figure A.11 shows the averaged accumulated exceedance for acidification as calculated by the LOTOS-EUROS model for The patterns are similar to those reported by EMEP (see again page 25 of the status report 1/2003 (Tarrasón et al., 2003)), but due to the lower deposition fluxes in LOTO-SEUROS the area of exceedances is smaller, as are the peak values. Figure A.12 shows the average accumulated exceedance for eutrophication for Again, as for acidification, it resembles the pattern by the EMEP model but the levels are somewhat lower. A sensitivity experiment was conducted to investigate the effects of increasing the sulphur deposition fluxes by 30%. In chapter 4 the findings of this experiment are discussed. The AOT40f resulting from the baseline 2010 emissions is given in figure A.13.

27 TNO-report 2006-A-R0251/B 27 of Results Reduction Runs 4.1 Sulphur In this section only the integrated results will be presented, that is the effect of emission reduction in one block of cells on the integrated AAE over Europe. Emissions of SO x are decreased by 20% in grid blocks of 2 longitude by 1 latitude, one by one. The calculations are based on the sulphur model on a 1.0x0.5 longitude-latitude resolution over the entire domain from 10 W till 60 E. Figure A.14 shows the amount of SO x reduction that is equivalent to a 20% emission reduction, and figure A.15 gives the contribution of each cell to the integrated change in AAE. The sum of all contributions together is by definition equal to 100%. A few cells in the UK, Benelux, Germany and Poland contribute more than 3% to the integrated change in AAE. This is due to a combination of large sources (and consequently large emission reduction) and the relative proximity to sensitive ecosystems. In the Balkan and Turkey there are larger sources but since they are more remote to the sensitive ecosystems their contribution is small. The integrated change in AAE per unit weight of reduced sulphur emission is expressed in relation to the average effect per unit weight (Figure A.16). (Average implies the average of all 704 blocks of grid cells involved in the reduction calculations.) It is clear that there is a large gradient in effectiveness in Europe from south to north. This is in the first place due to the gradient in the sensitivity of the ecosystems. In southern Europe the ecosystems are much less sensitive to acid deposition than in northern Europe. In southern Europe the AAE is zero whereas in northern Europe AAE is positive at a large number of cells. It also appears in Figure A.16 that there is substantial variation of effectiveness within the larger countries. Table A.2 gives for each country the minimum and the maximum effectiveness. In France and Norway there is nearly a factor of 100 between cells. In countries like Germany and Sweden there is also substantial variation in effects between the most effective and the least effective cells. For other large countries (Spain, Italy, Poland, Romania) the variation of effectiveness within a country is much less. The average variation within countries is about a factor of ten. Establishing the configuration of optimal control areas depends on how to do the clustering of cells. The effectiveness of sulphur reduction differ a factor of about 1000 ranging from ineffective cells in the southeast of Europe to very effective at a few cells in the northwest. Selecting the number of clusters is related to the question how much variation is allowed within a cluster. It was felt that the variation

28 TNO-report 28 of A-R0251/B within a zone should be close to the average variation within a country. With an average variation of ten it follows that there will be three classes or zones. Obviously, this choice (or any other choice) is somewhat arbitrary. With just three zones most of the countries belong to one zone, only a few of the larger countries are divided over two zones. With a clustering in more classes (for instance 6 classes with a variation within a class of about 3) a number of zones appear scattered over Europe, and, a number of large countries are divided over three or four zones. This might be very inconvenient when assigning new emission reduction targets for 2020 or later. Three belts with different types of effectiveness emerge. More than average effective regions (colour scales above 1) are found in the UK, Northern France, Benelux, Northern Germany, Scandinavia and parts of Poland. Less than average effective regions are found in Southern France, Southern Germany, Switzerland, Austria, Czech Republic, Slovakia, the Baltic States and Finland. Very ineffective regions are seen in Spain, Portugal, Italy, Hungary, Romania, Bulgaria, the former Yugoslavian republics, Albania and Greece Targets for individual countries In the previous sections the integrated effect referred to the changes in the AAE integrated over the whole European domain. Similarly, the integration can be restricted to changes in the AAE at the territory of individual countries. Figure A.17 shows the effects per reduced tonne SO x for an effect integrated over Germany. In the case that the integrated effect of AAE is restricted over Germany the SO x emission reductions are effective (more than average) in Germany itself and in areas upwind of Germany to a distance of about 500 km, including the Benelux, northern France and the southeast of the UK. Similar findings are seen when the integrated effect on AAE is restricted to other countries. It shows that in order to achieve a certain target in reducing the AAE in a particular country the most effective way is to apply emission reductions in the country involved and in source areas in neighbouring countries at a limited distance (approximately not more than 500 km away) Effects of emission changes in individual countries Figures A18-20 show the effects of changes in the AAE of 20% SO x emission reductions in respectively Germany, France and the UK plus Ireland. Reductions in a particular country have the largest effects at the ecosystem in the country itself plus at a few more remote ecosystems which are close to a no-effect level. It is clear that in certain areas where the AAE is high (German-Dutch border, western France, Manchester-Liverpool area in the UK) the improvements in AAE are low, and that in order to substantially reduce the AAE in these areas larger emis-

29 TNO-report 2006-A-R0251/B 29 of 49 sion reductions are required including support in reduction by neighbouring countries A sensitivity experiment As was noted in chapter 3 the fluxes of sulphur and nitrogen in LOTOS-EUROS are somewhat lower than the fluxes determined by the EMEP model. A sensitivity experiment was carried out to see if the results as shown in Figure A16 are sensitive to changes in the baseline 2010 fluxes. In this experiment the nitrogen and sulphur fluxes of the baseline 2010 case were increased by 30% as to reflect the higher deposition fluxes in the EMEP model. Consequently, the AAE increases, and larger areas are subject to exceedances. Changes are however not drastic and the patterns are quite alike. The changes of the sulphur deposition fluxes in the reduction runs are also increased by 30%. The effect on the integrated AAE per tonne reduced is given in Figure A.21. There are a few minor changes but the overall picture that emerges is nearly identical to what is portrayed in figures A Nitrogen Emissions of NO x are decreased by 20% in grid blocks of 6 longitude by 5 latitude, one by one. The calculations are based on the full chemical model on a 1.0x0.5 longitude-latitude resolution over the entire domain from 10 W till 60 E Acidification The integrated change in AAE-acidification per unit weight of reduced nitrogen emission is expressed in relation to the average effect per unit weight (Figure A.22). (Average implies the average of all 49 blocks of grid cells involved in the reduction calculations.) Due to the much coarser approach for nitrogen as compared to sulphur the extreme values in effectiveness in changing the AAE is less. Nevertheless it is clear that also for NO x emission reductions there is a large gradient in effectiveness in Europe from south to north. As for sulphur this is due to the gradient in the sensitivity of the ecosystems. In southern Europe the ecosystems are much less sensitive to acid deposition than in northern Europe. In southern Europe the AAE is zero whereas in northern Europe AAE is positive at a large number of cells.

30 TNO-report 30 of A-R0251/B Eutrophication Figure A.23 shows the integrated change in AAE-eutrophication per unit weight of reduced nitrogen emission, which is expressed in relation to the average effect per unit weight. The most effective regions in changing the AAE are found in the centre of the domain, roughly in an area between 4 W and 20 E in west-east direction and between 42 N and 55 N in north-south direction. This coincides with the location of ecosystems sensitive to eutrophication (Fig. A12). This area is just a factor of 2 more effective than the average. The ineffective regions (less than 10% of the average) are in the northern tip of Scandinavia and Finland, and at the western edge of Scotland. It is clear that the gradient in effectiveness for eutrophication is much smaller than for acidification. For eutrophication the most ineffective and effective grid blocks differ about a factor of 100 as compared to a factor of 400 for acidification-no x (coarse mode) and a factor of 1000 for acidification-so x (fine mode) Ozone Figure A.24 shows the integrated change in AOT40f (including wood area factor) per unit weight of reduced nitrogen emission, again expressed in relation to the average effect per unit weight. The most effective regions are in the north and in the south of the continent, there where forest is abundant. The middle section of Europe (stretching from Ireland to Poland) is less effective for reasons of less forest cover. For the Benelux, and parts of France, the United Kingdom and Germany there is an additional reason. The atmosphere in these areas is abundant in nitrogen, and a reduction of nitrogen emissions results in smaller decreases of ozone concentrations than in other regions of Europe Optimal control areas In the case of sulphur the zones were constructed on the presumption that the variation of effectiveness within a zone should be close to the average variation of effectiveness within countries. The fine resolution approach was instrumental in doing so. In the case of nitrogen the approach has used the coarse mode, and consequently variations within a country do not apply here since many countries are covered by just one block of grid cells. For NO x the factor of variations in effectiveness allowed within one zone was chosen to be the same as for SO x, namely a factor of ten. The gradient in effectiveness of nitrogen reductions for acidification is smaller than the effectiveness of sulphur reductions for acidification, but it seems reasonable to assume that this is largely due to differences in the approach (coarse versus fine). It is assumed that for SO x and NO x the gradients in effectiveness (acidification) would be similar if for both a

31 TNO-report 2006-A-R0251/B 31 of 49 fine mode approach was adopted. A division in three classes each of them a factor of ten apart is a defendable choice for NO x in relation to acidification. The gradients in effectiveness for eutrophication and AOT40f are considerably smaller than for acidification, and it seems logic that this should then result in less zones or classes. Also for the latter two themes a factor of ten is chosen for the variation within a class.

32 TNO-report 32 of A-R0251/B

33 TNO-report 2006-A-R0251/B 33 of Cost effective and eco-system effective options The previous chapter presented the ecosystem protection equivalency maps for SO 2 (acidification) and NO x (acidification, eutrophication and ozone). This chapter will analyse what these maps mean in the context of a European trading scheme. In order to do so, in addition to the environmental data, cost data on emission control technologies are a requisite in the following cost-effective emission control and trading calculations. Cost curves of marginal costs are taken from the website of IIASA. These costs are based on further reduction of emissions starting from the baseline 2010 emissions. However, it appeared that this baseline 2010 is a baseline in which climate measures are included (PRIMES with further climate measures; Amann et al., 2005) whereas the model runs are based on PRIMES without further climate measures. For various countries there is hardly any difference between the two sets, but for a few countries it may differ 10-20%. For the EU-25 as a whole the PRIMES without further climate measures have 10% higher sulphur emissions. Costs and effects are calculated for three options: 1. 30% of emissions by the Large Point Sources (LPS) are reduced on a national basis; 2. The same amount of emission reduction on an European scale is applied according to the most cost effective measures; 3. Emissions are reduced in the most economic way under the condition that the same ecosystem protection is achieved. The three options are calculated for SO 2 and NO x emissions for acidification (SO 2 and NO x ), eutrophication and ozone (NO x ). Since it concerns an analysis of emission trading, the calculations are performed for Large Point Sources. These are for practical reasons approximated by the total emissions of the sectors Energy Supply, Industry (combustion) and Industrial processes. The emissions of the smaller companies which are not included in IPPC and EPER cannot be distinguished in the data set. Therefore, total sector emissions are used in the emission control and trading calculation. Together they represent for SO x nearly 90% and for NOx more than half of all the land-based emissions in Europe. International shipping covers 23% of SO x and one third of NO x emissions in Europe in 2010, and it has a large potential of reducing the Average Accumulated Exceedances. Since emission trading is easier to conceive for stationary sources than for mobile ones, it was decided to focus on the Large Point Sources alone. Although the choice of a 30% reduction in Large Point Source emissions is rather arbitrary in some sense, it reflects a compromise between avoiding small and meaningless reductions and avoiding very large reductions which starts to limit

34 TNO-report 34 of A-R0251/B free choice of where to reduce. (Obviously, for a 100% reduction the options are all the same.) Annex C describes the methodology and the main results for SO 2 in terms of costs and ecosystem protection for illustrative purposes. 5.1 Integrated Results The reference is option 1 which represents current practice of Member States reducing their national emissions. This option is also referred to as national uniform reduction. In option 2 lowest cost emission reduction is the target, under the condition that the European total of emission reduction equals the European total of option 1. Lowest cost emission reduction is also the target in option 3 but under the condition that the improvement in ecosystem protection (AAE) integrated over the European domain equals the ecosystem protection improvement under option 1.Option 3 is referred to as effect based least costs reduction. In general, the following observations can be made on the location of emission reductions. Option 2 seeks the cheapest solutions and emission reductions often occur in other European countries which are the countries outside the EU25 (+Norway and Switzerland). Option 3 seeks the most cost effective solutions. These solutions are a combination of low marginal costs (EURO/tonne) and high effects (eq./ha/yr/tonne). By doing so, it appears that it is less attractive to reduce in other European countries since they contribute less or little to changing the Average Accumulated Exceedance. These observations are illustrated in Table 1 that presents the results of the different options for SO 2 and acidification for the different European regions.

35 TNO-report 2006-A-R0251/B 35 of 49 Table 1 The impact of one European trade regime for large sources: the regional distribution of reductions and costs to cost-effectively meet a 30% emission reduction target for each European country or Europe as a whole in terms of kton SO 2 (lowest cost emission reduction) or AAE-equivalents (effect based least costs reduction). See Appendix for a presentation by country. Case Item Region Target: 30% reduction by LPS Option 1 National uniform reduction: Option 2 Lowest cost emission reduction: Option 3 Effect based least costs reduction: EU-15 + NO + CH New EU Other European countries Total landbased Europe Reduction [kton] Reduction [ AAE-eq] Marginal cost [ /ton] Costs [k ] Reduction [kton] Reduction [ AAE-eq] Marg cost [ /ton] Costs [k ] Costs of trade [k ] Avoided costs [k ] Reduction [kton] Reduction [ AAE-eq] M. cost [ /ton AAE-eq] Costs [k ] Costs of trade [k ] Avoided costs [k ]

36 TNO-report 36 of A-R0251/B % of Equal share case Avoided impacts of SO2 mitigation cases 120% 100% 80% Costs Emissions Acidification 60% 40% 20% 0% Figure 3 option 2 option 3 (Acidification) Case / Optimisation principle SO 2 mitigation cases: changes in avoided costs, emissions and effects of options 2 (Lowest cost emission reduction) and 3 (Effect based least costs reduction) compared to option 1 (National uniform reduction; option 1 = 100%). % of Equal share case 120% 100% 80% Avoided impacts of NOx mitigation cases Costs Emissions Acidification Ozone Eutrofication 60% 40% 20% 0% Figure 4 option 2 option 3 Acidification option 3 Ozone Case / Optimisation principle option 3 Eutrophication NO x mitigation cases: changes in avoided costs, emissions and effects of options 2 (Lowest cost emission reduction) and 3 (Effect based least costs reduction) compared to option 1 (National uniform reduction; option 1 = 100%).

37 TNO-report 2006-A-R0251/B 37 of 49 The results of the options for Europe as a whole are illustrated for SO 2 and NO x in Figure 3 respectively 4. For SO 2, option 3 Effect based least costs reduction is the most attractive option since it establishes the same European integrated ecosystem protection as option 1 (National uniform reduction) but against much lower costs (60% cheaper). (see: Figure 3). Option 2 Lowest cost emission reduction is even cheaper (76% cheaper than option 1), but it does a poor job in protecting the ecosystem. Only 14% in terms of a European integrated change of AAE is achieved with respect to the other two options. It can be concluded that the European patterns of cost-effective SO 2 reduction and required ecosystem protection for acidification are asynchronous. For NO x, the results are less extreme and moreover, quite different for the three environmental themes. Option 2 Lowest cost emission reduction avoids approximately a quarter of the costs spent in option 1 National uniform reduction. Cost differences of NO x control options are clearly less pronounced over Europe than for SO 2. This leads to only small shifts in the location of emission reduction, leading to only limited shifts in ecosystem protection for the three environmental themes. In case the optimisation takes place in terms of ecosystem protection equivalents, cost savings can be larger up to half the costs for acidification. This is due to the concentration of required protection in a limited area. However, the downside is that the other environmental themes with a more equal distribution over Europe, particularly eutrofication, are less protected. Vice versa, taking eutrophication as optimisation criterion results in similar ecosystem protection for the other themes but the lowest cost reduction, comparable with option 2 Lowest cost emission reduction. It is concluded that trade in terms of SO 2 emission allowances will save a large share of the costs but have a strong negative impact on total European ecosystem protection against acidification. Trade in NO x allowances will hardly affect total European ecosystem protection against acidication, ozone and eutrophication but results in limited cost savings. Larger savings can be reached by focusing at one environmental theme but only at the cost of lower ecosystem protection for the other themes. 5.2 Distribution of sources and effects (sulphur case) The effects presented in Table 1 are integrated effects for European regions. An important question is how it will look like on a local or national scale, or in the proposed optimal control areas presented in chapter 4. Integrated reductions (over the European domain) in AAE can be realised in various ways, and on a local scale differences in AAE can arise. This might turn some countries into winners (more ecosystem protection achieved in option 2 or 3 compared to the reference option 1) and other countries into losers (less ecosystem protection than under option 1).

38 TNO-report 38 of A-R0251/B Another important consideration is the effect of redundancy. The effects on the ecosystems, expressed in AAE, are calculated as a result of a 20% emission reduction in blocks of 2 longitude x 1 latitude. The effect of reductions in multiple blocks (which is the case in the 3 options) might be to reduce the AAE down to zero leaving the remaining blocks ineffective. This chapter will look into detail into these issues for the SO 2 case. Sources The geographical distribution of the emission reductions is very different for the 3 options (Figure A.25-27). Obviously, with a national approach all countries participate in relatively the same manner. Since the largest emissions occur at the Balkan countries, the largest reduction takes place there (Fig. A.25). In option 2 (lowest cost emission reduction) the vast majority of the reductions are in the so-called other European countries. Other contributions come from Poland, Hungary, Greece and Spain. There are no reductions in Germany, Switzerland, Austria, The Netherlands, Luxemburg, Ireland, Scandinavia and Finland. In option 3 there are no reductions in other European countries. The main contributors are Poland, Germany, the UK, France and Belgium. Poland doubles its reduction compared to option 1, for the other aforementioned countries the reduction is nearly the same as in option 1. Redundancy The distribution of sources was used to calculate the effects on AAE in a detailed manner and taking into account the effects of redundancy. Table 2 shows the relative improvement of the European integrated AAE as compared to the AAE in the Baseline 2010 situation. Table 2 Change in AAE (%) compared to Baseline 2010 for 3 options. daae (%) according to table 1 daae(%) recalculated Option 1 (national uniform reduction) Option 2 (lowest cost emission reduction) Option 3 (effect based least cost reduction) The recalculated change in AAE is somewhat lower than according to the change given in Table 1. This is most likely a result due to redundancy. Table 2 also shows that option 3 when recalculated is slightly less effective than option 1. Possibly the redundancy effect plays a larger role here, which might be triggered by concentrating the emission reduction in a smaller area as happens in option 3.

39 TNO-report 2006-A-R0251/B 39 of 49 Local scale The effect of option 1 in terms of change in AAE relative to the AAE of the 2010 Baseline is given in Figure A28. There is a wide range of changes. For a number of ecosystems, most notably in Poland the change (improvement) is 80-90%. A few ecosystems in The Netherlands, Norway and Germany show an improvement of less than 10%. Adjacent ecosystems can differ enormously in the extent of improvement, reflecting the spatial variability in AAE. Figure A29 shows the effects for option 2. The majority of ecosystems have a response in the 0-10% and 10-20% categories. More interesting is to see the differences between the options in terms of response. Figure A30 shows the difference between option 2 and option 1. The difference between the two options is very large as was also seen in Table 1. The differences between option 3 and option 1 are much smaller. Integrated over Europe the AAE changes by -14.1% for option 1 and -12.6% for option 3. Figure A31 shows that for option 3 there are regions which are more protected than in option 1 (the winners) and there are other regions which are less protected (the losers). Winners are ecosystems in the UK, the northern part of France, Norway, the eastern part of Germany, Belgium, the Ukraine and especially Belorussia. Losers are ecosystems in Southwestern France, Slovakia, Switzerland, Czech Republic and Finland. Winners and losers are seen in France, Poland, Germany, Sweden, and Slovakia. The occurrence of winners and losers can easily be explained by the shifts in where the emission reduction occurs. The southern part of France suffers from SO x emissions in Northern Spain. Under option 1 these emissions are dealt with, but that is not the case in option 3. Option 3 avoids reducing the Spanish emissions since they hardly affect the bulk of ecosystems in North-western Europe. Migrating emission reductions in Hungary and Slovakia to Poland (option 1 to option 3) affects in a negative way the protection of ecosystems in Slovakia, but in a positive way the ecosystems (most of them) in Poland and Belorussia and the Ukraine. In a number of regions winners and losers are located quite close together. Examples are at the Polish-Belorussian border, in Slovakia and in Germany. Although the German emission reductions on a national basis are the same for option 1 and 3 there are local shifts. Costs (option 3 versus option 1) In terms of costs all countries benefit by swapping option 1 with option 3 (Table C4 in Annex C). For the EU-15 +Norway and Switzerland as a whole about 50% of the costs are saved. Denmark and Finland reduce their costs with about 40% by implementing option 3 instead of option 1. For the rest of the countries it is either huge savings with more than 75% reduction of costs, or very marginal savings. In

40 TNO-report 40 of A-R0251/B the first category are Austria, Switzerland, Italy, Portugal, Spain, Greece, Sweden and The Netherlands. In the second category are: Belgium, Luxemburg, Germany, France, Norway, Finland, and the United Kingdom. For the new Member States as a whole the cost savings are 68%. The largest savings (more than 75%) are found in the Czech Republic, Estonia and Slovenia. Small savings are seen in Lithuania and Hungary. For the other European countries the savings are large since they don t have to implement emission reduction at their territories. However, they do spend a small amount to trading. Their overall cost savings for this group of countries is 83%. 5.3 Optimal control areas in the context of trading Based on the illustrative calculations of cases in the previous sections 5.1 and 5.2, it is possible to address the basic question on what the optimal control areas mean in the context of a European trading scheme. To optimal control areas for environment and economy In the previous chapters, optimal control areas have been calculated for SO 2 and NO x emissions on the basis of European wide ecosystem impacts by acidification, eutrophication and ozone. These optimal control areas have been based upon carrying capacity of nature and atmospheric dispersion characteristics. These areas are optimal in the sense that it is assumed that ecosystem impacts are equivalent and interchangeable within Europe, so independent of the exact location. In other words, optimal is used here as environmentally optimal. Within integrated assessment studies, the term optimal refers also to economically optimal, e.g. least cost solutions to reach a designated (environmental) target. This aspect is not addressed yet. In the context of flexible instruments to protect the environment, e.g. emission trading, the marginal costs of abatement have to be included in the equation to see which parties or countries will control emissions and/or trade emission rights. This is important for the design of optimal control areas, since economics will determine which parties in reality will benefit (more) from European ecosystem protection and who will less or not. Protect parties by restriction of the trading bubble From an economic point-a-view, it is most attractive to trade within a trading bubble as large as possible (i.e. Europe). In one European trading bubble, environment and economy are served best in a trading system of ecosystem protection equivalencies ( exchange rates ). Since countries are the principal parties in the present international agreements, the number of countries losing ecosystem protection due to trade should be limited as much as possible. To guarantee a certain level of ecosystem protection to all participating countries, a division into several trading bulbs

41 TNO-report 2006-A-R0251/B 41 of 49 might be necessary at the costs of overall cost-effectiveness. The actual geographical definition of optimal trading bulbs depends on the geographical distribution of the sensitive ecosystems, their protection targets and the mitigation potentials and costs. It is clear that the equivalency areas of effective, less effective and ineffective ecosystem protection are in theory not cost-effective trading bubbles. First, the equivalency of ecosystem protection per ton of abated pollutant can vary a factor 10, which is in terms of cost-effectiveness substantial. This means that also in these areas with similar ecosystem impact, it is preferable to trade in terms of ecosystem protection equivalencies. Second, the equal distribution of ecosystem protection over the countries is not guaranteed (the main argument for limiting bubble size) by trade within equivalency bubbles. In a trading bulb, the distribution of ecosystem protection over countries is guided by lowest costs, which are not necessarily in line with an equal ecosystem protection over European countries. This is illustrated by comparing Figure A.16 the effect per ton SO 2 reduction on AAE for acidification and Figure A.27 Distribution of SO 2 emission reduction according effect based least cost reduction. Expected impact of a trading scheme The national emission reduction targets of the Gothenburg protocol have been underpinned with calculations of the impact assessment model RAINS. This means that cost-effectiveness of ecosystem protection has been among others a major criterion in calculating the national reduction targets. Therefore, it is expected that trade in terms of equivalency values would not have a major impact on present national emission reduction plans and hence national ecosystem protection. Trade in terms of tons of SO 2 emissions would have a strong negative impact on the ecosystem protection in terms of acidification, since sensitive ecosystem in terms of acidification have not the same distribution pattern over Europe as costeffective mitigation of SO 2 emissions. This means that European trade of SO 2 emission rights in addition to the Gothenburg protocol would result in large cost savings but at the costs of (strong) deterioration of the ecosystems in Europe. Costeffective mitigation of NO x is distributed over Europe quite equally. Therefore, the impact of NO x trade on both mitigation costs and ecosystem protection is limited. Larger savings can be reached by focusing at one environmental theme but only at the cost of lower ecosystem protection for the other themes. Compare methods to analyse trading variants The RAINS model is capable of calculating optimal control strategies for impacts of multiple environmental pollutants (i.e. SO 2 and NO x ). In this way, interaction of pollutants and ecosystem impacts are taken into account. In our simple cost-curve approach, ecosystem impacts are treated linearly and the pollutants are treated separately (independently) in terms of impacts, neglecting interaction. The advantage of our approach is that each location (grid cell) has its own equivalency rate

42 TNO-report 42 of A-R0251/B and marginal cost-curve. For RAINS, this calculation is conducted at a national level, since the basic idea is that technology standards and regulation will be valid for all similar equipment in a country. This neglects the possibility of trade. Therefore, it is recommended to compare national integrated RAINS calculations with the grid cell marginal cost-curve approach as presented in this study in order to assess the potential impact of realistic trading variants on ecosystem protection within economic and environmental optimal control areas throughout Europe.

43 TNO-report 2006-A-R0251/B 43 of Conclusions and recommendations 6.1 Conclusions Optimal control areas (in an environmental sense) are established on the basis of equivalent effects (per tonne reduction) on the European ecosystems. Three classes are distinguished: effective, less effective, and ineffective. Effective implies effects larger than average. Less effective is smaller than average but larger than 10% of the average. Ineffective is smaller than 10% of the average. For SO x and NO x in relation to acidification three optimal control areas emerge. For NO x in relation to eutrophication and protection of forest (AOT40f), two optimal control areas appear, but with different contours. If the definition of optimal control areas is extended with an economical component it seems that one area spanning Europe might be enough, presuming that emissions are exchanged on the basis of protection equivalencies, and not on the basis of mass. In that case, shifts in emissions will cause at a few locations deterioration of local ecosystem protection, but the indication is that this will be of limited scope. 6.2 Recommendations It is recommended to extend this study with other components: VOC, NH 3 and PM2.5. It is recommended to repeat the NO x calculations on a finer scale, i.e.: the scale at which the SO x calculations are done. It is recommended to compare national integrated RAINS calculations with the presented grid cell marginal cost-curve approach in a case with realistic national emission reduction ceilings in order to assess the potential impact on ecosystem protection, health and mitigation costs of two trading variants, viz. 1. trading of ktonne pollutant emission rights within several environmental optimal control areas with equivalent ecosystem protection effectiveness in Europe and 2. trading of ecosystem protection equivalent units within one European bubble.

44 TNO-report 44 of A-R0251/B

45 TNO-report 2006-A-R0251/B 45 of References Amann M., I. Bertok, J. Cofala, F. Gyarfas, C. Heyes, Z. Klimont, W. Schöpp and W. Winiwarter (2005). Baseline scenarios for the clean for Europe (CAFE) programme. Final report. IIASA, Laxenburg, Austria. De Boer M., J. de Vente, C. Mücher, W.Nijenhuis and H. Thunissen (2000). Land cover monitoring. An approach towards pan European land cover classification and change detection. NRSP-2. Proj. 4.2/DE-03 NIVR, Delft, The Netherlands. Dentener F.J., J.Feichter, and A.Jeuken. (1999). Simulation of the transport of 222Rn using on-line and off-line global models at different horizontal resolutions: A detailed comparison with measurements. Tellus, Ser.B, 51, Hettelingh J.P., M. Posch and J. Potting (2005). Country-dependent characterisation factors for acidification in Europe. Int. J. of LCA 10 (3) Leutert G., B. Achterman, R. Ballaman (1995). Contribution to the discussion on Joint Implementation under the 2 nd Sulphur Protocol. Federal Office of Environment, Forests and Landscape. Air Pollution Control Division, 3003 Bern, Switzerland. Ministry of Environment, Norway (1995). Discussion paper prepared for a meeting of an open-ended group of experts under the CLRTAP, Oslo 9-10 November Reimer E. and B. Scherer (1992). An operational meteorological diagnostic system for regional air pollution analysis and long term modelling. Air Poll. Modelling and its Application IX, Plenum Press. Schaap M., M. Roemer, F. Sauter, G. Boersen, R. Timmermans en P. Builtjes (2005). LOTOSEUROS: documentation. TNO report R2005/297, Apeldoorn, The Netherlands. Schaap, M, R.M.A. Timmermans, F.J. Sauter, M. Roemer,G.J.M. Velders, G.A.C.Boersen, J.P. Beck and P.J.H. Builtjes (2006). The LOTOS-EUROS model: description, validation and latest developments. Accepted Int. J. of Environ. And Pollution Tarrasón L., J. Jonson, H. Fagerli, A. Benedictow, P. Wind, D. Simpson and H. Klein (2003). EMEP status report 2003 part 3.DNMI, Oslo, Norway.

46 TNO-report 46 of A-R0251/B US-EPA (1997). Finding of significant contribution and rulemaking for certain states in the ozone transport assessment group region for purposes of reducing regional transport of ozone. US-EPA (2004).The OTC NOx buget program ( ): emissions trading and impacts on local emission patterns. Van Loon, M., M. Roemer and P. Builtjes (2004). Model Intercomparison; in the framework of the review of the Unified EMEP model. TNO report R2004/282, Apeldoorn, The Netherlands. Vestreng V., K. Breivik, M. Adams, A. Wagner, J. Goodwin, O. Rozovskaya and J. Pacyna (2005). Inventory Review 2005, Technical Report MSC-W1/2005, EMEP, Oslo, Norway. Acknowledgements Thanks are due to Jean-Paul Hettelingh and Maximiliaan Posch of the WGE-ICP M&M Coordination Centre for Effects at RIVM for providing the critical load data, and for fruitful discussion on the results. The authors kindly acknowledge IIASA for providing, through the website, the cost curves, and Jan-Eiof Jonson of EMEP for sending results of the EMEP model. Eberhard Reimer and coworkers of the Free University of Berlin have provided the meteorological data sets for the LOTOS-EUROS model. The graphics in this report are based on the Grads software freely made available by the Center for Ocean Land Atmosphere (COLA) studies in Calverton, MD, USA. Andreas Kerschbaumer of the Free University of Berlin kindly provided a script to draw in Grads the political boundaries of the newly (after 1990) established countries.

47 TNO-report 2006-A-R0251/B 47 of Abbreviations AVHRR AAE AOT40f CBM-4 CCE EMEP IIASA NDVI NOAA OTAG RIVM TNO US-EPA Advanced Very High Resolution Radiometer Average Accumulated Exceedance Accumulation Over Threshold (40 ppb); f: forest; all positive hourly ozone concentrations (after subtracting 40 ppb) are summed up over the interval from April 1 to September 30. Only values between 8h and 20h count. Carbon Bond Mechanism - IV Coordination Center for Effects Co-operative programme for monitoring and evaluation of the long range transmission of air pollutants in Europe International Institute for Applied Systems Analysis Normalised Differenced Vegetation Index National Oceanic and Atmospheric Administration Ozone Transport Assessment Group National Institute for Public Health and the Environment (in the Netherlands) Netherlands Organisation for Applied Scientific Research United States Environmental Protection Agency

48 TNO-report 48 of A-R0251/B

49 TNO-report 2006-A-R0251/B 49 of Authentication Name and address of the principal: European Commission DG Environment, Unit ENV.3 Mr. E. Dame BU 5 03/06 B-1049 Brussels Belgium Names and functions of the cooperators: Martijn Schaap Ger Boersen Jack Pesik Names and establishments to which part of the research was put out to contract: Date upon which, or period in which, the research took place: December 2004 August 2006 Signature: Approved by: M.G.M. Roemer project leader M.P. Keuken manager

50 TNO-report 2006-A-R0251/B 1 of 19 Annex A Annex A Tables and Figures

51 TNO-report 2 of A-R0251/B Annex A Table A.1 Overview of measurement stations. emep lon lat alt emep lon lat alt AT GB AT GB AT GB CH GB CH GB CH GB CH GB CS GB CS GB DE GR DE HU DE IE DE IT DE IT DE LT DE LV DE NL DE NL DE NO DE NO DE NO DE NO DE NO DE NO DE NO DK NO DK NO EE NO EE NO ES PL ES PL ES PL ES PL ES PT FI RU FI RU FI RU FI SE FI SE FR SE FR SE FR SE GB SE GB SI GB SI GB SI GB SI GB SK GB SK GB SK

52 TNO-report 2006-A-R0251/B 3 of 19 Annex A Table A.2 Extremes per country in effectiveness of sulphur emission reduction on integrated AAE for acidification. minimum maximum Ratio max./min. Albania Austria Belgium Bosnia/Herzegovina Bulgaria Croatia Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Montenegro Netherlands Norway Poland Portugal Republic of Moldavia Romania Serbia Slovakia Slovenia Spain Sweden Switzerland FYR of Macedonia United Kingdom

53 TNO-report 4 of A-R0251/B Annex A Figure A.1 The critical load (eq./ha/yr) of sulphur deposition only. Figure A.2 Fraction of wood cover according to PELINDA land-use database.

54 TNO-report 2006-A-R0251/B 5 of 19 Annex A SO2 LOTOSEUROS ratio modelled/observed CH02 CH03 DE01 DE02 DE04 DE07 DE09 EE11 FI09 FI17 FI22 FR08 FR09 GB02 GB06 GB13 GB15 HU02 IT01 IT04 LT15 LV10 NL09 NL10 NO01 PL05 PL02 PL04 RU16 SE02 SE11 SE12 SE13 SI08 SK04 SK06 station code Figure A.3 The ratio of modelled versus measured SO 2 concentrations. Meteorology: Emissions: Baseline2000. SO2 LOTOSEUROS correlation coefficient CH02 CH03 DE01 DE02 DE04 DE07 DE09 EE11 FI09 FI17 FI22 FR08 FR09 GB02 GB06 GB13 GB15 HU02 IT01 IT04 LT15 LV10 NL09 NL10 NO01 PL05 PL02 PL04 RU16 SE02 SE11 SE12 SE13 SI08 SK04 SK06 station code Figure A.4 The correlation coefficient of modelled and measured SO 2 concentrations. Meteorology: Emissions: Baseline2000.

55 TNO-report 6 of A-R0251/B Annex A SO4 LOTOSEUROS ratio modelled/observed CH02 CS01 CS03 DE01 DE02 DE04 DE07 DE09 ES03 ES04 FI09 FI17 FI22 FR08 FR09 FR11 GB02 GB06 GB13 GB15 HU02 IT01 IT04 LT15 LV10 NL09 NL10 NO01 NO15 NO39 NO41 NO55 PL05 PL02 PL04 RU16 SE02 SE11 SE12 SE13 SI08 SK04 SK06 station code Figure A.5 The ratio of modelled versus measured SO 4 concentrations. Meteorology: Emissions: Baseline2000. SO4 LOTOSEUROS correlation coefficient CH02 CS01 CS03 DE01 DE02 DE04 DE07 DE09 ES03 ES04 FI09 FI17 FI22 FR08 FR09 FR11 GB02 GB06 GB13 GB15 HU02 IT01 IT04 LT15 LV10 NL09 NL10 NO01 NO15 NO39 NO41 NO55 PL05 PL02 PL04 RU16 SE02 SE11 SE12 SE13 SI08 SK04 SK06 station code Figure A.6 The correlation coefficient of modelled and measured SO 4 concentrations. Meteorology: Emissions: Baseline2000.

56 TNO-report 2006-A-R0251/B 7 of 19 Annex A O3 LOTOSEUROS ratio modelled/observed AT02 CH02 CH05 DE01 DE04 DE08 DE12 DE26 DE38 EE09 FI09 FI37 FR11 GB06 GB15 GB33 GB37 GR01 IT01 LV10 NO01 NO41 NO52 PL05 PT04 SE12 SI08 SI33 station code Figure A.7 The ratio of modelled versus measured O 3 concentrations. Meteorology: Emissions: Baseline2000. O3 LOTOSEUROS correlation coefficient AT02 CH02 CH05 DE01 DE04 DE08 DE12 DE26 DE38 EE09 FI09 FI37 FR11 GB06 GB15 GB33 GB37 GR01 IT01 LV10 NO01 NO41 NO52 PL05 PT04 SE12 SI08 SI33 station code Figure A.8 The correlation coefficient of modelled and measured O 3 concentrations. Meteorology: Emissions: Baseline2000.

57 TNO-report 8 of A-R0251/B Annex A Figure A.9 The sulphur deposition (eq./ha/yr) in 2010 as a result of baseline emissions. Figure A.10 The nitrogen deposition (eq./ha/yr) in 2010 as a result of baseline emissions.

58 TNO-report 2006-A-R0251/B 9 of 19 Annex A Figure A.11 Average Accumulated Exceedances (eq./ha/yr) for acidification for grid average deposition in 2010 (baseline). Figure A.12 Average Accumulated Exceedances (eq./ha/yr) eutrophication for grid average deposition in 2010 (baseline).

59 TNO-report 10 of A-R0251/B Annex A Figure A.13 AOT40f (ppb.h) for 2010 (baseline). Figure A.14 The amount of SOx emission reduced with a 20% reduction per cell.

60 TNO-report 2006-A-R0251/B 11 of 19 Annex A Figure A.15 The effect (%) per grid cell of changing the integrated AAE. All grid cells together are 100% Figure A.16 The effect per tonne SO x reduction on AAE for acidification expressed with respect to the average effect.

61 TNO-report 12 of A-R0251/B Annex A Figure A.17 The integrated (over Germany) effect per tonne SO x reduction on AAE of acidification expressed with respect to the average effect. Figure A.18 The change in AAE-acidification as a result of a 20% reduction of German SO x emissions.

62 TNO-report 2006-A-R0251/B 13 of 19 Annex A Figure A.19 The change in AAE-acidification as a result of a 20% reduction of French SO x emisisons Figure A.20 The change in AAE-acidification as a result of a 20% reduction of SO x emissions in the UK and Ireland.