International and National Policy

Transcription

1 Sectoral Approaches in International and National Policy 2nd International Expert Meeting on Bottom-up Based Analysis on Mitigation Potential Leon Clarke, Kate Calvin October 21, 2008

2 Acknowledgements GTSP Sponsors Phases 1,2, & 3 Thanks to the supporters of the Global Technology Strategy Project

3 Overview of MiniCAM Integrated Assessment Model 14 Global Regions Fully Integrated Explicit Energy Technologies All Regions Hybrid y Model Economic Equilibrium Model Dynamic Recursive Fully Integrated Agriculture and Land Use Model Key for consistent biomass crop analysis Multiple Greenhouse Gases Runs to 2100 in 15-year time steps Long-Term Integrated Perspective

4 The Reference Case: Population and GDP b illion trillion 2000$ U.S. MER 10 USA Population USA GDP Korea Japan Europe Canada Australia_NZ FSU Southeast Asia Middle East Latin America Africa India China Korea Japan Europe Canada Australia_ NZ FSU Southeast Asia Middle East Latin America Africa India China Most MiniCAM scenarios envision a growing global economy with an evolution in the distribution of economic activity. MiniCAM has 14 regions and represents population growth, labor productivity growth, and labor participation as drivers of economic activity.

5 Background on Stabilization

6 Stabilization requires that emissions ultimately decline toward the rate at which emissions are balanced by removal processes.

7 Large emissions reductions require large changes in global energy and agricultural systems CO CO 2 Concentration Stabilization of CO Concentration ~740 ppm 2 at 4.7 Wm ~550 ppm 1400 History and Reference Case Stabilization of CO 2 at 4 7 Wm -2 History Future History Future EJ/year Present CO 2 Concentration ~380 ppm. EJ/year Present CO 2 Concentration ~380 ppm Preindustrial CO 2 Concentration ~280 ppm Oil Natural Gas Coal Biomass Energy Non-Biomass Renewable Energy Oil + CCS Natural Gas + CCS Coal + CCS Nuclear Energy End-use Energy

8 Stabilization implies that greenhouse gases have a price either implicitly or explicitly. If carbon and other GHG s are valued at zero, both implicitly and explicitly you get the reference scenario. None of the reference scenarios that we have examined stabilize GHG concentrations at low levels.

9 All net carbon emissions affect the atmosphere To the extent that marginal costs are similar across all emissions sources, costs will be minimized. To the extent that large marginal cost differences are created, then the total cost of carbon emissions mitigation will rise, and potentially by large amounts. The Implications for sectoral policies The policy needs to reach all sectors. Mitigation i i costs will be minimized i i by equalizing i marginal costs across sectors, regions, and gases. Three Examples Sectoral Policies in the Energy and Industrial Sectors Land use and Emissions Policies International Participation

10 Energy And Industrial Sectoral Emissions Reductions

11 Sectoral Emissions in the Reference and Stabilization at 450 ppmv Sectoral emissions reductions vary because of differing opportunities Gt C/yr Cement Buildings Industry Transportation Electricity REFERENCE GtC C/yr Emissions Reduction Cement Buildings Industry Transportation Electricity 450 ppmv Sectors in MiniCAM Transport*, Refining, Electricity, Cement, Other Industry*, Buildings*

12 Emissions Mitigation by Sector in 450 Stabilization GtC/yr Cement Buildings Industry Transportation Electricity Carbon Price $/ton nne C ( US$)

13 Single Sector Reductions: A Sectoral Policy Experiment If only one sector sees a carbon prices, then the cost of reducing a tonne of carbon emissions i rises dramatically. $30 $25 Trillion USD $20 $15 $10 From Edmonds, J., T. Wilson, M. Wise, and J. Weyant Electrification of the Economy and CO 2 Emissions Mitigation, Journal of Environmental Economics and Policy Studies. (2006) 7: [PNWD-3574]. $5 $0 Carbon Tax Elec Power only Equivalent Reduction All Sectors

14 Equal Shares : A Sectoral Policy Experiment Two CO2 stabilizations scenarios 450 ppm and 550 ppm Two Policy Regimes Full Fossil & Industrial Coverage Universal, globally common carbon tax (CCSP) Each sector reduces its emissions by an equal amount relative to 2005 Land use sector values carbon at the WRE rate in both policy regimes.

15 Equal Shares : Anthropogenic CO2 Emissions and Concentrations Referenc e CCSP 550 CCSP Referenc e CCSP 550 CCSP ppmv GtC/yr r

16 Equal Shares : Emissions by Sector Reductions Relative to 2005 Reductions Relative to Ref 450 ppm 100% 90% electricity 80% transportation 70% industry building 60% cement 50% average 40% 30% 20% 10% 0% % 90% electricity 80% transportation 70% industry building 60% cement 50% average 40% 30% 20% 10% 0% % 100% 550 ppm 80% 60% 40% 20% 0% electricity transportation industry building cement average 80% 60% 40% 20% 0% electricity transportation industry building cement average -20% % % -40% -60% -60%

17 Equal Shares = Unequal Marginal Costs 450 ppm 550 ppm $1,200 $1,200 $1,000 Electricity Transportation Industry Cement Buildings $1,000 CCSP 450 Electricity Transportation Industry Cement Buildings CCSP USD per ton t C $800 $600 $400 ton C USD per $800 $600 $400 $200 $200 $0 $

18 Equal Shares = Higher Total Costs osts Tril llion unted Co 00 USD t Discou 200 Present CCSP 450 Equal Shares 450 PPM CO2 Concentration

19 Land Use and Sectoral Policy Approaches

20 The Importance of Terrestrial Carbon 6,000 Land use emissions reduction by valuing terrestrial carbon (cumulative 2005 to 2095) 550 ppm 125 PgC 500 ppm 170 PgC 450 ppm 210 PgC TgC/yr 5,000 4,000 3,000 2,000 1, ,000-2, Land Use Change Emissions FirstBest_CCS_450 Reference 450 NoLUCO2 Price No Terrestrial Carbon Price Pricing Terrestrial Carbon

21 The Importance of Terrestrial Carbon Valuing all carbon, including terrestrial carbon Dramatically reduces the price of carbon Reduces the long-term role of bioenergy 2005 Constant US SD/tC $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 UCT 550 UCT 500 UCT 450 Reference 550 FFICT 500 FFICT 450 FFICT Universal Carbon Price Fossil Fuel and Industrial Carbon Price $500 $

22 International Participation and Climate Policy

23 Three Scenarios of Delayed Participation USA USA USA USA USA USA Australia & NZ Australia & NZ Australia & NZ Australia & NZ Australia & NZ Australia & NZ Canada Canada Canada Canada Canada Canada W. Europe W. Europe W. Europe W. Europe W. Europe W. Europe E. Europe E. Europe E. Europe E. Europe E. Europe E. Europe Japan Japan Japan Japan Japan Japan FSU FSU FSU FSU FSU FSU Korea Korea Korea Korea Korea China China China China China Latin America Latin America Latin America Latin America Latin America Mideast Mideast Mideast Mideast Mideast Other SE Asia Other SE Asia Other SE Asia Other SE Asia India India India India Africa Africa Africa NA1 1st Group Enters

24 Three Scenarios of Delayed Participation USA USA USA USA USA USA Australia & NZ Australia & NZ Australia & NZ Australia & NZ Australia & NZ Australia & NZ Canada Canada Canada Canada Canada Canada W. Europe W. Europe W. Europe W. Europe W. Europe W. Europe E. Europe E. Europe E. Europe E. Europe E. Europe E. Europe Japan Japan Japan Japan Japan Japan FSU FSU FSU FSU FSU FSU Korea Korea Korea Korea China China China China Latin America Latin America Latin America Latin America Mideast Mideast Mideast Mideast Other SE Asia Other SE Asia Other SE Asia India India India Africa Africa NA1 1st Group Enters

25 Three Scenarios of Delayed Participation USA USA USA USA USA USA Australia & NZ Australia & NZ Australia & NZ Australia & NZ Australia & NZ Australia & NZ Canada Canada Canada Canada Canada Canada W. Europe W. Europe W. Europe W. Europe W. Europe W. Europe E. Europe E. Europe E. Europe E. Europe E. Europe E. Europe Japan Japan Japan Japan Japan Japan FSU FSU FSU FSU FSU FSU Korea Korea Korea China China China Latin America Latin America Latin America Mideast Mideast Mideast Other SE Asia Other SE Asia India India Africa NA1 1st Group Enters Note that India comes in one period after China

26 International participation can have dramatic implications for emissions and cost. Year 2020 Annex I emissions mitigation, relative to 2005, for different accession assumptions: 450 ppm 100% 90% 80% 70% 60% 50% 40% Set 1: 450 ppm Set 3: 1st Accession Set 3: 1st Accession Set 3: 1st Accession Not Po ossible Not Po ossible 30% 20% 10% 0%

27 The Interactions between Delay and International Participation Land Use in Three Regions: 550 CO2-e (Kyoto Gases) with Overshoot to 2100 BRICs Group ROW 13.7 W/m2 Overshoot Immediate Accession 100% UnmanagedLand 90% UnmanagedForest 80% 70% 60% 50% 40% Forest 80% biomass PastureLand 70% Wheat 60% SugarCrop Rice Rice OtherGrain BRICs ROW Group W/m2 3.7 W/m2 Overshoot Overshoot Delayed Delayed Accession 100% UnmanagedLand 90% UnmanagedForest 30% OilCrop 30% 20% MiscCrop FodderCrop 20% 10% FiberCrop FiberCrop 10% 0% 0% Corn Corn 0% % 40% Forest biomass PastureLand Wheat SugarCrop Rice OtherGrain OilCrop MiscCrop p FodderCrop FiberCrop Corn Pricing carbon in land substantially lowers the costs of mitigation. Limited sectoral coverage can have adverse economic and physical effects Draft Results

28 Discussion