Search

Power generation under the Renewable Portfolio Standard (RPS) can reduce greenhouse gas emissions below the baseline level, so entities may argue to use this attribute to meet the goal of Emission Trading Scheme (ETS). Although these two quantity-based regulation systems have different policy objectives, both mechanisms are implicitly linked by credit conversions depending on credit prices. This paper builds an analytic partial equilibrium model and derives market equilibria in a closed form to demonstrate how each mechanism influences the other by policy instruments such as a renewable requirement, a reduction target in greenhouse gas emission, levels of penalties, or marginal costs. We can compare "direct vs indirect" effectiveness of a regulatory changes across both markets with the case where converting renewable offsets are completed prohibited. [ABSTRACT FROM AUTHOR]

In the context of sub-global participation in greenhouse gas mitigation efforts, this paper investigates the effectiveness of a Canada-U.S. emissions bubble under their existing regional trade agreement. It also explores the potential economic impact of carbon tariff harmonization through the implementation of a common Canada-U.S. external border tariff adjustment as a mean to address competitiveness issues. Using a multi-region, multi-sector computable general equilibrium model the paper finds that the creation of an emission bubble between the two countries could improve efficiency. The findings also suggest that a carbon tariff harmonization policy could give rise to distributional issues among Annex I regions and could fail to mitigate the negative competitiveness impacts of carbon abatement policies. [ABSTRACT FROM AUTHOR]

Within this paper, we explore the technical and economic feasibility of very low stabilization of atmospheric GHG concentration based on the hybrid model REMIND-R. The Fourth Assessment Report of the IPCC and the scientific literature have analyzed some low stabilization scenarios but with as yet little attention being given to the regional distribution of the global mitigation costs. Our study helps to fill this gap. While we examine how technological development and international trade affect mitigation costs, this paper is novel in addressing the interaction between both. Simulation results show for instance that reduced revenues from fossil fuel exports in a low stabilization scenario tend to increase mitigation costs borne by the exporting countries, but this impact varies with the technology options available. Furthermore it turns out that the use of biomass in combination with carbon capturing and sequestration is key in order to achieve ambitious CO2 reduction targets. Regions with high biomass potential can clearly benefit from the implementation of low stabilization scenarios due to advantages on the carbon market. This may even hold if a reduced biomass potential is assumed. [ABSTRACT FROM AUTHOR]

This paper analyses the future trends (2000-2030) in Methane and Nitrous Oxide emissions across four scenarios that have been developed for India. The future state of Indian economy in the next 30-years has been broadly visualized under four scenarios proposed as combinations of market integration (extent of liberalization, globalization and integration with the world markets) and nature of governance (centralization vs. decentralization). The methodology chosen for the development of these scenarios draws mainly from the IPCC SRES methodology. The paper presents CH4 and N2O emissions for each of the scenarios for all the major emitting sectors. The major sources of Methane emissions are livestock and paddy contributing to about 65% of the total emissions in 2000. The share of emissions from Municipal Solid Waste is also expected to rise with increasing urbanization. Nitrous Oxide emissions arise chiefly from synthetic fertilizer use (contributing 67% of total emissions) and from field burning of agricultural residue. The paper also presents mitigation analysis for CO2 and CH4 and long-term, hundred-year analysis for CO2, CH4 and N2O [ABSTRACT FROM AUTHOR]

In this paper we examine the interaction between technology policy and its impact on the full basket of worldwide greenhouse emissions over the 21st century. The heart of the analysis is the Argonne National Laboratory's AMIGA Modeling System, a technology rich, general equilibrium model that (depending on data availability) characterizes as many as 200 sectors of the regional economies. We suggest in this paper that technologies and technology policies exist which could reduce carbon emissions enough to achieve stabilization targets at relatively modest costs given the size of the world economy. This can be accomplished largely through harnessing market forces and creating incentives with the use of efficient prices on greenhouse gas emissions, combined with complementary programs and policies to reduce market failures and to promote new technology improvements and investments. [ABSTRACT FROM AUTHOR]

The Second Generation Model (SGM) was developed to analyze policies designed to reduce greenhouse gas emissions. This paper documents how greenhouse gas emissions are calculated in the SGM, and provides an application to several Energy Modeling Forum scenarios that stabilize radiative forcing by using policies that either exclusively limit CO2 emissions or include both CO2 and non-CO2 greenhouse gases. Additionally, this paper discusses an extension which includes advanced fossil generating technologies with CO2 capture and storage in the USA region of the SGM. [ABSTRACT FROM AUTHOR]

Publicly announced greenhouse gas (GHG) mitigation targets and emissions pricing strategies by individual governments may suffer from inherent commitment problems. When emission prices are perceived as short-lived, socially cost-effective upfront investment in climate technologies may be hampered. This paper compares the social abatement cost of a uniform GHG pricing system with two policy options for overcoming such regulatory uncertainty: One combines the emissions pricing with a state guarantee scheme whereby the regulatory risk is borne by the government and one combines the system with subsidies for upfront climate technology investments. A technology-rich computable general equilibrium model is applied that accounts for abatement both within and beyond existing technologies. Our findings suggest a tripling of abatement costs if domestic climate policies fail to stimulate investment in new technological solutions. Since the cost of funding investment subsidies is found to be small, the subsidy scheme performs almost as well as the guarantee scheme. [ABSTRACT FROM AUTHOR]

Scientific evidence indicates that greenhouse gases emissions related to human activity are a significant contributor to global climate change. This paper investigates the impact of policy prescriptions and technologies for reducing U.S. greenhouse gas emissions. The analysis uses NERA's NewERA integrated model, which combines a top-down general equilibrium macro model of the U.S. economy with a detailed bottom-up model of the North American electricity sector. It examines the cost of cutting emissions by 0% to 80% of 2005 levels by 2050 under several scenarios, which consider different assumptions about policy choices ranging from purely market-based policy such as a cap-and-trade program to purely command-and-control policies and technology involving availability and efficacy of nuclear, Carbon Capture and Storage, renewables, and end-use efficiency technology. Our analysis shows a distinct efficiency advantage for market-based mechanisms and interaction of command-and-control mandates with market-based policies increase market distortions leading to higher welfare loss. We show that under such a mixed policy regime, carbon price is an unsuitable indicator of economic costs. [ABSTRACT FROM AUTHOR]

This paper examines a range of technological and regulatory approaches to reducing greenhouse gas (GHG) emissions. Availability of new technologies will control how the economy and energy infrastructure respond to any future climate policies. How such policies interact with other types of environmental regulations will also influence the best options for meeting emissions goals. To investigate these effects, the ADAGE model is used to examine policy impacts for several climate and technology scenarios, focusing on key factors such as emissions, technology deployment, energy prices and macroeconomic indicators. In general, the simulations indicate that reductions in GHG emissions can be accomplished with limited economic adjustments, although the impacts depend on both the regulatory approaches used and the future availability of new low-carbon technologies. [ABSTRACT FROM AUTHOR]

To what extent could various technological advancements in the coming decades potentially help greenhouse gas mitigation in the U.S.? What could the potential contribution of end-use technology and other key clean electric energy technologies such as CCS, Nuclear power, wind & solar, and biomass be? This paper presents simulation results from an Integrated Assessment Model that suggest that, in the absence of policy measures, even under the most optimistic state of technology development and deployment scenarios, the U.S. energy system would still be dominated by fossil fuels and GHG emissions would increase significantly between 2010 and 2050. A pessimistic scenario in end-use technology would result in increased electric and non-electric energy use and GHG emissions compared to the advanced technology scenario, while a pessimistic scenario in any one of the four clean technologies examined would result in reduced electric and non-electric energy use and a small increase in GHG emissions. However, if all technologies are in pessimistic status, GHG emissions would increase significantly as more fossil fuels would be used in the energy system. Technology alone cannot achieve the abatement levels required. A market-based policy targeting the reduction of U.S. GHG emissions to 50% below 2005 levels by 2050 would result in dramatic decrease in coal-fired generation. With abatement policies in place, favorable technology scenarios reduce abatement costs and facilitate the energy system transition from fossil fuels to clean energy. [ABSTRACT FROM AUTHOR]

This paper presents an overview of the study design and the results of the EMF 24 U.S. Technology Scenarios. The EMF 24 U.S. Technology Scenarios engaged nine top energy-environment-economy models to examine the implications of technological improvements and technological availability for reducing U.S. greenhouse gas emissions by 50% and 80% by 2050. The study confirms that mitigation at the 50% or 80% level will require a dramatic transformation of the energy system over the next 40 years. The study also corroborates the result of previous studies that there is a large variation among models in terms of which energy strategy is considered most cost-effective. Technology assumptions are found to have a large influence on carbon prices and economic costs of mitigation. [ABSTRACT FROM AUTHOR]

The Energy Modeling Forum 24 study included a set of policy scenarios designed to compare economy wide market-based and sectoral regulatory approaches of potential U.S. climate policy. Models from seven teams participated in this part of the study assessing economy-wide cap-and-trade climate policy and sectoral policies in the transportation and electric sector in terms of potential greenhouse gas emissions reductions, economic cost, and energy systems implications. This paper presents an overview of the results from the U.S. policy scenarios, and provides insights into the comparison of results from the participating models. In particular, various metrics were used to compare the model results including allowance price, the efficient frontier, consumption loss, GDP loss, and equivalent variation. We find that the choice of economic metric is an important factor in the comparison of model results. Among the insights, we note that the carbon price should cautiously be considered when other non-cap sectoral policies affecting emissions are assumed in tandem. We also find that a transportation sector policy is consistently shown to be inefficient compared to an economy-wide capand-trade policy with a comparable level of emissions reductions. [ABSTRACT FROM AUTHOR]

The Clean Development Mechanism (CDM) is an offset mechanism designed to reduce the overall cost of implementing a given target for greenhouse gas (GHG) emissions in industrialized Annex B countries of the Kyoto Protocol, by shifting some of the emission reductions to Non-Annex B countries. This paper analyzes how CDM projects may lead to leakage of emissions elsewhere in Non-Annex B countries. Leakage occurs because emissions reductions under a CDM project may affect market equilibrium in regional and/or global energy and product markets, and thereby increase emissions elsewhere. We also account for potential reverse or negative leakage effects in Non-Annex B from higher emissions cap in Annex B. Our conclusion is that net leakage typically is positive and sizeable, thus leading to an overall increase in global GHG emissions when CDM projects are undertaken. Leakage is greater when the different fossil fuel markets are more segregated. [ABSTRACT FROM AUTHOR]

Model analysis within the ADAM project has shown that achieving low greenhouse gas concentration levels, e.g. at 400ppm CO2-e is technologically feasible at costs of a few percent of GDP. However, models simplify the dynamics involved in implementing climate policy and the results depend on critical model assumptions such as global participation in climate policy and full availability of current and newly evolving technologies. The design of a low stabilization policy regime in the real world depends on factors that can only be partly covered by models. In this context, the paper reflects on limits of the integrated assessment models used to explore climate policy and addresses the issues of (i) how global participation might be achieved, (ii) which kind of options are available to induce deep GHG reductions inside and outside the energy sector, and (iii) which risks and which co-benefits of mitigation options are not assessed by the models. [ABSTRACT FROM AUTHOR]

This paper presents a long-term assessment of the worldwide energy system in scenarios ranging from a baseline to a very low greenhouse gas stabilization, using the energy model POLES. Despite improved energy efficiency, the baseline scenario would lead to a doubling in energy consumption by 2050 increasing further thereafter. CO2 emissions would continue rising, driven by the coal consumed in the power production which roughly follows the GDP growth; the scarcity of oil resources would trigger the development of alternative vehicles. Conversely, a 400 ppm CO2 eq stabilization case would lead to drastic changes in supply (renewables - biomass), transformation (carbon capture and storage) and demand (low energy technologies). It transpires that the contribution to the reduction effort of low stabilization compared to a baseline scenario would be similar for final consumption (36% efficiency and 10% fuel mix) and for the power sector (25% renewables, 25% CCS, 4% nuclear). In addition this low emission scenario would alleviate the tensions on fossil energy markets. [ABSTRACT FROM AUTHOR]

The rise in world oil prices, coupled with heightened interest in the abatement of greenhouse gas emissions, led to a sharp increase in biofuels production around the world. Previous authors have devoted considerable attention to the impacts of these policies on a country-by-country basis. However, there are also strong interactions among these programs, as they compete in world markets for feedstocks and ultimately for a limited supply of global land. In this paper, we offer the first global assessment of biofuel programs -focusing particularly on the EU and US. We begin with an historical analysis of the period 2001-2006, which also permits us to validate the model. We then conduct an ex ante analysis of mandates in the year 2015. We find that if these mandates are indeed fulfilled the impact on global land use could be substantial, with potentially significant implications for greenhouse gas emissions. [ABSTRACT FROM AUTHOR]

Climate change is a long-term issue due to the long lifespan of greenhouse gases (GHG) and the delayed response of the climate system. This paper investigates the long-term economic consequences of both climate change impacts and mitigation efforts by applying the multi-regional, multi-sectoral integrated assessment model WIAGEM based on GTAP-EL coupled with the reduced-form multi-gas climate model ICM. We investigate emissions reduction paths to reach a radiative forcing target of 4.5 W/m². Economic impacts are studied and compared with and without the inclusion of all GHG gases. We find that multi-gas emissions reduction causes less economic losses compared with a case where only CO2 emissions reductions would be considered. [ABSTRACT FROM AUTHOR]

To address the problem of human induced climate change effectively, climate policy must embody the principles of economic efficiency, environmental effectiveness and equity. In this paper it is shown that such a climate change policy should include a broad coverage of major greenhouse gases and sources. ABARE's Global Trade and Environment Model (GTEM) is used to analyse the economic impact of meeting a radiative forcing target using policies that focus on carbon dioxide emissions only and policies that focus on all major greenhouse gases and sources, including land use change and forestry emissions. It is projected that incorporating non-carbon dioxide gases into climate change policy reduces the economic adjustment cost significantly. Broadening the sources of carbon dioxide to include land use change and forestry emissions further reduces the economic adjustment costs. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to assess and compare regional welfare costs associated with alternative multi-gas strategies for a stabilization of global greenhouse gases (GHG) emissions in the long run. Mitigation costs of non-CO2 greenhouse gases are integrated into a multi-region multi-country CGE model of the world economy. Calibrations are based on GHG emissions projections from, and marginal abatement cost curves provided by, the EMF21 working group for the six greenhouse gases. We find that the introduction of non-CO2 GHGs in the mitigation strategy reduces significantly the welfare cost of a long term emissions stabilization policy but that benefits vary across regions. We also find that the various possible rules of emission quotas allocation may have large effects on the burden sharing among regions. [ABSTRACT FROM AUTHOR]

This paper examines the role of climate forcing agents other than carbon dioxide using the MiniCAM integrated assessment model for both no-climate-policy and policy emissions scenarios. Non-CO2 greenhouse-gas forcing is dominated by methane and tropospheric ozone. Assumptions about the prevalence of methane recovery and local air pollution controls in the no-policy cases are a critical determinant of methane and ozone-precursor emissions. When these factors are considered, emissions are substantially reduced relative to earlier estimates. This reduces their potential as climate mitigation agents through specific climate policies. Nevertheless, the addition of non-CO2 greenhouse gas and ozone precursor abatement options significantly reduces mitigation costs in the first half of the 21st century (by up to 40%) compared to the case where only CO2 abatement options are pursued. While the influences of aerosols are small by the end of the century, there is a significant interaction in the early 21st century between policies to reduce CO2 emissions and SO2 emissions, even in the presence of SO2-related pollution control policies. The attendant reduced aerosol cooling can more than offset the reduction in warming that accrues from reduced CO2. When non-CO2 gases are included in the policy, the net effect is that global-mean climate change to 2050 is practically unaffected by mitigation policy. [ABSTRACT FROM AUTHOR]

The non-CO2 greenhouse gases have so far jointly contributed around 40 percent to overall global warming. In this paper we examine the role of non-CO2 greenhouse gases in meeting long-term climate change targets. For this purpose, we develop climate mitigation scenarios aimed at achieving long-term stabilization of global radiative forcing. We use the MESSAGE model for a thorough bottom-up representation of the six Kyoto greenhouse gases and corresponding mitigation technologies. This approach endogenizes energy feedback effects from mitigation of non-CO2 gases and takes into account the interplay and side benefits that exist across GHGs. We analyze two mitigation scenarios that stabilize global radiative forcing at 4.5 W/m² as compared to pre-industrial times-one allowing only for CO2 mitigation and another with multigas mitigation. In addition, we also investigate a lower stabilization level of 3 W/m² and look into the implications this has for abatement strategies. Our approach helps us to identify a portfolio of measures in the energy, industry and agricultural sectors for achieving a proposed climate target. We find that considering the full basket of GHGs improves the effectiveness of the mitigation portfolio resulting in significantly lower costs, especially in the short term. In the long run, the bulk of the emissions reductions are still found to come from CO2 and this effect becomes more pronounced under the more stringent climate target. This emphasizes the importance of a diverse mitigation portfolio that includes both CO2 and non-CO2 related abatement options in meeting long-term climate targets. [ABSTRACT FROM AUTHOR]

This paper presents a set of multi-gas mitigation scenarios that aim for stabilisation of greenhouse gas radiative forcing in 2150 at levels from 3.7 to 5.3 W/m². At the moment, non-CO2 gasses (methane, nitrous oxide, PFCs, HFCs and SF2) contribute to about a quarter of the global emissions. The analysis shows that including these non-CO2 gases in mitigation analysis is crucial in formulating a cost-effective response. For stabilisation at 4.5 W/m², a multi-gas approach leads to 40% lower costs than an approach that would focus at CO2-only. Within the assumptions used in this study, the non-CO2 gasses contribution to total reduction is very large under less stringent targets (up to 60%), but declines under stringent targets. While stabilising at 3.7 W/m² obviously leads to larger environmental benefits than the 4.5 W/m² case (temperature increase in 2100 are 1.9 and 2.3°C, respectively), the costs of the lower target are higher (0.80% and 0.34% of GDP in 2100, respectively). Improving knowledge on how future reduction potential for non-CO2 gasses could develop is shown to be a crucial research question. [ABSTRACT FROM AUTHOR]

Traditionally, economic analyses of greenhouse gas (GHG) mitigation focused on carbon dioxide (CO2) emissions from energy sources, while non-CO2 GHGs were not incorporated into the studies, due to the lack of data on abatement costs of non-CO2 GHGs. In recent years, however, increasing attention has been dedicated to the benefits of reducing emissions of non-CO2 GHGs such as methane and nitrous oxide. Increased attention to the potential role of these gases in a GHG reduction policy increased the need for better data on the costs of non-CO2 GHG abatement for countries and regions outside of the US and the European Union (EU). Using a net present value calculation, this analysis develops regionally adjusted costs per mitigation option and marginal abatement cost curves by region for use in economic models. The result is worldwide cost estimates for methane and nitrous oxide from waste, energy and the industrial sectors. This paper also demonstrates the ability to significantly reduce greenhouse gases from these sectors with current technologies and the low cost of methane and nitrous oxide relative to CO2 reductions. [ABSTRACT FROM AUTHOR]

This paper reports on the global potential for carbon sequestration in forest plantations, and the reduction of carbon emissions from deforestation, in response to six carbon price scenarios from 2000 to 2100. These carbon price scenarios cover a range typically seen in global integrated assessment models. The world forest sector was disaggregated into ten regions, four largely temperate, developed regions: the European Union, Oceania, Russia, and the United States; and six developing, mostly tropical, regions: Africa, Central America, China, India, Rest of Asia, and South America. Three mitigation options--long- and short-rotation forestry, and the reduction of deforestation--were analyzed using a global dynamic partial equilibrium model (GCOMAP). Key findings of this work are that cumulative carbon gain ranges from 50.9 to 113.2 Gt C by 2100, higher carbon prices early lead to earlier carbon gain and vice versa, and avoided deforestation accounts for 51 to 78% of modeled carbon gains by 2100. The estimated present value of cumulative welfare change in the sector ranges from a decline of $158 billion to a gain of $81 billion by 2100. The decline is associated with a decrease in deforestation. [ABSTRACT FROM AUTHOR]

This paper reports how endogenous economic growth and technological change have been introduced into a global econometric model. It explains how further technological change might be induced by mitigation policies so as to reduce greenhouse gas emissions and stabilize atmospheric concentrations. These are the first results of a structural econometric approach to modeling the global economy using the model E3MG (energy-environment-economy model of the globe), which in turn constitutes one component in the Community Integrated Assessment System (CIAS) of the UK Tyndall Centre. The model is simplified to provide a post-Keynesian view of the long-run, with an indicator of technological progress affecting each region's exports and energy use. When technological progress is endogenous in this way, long-run growth in global GDP is partly explained by the model. Average permit prices and tax rates about $430/tC (1995) prices after 2050 are sufficient to stabilize atmospheric concentrations at 450ppm CO2 after 2100. They also lead to higher economic growth. [ABSTRACT FROM AUTHOR]

The Kyoto agreement as originally drafted sought to mitigate anthropogenic greenhouse gas emissions through policy measures by most industrialized countries. It now seems likely that the agreement will be ratified and implemented without the participation of the United States. Any emissions abatement policies which have a measurable reduction in global emissions will induce changes in the terms of trade and comparative advantage and competitiveness To the extent that aggressive policies are undertaken to reduce CO2 emissions, there are likely to be strong calls in the Kyoto coalition for greenhouse-gas related border adjustment measures. This paper uses a multi-region, multi-commodity static general equilibrium model to quantify and assess the implications of such policies. [ABSTRACT FROM AUTHOR]

The high costs for the US economy of mitigating climate change have been cited by the Bush administration as one of the reasons for rejecting US ratification of the Kyoto Protocol. A range of cost estimates are assessed in the IPCC's third report (2001), but they are hedged with so many qualifications that it is not easy to reach useful conclusions. This paper organises, some of the quantitative information on costs of greenhouse gas mitigation for the US published before the US rejection of Kyoto. The aim is to put them in a wider context, e.g., allowing for non-climate benefits, and to draw conclusions that are robust in the face of the uncertainties. Important lessons can be drawn for how costs can be reduced in any future international commitment by the US to reduce emissions. Provided policies are expected, gradual and well designed (e.g., through auctioned Annex I tradable permits with revenues used to reduce burdensome tax rates) the net costs for the US of mitigation are likely to be insignificant, that is within the range ±1% of GDP. [ABSTRACT FROM AUTHOR]

Developing countries can participate in the Kyoto Protocol to limit greenhouse gas emissions by adopting national emissions limits. Such limits could offer economic gains to developing countries, cost savings to industrialized countries, and environmental benefits. They could also address concerns of the U.S. Senate. On the other hand, uncertainty about greenhouse gas emissions in developing countries is so great that emissions limits may impose substantial costs if they turn out to be unexpectedly stringent. To manage risks arising from emissions limits, developing countries should index any emissions limits to variables that predict emissions in the absence of limits. This paper presents such an index--similar to one recently adopted by Argentina--and develops estimates showing that it could lower the risk of economic losses to developing countries from about 40 percent to about 35 percent. [ABSTRACT FROM AUTHOR]

In this paper various emission reduction scenarios are evaluated with FUND -- the Climate Framework for Uncertainty, Negotiation, and Distribution model. The aim is to help international negotiators improve upon the Kyoto Protocol. International cooperation in greenhouse gas emission reduction is important, and the more of it the better. The emission reduction targets as agreed in the Kyoto Protocol are irreconcilable with economic rationality. If the targets nevertheless need to be met, it is better to start emission reduction sooner than later in order to minimise costs. Methane emission reduction may be an important instrument to reduce costs. [ABSTRACT FROM AUTHOR]