Transcript EU Climate Change Policy

Limiting Global Climate Change to 2 ºCelsius
The way ahead for 2020
and beyond
What does it mean for supply security?
Peter Russ
European Commission
European Commission: JRC,IPTS
Overview
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Global emissions pathways
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Objectives of the modelling exercise
The POLES model
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Assumptions and Outcome
Security of supply
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Reaching the 2°C target
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Emission path to reach the 2°C objective
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450 ppm CO2 equivalent emission path with limited overshooting
gives 50 % chance reaching the 2°C objective.
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Peak before 2025
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Reduce up to 50%
by 2020 compared
to 1990

Annual reduction
rates increase by
5% for each 5 years
delay
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Source: Meinshausen
Overview
-A
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The POLES Modelling system
• partial equilibrium model of the world energy system
• recursive dynamic simulation up to the year 2050
• endogenous energy demand and prices
• explicit technology modelling for many sectors
• 47 world regions / countries
• 30 power generation technologies
• 8 industry sectors + transport sector + residential and
services + agriculture
European Commission: JRC,IPTS
The POLES Modelling system (2)
• energy supply modelling
• oil reserves by region (64 regions)
• drilling and extraction
• world and regional markets
• hydrogen options included
• emissions of CO2 and other GHG (“Kyoto gases”) from
energy use and industrial processes
• CCS included
• capture from coal and gas
• storage potential by region
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Assessing the mitigation potential:
objectives
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Technically feasible vision on how to reach an ambitious
emission development, for the EU and rest of the world
Global cost/technology estimates for mitigation scenarios
until 2030
Options for viable long-term technology paths identified
beyond 2030 up to 2050
Realistic role of the carbon market and the use of flexible
mechanisms defined.
Identify options for policy instruments that engage all
key players on the basis of their responsibilities and
capabilities
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POLES Model: Scenario assumptions
• Global GHG emissions peak before 2020, i.e. 2015, and reduce to 10%
above 1990 levels by 2030. Economic assessment up to 2030
30
20
10
Baseline
2050
2045
2040
2035
2030
2025
2020
2015
2010
0
2005
• Non Trading sectors experience
policies that lead to emission
reductions.
40
1990
• Global Emission trading market
develops gradually in power and
energy intensive sectors.
GtCO2-equi
• Global GHG emissions continue to decrease up to 2050 to allow for a
technology assessment up to 2050
• Multi-gas and introduction of
50
Carbon Capture and Storage
Emission Reduction Scenario
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POLES model: assumptions on the
evolving global carbon market
- Markets develop at different speed and companies experience
different carbon prices in different countries.
- E.g. a carbon prices in the EU of 25 € does not translate
automatically into a global price of 25 €.
-By 2030 all industries
experience same
carbon price except in
poor DCs
70
EU
Power Sector and Industry
60
EUR per t CO2
- Carbon price
developing countries
catches up with those
in the EU and other
developed countries
Developed
Countries
50
Economies in
Transition
40
30
High Income
Developing
Countries
20
Developing
Countries
10
Low Income
Developing
Countries
0
2010
2015
2020
2025
2030
European Commission: JRC,IPTS
POLES MODEL: Assumptions on how
to broaden participation
• All countries, also DCs, implement Energy Efficiency policies, specifically
in transport and residential sectors. Includes:
• Better foresight and information.
• Increased Technology Development
• Additional Energy Efficiency Standards
• In order to achieve the 2 target, developed countries take the lead but
targets but gradually more and more participation from developing
countries.
• Answer the question to what extent the guidance from the 2005 EU
Spring Council can translate into a 2 emission scenario:
the EU looks forward to exploring with other parties strategies for
achieving necessary emission reductions and believes that, in this
context, reduction pathways for the group of developed countries
in the order of 15-30% by 2020, should be considered
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Emission reduction vs. baseline (1
means same as in baseline)
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Results: Global Participation
Developed countries GHG emissions
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Emissions in developed
countries on a continues
descending path.
Internal emissions should be at
-20% by 2020 and – 60% by
2050 compared to 1990
140%
120%
100%
80%
60%
40%
20%
0%
1990
2005
2020
Baseline
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Developing countries emissions
may grow but at lower rate
than baseline.
Need to peak also between
2020 and 2025
2030
2040
2050
Reduction Scenario
Developing countries GHG emissions
320%
280%
240%
200%
160%
120%
80%
40%
0%
1990
2005
2020
Baseline
2030
2040
2050
Reduction Commission:
Scenario
European
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Cost of action: role of the global carbon
market (1)
• Developed countries targets need to be at 30% by 2020 to
see sufficient global reductions (± 2/3 domestic,
± 1/3 trade)
•But developing countries need to reduce substantially more
than what is bought by developed countries !
70
Cumulative reductions compared to baseline
and emissions trading
Developed countries
Developing countries
60
Trade
50
GtCO2eq
40
30
20
10
0
-10
-20
-30
20132017
20182022
20232027
20282032
2013-
2018-
2023-
2028-
2017
2022
2027 JRC,IPTS
2032
European
Commission:
Cost of action: How to bring in developing
countries?
• Size of bubble corresponds
with amount traded!
21
cost/capita (relative to world average)
• The economic impact of
internal effort and trade
seem to be equitable
16
11
6
1
-4
-9
0
1
2
3
4
5
gdp/cap (relative to world average)
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Cost of action: role of the global carbon
market (2)
• Carbon market decreases investment
costs by a factor of 3.
1.4%
1.2%
no trade
1.0%
• Carbon price is substantial but
evolves gradual
trade
0.8%
0.6%
0.4%
Carbon Price Trading
Sectors €/t CO2eq.
0.2%
0.0%
2010
14
2015
21
2020
37
World
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Technologies:
there is no silver bullet
45
Energy savings
40
avoided emissions
35
Gt CO2
30
25
Fossil fuel switch
Renewable energies
20
Nuclear energy
15
Carbon sequestration
10
5
0
2000
Emission of reduction case
2010
2020
2030
2040
2050
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A post-2030 glimpse: technology
deployment on a 2C trajectory
35000
EU Gross Energy
Consumption
EU Electricity Generation
4500
30000
4000
25000
Natural gas (TWh)
3500
20000
PJ
Oil (TWh)
3000
15000
2500
10000
2000
Coal (TWh)
Nuclear (TWh)
Hydro (TWh)
1500
5000
Renewables (TWh)
1000
Natural
Gas
Oil
2005 Consum ption
Nuclear
2050 Baseline
Other
2050 CC policy
500
0
China Gross Energy
Consumption
China Electricity Generation
6000
atural gas (TWh)
5000
Oil (TWh)
4000
Coal (TWh)
3000
Nuclear (TWh)
Hydro (TWh)
2000
Renewables (TWh)
1000
Natural
Gas
Oil
Coal
Nuclear
Other
0
20
05
20
10
20
15
20
20
20
25
20
30
20
35
20
40
20
45
20
50
PJ
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
Coal
20
05
20
10
20
15
20
20
20
25
20
30
20
35
20
40
20
45
20
50
0
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2005 Consum ption
2050 Baseline
2050 CC policy
The role of energy efficiency by 2020
• EE reduces emissions most in transport,
residential and commercial sectors.
•EE achieves 1/3 of the necessary global
reductions by 2020.
• Energy standards key to deliver real
reductions
• Trickle through effect developing
countries product markets
• Difficult to steer through the UNFCCC,
look for role of the Gleneagles Dialogue
and a G20 energy efficiency pact
2020
Share of emission
reductions due to EE
scenario
Annex I
35%
China
31%
Non - Annex I
27%
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Carbon Capture and Storage
Share of Power Sector Emissions Captured (%)
• CCS needs to be first deployed in developed
countries
• By 2020 full deployment of technology in EU power
sector
70
• Crucial to prove
EU-25
60
technology and
Annex I
50
build capacity in
Non-Annex I
40
developing
World
30
countries
20
10
0
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
European Commission: JRC,IPTS
Security of supply
• what does the scenario mean in terms of “supply
security”
• lower energy demand
• transport => oil
1.2
1.0
• EU fuel imports
drastically
reduced
0.8
Gas
0.6
Oil
Coal
0.4
0.2
0.0
2005
2015
2025
2035
2045
European Commission: JRC,IPTS
Security of supply
60000
50000
• EU fuel imports
reduced as
compared with
current levels
40000
Coal (PJ)
30000
Oil (PJ)
Natural gas (PJ)
20000
10000
0
0B 0 10 20B 0 20 30B 0 30 40B 0 40 50B 0 50
1
2 20
2 20
2 20
2 20
2
20
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The GEM-E3 World Model
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GEM-E3 World is a CGE model
It follows the computable general equilibrium methodology
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demand and supply functions derived from microeconomic
behaviour of economic agents (optimisation of their objective)
markets clear through prices
covers the entire economic activity within a region
simultaneously multinational and specific for each region,
markets clear at regional or World level, where appropriate
extensive environmental dimension (GHG and local pollutants,
incl. abatement)
wide variety of policy instruments (standards, taxes, permits, at
World and regional level, different allowance scheme)
 follows a time forward path (dynamic recursive over time)
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Results: emissions compared to 1990
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Results: Cost of action is consistent
with global economic development
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World GDP
relative to 2005
Cost of action is consistent with IPCC
results
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Benefits from the global carbon
market
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The global carbon market reduces overall global costs
substantially!
Countries that do not participate in the carbon market and
do not have reduction targets still experience an impact
through trading effects.
When the carbon market would be limited to the Annex I
countries, then the cost is higher for those countries but
it is also higher for the developing countries!
Countries that participate in the global carbon market
actually perform better!
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All documents in the climate and energy package:
http://europa.eu/press_room/presspacks/energy/index_en.htm
http://ec.europa.eu/environment/climat/future_action.htm
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POLES direct cost of reduction (% of GDP)
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GDP per capita 2050 / 2005
main driver of the scenario
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Emission path to reach the 2°C objective

450 ppm CO2 equivalent
emission path with limited
overshooting gives 50 %
chance reaching the 2°C
objective.

Peak before 2025

Reduce up to 50% by 2020
compared to 1990

Annual reduction rates
increase by 5% for each 5
years delay
Note: The black solid line presents the median, the borders of shaded areas describe the
1%, 10%, 33%, 66%, 90%, and 99% percentiles.
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