Download Approach to Differentiating Commitments

Scenarios For Differentiating
Commitments :
A quantitative analysis
EU Expert Group on Further Action
Berlin, May 14, 2003
Odile Blanchard, LEPII-EPE (Previously IEPE)
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Overview
• Possible elements and options of a climate
protection architecture
• Differentiated commitment scenarios :
objectives, methodology, assumptions
• Comparative results
• Implementation issues
• Conclusion
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Designing a Climate Protection Architecture:
Possible Elements and Options
1.
2.
3.
4.
5.
Legal Nature of Commitments
- Binding
- Non-Binding
- Mixture
Type of GHG Limitation Commitment
- Tax
- PAMs (e.g., harmonized PAMs; SD-PAMs)
- Targets (e.g., fixed, dynamic, dual)
Approach to Differentiating Commitments
- Pledge-based (e.g., Kyoto-style)
- Principle-based (e.g., Brazilian Proposal, equal per capita)
Timing and Triggers
- By existing or new Annex
Coverage and Scope of Actions
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- Different gases and/or sectors
Designing a Climate Protection Architecture:
Possible Elements and Options
Continued…
6.
Market-Based Mechanisms
- Int’l emissions trading
- CDM
- Sector-CDM
7. Financial and Technology Commitments
- Funding for adaptation/impacts compensation
- Funding for clean energy development
8. Accountability Mechanisms
- Measurement, reporting, and review of commitments
- Compliance system
9. Overall Environmental Objective
- UNFCCC Article 2
- More specific (e.g., keep 450 CO2 eq. option open)
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Building on the Kyoto Protocol:
Options for Protecting the Climate
1. Introduction: An Architecture for Climate Protection
2. Continuing Kyoto: Emission Caps in DCs?
3. Sustainable Development Policies and Measures
4. Evolving to a Sector-Based CDM
5. Dual-Intensity Targets: Reducing Uncertainty
6. Learning from the Argentine Voluntary Commitment
7. The Brazilian Proposal on Relative Responsibility
8. Equal Per Capita Entitlements
9. Differentiated Commitment Scenarios: Quantitative Analysis
10. Conclusion: Building and Effective and Fair Climate
Protection Architecture
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9. Differentiated Commitment Scenarios
Objectives
• Illustrate the formalization of a few emission
allocation proposals, 2010-2030
• For each allocation scenario, quantitatively assess :
- the emission allowances distributed across
countries
- the emission reduction costs
- the impacts of trade
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9. Differentiated Commitment Scenarios
Methodology
• Set an intermediate (2030) environmental goal,
compatible with a long term CO2 concentration target
of 450-550 ppmv : 9.4 GtC in 2030
• Define 3 worldwide scenarios:
- Per Capita Convergence scenario
- Relative Responsibility scenario
- Emissions-Intensity Target scenario
• POLES model and ASPEN software
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Why stabilization below 10 GtC by 2030 ?
Fossil fuel CO2 emissions from mitigation scenarios for 550ppmv stabilization
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IPCC TAR WGIII
Why stabilization below 10 GtC by 2030 ?
Fossil fuel CO2 emissions from 76 post- SRES stabilization scenarios
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IPCC TAR WGIII
Tools developed at IEPE
• POLES (Prospective Outlook on Long-term Energy
Systems): a world simulation energy model, partial
equilibrium, 38 countries/regions. Main outputs :
– energy supply, demand, price projections to 2030
– GHG emission marginal abatement curves (MAC) by
regions/countries
• ASPEN (Analyse des Systemes de Permis d’Emission
Negociables), computes :
– GHG emission allocations based on the allocation rule
chosen ;
– emission permit price and trade flows, for any permit
market
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Quantitative assessments:
2010 and 2030 assumptions
• 2010 CO2 world emissions : 7.8 GtC (+38 % /1990),
resulting from :
– Annex 1 : comply with KP commitment, except USA, Eastern
Europe
– USA : Feb 14, 2002 “Bush Adm. Rule” (-18 % emission intensity
over 10 years)
– Eastern Europe: BAU emissions (to avoid “hot air”)
– Non-Annex 1: BAU emissions
• 2030 BAU world emissions : almost 12 GtC (+ 111% /1990)
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Emissions per capita scenario : assumptions
• Convergence year: 2050, at 0.95 tC/cap.
• Transition period : 2011-2049 with a yearly carbon
budget to allocate (resource sharing)
• 2010-2030 yearly global CO2 emissions budget
calculated on a linear basis to reach 9.4 GtC in 2030.
2030-2040: global emissions stabilization at 9.4 GtC
• 2040-2050: -1%/y global emissions reduction
• Using one of GCI’s proposed equations for convergence
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Emissions per capita scenario
Convergence equation
• Country’s annual emissions share:
Sy = Sy-1 - (Sy-1 - Py)*exp(-a*(1-t))
Sy : emissions share in year y
Py : population share in year y
a: convergence coefficient (= 4)
t : elapsed time ratio between starting year (2011, t = 0 )
and convergence year (2050, t = 1)
• Country’s annual emissions entitlement: share Sy
multiplied by the global CO2 emissions budget of year y
• Source: adapted from GCI
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Relative responsibility scenario : assumptions
• Brazilian-type approach : reductions sharing
• 2010-2030 yearly global CO2 emissions budget:
same as for Per capita convergence scenario
• 2010-2030 yearly global CO2 emission reductions relative
to BAU
• Distribution of the yearly reductions among ALL countries,
based on relative responsibility
• CO2 cumulative emissions from 1900
• Responsibility of a country: ratio of cumulative emissions
of the country/world cumulative emissions
• 2011-2015 relative responsibility: refers to 2005 ratio
2016-2020 to 2010; 2021-2025 to 2015 BAU; 2026-2030
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to 2020 BAU.
Relative responsibility scenario : calculating
emission reductions, an example
• 2030 global CO2 reductions:
BAU - Emission Budget= 11.981 - 9.4 = 2.581GtC
• 2030 US relative responsibility :
US CO2 cumulative emissions 1900-2020: 111.3 GtC
World CO2 cumulative emissions 1900-2020: 421 GtC
US 2030 responsibility ratio: 111.3 / 421 = 26.43 %
• US 2030 emission reductions relative to BAU :
2.581 * 26.43 % = 0.682 GtC = 682 MtC
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Emissions-Intensity Target scenario:
assumptions
• 2030 global CO2 emissions target: still 9.4 GtC
• Approach based on relative changes of em / GDP (no
absolute figures for em/GDP) ; country specific
• Various simulations carried out to reach the 9.4 GtC target
• Simulation used:
– Annex I improve CO2/GDP by 2 % yearly from BAU
trend ;
– Non-Annex I : 0.5 % improvement from BAU trend
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Results:
Comparing Emission Allowances
• All scenarios meet the near-term environmental goal
• In all scenarios, more stringent emission limitations in
Annex I than in Non-Annex I countries
• 2030 emission allowances above 1990 levels for all NonAnnex I countries
• In the Per Cap Convergence scenario, some Non-Annex
I countries would have allowance surpluses relative to
their BAU emission projections in 2030
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Results : comparing emission allowances
Reduction (–) or increase (+) in 2030 emissions relative to 1990 (%)
Countries
Per Capita
Convergence
Scenario
Relative
Responsibility
Scenario
EmissionsIntensity
Target Scenario
Annex I
United States
European Union
Japan
Australia and New Zealand
Former Soviet Union
Other Economies in
Transition
Annex I, all others
Non-Annex I
Brazil
Mexico
India
South Asia, excl. India
China
South Korea
Southeast Asia
Africa
Gulf States
Non-Annex I, all others
World
-34
-31
-31
-19
-51
-34
-5
-34
-19
+59
-32
-37
-6
-33
-32
+5
-35
-32
-35
+6
-26
+322
+93
+713
+2,130
+173
+48
+270
+626
+111
+195
+66
+264
+88
+557
+635
+223
+239
+289
+274
+194
+151
+66
+275
+105
+551
+620
+233
+248
+291
+282
+209
+167
+66
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Results:
Comparing Emission Allowances
Distribution of CO2 Emissions allowances
Annex I
Non-Annex I
1990
Actual
emissions
69%
31%
2010
Projected
emissions
51%
49%
Total (MtC)
5679
7832
2030
2030 allowances
Projected
emissions (BAU) Per cap conv.
Relative resp.
41%
26%
34%
59%
74%
66%
11981
9400
9400
Emis. int. targ
32%
68%
9400
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Results:
Comparing Emission Allowances
Per capita CO2 emission allowances
1990
2010
2030
tC / cap
2030
Emission Allowances
Projected
Per Capita
Actual
Projected Emissions Convergence
Emissions Emissions
(BAU)
Scenario
Relative
Responsibility
Scenario
EmissionIntensity
Target
Scenario
Annex I
United States
European
Union
Japan
Australia and
New Zealand
Former Soviet
Union
Other EITs
Annex I,
others
5.1
2.4
5.6
2.4
5.8
2.8
2.6
1.7
3.8
1.6
3.7
1.6
2.4
3.0
2.4
3.1
2.8
3.8
1.7
1.6
2.0
3.1
1.7
2.0
3.3
2.0
3.2
1.6
2.2
2.1
2.2
3.5
1.9
3.8
2.5
4.1
1.6
1.7
1.5
2.8
1.6
2.0
0.4
1.0
0.2
0.1
0.6
1.1
0.5
0.2
1.0
1.4
0.8
0.3
1.0
1.2
1.0
0.8
0.9
1.1
0.8
0.3
0.9
1.2
0.8
0.3
0.6
1.5
0.4
1.1
2.8
0.6
1.6
4.7
1.2
1.2
1.8
1.0
1.4
4.2
1.1
1.5
4.3
1.1
0.3
1.2
0.6
0.3
1.6
0.7
0.5
1.9
1.0
0.9
1.2
1.0
0.5
1.2
0.9
0.5
1.8
0.9
1.1
1.1
1.5
1.2
1.2
1.2
Non-Annex I
Brazil
Mexico
India
South Asia,
excl. India
China
South Korea
Southeast
Asia
Africa
Gulf States
Non-Annex I,
others
World
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Results:
Comparing Costs and Trade
• Across all scenarios, higher emission reduction
costs in Annex I than in Non-Annex I
• Trade: all countries benefit from trade ;
typically, Annex I countries are buyers; NonAnnex I countries are sellers
• Highest volume of trade and highest gains from
trade in the Per Capita Convergence scenario
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Results :Comparing impacts of trading
Per Capita Convergence
Total Cost to
Permit price: Meet Target
$ 97
( % of GDP)
Relative Responsibility
Gains from
Trade
(Billion $)
Total Cost to
Meet Target
(% of GDP)
Emissions–Intensity
Target
Gains from Total Cost to Gains from
Trade
Meet Target
Trade
(Billion $) (% of GDP) (Billion $)
Annex I
United States
European
Union
0.48
81.9
0.24
4.9
0.24
5.8
0.21
47.1
0.23
60.7
0.22
53.6
Japan
Australia and
New Zealand
Former Soviet
Union
Other
Economies in
Transition
Annex I, all
other
0.24
26.9
0.17
11.4
0.24
28.6
0.49
6.3
0.01
0.6
0.35
1.3
1.27
66.9
0.62
5.0
0.73
9.8
0.40
3.6
0.44
5.0
0.37
2.8
0.47
19.9
0.20
1.3
0.41
14.6
Brazil
-0.06
1.6
0.06
0.0
0.03
0.0
Mexico
0.04
0.1
0.06
0.0
0.00
0.4
India
South Asia,
excl. India
-0.35
28.6
-0.05
5.5
-0.03
4.8
-1.89
32.9
-0.01
0.5
0.01
0.3
China
0.13
0.2
-0.04
12.2
-0.07
16.5
South Korea
0.67
31.6
0.02
0.3
0.00
0.5
Southeast Asia
0.03
1.4
-0.02
3.4
-0.03
3.6
Africa
-1.38
55.6
0.06
0.2
0.03
0.6
Gulf States
Non-Annex I,
all other
0.63
13.6
0.09
0.2
-0.01
1.0
-0.05
3.5
0.06
0.1
0.02
0.3
World
0.11
421.6
0.11
111.4
0.11
144.7
Non-Annex I
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Implementation issues :
Per capita convergence
• Principle-based : egalitarian
• What long-term environmental goal (“emission budget”) ?
What yearly contraction path ? What level of convergence?
• Emissions trading is essential
• Does not account much for national circumstances
• Acceptability : low for Annex I, high for Non-Annex I
• Variants : more acceptable but more complex (e.g. Aslam’s
proposal : fixed minimum per capita level + variable per
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capita portion related to country-specific circumstances)
Implementation issues :
Relative responsibility
• Principle-based : polluter pays
• Choice of indicator of responsibility: how far down the causal chain of global
warming ?
• Data challenges:
– Consensus on distant past CO2-energy related figures ?
– Data for CO2 from land-use change, non-CO2 GHGs? Sensitivity analyses.
• Acceptance of Annex I responsibility for pre-1990 emissions ?
• Bringing developing countries on board :
– Delay participation (thresholds: GDP/cap, non-Annex I responsibility vs Annex I)
– Reductions relative to a dynamic baseline
– Responsibility principle for Annex I, other basis for non-Annex I commitments
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Implementation issues :
Emissions-intensity targets
• Pledge-based target: as many targets as countries ; choice of
adjustment form of GHG emissions to GDP changes, need for
capacity building
• Additional data set : GDP
• GDP measure : domestic currency
• Emission intensity targets expressed in rates of change, rather than
absolute terms
• Emissions trading: after compliance period ; or allow trade during
commitment period (GDP projections and commitment period
reserve)
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Conclusion (1):
Scenarios for differentiating commitments
• Reaching 550 ppmv stabilization of CO2 concentrations
by 2100 requires stringent reductions in the near-term,
particularly by Annex I countries
• Emission allowances and emission reduction costs vary
for each country across the 3 scenarios
• Helpful information for countries to shape their
negotiating position
• Extension of work: exempt some countries from
emission limitations ; mix approaches
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Conclusion (2): options for climate protection
• No proposal can satisfy the interests and concerns
of all countries
• Design of a menu of near-term options to build confidence
and capacity…
- Stronger leadership of developed countries in emission reductions
- Multiple options : enhanced participation in emission reductions
- But potentially insufficient to address climate change over the LT
• … coupled to a principled, long-term framework
- To combat bargaining power of pledged-based commitments
- To avoid the complexity of multiple options
- Could include a more definite environmental objective
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