Differentiation and Dynamics of Competitiveness Impacts from the EU ETS

We summarise the main factors that differentiate impacts of the EU ETS on profitability and market share. By examining and sampling a range of sectors, we present some simple metrics and indicators to help judge the nature of potential impacts. We also consider briefly the mitigation response to these impacts by sectors, and how they may evolve over time. The broad conclusion confirms the aggregate findings presented in the existing literature - more participating sectors are likely to profit under the current ETS structure out to 2012 at the cost of a modest loss of market share, but this may not hold for individual companies and regions. The period 2008-12 can assist technology investments and diversification, providing the continuation and basic principles of the EU ETS post-2012 is quickly defined and incentives are in place for sectors to pursue this

Differentiation and dynamics of competitiveness impacts from the EU ETS

We summarises the main factors that differentiate impacts of the EU ETS on profitability and market share. By examining sampling a range of sectors, we present some simple metrics and indicators to help judge the nature of potential impacts. We also consider briefly the mitigation response to these impacts by sectors, and how they may evolve over time. The broad conclusion confirms the aggregate findings presented in the existing literature - most participating sectors are likely to profit under the current ETS structure out to 2012 at the cost of a modest loss of market share, but this may not hold for individual companies and regions. The period 2008-12 can assist participating sectors to build experience and financial reserves for longer term technology investments and diversification, providing the continuation and basic principles of the EU ETS post-2012 is quickly defined and incentives are in place for sectors to pursue this.Emissions trading, industrial competitiveness, spillovers, allowance allocation, perverse incentives.

Testing Global Sectoral Industry Approaches to Address Climate Change: Interim report of a CEPS Task Force. CEPS Task Force Reports, 4 December 2007

Successful global sectoral industry approaches could become an effective means of broadening the range of contributions by all parties to greenhouse gas reductions, and of addressing competitiveness concerns in trade-exposed industries. This report puts these two hypotheses to the test and identifies the key requirements for global sectoral industry approaches to work. The analysis is based on ongoing work within a CEPS multi-stakeholder Task Force on “Sectoral industry approaches to address climate change”, supported by the Cement Sustainability Initiative (CSI) of the World Business Council for Sustainable Development. The Final Report will be published in spring 2008

Reducing global CO2 emissions with the technologies we have

The energy intensities of the various industrial sectors differ considerably across countries. This suggests a potential for emissions reductions through improved accessibility to efficient technologies. This paper estimates an upper-bound CO2 emission mitigation potential that could theoretically be achieved by improved access to efficient technologies in industrial sectors. We develop a linear optimization framework that facilitates the exchange of sectoral production technologies based on the World Input-Output Database (WIOD), assuming perfect substitutability of technologies and homogeneity within economic sectors, while ignoring barriers to technological adoption and price driven adjustments. We consider the full global supply chain network and multiple upstream production inputs in addition to energy demand. In contrast to existing literature our framework allows to consider supply chain effects of technology replacements. We use our model to calculate emission reduction potentials for varying levels of access to technology. If best practice technologies were made available globally, CO2 emissions could theoretically be reduced by more than 10 gigatons (Gt). In fact, even second-tier production technologies would create significant global reduction potentials. We decompose sectoral emission reductions to identify contributions by changes in energy intensity, supply chain effects and changes in carbon intensities. Excluding the latter, we find that considering supply chain effects increases total mitigation potentials by 14%. The largest CO2 emission reduction potentials are found for a small set of developing countries.DFG, SFB 1026, Sustainable Manufacturing - Globale Wertschöpfung nachhaltig gestalte

A roadmap for China to peak carbon dioxide emissions and achieve a 20% share of non-fossil fuels in primary energy by 2030

As part of its Paris Agreement commitment, China pledged to peak carbon dioxide (CO2) emissions around 2030, striving to peak earlier, and to increase the non-fossil share of primary energy to 20% by 2030. Yet by the end of 2017, China emitted 28% of the world's energy-related CO2 emissions, 76% of which were from coal use. How China can reinvent its energy economy cost-effectively while still achieving its commitments was the focus of a three-year joint research project completed in September 2016. Overall, this analysis found that if China follows a pathway in which it aggressively adopts all cost-effective energy efficiency and CO2 emission reduction technologies while also aggressively moving away from fossil fuels to renewable and other non-fossil resources, it is possible to not only meet its Paris Agreement Nationally Determined Contribution (NDC) commitments, but also to reduce its 2050 CO2 emissions to a level that is 42% below the country's 2010 CO2 emissions. While numerous barriers exist that will need to be addressed through effective policies and programs in order to realize these potential energy use and emissions reductions, there are also significant local environmental (e.g., air quality), national and global environmental (e.g., mitigation of climate change), human health, and other unquantified benefits that will be realized if this pathway is pursued in China

A practical approach to offset permits in post Kyoto climate policy

International Carbon Offsets from developing countries and emerging economies such as permits from the Clean Development Mechanism (CDM) will potentially play an important role for cost containment in domestic greenhouse gas regulation schemes in industrialised countries. We analyse the potential role of offset permits assuming that major emitters such as the USA, Canada, Japan, Australia and New Zealand install domestic greenhouse gas regulation schemes to achieve the emissions reductions pledged in the Copenhagen Accord and seek cost containment. We estimate a potential demand for offset permits of 627 to 667 MtCO2e p.a. from industrialised countries. To describe the supply structure, we derive marginal abatement cost curves for developing countries and emerging economies. We find that developing countries and emerging economies can supply 627 to 667 MtCO2e p.a. at costs of approximately EUR 10 (in 2004 EUR), neglecting transaction costs and country specific risks. The highest potentials for the generation of carbon offsets are present in China, India and the rest of Asia. --emissions trading,offsets,CDM,marginal abatement costs,climate policy

Greenhouse gas emissions in New Zealand: a preliminary consumption-based analysis

Abstract: New Zealand’s per capita greenhouse gas emissions are usually calculated by taking total emissions as reported under the Kyoto Protocol or the United Nations Framework Convention on Climate Change and simply dividing by population. However this focuses on emissions associated with production within New Zealand. From the point of view of individuals, these are not the emissions they control, and hence can mitigate. Individuals can calculate their “carbon footprint” but tools to do this typically focus on a few categories of emissions (mostly electricity, direct fuel use and waste) and emissions footprints are not available for a wide range of households so cannot be used for comparative analysis. This paper explores how the carbon emissions related to the consumption categories of households in New Zealand vary with household characteristics. We use product consumption data from the 2007 Household Economic Survey. Consumption within each category is linked to a carbon intensity multiplier (tonnes of carbon dioxide equivalent per dollar of consumption) which is derived from: the official 2007 input–output table of 106 industries produced by Statistics New Zealand; energy data on carbon dioxide per petajoule of fuel in each industry from the Energy Data File; and the Energy Greenhouse Gas Emissions Report both provided by the Ministry of Business, Innovation and Employment. Previous literature has used similar methods to calculate the incidence of a carbon tax (e.g. Creedy and Sleeman [2006]). This paper uses these methods in order to study which sectors of household expenditure offer the greatest opportunities for mitigation and how these opportunities vary with household characteristics such as income decile, region and household composition