193 research outputs found
Reducing Deforestation and Trading Emissions: Economic Implications for the post-Kyoto Carbon Market
This paper quantitatively assesses the economic implications of crediting carbon abatement from reduced deforestation for the emissions market in 2020 by linking a numerical equilibrium model of the global carbon market with a dynamic partial equilibrium model of the forestry sector. We find that integrating avoided deforestation in international emissions trading considerably decreases the costs of post-Kyoto climate policy – even when accounting for conventional abatement options of developing countries under the CDM. At the same time, tropical rainforest regions receive substantial net revenues from exporting carbon-offset credits to the industrialized world. Moreover, reduced deforestation can increase environmental effectiveness by enabling industrialized countries to tighten their carbon constraints without increasing mitigation costs. Regarding uncertainties of this future carbon abatement option, we find both forestry transaction costs and deforestation baselines to play an important role for the post-Kyoto carbon market. --Climate Change,Kyoto Protocol,Emissions Trading,Deforestation
Reducing Deforestation and Trading Emissions: Economic Implications for the post-Kyoto Carbon Market
This paper quantitatively assesses the economic implications of crediting carbon abatement from reduced deforestation for the emissions market in 2020 by linking a numerical equilibrium model of the global carbon market with a dynamic partial equilibrium model of the forestry sector. We find that integrating avoided deforestation in international emissions trading considerably decreases the costs of post-Kyoto climate policy – even when accounting for conventional abatement options of developing countries under the CDM. At the same time, tropical rainforest regions receive substantial net revenues from exporting carbon-offset credits to the industrialized world. Moreover, reduced deforestation can increase environmental effectiveness by enabling industrialized countries to tighten their carbon constraints without increasing mitigation costs. Regarding uncertainties of this future carbon abatement option, we find both forestry transaction costs and deforestation baselines to play an important role for the post-Kyoto carbon market
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India's aluminum industry: Productivity, energy efficiency and carbon emissions
Historical estimates of productivity growth in India's aluminum sector vary from indicating an improvement to a decline in the sector's productivity. The variance may be traced to the time period of study, source of data for analysis, and type of indices and econometric specifications used for reporting productivity growth. An analysis shows that in the twenty year period, 1973 to 1993, productivity in the aluminum sector declined slightly by 0.2%. An econometric analysis reveals that technical progress in India's aluminum sector has been biased towards the use of energy, while it has been labor saving. The decline in productivity was mainly driven by a decline in the 1970s when capacity utilization was low and the energy crisis hit India and the world. From the early 1980s on productivity recuperated. The authors examine the current changes in structure and energy efficiency in the sector. Their analysis shows that the Indian aluminum sector has high potential to move towards world-best technology, which will result in fewer carbon emissions and more efficient energy use. Substantial energy savings and carbon reduction options exist
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Market failures, consumer preferences, and transaction costs inenergy efficiency purchase decisions
Several factors limit the energy savings potential and increase the costs of energy-efficient technologies to consumers. These factors may usefully be placed into two categories; one category is what economists would define as market failures and the other is related to consumer preferences. This paper provides a conceptual framework for understanding the roles of these factors, and develops a methodology to quantify their effects on costs and potentials of two energy efficient end uses - residential lighting and clothes washers. It notes the significant roles played by the high implicit cost of obtaining information about the benefits of the two technologies and the apparent inability to process and utilize information. For compact fluorescent lamps, this report finds a conservative estimate of the cost of conserved energy of 3.1 cents per kWh. For clothes washers, including water savings reduces the cost of conserved energy from 13.6 cents to 4.3 cents per equivalent kWh. Despite these benefits, market share remains low. About 18 million tons of CO2 could be saved cost effectively from 2005 sales of these two technologies alone. The paper also notes that trading of carbon emissions will incur transaction costs that will range from less than 10 cents per metric ton of CO2 for larger size projects and programs to a few dollars per metric ton of carbon for the smaller ones
THE HUNDRED BILLION DOLLAR BONUS: Global Energy Efficiency Lessons from India
At a time when India and other nations are grappling with myriad energy-related challenges, including unstable, costly power sources and growing greenhouse gas emissions, energy efficiency offers an alternative at a fraction of the cost of other new sources of energy. A consortium of leading Indian regulators, nongovernmental organizations, and international experts has recognized this opportunity and is working to develop effective policies that will bring significant domestic benefits to India while accelerating the global transition to energy efficiency
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Methodological and Practical Considerations for DevelopingMultiproject Baselines for Electric Power and Cement Industry Projects inCentral America
The Lawrence Berkeley National Laboratory (Berkeley Lab) andthe Center for Sustainable Development in the Americas (CSDA) conductedtechnical studies and organized two training workshops to developcapacity in Central America for the evaluation of climate changeprojects. This paper describes the results of two baseline case studiesconducted for these workshops, one for the power sector and one for thecement industry, that were devised to illustrate certain approaches tobaseline setting. Multiproject baseline emission rates (BERs) for themain Guatemalan electricity grid were calculated from 2001 data. Inrecent years, the Guatemalan power sector has experienced rapid growth;thus, a sufficient number of new plants have been built to estimateviable BERs. We found that BERs for baseload plants offsetting additionalbaseload capacity ranged from 0.702 kgCO2/kWh (using a weighted averagestringency) to 0.507 kgCO2/kWh (using a 10th percentile stringency),while the baseline for plants offsetting load-followingcapacity is lowerat 0.567 kgCO2/kWh. For power displaced from existing load-followingplants, the rate is higher, 0.735 kgCO2/kWh, as a result of the age ofsome plants used for meeting peak loads and the infrequency of their use.The approved consolidated methodology for the Clean Development Mechanismyields a single rate of 0.753 kgCO2/kWh. Due to the relatively smallnumber of cement plants in the region and the regional nature of thecement market, all of Central America was chosen as the geographicboundary for setting cement industry BERs. Unfortunately, actualoperations and output data were unobtainable for most of the plants inthe region, and many data were estimated. Cement industry BERs rangedfrom 205 kgCO2 to 225 kgCO2 per metric ton of cement
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Updating Carbon Density and Opportunity Cost Parameters in Deforesting Regions in the GCOMAP Model
This paper explores the economics of carbon density and carbon pricing in forestry and in deforested areas. According to a footnote, this paper was commissioned by the [United Kingdom] Office of Climate Change as background work to its report 'Climate Change: Financing Global Forests' (the Eliasch Review)
Renewable Energy in the Context of Sustainable Development
Historically, economic development has been strongly correlated with increasing energy use and growth of greenhouse gas (GHG) emissions. Renewable energy (RE) can help decouple that correlation, contributing to sustainable development (SD). In addition, RE offers the opportunity to improve access to modern energy services for the poorest members of society, which is crucial for the achievement of any single of the eight Millennium Development Goals.
Theoretical concepts of SD can provide useful frameworks to assess the interactions between SD and RE. SD addresses concerns about relationships between human society and nature. Traditionally, SD has been framed in the three-pillar model—Economy, Ecology, and Society—allowing a schematic categorization of development goals, with the three pillars being interdependent and mutually reinforcing. Within another conceptual framework, SD can be oriented along a continuum between the two paradigms of weak sustainability and strong sustainability. The two paradigms differ in assumptions about the substitutability of natural and human-made capital. RE can contribute to the development goals of the three-pillar model and can be assessed in terms of both weak and strong SD, since RE utilization is defined as sustaining natural capital as long as its resource use does not reduce the potential for future harvest.
The relationship between RE and SD can be viewed as a hierarchy of goals and constraints that involve both global and regional or local considerations. Though the exact contribution of RE to SD has to be evaluated in a country specifi c context, RE offers the opportunity to contribute to a number of important SD goals: (1) social and economic development; (2) energy access; (3) energy security; (4) climate change mitigation and the reduction of environmental and health impacts. The mitigation of dangerous anthropogenic climate change is seen as one strong driving force behind the increased use of RE worldwide. The chapter provides an overview of the scientific literature on the relationship between these four SD goals and RE and, at times, fossil and nuclear energy technologies. The assessments are based on different methodological tools, including bottom-up indicators derived from attributional lifecycle assessments (LCA) or energy statistics, dynamic integrated modelling approaches, and qualitative analyses.
Countries at different levels of development have different incentives and socioeconomic SD goals to advance RE. The creation of employment opportunities and actively promoting structural change in the economy are seen, especially in industrialized countries, as goals that support the promotion of RE. However, the associated costs are a major factor determining the desirability of RE to meet increasing energy demand and concerns have been voiced that increased energy prices might endanger industrializing countries’ development prospects; this underlines the need for a concomitant discussion about the details of an international burden-sharing regime. Still, decentralized grids based on RE have expanded and already improved energy access in developing countries. Under favorable conditions, cost savings in comparison to non-RE use exist, in particular in remote areas and in poor rural areas lacking centralized energy access. In addition, non-electrical RE technologies offer opportunities for modernization of energy services, for example, using solar energy for water heating and crop drying, biofuels for transportation, biogas and modern biomass for heating, cooling, cooking and lighting, and wind for water pumping. RE deployment can contribute to energy security by diversifying energy sources and diminishing dependence on a limited number of suppliers, therefore reducing the economy’s vulnerability to price volatility. Many developing countries specifically link energy access and security issues to include stability and reliability of local supply in their definition of energy security.
Supporting the SD goal to mitigate environmental impacts from energy systems, RE technologies can provide important benefits compared to fossil fuels, in particular regarding GHG emissions. Maximizing these benefits often depends on the specific technology, management, and site characteristics associated with each RE project, especially with respect to land use change (LUC) impacts. Lifecycle assessments for electricity generation indicate that GHG emissions from RE technologies are, in general, considerably lower than those associated with fossil fuel options, and in a range of conditions, less than fossil fuels employing carbon capture and storage (CCS). The maximum estimate for concentrating solar power (CSP), geothermal, hydropower, ocean and wind energy is less than or equal to 100 g CO2eq/kWh, and median values for all RE range from 4 to 46 g CO2eq/kWh. The GHG balances of bioenergy production, however, have considerable uncertainties, mostly related to land management and LUC. Excluding LUC, most bioenergy systems reduce GHG emissions compared to fossil-fueled systems and can lead to avoided GHG emissions from residues and wastes in landfill disposals and co-products; the combination of bioenergy with CCS may provide for further reductions. For transport fuels, some first-generation biofuels result in relatively modest GHG mitigation potential, while most next-generation biofuels could provide greater climate benefits. To optimize benefits from bioenergy production, it is critical to reduce uncertainties and to consider ways to mitigate the risk of bioenergy-induced LUC.
RE technologies can also offer benefits with respect to air pollution and health. Non-combustion-based RE power generation technologies have the potential to significantly reduce local and regional air pollution and lower associated health impacts compared to fossil-based power generation. Impacts on water and biodiversity, however, depend on local conditions. In areas where water scarcity is already a concern, non-thermal RE technologies or thermal RE technologies using dry cooling can provide energy services without additional stress on water resources. Conventional water-cooled thermal power plants may be especially vulnerable to conditions of water scarcity and climate change. Hydropower and some bioenergy systems are dependent on water availability, and can either increase competition or mitigate water scarcity. RE specific impacts on biodiversity may be positive or negative; the degree of these impacts will be determined by site-specific conditions. Accident risks of RE technologies are not negligible, but the technologies’ often decentralized structure strongly limits the potential for disastrous consequences in terms of fatalities. However, dams associated with some hydropower projects may create a specific risk depending on site-specific factors.
The scenario literature that describes global mitigation pathways for RE deployment can provide some insights into associated SD implications. Putting an upper limit on future GHG emissions results in welfare losses (usually measured as gross domestic product or consumption foregone), disregarding the costs of climate change impacts. These welfare losses are based on assumptions about the availability and costs of mitigation technologies and increase when the availability of technological alternatives for constraining GHGs, for example, RE technologies, is limited. Scenario analyses show that developing countries are likely to see most of the expansion of RE production. Increasing energy access is not necessarily beneficial for all aspects of SD, as a shift to modern energy away from, for example, traditional biomass could simply be a shift to fossil fuels. In general, available scenario analyses highlight the role of policies and finance for increased energy access, even though forced shifts to RE that would provide access to modern energy services could negatively affect household budgets. To the extent that RE deployment in mitigation scenarios contributes to diversifying the energy portfolio, it has the potential to enhance energy security by making the energy system less susceptible to (sudden) energy supply disruption. In scenarios, this role of RE will vary with the energy form. With appropriate carbon mitigation policies in place, electricity generation can be relatively easily decarbonized through RE sources that have the potential to replace concentrated and increasingly scarce fossil fuels in the building and industry sectors. By contrast, the demand for liquid fuels in the transport sector remains inelastic if no technological breakthrough can be achieved. Therefore oil and related energy security concerns are likely to continue to play a role in the future global energy system; as compared to today these will be seen more prominently in developing countries. In order to take account of environmental and health impacts from energy systems, several models have included explicit representation of these, such as sulphate pollution. Some scenario results show that climate policy can help drive improvements in local air pollution (i.e., particulate matter), but air pollution reduction policies alone do not necessarily drive reductions in GHG emissions. Another implication of some potential energy trajectories is the possible diversion of land to support biofuel production. Scenario results have pointed at the possibility that climate policy could drive widespread deforestation if not accompanied by other policy measures, with land use being shifted to bioenergy crops with possibly adverse SD implications, including GHG emissions. 712 Renewable Energy in the Context of Sustainable Development Chapter 9 The integration of RE policies and measures in SD strategies at various levels can help overcome existing barriers and create opportunities for RE deployment in line with meeting SD goals. In the context of SD, barriers continue to impede RE deployment. Besides market-related and economic barriers, those barriers intrinsically linked to societal and personal values and norms will fundamentally affect the perception and acceptance of RE technologies and related deployment impacts by individuals, groups and societies. Dedicated communication efforts are therefore a crucial component of any transformation strategy and local SD initiatives can play an important role in this context. At international and national levels, strategies should include: the removal of mechanisms that are perceived to work against SD; mechanisms for SD that internalize environmental and social externalities; and RE strategies that support low-carbon, green and sustainable development including leapfrogging.
The assessment has shown that RE can contribute to SD to varying degrees; more interdisciplinary research is needed to close existing knowledge gaps. While benefi ts with respect to reduced environmental and health impacts may appear more clear-cut, the exact contribution to, for example, social and economic development is more ambiguous. In order to improve the knowledge regarding the interrelations between SD and RE and to fi nd answers to the question of an effective, economically effi cient and socially acceptable transformation of the energy system, a much closer integration of insights from social, natural and economic sciences (e.g., through risk analysis approaches), refl ecting the different (especially intertemporal, spatial and intra-generational) dimensions of sustainability, is required. So far, the knowledge base is often limited to very narrow views from specifi c branches of research, which do not fully account for the complexity of the issue
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