Atmospheric stabilization of CO2 emissions : near-term reductions and intensity-based targets

This study analyzes CO2 emissions reduction targets for various countries and geopolitical regions by the year 2030 in order to stabilize atmospheric concentrations of CO2 at the level of 450 ppm (550 ppm including non CO2 greenhouse gases). It also determines CO2 intensity cuts that would be needed in those countries and regions if the emission reductions were achieved through intensity-based targets while assuming no effect on forecasted economic growth. Considering that the stabilization of CO2 concentrations at 450 ppm requires the global trend of CO2 emissions to reverse before 2030, this study develops two scenarios: reversing the global CO2 trend in (i) 2020 and (ii) 2025. The study shows that global CO2 emissions would be 42 percent above the 1990 level in 2030 if the increasing trend of global CO2 emissions is reversed by 2020. If reversing the trend is delayed by 5 years, the 2030 global CO2 emissions would be 52 percent higher than the 1990 level. The study also finds that to achieve these targets while maintaining assumed economic growth, the global average CO2 intensity would require a 68 percent drop from the 1990 level or a 60 percent drop from the 2004 level by 2030.Climate Change,Transport and Environment,Environment and Energy Efficiency,Energy Production and Transportation,Energy and Environment

The role of revenue recycling schemes in environmental tax selection : a general equilibrium analysis

This study examines the roles of revenue recycling schemes for the selection of alternative tax instruments (i.e., carbon-, sulphur-, energy- and output-tax) to reduce CO2 emissions to a specified level in Thailand. A static, single period, multi-sectoral computable general equilibrium (CGE) model of the Thai economy has been developed for this purpose. This study finds that the selection of a tax instrument to reduce CO2 emissions would be significantly influenced by the scheme to recycle the tax revenue to the economy. If the tax revenue is recycled to finance cuts in the existing labour or indirect tax rates, carbon tax would be more efficient than the sulphur-, energy- and output-taxes to reduce CO2 emissions. On the other hand, if the tax revenue is recycled to households through a lump-sum transfer, sulphur and carbon taxes would be more efficient than energy and output taxes. The ranking between the sulphur and carbon taxes under the lump sum transfer scheme depends on substitution possibility of fossil fuels. Sulphur tax is found superior over carbon tax at the higher substitution possibility between fossil fuels; the reverse is found true at the lower substitution possibility. In all schemes of revenue recycling considered, the output tax is found to be the most costly (i.e., in welfare terms) despite the fact that it generates two to three times higher revenue than the other tax instruments.Environmental Economics&Policies,Taxation&Subsidies,Transport Economics Policy&Planning,Energy Production and Transportation,Debt Markets

A general equilibrium analysis of demand side management programs under the clean development mechanism of the kyoto protocol

This paper analyzes the economic and environmental consequences of a potential demand side management program in Thailand using a general equilibrium model. The program considers replacement of less efficient electrical appliances in the household sector with more efficient counterparts. The study further examines changes in the economic and environmental effects of the program if it is implemented under the clean development mechanism of the Kyoto Protocol, which provides carbon subsidies to the program. The study finds that the demand side management program would increase economic welfare if the ratio of unit costof electricity savings to price of electricity is 0.4 or lower even in the absence of the clean development mechanism. If the program's ratio of unit cost of electricity savings to price of electricity is greater than 0.4, registration of the program under the clean development mechanism would be needed to achieve positive welfare impacts. The level of welfare impacts would, however, depend on the price of carbon credits the program generates. For a given level of welfare impacts, the registration of the demand side management program under the clean development mechanism would increase the volume of emission reductions.Energy Production and Transportation,Environmental Economics&Policies,Economic Theory&Research,Environment and Energy Efficiency,Energy and Environment

The growth of transport cector CO2 emissions and underlying factors in Latin America and the Caribbean

This study examines the factors responsible for the growth of transport sector carbon dioxide emissions in 20 Latin American and Caribbean countries during 1980-2005 by decomposing the emissions growth into components associated with changes in fuel mix, modal shift, and economic growth, as well as changes in emission coefficients and transportation energy intensity. The key finding of the study is that economic growth and the changes in transportation energy intensity are the main factors driving transport sector carbon dioxide emissions growth in the countries considered. The results imply that fiscal policy instruments - such as subsidies to clean fuels and clean vehicles - would be more effective in reducing emissions in countries where the economic activity effect is the primary driver for transport sector carbon dioxide emissions growth. By contrast, regulatory policy instruments - such as vehicle efficiency standards and vehicle occupancy standards - would be more effective in countries where the transportation energy intensity effect is the main driver of carbon dioxide emissions growth. Both fiscal and regulatory policy instruments would be useful in countries where both economic activity and transportation energy intensity effects are responsible for driving transport sector carbon dioxide emissions growth.Transport Economics Policy&Planning,Energy Production and Transportation,Oil Refining&Gas Industry,Environment and Energy Efficiency,Energy and Environment

Biofuels : markets, targets and impacts

This paper reviews recent developments in biofuel markets and their economic, social and environmental impacts. Several countries have introduced mandates and targets for biofuel expansion. Production, international trade and investment have increased sharply in the past few years. However, several existing studies have blamed biofuels as one of the key factors behind the 2007-2008 global food crisis, although the magnitudes of impacts in these studies vary widely depending on the underlying assumptions and structure of the models. Existing studies also have huge disparitiesin the magnitude of long-term impacts of biofuels on food prices and supply; studies that model only the agricultural sector show higher impacts, whereas studies that model the entire economy show relatively lower impacts. In terms of climate change mitigation impacts, there exists a consensus that current biofuels lead to greenhouse gas mitigation only when greenhouse gas emissions related to land-use change are not counted. If conversion of carbon rich forest land to crop land is not avoided, the resulting greenhouse gas release would mean that biofuels would not reduce cumulative greenhouse gas emissions until several years had passed. Overall, results from most of the existing literature do not favor diversion of food for large-scale production of biofuels, although regulated production of biofuels in countries with surplus land and a strong biofuel industry are not ruled out. Developments in second generation biofuels offer some hope, yet they still compete with food supply through land use and are currently constrained by a number of technical and economic barriers.Energy Production and Transportation,Renewable Energy,Climate Change Mitigation and Green House Gases,Food&Beverage Industry,Environmental Economics&Policies

Biofuels and climate change mitigation : a CGE analysis incorporating land-use change

The question of whether biofuels help mitigate climate change has attracted much debate in the literature. Using a global computable general equilibrium model that explicitly represents land-use change impacts due to the expansion of biofuels, this study attempts to shed some light on this question. The study shows that if biofuel mandates and targets currently announced by more than 40 countries around the world are implemented by 2020 using crop feedstocks, and if both forests and pasture lands are used to meet the new land demands for biofuel expansion, this would cause a net increase of greenhouse gas emissions released to the atmosphere until 2043, since the cumulative greenhouse gas emissions released through land-use change would exceed the reduction of emissions due to replacement of gasoline and diesel until then. However, if the use of forest lands is avoided by channeling only pasture lands to meet the demand for new lands, a net increase of cumulative greenhouse gas emissions would occur but would cease by 2021, only a year after the assumed full implementation of the mandates and targets. The study also shows, contrary to common perceptions, that the rate of deforestation does not increase with the rate of biofuel expansion; instead, the marginal rate of deforestation and corresponding land-use emissions decrease even if the production of biofuels increases.Climate Change Mitigation and Green House Gases,Climate Change Economics,Energy and Environment,Environment and Energy Efficiency,Climate Change and Environment

Why have CO2 emissions increased in the transport sector in Asia ? underlying factors and policy options

Rapidly increasing emissions of carbon dioxide from the transport sector, particularly in urban areas, is a major challenge to sustainable development in developing countries. This study analyzes the factors responsible for transport sector CO2 emissions growth in selected developing Asian countries during 1980-2005. The analysis splits the annual emissions growth into components representing economic development; population growth; shifts in transportation modes; and changes in fuel mix, emission coefficients, and transportation energy intensity. The study also reviews existing government policies to limit CO2 emissions growth, particularly various fiscal and regulatory policy instruments. The study finds that of the six factors considered, three - economic development, population growth, and transportation energy intensity - are responsible for driving up transport sector CO2 emissions in Bangladesh, the Philippines, and Vietnam. In contrast, only economic development and population growth are responsible in the case of China, India, Indonesia, Republic of Korea, Malaysia, Pakistan, Sri Lanka, and Thailand. CO2 emissions exhibit a downward trend in Mongolia due to decreasing transportation energy intensity. The study also finds that some existing policy instruments help reduce transport sector CO2 emissions, although they were not necessarily targeted for this purpose when introduced.Transport Economics Policy&Planning,Climate Change Mitigation and Green House Gases,Energy Production and Transportation,Climate Change Economics,Transport and Environment

Impacts of policy instruments to reduce congestion and emissions from urban transportation : the case of Sao Paulo, Brazil

This study examines impacts on net social benefits or economic welfare of alternative policy instruments for reducing traffic congestion and atmospheric emissions in São Paulo, Brazil. The study shows that expanding road networks, subsidizing public transit, and improving automobile fuel economy may not be as effective as suggested by economic theories because these policies could cause significant rebound effects. Although pricing instruments such as congestion tolls and fuel taxes would certainly reduce congestion and emissions, the optimal level of these instruments would steeply increase the monetary cost of travel per trip and are therefore politically difficult to implement. However, a noticeable finding is that even smaller tolls, which are more likely to be politically acceptable, have substantial benefits in terms of reducing congestion and emissions. Among the various policy instruments examined in the study, the most socially preferable policy option for São Paulo would be to introduce a mix of congestion toll and fuel taxes on automobiles and use the revenues to improve public transit systems.Transport Economics Policy&Planning,Climate Change Economics,Roads&Highways,Climate Change Mitigation and Green House Gases,Transport and Environment

Lock-in effects of road expansion on CO2 emissions : results from a core-periphery model of Beijing

In the urban planning literature, it is frequently explicitly asserted or strongly implied that ongoing urban sprawl and decentralization can lead to development patterns that are unsustainable in the long run. One manifestation of such an outcome is that if extensive road investments occur, urban sprawl and decentralization are advanced and locked-in, making subsequent investments in public transit less effective in reducing vehicle kilometers traveled by car, gasoline use and carbon dioxide emissions. Using a simple core-periphery model of Beijing, the authors numerically assess this effect. The analysis confirms that improving the transit travel time in Beijing’s core would reduce the city’s overall carbon dioxide emissions, whereas the opposite would be the case if peripheral road capacity were expanded. This effect is robust to perturbations in the model’s calibrated parameters. In particular, the effect persists for a wide range of assumptions about how location choice depends on travel time and a wide range of assumptions about other aspects of consumer preferences.Transport Economics Policy&Planning,Roads&Highways,Energy and Environment,Environment and Energy Efficiency,Economic Theory&Research,Urban Transport

Technology strategies for low-carbon economic growth: a general equilibrium assessment

This paper investigates the potential for developing countries to mitigate greenhouse gas emissions without slowing their expected economic growth. A theoretical frame- work is developed that unifies bottom-up marginal abatement cost curves and partial equilibrium techno-economic simulation modeling with computational general equilibrium (CGE) modeling. The framework is then applied to engineering assessments of energy efficiency technology deployments in Armenia and Georgia. The results facilitate incorporation of bottom-up technology detail on energy-efficiency improvements into a CGE simulation of the economy-wide economic costs and mitigation benefits of technology deployment policies. Low-carbon growth trajectories are feasible in both countries, enabling reductions of up to 4 percent of baseline emissions while generating slight increases in GDP (1 percent in Armenia and 0.2 percent in Georgia). The results demonstrate how MAC curves can paint a misleading picture of the true potential for both abatement and economic growth when technological improvements operate within a system of general equilibrium interactions, but also highlight how using their underlying data to identify technology options with high opportunity cost elasticities of productivity improvement can lead to more accurate assessments of the macroeconomic consequences of technology strategies for low-carbon growth.http://documents.worldbank.org/curated/en/279241468256026769/Technology-strategies-for-low-carbon-economic-growth-a-general-equilibrium-assessmentPublished versio