medec: low-carbon development for mexico · 2020. 6. 29. · mexico ghg emissions – 14th largest...
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MEDEC:MEDEC:MEDEC:Low-carbon
MEDEC:Low-carbon
development for Mexico
development for Mexico
Todd M. JohnsonTodd M. Johnson
MEDEC Mé i E t di b l Di i ió d E i i d C b
World Bank – LCR Sustainable Development Department – August 24, 2009MEDEC – México: Estudio sobre la Disminución de Emisiones de Carbono
Global context
Run-up to Copenhagen
– How much will climate change mitigation cost? – How do interventions compare across sectors? – What can be done today to mitigate CO2 emissions that has financial,What can be done today to mitigate CO2 emissions that has financial,
economic, employment, and other benefits?
Mexico and other major non-Annex 1 countries
– One of five low-carbon country studies being undertaken by the WB– Middle income developing country, proactive on climate change, mitigation
potential, several studies (PECC, Instituto Mario Molina, Galindo, Quadri, M Ki CCAP )McKinsey, CCAP, …)
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono 2
Mexico GHG emissions
– 14th largest emitting countryld id (1 5% f th t t lworldwide (1.5% of the total
global emissions), largest energy emitter in LAC
– Nearly 2/3 of the CO2 emissionsfrom energy consumption (transport, energy generation, industry, g , y,gas flaring)
– Poznan: Mexico announced target ofannounced target of reducing 2002 GHG emission levels 50% by 2050
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono 3
Study methodologyModeling the low-carbon scenario
Construction of an economic and emissions model for Mexico to the year 2030– Construction of an economic and emissions model for Mexico to the year 2030– BAU consistent with national income and energy estimates and international
energy forecasts and markets– Bottom-up analysis of GHG reduction potential to 2030 from major sectors– 3 criteria for selection of reduction options– limited number of interventions
Cost methodology
– Economic cost-benefit analysis of interventions across sectors using a common methodology
– Not CDM analysis, but many interventions would qualify (carbon price=0)– Focus is on existing technologies only – thus underestimates potential– Calculate externalities where possible– Excludes “transactions” costs
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono 4
Ele
ctric
ity
rgy
end-
use
MEDECMEDECsectorssectors
Ene
nspo
rt
sectorssectors
and
fore
stryTr
ans
Agr
icul
ture
a
Oil
and
gas
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono
ELECTRICITY
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono
y
Baseline generationE
lect
ricity
– 2009 – 2016: Based on Mexico’s official outlook– 2017 – 2030: Based on national and international estimates for least cost
generation technologies– BAU emissions increase from 142 Mt CO2eq in 2008 to 322 in 2030 (+230%)
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono 7
y
MEDEC scenario generationE
lect
ricity
– Coal and gas generating plants are replaced by low-carbon technologies– Capacities based on national potentials
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono 8
yMEDEC electricity
interventionsE
lect
ricity interventions
nnua
l
ar)
bene
fit
n
Max
imum
an
emis
sion
ed
ucti
on
MtC
O2e
/yea
Net
cos
t or
bof
mit
igat
ion
US$
/tCO
2e)
M e re (M N o (U
Utility efficiency Utility efficiency 6.2 19.3 (benefit)
Electricity generation
Biogas 5.4 0.6 (cost)Windpower 23.0 2.6 (cost)
Electricity generationSmall hydropower 8.8 9.4 (cost)Geothermal power 48.0 11.7 (cost)
Electricity
Oil and gas Cogeneration in PEMEX 26.7 28.6 (benefit)Industry Cogeneration in industry 6.5 15.0 (benefit)Electricity
generation in other sectors
g y ( )
Ag and forestry
Biomass electricity 35.1 2.4 (benefit)20% fuelwood co-firing retrofitting 2.4 7.3 (cost)Bagasse (existing sugar mills) 6.0 4.9 (cost)Bagasse (new ethanol factories) 16 8 11 3 (cost)
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono
Bagasse (new ethanol factories) 16.8 11.3 (cost)
9
Electricity emissions BAU and MEDECMEDEC
300
350
250
300
e/ye
ar]
OtherGeothermalSugarcane ethanolSmall hydroB ti
150
200
ons
[MtC
O2e Bagasse cogeneration
WindpowerBiogasBiomass electricityResidential refrigerationUtility efficiency
100Em
issi
o Utility efficiencyIndustrial motorsNon-residential lightingResidential lightingCogeneration in PEMEXMEDEC emissions
0
50
2008 2012 2016 2020 2024 2028
MEDEC emissions
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono
2008 2012 2016 2020 2024 2028
10
OIL AND GAS
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono
sMEDEC oil and gas
interventionsO
il an
d ga
s interventions
Maximum annual emission reduction
(MtCO / )
Net cost or benefit of mitigation (US$/tCO )(MtCO2e/year) (US$/tCO2e)
Cogeneration in PEMEX 26.7 28.6 (benefit)
Gas leakage reduction 0.8 4.4 (benefit)
Refinery efficiency 2.5 16.6 (cost)
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono 12
ENERGYENERGY END-USE
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono
e
MEDEC energy end-useer
gy e
nd-u
se
um a
nnua
l on
on
e/
year
)
st o
r of
on
C
O2e
)
Ene
Max
imu
emis
sio
redu
ctio
(MtC
O2e
Net
cos
bene
fit
miti
gati
(US$
/tC
Residential lighting 5.7 22.6 (benefit)
Electricity end-use efficiency
g g ( )Residential refrigeration 3.3 6.7 (benefit)Residential air conditioning 2.6 3.7 (benefit)Nonresidential lighting 4.7 19.8 (benefit)yNonresidential air conditioning 1.7 9.6 (benefit)Street lighting 0.9 24.2 (benefit)Industrial motors 6.0 19.5 (benefit)
Cogeneration Cogeneration in industry 6.5 15.0 (benefit)Bagasse cogeneration 6.0 4.9 (cost)
Renewable heat supply Solar water heating 18.9 13.8 (benefit)I d k t 19 4 2 0 (b fit)
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono
Improved cookstoves 19.4 2.0 (benefit)
14
TRANSPORT
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono
t
Baseline fleet growthTr
ansp
ort
• The transport sector is the main consumer of energy, and responsible for the largest growth and absolute quantity of GHG emissions in MexicoMexico
• Currently the sector accounts for 18% total emissionsHistorical trend in the growth of the vehicle fleet
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono 16
t
Transport baseline emissionsTr
ansp
ort
• Trends in Mexico’s transport sector are assumed to be consistent with i t ti l t dinternational trends
• The national vehicle fleet would grow from 24 million vehicles in 2008 to 70 million in 2030, with emissions increasing from 167 to 347 Mt CO2eq
• 72% of emissions would be generated by trucks and private automobilesg y p
350400450
tCO
2e] Maritime
TrainsAirplanes
150200250300
mis
sion
s [M
t AirplanesHeavy duty vehiclesLight duty vehiclesTaxis
050
100150
1980 1990 2000 2010 2020 2030
Tota
l em Buses
SUVsPassenger carsMotorcycles
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono
1980 1990 2000 2010 2020 2030 Motorcycles
17
tmj1
Slide 17
tmj1 There is a mistake in the BAU emissions graph for transport, both in this chart and in the document. BAU emissions are 347 compared to over 400 in graph.wb63005; 8/23/2009
tMEDEC transport
interventionsTr
ansp
ort interventions
ual
uctio
n
enef
it
xim
um a
nnis
sion
redu
tCO
2e/y
ear)
t cos
t or b
em
itiga
tion
S$/tC
O2e
)
Max
em (Mt
Net
of m
(US
Modal shift and b d l t
Bus system optimization 31.5 96.6 (benefit)Urban densification 14.3 66.4 (benefit)
urban development Bus rapid transit 4.2 50.5 (benefit)Non-motorized transport 5.8 50.2 (benefit)
TechnologiesBorder vehicle inspection 11.2 69.0 (benefit)I ti d i t i 21 iti 10 6 14 5 (b fit)Technologies Inspection and maintenance in 21 cities 10.6 14.5 (benefit)Fuel economy standards 20.1 12.3 (benefit)
Freight Freight logistics 13.8 46.3 (benefit)Railway freight 19.2 88.7 (benefit)
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono
Railway freight 19.2 88.7 (benefit)
18
Transport emissions wedge graph
350Sugarcane ethanol
250
300
year
]
gPalm oil biodieselSorghum ethanolFuel economy standardsI&M i 21 iti
150
200
ns [M
tCO
2e/y I&M in 21 cities
Zero tillage maizeFreight logisticsNon-motorized transport
100
150
Em
issi
on Bus rapid transitUrban densificationBorder vehicle inspectionRailway freight
0
50
2008 2012 2016 2020 2024 2028
Railway freightBus system optimizationMEDEC emissions
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono
2008 2012 2016 2020 2024 2028
19
AGRICULTURE AND FORESTRYAND FORESTRY
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono
y
Baseline emissionsnd
bio
ener
gy
160
Land
-use
an
120
140
r]
80
100
s [M
tCO
2e/y
ear
Forestry
Agriculture and Livestock
40
60
Emis
sion
s g
Rural Uses
0
20
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono 21
yAgriculture and Forestry
interventionsnd
bio
ener
gy interventions
annu
al
redu
c-2e
/yr]
r e]
Land
-use
an
Max
imum
am
itiga
tion
rtio
n [M
tCO
2
Net
cos
t or
bene
fit o
f m
itiga
tion
[US$
/tCO
2e
stry
RE
DD
Productive use of biomass
For energy purposes
Biomass electricity 35.1 2 (benefit)Fuelwood co-firing 2.4 7 (cost)Charcoal production 22.6 20 (benefit)
For other purposes Forest management 7.8 13 (benefit)
Fore
s p p g ( )
No productive use of biomassWildlife management 27.0 18 (cost)Payment for environmental services 4.4 18 (cost)
Reforestation / afforestationReforestation and restoration 22.4 9 (cost)Afforestation 13 8 8 (cost)Afforestation 13.8 8 (cost)
Agriculture Zero tillage maize 2.2 15 (benefit)
Liquid biofuelsSugarcane ethanol 16.8 11 (cost)Sorghum ethanol 5.1 5 (cost)P l il bi di l 2 4 6 ( t)
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono
Palm oil biodiesel 2.4 6 (cost)
22
Land-use emissions wedge graph
100
year
] Environmental servicesWildlife management
50
ns [M
tCO
2e/y Reforestation & restoration
AfforestationFuelwood co-firing (20%)Biomass electricity
Em
issi
on
Biomass electricityForest managementZero tillage maizeCharcoal production
02008 2012 2016 2020 2024 2028
MEDEC emissions
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono 23
Ele
ctric
ity
rgy
end-
use
MEDECMEDECscenarioscenario
Ene
nspo
rt
scenarioscenario
and
fore
stryTr
ans
Agr
icul
ture
a
Oil
and
gas
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono
Overall wedge graph
1200
800
1000
ear]
600
800
s [M
tCO
2e/y
e
LUBIOOil and gasStationary energy end-useTransport
(Ag and for)
Mexico could keep its emissions virtually
200
400
Em
issi
ons Transport
ElectricityMEDEC emissions
p yconstant through the adoption of the 40
MEDEC interventions
0
200
2008 2012 2016 2020 2024 2028
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono
2008 2012 2016 2020 2024 2028
25
Marginal abatement costs/benefits
optim
ization
ght
cle inspectio
n
ificatio
nansit
zed transport
stics
on in PEM
EX
ng lighting
ntial lighting
oductio
n
motors
ency
maize
on in indu
stry
ities
heating
agem
ent
my standards
ntial A
Crefrigeration
e redu
ction
AC
ectricity
ookstoves
er ogen
eration
ethano
lbiod
iesel
d co‐firing (20%
)ation
tatio
n & restoratio
n
ydro
ane ethano
l
ermal
ery efficiency
life managem
ent
ronm
ental services
50
100
Bus system
Railw
ay freig
Border veh
i
Urban
den
s iBu
s rapid tra
Non
‐motori
Freight logi s
Cogene
ratio
Street lighti
Reside
ntial
Non
‐reside n
Charcoal pro
Indu
strial m
Utility
efficie
Zero tillage
Cogene
ratio
I&M in 21 ci
Solar water
Forest m
ana
Fuel econo
mNon
‐residen
Reside
ntial
Gas leakage
Reside
ntial A
Biom
ass ele
Improved
co
Biogas
Windp
owe
Bagasse co
Sorghu
m
Palm
oil b
Fuelwoo
dAfforesta
Reforest
Small hy
Sugarca
Geo
the
Refin
Wild
Envir
0
50
→Net costs
O2e]
50
Net ben
efits ←
[US$/tC
100
N
150
0 1,000 2,000 3,000 4,000 5,000
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono
Cumulative mitigation 2009‐2030 [MtCO2e]
26
Investments required
60
]
40
osts [U
S$/tCO
2e]
20
w investmen
t co
ptim
ization
way freight
inspectio
n
nsificatio
npid transit
d transport
ht logistics
n in PEM
EX
eet lighting
ial lighting
ial lighting
prod
uctio
n
rial m
otors
y efficiency
age maize
in indu
stry
n 21
cities
er heatin
g
nagemen
t
standards
dential A
Cfrigeration
redu
ction
dential A
Celectricity
cookstoves
Biogas
Windp
ower
gene
ratio
nm ethanol
l biodiesel
ring
(20%
)orestatio
n
estoratio
n
mall hydro
ne ethanol
eothermal
y efficiency
nagemen
t
al services
0
New
Bus system
op
Railw
Border veh
icle
Urban
de
Bus ra
Non
‐motorize d
Freigh
Cogene
ratio
n
Stre
Reside
ntNon
‐residen
tCh
arcoal p
Indu
str
Utility
Zero till
Cogene
ratio
n i
I&M i
Solar wat
Forest m
a
Fuel econo
my
Non
‐resi
Reside
ntial re f
Gas leakage
Resi
Biom
ass
Improved
c WBa
gasse cog
Sorghu
Palm
oi
Fuelwoo
d co‐fi
Aff
Reforestation & r S m
Sugarcan Ge
Refin
ery
Wildlife ma
Environm
ent
0 1,000 2,000 3,000 4,000 5,000
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono
Cumulative mitigation 2009‐2030 [MtCO2e]
27
Main messages
Mexico has significant GHG reduction potential…
– Mexico could keep emissions relatively constant by undertaking a limited number of low-carbon interventions Primary emissions reduction potential is in transport (27%) agriculture and– Primary emissions reduction potential is in transport (27%), agriculture and forestry (32%), power (17%), and energy efficiency (16%)
... at relatively low financial and economic cost…... at relatively low financial and economic cost…
– 65% of MEDEC interventions have positive financial and economic benefits. A carbon cost of $10/ton would capture another 17%
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono 28
Main messages
...that will require changes in investment and financing, regulations, and institutions to achieveand institutions to achieve…
– Investment and Financing. Higher up-front costs (MEDEC scenario -- ~$64 billion to 2030). Financing required from public and private sectors and households
– Regulatory. Below-MC pricing of electricity (especially residential) and fossil fuels. Enforcement of environmental and efficiency standards and natural resource policies. Contracting issues
– Institutional. Governance reforms in CFE and PEMEX. Better coordination of Federal, State and Municipal government agencies, such as for public transport
MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono 29