Reduction potential and costs based on pthe IMAGE/TIMER/FAIR model

Michel den El enMichel den Elzen

Outline presentation

1. Methodology2. Analysis• Low stabilisation scenarios• Low stabilisation scenarios• Carbon tax scenarios (OECD Environmental Outlook)3. Conclusions

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Part of integrated IMAGE model to develop climate mitigation scenarios Vaclimate mitigation scenarios an Vuuren et1 Baseline and t al, 2007, Sta

1.Baseline and MACs

abilising gre2. Global emission eenhouse ga

pathway, regional targets and costs

as concentra3. Energy and ations, Clim

a

3. Energy and land use changes

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atic Change

Regions

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Marginal Abatement Costs (MAC) curves de

Energy CO2 emissions from energy models TIMER and POLES ti t h l i l i t i ti d

en Elzen et a

accounting technological improvements, energy inertia and learning effectsMany sectors and mitigation options (inc. CCS, renewables)

al., 2007, Muly g p ( , )

Non-CO2 emissions based on extended EMF non-CO2 MAC curves

ti-gas emiss

accounting technological improvements and removal of implementation barriers

Avoiding deforestation based on MAC curves of GCOMAP

sion envelopAvoiding deforestation based on MAC curves of GCOMAP model (LBNL), IIASA DIMA forest sector model Reforestation MAC based on IMAGE runs

pes, Global E

accounting difference in productivity between existing vegetation and new forests (at grid-level).

Environment

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tal Change

Path Dependency of MAC curves de

Costs vary depending on what happened in previous yearsITC Induced Technological Change

en Elzen et a

ITC – Induced Technological ChangeInertia in energy system – lifetimes times for power plants etc

Using static MACs does not capture this

al., 2007, MulUsing static MACs does not capture this

But FAIR tries to take into account by interpolating between 3 “standard” MAC curves, based on 3 “standard” historical price

ti-gas emiss, p

paths

$/ MAC 2: linear price pathMACCs construction in 2050

sion envelop

$/

tCO2e MAC 1: cubic

price path

MAC 2: linear price pathMACCs construction in 2050

70%80%90%

100%

pes, Global E

MAC 3:

cube

root 30%40%50%60%70%

$/tC Linear

Cubic (3)

Environment

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price

path0%10%20%

2000 2010 2020 2030 2040 2050

Cube root

tal Change

Methodology Abatement costs model Va

Abatement costs include direct costs for climate policy, but do not

an Vuuren et

include: macro-economic effects, gains of ancillary benefits and cost/gains of changes fuel tradeusing Marginal Abatement Cost (MAC) curves and calculating

t al, 2007, Stausing Marginal Abatement Cost (MAC) curves and calculating demand & supply curvesDiscount rate of 5%, but energy system also 10% (investments

abilising greDiscount rate of 5%, but energy system also 10% (investments made by private parties)Include Transaction costs and CDM accessibility

eenhouse ga

Emission tradingfull trading in case regions participate

as concentra

limited trading for non-participants (CDM)

ations, Clim

a

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atic Change

Baseline – developments without Climate PolicyVa

40 B2 Baseline and other baselines

an Vuuren et

30

q)

B2 Baseline and other baselines

IMAGE 2 3 B2

Central case B2:Population 2100: 9 billion ( )

t al, 2007, Sta

20

ions

(GtC

-eq IMAGE 2.3 B2

IMAGE 2.3 A1b IMAGE 2.3 B1

(UN medium)

GDP growth: 2% per year

abilising gre

10Emis

s

Grey area indicates EMF21 range

GDP growth: 2% per year

Energy: near IEA until 2030,

eenhouse ga

1980 2000 2020 2040 2060 2080 21000

gy ,conventional development after 2030

as concentraations, Clim

a

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atic Change

Pathways for stabilisation at 450,550 and 650 ppm CO2-equivalent deequivalent

1.61.61.6Relative CO2-eq emisions(incl. LUCF CO2)

1.6

index(1990=1)

1.61.61.6Relative CO2-eq emisions(incl. LUCF CO2)

1.6

index(1990=1)

en Elzen et a1.61.6

1.4

1.61.6

1.4

al., 2007, Mul+35%

1

1.2

1

1.2

ti-gas emiss

+20%

0 6

0.8 650

0 6

0.8 650

sion envelop

-5%

-35%

0.4

0.6

450

550

0.4

0.6

450

550

pes, Global E

019900199000

0.2

019900199000

0.2

Environment

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1990199019901990 2010 2030 2050 2070 2090time(years)

1990199019901990 2010 2030 2050 2070 2090time(years)

tal Change

Global abatement costs for meeting 450ppm increase up to 2% of world GDP Vaincrease up to 2% of world GDP

800650 CO2 eq

2.5

P 650 CO2 eqCarbon tax Abatement costs (%GDP)

an Vuuren et

500600700

/tC-e

q)

650 CO2-eq550 CO2-eq450 CO2-eq

1 5

2.0

ts (%

GD

P 650 CO2-eq550 CO2-eq450 CO2-eq

t al, 2007, Sta

300400500

bon

tax

($

1.0

1.5

atio

ns c

ost abilising gre

0100200C

arb

0 0

0.5

Miti

iga eenhouse ga0

1970 1990 2010 2030 2050 2070 20900.0

1970 1990 2010 2030 2050 2070 2090

as concentra

Carbon taxes in the order of 200 (650) to 600-800 (450) $/tCAbatement costs as % of GDP vary over time – and peak around 2030-2050

ations, Clim

a

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2030 2050 atic Change

Major changes in the global energy system are required to meet 450ppm Varequired to meet 450ppm

1400

1600

1400

1600

450 ppm CO2-eqBaseline

an Vuuren et

1000

1200

1400

1000

1200

1400

BioRenew

Nuclear

Nuclear

t al, 2007, Sta

600

800

1000

nerg

y us

e (E

J)

600

800

Ene

rgy

use

(EJ)

NGas

BioBio Renew

NGas+CCS

abilising gre

200

400

E

200

400

E

Oil

Coal OilNGas

Bio

Coal+CCS

eenhouse ga

0 0Coal

as concentra

E i b li i i i i

Nuclear

Renewables

Biofuels + CCS

Natural gas+CCS

Oil+CCS

Coal+CCS

Biofuels

Natural gas

Oil

Coal

ations, Clim

a

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Energy use in baseline vs. mitigation scenario

atic Change

Energy efficiency improvements, bio-energy and CCS contribute the most in the reductions vaCCS contribute the most in the reductions

25 Sinks/avoided defor

Contributions of reduction measures

an Vuuren et

20q)

avoided defor. Non-CO2

Fuel switch CCSBio energy

baseline

al, 2007, Sta

15

s (G

tC-e

q Bio-energy Solar, wind, nuclear Energy efficiency

abilising gre

5

10 450 ppmstabilization

Emis

sion

s eenhouse ga

0

5E s concentra

1970 1980 1990 2000 2010 2020 2030 2040 2050

Main options short term: non-CO2, fuel switch and efficiencyM i i l CCS Bi f l bl & l

tions, Clim

a

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Main options long term: CCS; Biofuels, renewables & nuclear

atic Change

Meeting 450ppm also leads to major changes in land use, i.e. bio-energy and C-plantations valand use, i.e. bio energy and C plantations an Vuuren et al, 2007, Staabilising greeenhouse ga

A i lt Bi

450 ppm CO2-eq

s concentra

Forests

D t

AgricultureIceTundra Ext. grasslandGrass

Bio-energyC-plantation

L d tt i 450 i i 2100

tions, Clim

a

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Desert Land use pattern in 450 ppm scenario in 2100

atic Change

Carbon tax scenarios (OECD Environmental Outlook)

Bakkes eOutlook) et al, 2008, B

450 ppm reduce emission in order to stay within 2oC with a 50% probability

Background

with a 50% probability CC OECD Increasing carbon tax in OECD only (2008) CC Global Increasing carbon tax in al countries (2008) report to the

CC global (phased)

Increasing carbon tax, all countries (but phased): OECD 2008; BRIC 2020; Rest of World 2030 e O

ECD

Env

World 2030 CC global (delayed)

Increasing tax, but all countries starting in 2020

Starting at 25 US$/tCO2, increasing with 2.4%/yr (Social C t f C b (SCC) i IPCC’ 4th A t R t)

ironmental O

Cost of Carbon (SCC) in IPCC’s 4th Assessment Report)

Outlook to 2

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030, MN

P

Carbon tax scenarios (OECD Environmental Outlook)

Bakkes eOutlook) et al, 2008, BB

ackground report to thee OEC

D Env

The difference in implementation in 2008 and 2020 corresponds

ironmental OThe difference in implementation in 2008 and 2020 corresponds

more or less to stabilization at 550 and 650 ppm CO2-eq. No carbon tax scenario meets 2 degree

Outlook to 2

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No carbon tax scenario meets 2 degree 030, MN

P

Comparable effort analysis: Mitigation reduction potential & Costs for 0, 60 and 150US$/tCO2 D

epotential & Costs for 0, 60 and 150US$/tCO2

Reduction compared to 1990 emissions in 2020 (%)50

en Elzen et a

01020304050

Equal MAC (0US$)Equal MAC (60US$)Equal MAC (150US$)

al, 2008, Exp

-50-40-30-20-10

0 loring comp

-70-6050

Canada USA EU RussianFederation

Japan Oceania Ukraineregion

Annex I

parable post-

Tax levels corresponds to baseline, and 20% and 30% Annex I reduction scenario

-2012 effortsreduction scenarioNo emissions trading

s, MN

P repor

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rt

Comparable effort analysis: reductions for Annex I countries D

ecountries

-reduction comp. 1990 level

en Elzen et aal, 2008, Exploring compparable post--2012 efforts

reductions dependent on the assumed Marginal Abatement Costs

s, MN

P repor

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curves

rt

Conclusions

Stabilizing GHG concentration at low levels (about 450 ppm CO2 ) i d t t 2 d t t t h i ll f iblCO2-eq) in order to meet 2 degree target technically feasible possible with ‘known techniques’P tf li f ti d d b t ti l t ib ti CCS dPortfolio of options needed: substantial contribution CCS and efficiency. Multi-gas approach. Abatement costs for 450 ppm are in the order of a few percentAbatement-costs for 450 ppm are in the order of a few percent of world GDP, strongly depending on baseline developments

E l ti i ti f l itti t i i d d fEarly participation of large emitting countries is needed for meeting the low stabilisation levels

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Thank you for your attentiony y

Report (www.mnp.nl¥en):den Elzen, M.G.J, Höhne, N., van Vliet, J. and Ellerman, C., 2008. Exploring comparable post-2012 efforts for Annex I countries.Bakkes et al, 2008, Background report to the OECD Environmental Outlook to 2030.

Paper:van Vuuren D P den Elzen M G J Eickhout B Lucas P Lvan Vuuren, D.P., den Elzen, M.G.J., Eickhout, B., Lucas, P.L., Strengers, B.J., 2007. Stabilising greenhouse gas concentrations. Assessment of different strategies and costs using an integrated assessment framework Climatic Change 81: 119 159assessment framework. Climatic Change, 81: 119-159.Contact: michel.denelzen@pbl.nl

This research was performed with the support of the Dutch Ministry of p pp yHousing, Spatial Planning and the Environment (VROM)

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Back-up slides: for informationBack up slides: for information

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Publications (www.mnp.nl¥fair):

den Elzen, M.G.J. and Höhne, N.: 2008, 'Reductions of greenhouse gas emissions in Annex I and non-Annex I countries for meeting concentration stabilisation targets', Cli ti Ch i htt //d d i /10 1007/ 10584 008 9484Climatic Change, in press http://dx.doi.org/10.1007/s10584-008-9484-z.den Elzen, M.G.J., Höhne, N. and Moltmann, S.: 2008a, 'The Triptych approach revisited: a staged sectoral approach for climate mitigation', Energy Policy 36 (3): 1107 11241107-1124.den Elzen, M.G.J. and Lucas, P., 2005. The FAIR model: a tool to analyse environmental and costs implications of climate regimes. Environmental Modeling and Assessment, 10(2): 115-134.den Elzen, M.G.J., Lucas, P. and van Vuuren, D.P.: 2008c, 'Regional abatement action and costs under allocation schemes for emission allowances for achieving low CO2-equivalent concentrations', Climatic change 90 (3): 243–268den Elzen, M.G.J., Meinshausen, M. and van Vuuren, D.P., 2007. Multi-gas emission envelopes to meet greenhouse gas concentration targets: costs versus certainty of limiting temperature increase. Global Environmental Change, 17: 260–280.Lucas, P., van Vuuren, D.P., Olivier, J.A. and den Elzen, M.G.J.: 2007, 'Long-term reduction potential of non-CO2 greenhouse gases', Environmental Science & Policy

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p g g y10 (2): 85-103.van Vuuren, D.P., den Elzen, M.G.J., Eickhout, B., Lucas, P.L., Strengers, B.J., 2007. Stabilising greenhouse gas concentrations. Assessment of different strategies and

YOU CAN DOWNLOAD PAPERS OR CONTACT: michel.denelzen@pbl.nl

FAIR 2.0 model: to assess regional emissions andcosts for post-2012 mitigation regimes d

DATASETS

costs for post-2012 mitigation regimes

CLIMATE MODEL

den Elzen, LuDATASETS

Historicalemissions

Climate assessmentmodel

CLIMATE MODEL

Climate attributionmodel

ucas, 2005, T

Multi-stageEMISSIONS ALLOCATION MODEL

BrazilianBaselinescenario

1. Global emission pathway

The FAIR

2 m

Per capita C

Multi-stageapproach

South-North di l l

BrazilianProposal

Triptych h

scenario

Emissions

model, Enviro

2. Regional emissions targets before emissions trading

Convergence dialogue proposal approachpathways

onmental M

o

Mitigation costs & Emissions trade

EMISSION TRADE & COST MODELMACs

odelleing As

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3. Regional GHG emissions after trade Abatement costs & permit price

ssessment

Objective Abatement costs model

To calculate abatement costs and permit price (multi-gas)T l l t th b d ll d fi i l fl th

den Elz

To calculate the buyers and sellers and financial flows on the international permit marketTo distribute the global reduction objective over the different

zen, Lucas aTo distribute the global reduction objective over the different regions, gases and sectors following a least-cost approach, making use of the flexible Kyoto mechanisms

nd van Vuurren, 2005, Abbatem

ent cossts, Energy P

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Policy

Choice of MAC curves matters: POLES gives lower prices till 2035-2040, and higher later

Equilibrium Carbon Price [2005US$/tCO2]250

p , g

200

250

POLES MAC CO2450

150

200 POLES MAC CO2TIMER MAC CO2

100

450

550

50

550

02000 2010 2020 2030 2040 2050

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2000 2010 2020 2030 2040 2050

Global costs are manageable for POLES and TIMER MAC curves

Global costs as %-GDP [2005US$]

2.0

POLES MAC CO21.5

POLES MAC CO2TIMER MAC CO2 450

4501.0

450

550

0.5550550

0.02000 2010 2020 2030 2040 2050

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2000 2010 2020 2030 2040 2050