Sergey Paltsev

MassachusettsInstitute of Technology

Low-Carbon Russia: Myth or Reality?

Moscow, RussiaJanuary 15, 2015

http://globalchange.mit.edu/

Setting

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Russia’s share in global energy use – 5.5%, in global GHG emissions – about 4%.

Low-Carbon Options:

Nuclear, Hydro, Wind, Solar, Biomass, CCS

2011 global shares of energy use: Oil – 31%; Coal – 29%, Natural Gas – 21%; Bioenergy – 10%, Nuclear – 5%; Hydro – 2%; Renewables – 1%.

2011 Russia’s shares of energy use: Natural Gas – 54%; Oil – 20%, Coal – 16%; Nuclear – 6%, Hydro – 2%, Bioenergy – 1%.

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Setting: Energy Intensity - Energy Efficiency

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Source: MIT Energy and Climate Outlook (2014)

While energy consumption will increase over time, energy use per unit of GDP generally decreases about 40% from 2010 to 2050. This reflects the improvement in energy-efficiency and rising energy prices caused by resource depletion and carbon policies.

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Why to move to low-carbon?

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Source: MIT Energy and Climate Outlook (2014)

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Climate goals – which one?

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Expected GHG Emissions from COP-21

Nature (2014), 514, 30-31.

Source: MIT Energy and Climate Outlook (2014)

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Russia’s GHG Emissions

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Data:1990-2012 UNFCCC

25% - 2013 President‘s Decree 752

40% - Comparable to the proposed EU reduction for 2030

Reference, Measures, Additional Measures – from Rosgidromet submission to UNFCCC

25 % Reductions from 1990 GHG including Land Use (Forestry change) – from Blue Curve.

Land Use and Forestry Change Emissions are more uncertain.

Projections for GHG are without Land Use here.

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Projections

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Pages 153-169

http://www.cenef.ru/file/CB-LCE-2014-rus.pdf

178 pages

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GHG and GDP Growth Projections for Russia

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GHG Emissions

Impact on Russian economy: more expensive energy and reduction in energy exports

MIT EPPA Model:Reference Scenario andClimate Stabilization

Global, Economy-Wide Model,captures impact on Economy.2030 Policy Cost: $60 billion

Real GDP growth – 5-year average

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Energy Use in Russia

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Note: These results are based on a stringent climate policy and the same carbon price in all countries (2030 - $75/tCO2, 2050 - $165/tCO2). The results depend on emission burden sharing between countries.

With different allocation the impact might be less dramatic, but a direction of the changes is the same. Russia is affected by higher energy costs for consumers and a loss of revenue from oil and gas exports.

Reference 2C Climate Policy

Source: Paltsev and Kalinina (2014)

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Move to low-carbon energy

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~3°C

Based on AR5 WGIII Figure 6.7Low climate stabilization scenarios are dependent on decarbonization

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Plenty of carbon in the ground

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Based on SRREN Figure 1.7

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Rising GHG emissions in no-policy scenarios

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Based on AR5 WGIII Figure TS.17

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Mitigation requires dramatic changes

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Based on AR5 WGIII Figure TS.17

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No negative emission technologies in power sector imply more effort in other sectors

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Based on AR5 WGIII Figure TS.17

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Technology options are affected by policy instruments and cost assessments

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Based on EPPA results for US CCSP (2007)

2004 – 2007 Optimism about CCS

Short-term increase in gas

By 2100 coal and gas with CCS and

Renewables

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Technology options are affected by policy instruments and cost assessments

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Based on EPPA results for US CCSP (2007)

2014 – Less optimism about CCS,More optimism on nuclear, renewables and energy efficiency

2050 global shares of generation: 2007 study –- fossil – 75%, renewables – 15%2014 study –- fossil – 30%, renewables – 50%

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Technology options are affected by policy instruments and cost assessments

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Different modeling groups - no dominant technology for de-carbonization

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Based on AR5 WGIII Figure 7.11

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Some low-carbon technologies can compete with conventional

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Based on AR5 WGIII Figure 7.7

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Moving to Low-Carbon: Example of the U.S. electricity price increases (relative to BAU)

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EPPA:

Increase in 2050$60/MWh

MIT JP Report 173 (2009)

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How to move to low-carbon energy?

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Conclusions

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Aggressive climate stabilization targets (2-3C) require drastic changes in power generation technology options

Future costs and the resulting technology mixes are uncertain

Policy: Target emissions reductions from any source, rather than focus on boosting certain kinds of renewable energy.

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Conclusions for Russia

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• Cost of climate policy is higher for a country that relies on fossil fuel exports and has a limited potential for renewable energy than for energy importing countries.

• Targets for GHG reduction should be milder than for other regions.

• Policy: Economic diversification (and nuclear energy expansion?).

• Low carbon Russia: nuclear, hydro, and electric cars? Not a near future.

• Carbon Policy: Carbon Tax

• Policy Design: “Хотели как лучше...”

Thank you

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Questions or comments?Please contact Sergey Paltsev at paltsev@mit.edu.

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