Scenarios For Differentiating Commitments : A quantitative analysis

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Scenarios For Differentiating Commitments A
quantitative analysis

• EU Expert Group on Further Action
• Berlin, May 14, 2003
• Odile Blanchard, LEPII-EPE (Previously IEPE)

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Overview

• Possible elements and options of a climate
  protection architecture
• Differentiated commitment scenarios objectives,
  methodology, assumptions
• Comparative results
• Implementation issues
• Conclusion

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Designing a Climate Protection ArchitecturePossi
ble Elements and Options

• Legal Nature of Commitments
• Binding
• Non-Binding
• Mixture
• Type of GHG Limitation Commitment
• Tax
• PAMs (e.g., harmonized PAMs SD-PAMs)
• Targets (e.g., fixed, dynamic, dual)
• Approach to Differentiating Commitments
• Pledge-based (e.g., Kyoto-style)
• Principle-based (e.g., Brazilian Proposal, equal
  per capita)
• Timing and Triggers
• By existing or new Annex
• Coverage and Scope of Actions
• - Different gases and/or sectors

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Designing a Climate Protection ArchitecturePossi
ble Elements and Options

• Continued
• Market-Based Mechanisms
• Intl emissions trading
• CDM
• Sector-CDM
• Financial and Technology Commitments
• Funding for adaptation/impacts compensation
• Funding for clean energy development
• Accountability Mechanisms
• Measurement, reporting, and review of commitments
  
• Compliance system
• Overall Environmental Objective
• UNFCCC Article 2
• More specific (e.g., keep 450 CO2 eq. option
  open)

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Building on the Kyoto Protocol Options for
Protecting the Climate

• 1. Introduction An Architecture for Climate
  Protection
• 2. Continuing Kyoto Emission Caps in DCs?
• 3. Sustainable Development Policies and Measures
• 4. Evolving to a Sector-Based CDM
• 5. Dual-Intensity Targets Reducing Uncertainty
• 6. Learning from the Argentine Voluntary
  Commitment
• 7. The Brazilian Proposal on Relative
  Responsibility
• 8. Equal Per Capita Entitlements
• 9. Differentiated Commitment Scenarios
  Quantitative Analysis
• 10. Conclusion Building and Effective and Fair
  Climate Protection Architecture

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9. Differentiated Commitment ScenariosObjectives

• Illustrate the formalization of a few emission
  allocation proposals, 2010-2030
• For each allocation scenario, quantitatively
  assess
• - the emission allowances distributed across
  countries
• - the emission reduction costs
• - the impacts of trade

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9. Differentiated Commitment ScenariosMethodology

• Set an intermediate (2030) environmental goal,
  compatible with a long term CO2 concentration
  target of 450-550 ppmv 9.4 GtC in 2030
• Define 3 worldwide scenarios
• - Per Capita Convergence scenario
• - Relative Responsibility scenario
• Emissions-Intensity Target scenario
• POLES model and ASPEN software

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Why stabilization below 10 GtC by 2030 ?

• Fossil fuel CO2 emissions from mitigation
  scenarios for 550ppmv stabilization
• IPCC TAR WGIII

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Why stabilization below 10 GtC by 2030 ?

• Fossil fuel CO2 emissions from 76 post- SRES
  stabilization scenarios
• IPCC TAR WGIII

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Tools developed at IEPE

• POLES (Prospective Outlook on Long-term Energy
  Systems) a world simulation energy model,
  partial equilibrium, 38 countries/regions. Main
  outputs
• energy supply, demand, price projections to 2030
• GHG emission marginal abatement curves (MAC) by
  regions/countries
• ASPEN (Analyse des Systemes de Permis dEmission
  Negociables), computes
• GHG emission allocations based on the allocation
  rule chosen
• emission permit price and trade flows, for any
  permit market

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Quantitative assessments2010 and 2030
assumptions

• 2010 CO2 world emissions 7.8 GtC (38 /1990),
  resulting from
• Annex 1 comply with KP commitment, except USA,
  Eastern Europe
• USA Feb 14, 2002 Bush Adm. Rule (-18
  emission intensity over 10 years)
• Eastern Europe BAU emissions (to avoid hot
  air)
• Non-Annex 1 BAU emissions
• 2030 BAU world emissions almost 12 GtC ( 111
  /1990)

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Emissions per capita scenario assumptions

• Convergence year 2050, at 0.95 tC/cap.
• Transition period 2011-2049 with a yearly
  carbon budget to allocate (resource sharing)
• 2010-2030 yearly global CO2 emissions budget
  calculated on a linear basis to reach 9.4 GtC in
  2030. 2030-2040 global emissions stabilization
  at 9.4 GtC
• 2040-2050 -1/y global emissions reduction
• Using one of GCIs proposed equations for
  convergence

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Emissions per capita scenarioConvergence equation

• Countrys annual emissions share
• Sy Sy-1 - (Sy-1 - Py)exp(-a(1-t))
• Sy emissions share in year y
• Py population share in year y
• a convergence coefficient ( 4)
• t elapsed time ratio between starting year
  (2011, t 0 ) and convergence year (2050, t 1)
• Countrys annual emissions entitlement share Sy
  multiplied by the global CO2 emissions budget of
  year y
• Source adapted from GCI

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Relative responsibility scenario assumptions

• Brazilian-type approach reductions sharing
• 2010-2030 yearly global CO2 emissions budget
• same as for Per capita convergence scenario
• 2010-2030 yearly global CO2 emission reductions
  relative to BAU
• Distribution of the yearly reductions among ALL
  countries, based on relative responsibility
• CO2 cumulative emissions from 1900
• Responsibility of a country ratio of cumulative
  emissions of the country/world cumulative
  emissions
• 2011-2015 relative responsibility refers to 2005
  ratio 2016-2020 to 2010 2021-2025 to 2015 BAU
  2026-2030 to 2020 BAU.

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Relative responsibility scenario calculating
emission reductions, an example

• 2030 global CO2 reductions
• BAU - Emission Budget 11.981 - 9.4 2.581GtC
• 2030 US relative responsibility
• US CO2 cumulative emissions 1900-2020 111.3 GtC
• World CO2 cumulative emissions 1900-2020 421 GtC
• US 2030 responsibility ratio 111.3 / 421 26.43
  
• US 2030 emission reductions relative to BAU
• 2.581 26.43 0.682 GtC 682 MtC

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Emissions-Intensity Target scenario assumptions

• 2030 global CO2 emissions target still 9.4 GtC
• Approach based on relative changes of em / GDP
  (no absolute figures for em/GDP) country
  specific
• Various simulations carried out to reach the 9.4
  GtC target
• Simulation used
• Annex I improve CO2/GDP by 2 yearly from BAU
  trend
• Non-Annex I 0.5 improvement from BAU trend

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Results Comparing Emission Allowances

• All scenarios meet the near-term environmental
  goal
• In all scenarios, more stringent emission
  limitations in Annex I than in Non-Annex I
  countries
• 2030 emission allowances above 1990 levels for
  all Non-Annex I countries
• In the Per Cap Convergence scenario, some
  Non-Annex I countries would have allowance
  surpluses relative to their BAU emission
  projections in 2030

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Results comparing emission allowancesReduction
() or increase () in 2030 emissions relative to
1990 ()
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Results Comparing Emission Allowances

• Distribution of CO2 Emissions allowances

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Results Comparing Emission Allowances

• Per capita CO2 emission allowances

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Results Comparing Costs and Trade

• Across all scenarios, higher emission reduction
  costs in Annex I than in Non-Annex I
• Trade all countries benefit from trade
  typically, Annex I countries are buyers
  Non-Annex I countries are sellers
• Highest volume of trade and highest gains from
  trade in the Per Capita Convergence scenario

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Results Comparing impacts of trading
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Implementation issues Per capita convergence

• Principle-based egalitarian
• What long-term environmental goal (emission
  budget) ? What yearly contraction path ? What
  level of convergence?
• Emissions trading is essential
• Does not account much for national circumstances
• Acceptability low for Annex I, high for
  Non-Annex I
• Variants more acceptable but more complex (e.g.
  Aslams proposal fixed minimum per capita level
  variable per capita portion related to
  country-specific circumstances)

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Implementation issues Relative responsibility

• Principle-based polluter pays
• Choice of indicator of responsibility how far
  down the causal chain of global warming ?
• Data challenges
• Consensus on distant past CO2-energy related
  figures ?
• Data for CO2 from land-use change, non-CO2 GHGs?
  Sensitivity analyses.
• Acceptance of Annex I responsibility for pre-1990
  emissions ?
• Bringing developing countries on board
• Delay participation (thresholds GDP/cap,
  non-Annex I responsibility vs Annex I)
• Reductions relative to a dynamic baseline
• Responsibility principle for Annex I, other basis
  for non-Annex I commitments

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Implementation issues Emissions-intensity
targets

• Pledge-based target as many targets as countries
  choice of adjustment form of GHG emissions to
  GDP changes, need for capacity building
• Additional data set GDP
• GDP measure domestic currency
• Emission intensity targets expressed in rates of
  change, rather than absolute terms
• Emissions trading after compliance period or
  allow trade during commitment period (GDP
  projections and commitment period reserve)

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Conclusion (1) Scenarios for differentiating
commitments

• Reaching 550 ppmv stabilization of CO2
  concentrations by 2100 requires stringent
  reductions in the near-term, particularly by
  Annex I countries
• Emission allowances and emission reduction costs
  vary for each country across the 3 scenarios
• Helpful information for countries to shape their
  negotiating position
• Extension of work exempt some countries from
  emission limitations mix approaches

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Conclusion (2) options for climate protection

• No proposal can satisfy the interests and
  concerns
• of all countries
• Design of a menu of near-term options to build
  confidence and capacity
• - Stronger leadership of developed countries in
  emission reductions
• - Multiple options enhanced participation in
  emission reductions
• - But potentially insufficient to address
  climate change over the LT
• coupled to a principled, long-term framework
• - To combat bargaining power of pledged-based
  commitments
• - To avoid the complexity of multiple options
• - Could include a more definite environmental
  objective