The Canadian Approach To Compiling Emission Projections

1
The Canadian Approach To Compiling Emission
Projections

• Marc Deslauriers
• Environment Canada
• Pollution Data Division
• Science and Technology Branch
• Projections expert panel (PEP) meeting
• Dublin, Ireland
• 25th October 2007

2
Outline

• Explain the emission projections framework used
  in Canada
• Discuss the current application for the emission
  projections

3
Modeling Framework

• A modeling framework called E3MC (Energy,
  Environment, Economy Model for Canada) is
  currently used for the estimation of future
  emissions for GHG and air pollutants
• The modeling framework was developed during the
  past 1.5 years and includes two models
• An energy demand model called Energy 2020
• A macroeconomic model call TIM (The Infometrica
  Macroeconomic model)
• E3MC is used to estimate the Business As Usual
  Projections (with existing measures and policies)
  and evaluate various emission reduction
  strategies up to 2075 and estimate the associated
  costs

4
Energy 2020 Model

• Integrated multi-region, multi-sector model for
  North America
• It simulates the supply, the price, and the
  demands for all fuel types
• The models main outputs include
• Changes in energy use
• Energy prices
• Investment costs and potential costs savings
  resulting from policy changes
• GHG and air pollutant emissions as a function of
  energy use and economic activity (using emission
  coefficients for each pollutant and industrial
  sector)

5
TIM (Macroeconomic) Model

• Examines the consumption, investment, production,
  and trade decisions for the whole economy
• It captures the interaction among industries and
  the implications for changes in producer prices,
  relative final prices and income 
• It also factors in government fiscal balances,
  monetary flows, interest and exchange rates
• It accounts for 133 industries at the provincial
  and territorial levels
• It includes an international component to account
  for exports and imports, which covers
  approximately 100 commodities

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TIM (Macroeconomic) Model

• This model projects the direct impacts on the
  economy's final demand, output and employment,
  price formation, and sectoral income that result
  from various GHG and air pollutants emission
  reduction policies
• Similarly to other macro economic models, E3MC
  provides directional guidance with respect to the
  broad economic consequences that are likely to
  arise from policy changes
• TIM is liked to the energy model to capture the
  interactions between the energy sector and the
  economy

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Interaction Between The Two Models
ENERGY 2020
SUPPLY Electric Utility/IPPs Gas Supply Oil
Supply Coal Supply International
Supply International Trade
DEMAND Residential Commercial Industrial Transport
ation
Outputs
(i) changes to investments in energy using
equipment and structures by sector and
industry (ii) changes to energy intensity
(energy input per unit of output) by sector, by
industry and fuel

• Gross output by industry and jurisdictions
• Personal income

• Inflation
• Taxe rates
• Exchange rates

Inputs
THE INFORMETRICA MACROECONOMIC (TIM) MODEL
8
Background On The Framework

• Energy2020 has been used for the past 20 years to
  analyze energy and environment policies in the
  U.S. (state and federal level) and Canada
• It can provide facility level emissions for all
  power plants in Canada
• Informetrica TIM Model has been used for the past
  30 years to assess the economic impacts of
  Canadian and provincial governments policy
  initiatives
• Historical emission inventories (1995 to 2006)
  are used to develop emission coefficients in the
  framework (for energy and other emission sources)
• The framework also uses inputs from other
  departments (finance, Natural Resources, National
  Energy Board) and organizations (National Round
  Table on Energy and the Economy, industry
  associations)

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Review Of The Emission Projections

• Economic and emissions projections are estimated
  by Environment Canada
• They are reviewed by sector experts in
  Environment Canada
• They are then reviewed by the provinces
• The comments obtained from the reviewers are
  discussed and adjustments are applied where
  necessary
• The process is used to obtain agreement
  (consensus) on the projections which are then
  published

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Current Uses of The Projections Framework

• A new regulatory program (named CARA) to improve
  air quality and reduce GHG is currently in
  development in Canada
• Emission reduction targets and intensities are
  being developed for 16 industrial sectors,
  transportation vehicles, and solvent uses
• For the development of the reduction targets
  different scenarios are proposed and analyzed
• E3MC is being used to estimate
• The costs to the industries
• The impact on the economy

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Projected Emission Inventories

• The emission projections from the E3MC framework
  are used to prepare future year emission
  inventories required for air quality modeling
  (eg. 2015 and 2020)
• Facility specific emissions are developed for the
  each industry sectors taking in consideration
• The future capacity of existing facilities
  (proposed expansions and possible closures)
• Expected capacity of new facilities (based on
  permit application and environmental assessments
  information, knowledge of sector experts,
  information obtained from individual industry and
  industrial associations)
• Process technology changes, changes in control
  equipment, changes in fuel consumption, etc.
• Emission intensities of old and new or modernized
  facilities

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Cost and Benefit Analyses of Emission Reduction
Targets For Air Pollutants
Projected Emissions (by province and sector)
2006 and historical emission Inventories
E3MC framework
Cost Estimates
2015 BAU emission inventory 2015 emission
inventory with proposed reduction targets
Air Quality Model
Output - Components of Smog and Acid Rain O3,
PM2.5, deposition of acidifying compounds,
visibility, critical loads
Ecosystem Effect Models
Human Health Impact Model
Benefit Estimates
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Next Steps For E3MC

• Develop new module to model the emissions by
  facility for the oil sands industry
• Continue to improve the alignment of the sectors
  in the emissions inventory with those in the
  projections framework
• Automate and accelerate the process to generate
  detailed emission inventories for 2015 to 2020,
  which are required for air quality modeling