Energy, GHG and Climate Change Scenarios: IEA Insights

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Energy, GHG and Climate Change Scenarios IEA
Insights

• Cédric Philibert
• Energy Efficiency and Environment Division
• European Environment Agency Workshop
• Copenhagen, 29 June 2004

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Growing trend
Energy-Related CO2 Emissions, WEO, 2002
World emissions increase by 1.8 per year to
38 billion tonnes in 2030 70 above 2000
levels
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CO2 Emissions per Capita
Source WEO 2002
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Climate Stabilisation
Source IPCC TAR
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Technology Innovation, Development and Diffusion

• All options needed
• Timing and lock-in matter
• Technology policies help provide for long term
  non-carbon energy
• Comprehensive tools (caps, taxes) promote short
  term results
• and provide long-term price signals
• International technology collaboration helpful,
  but cannot substitute to comprehensive agreements

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Key energy technologies

• End-use efficiency
• Building sector
• Industry
• Transport
• Fuel switching
• Conversion efficiency
• Non carbon energies nuclear, renewable, CCS
• Excluding any of these options is likely to drive
  higher costs/higher concentrations

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Nuclear energy

• Currently 7,3 of world TPES
• Concerns risks, waste, proliferation
• Member countries have various policies
• Costs may not be an issue if carbon is priced
• Various new designs may
• Reduce size and costs
• Minimise waste and expand the resource base
• Alleviate proliferation concerns

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Carbon Capture and Storage

• Pre-, post- and oxyfuel combustion technologies
• Pre-combustion capture could be one way to
  provide a versatile fuel hydrogen
• Plentiful geological storage capabilities
• But current experiments not numerous enough
• Ocean storage would be temporary only
• Achieving stabilisation may require storing
  significant CO2 (100s of GT)
• The question of permanence

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Renewable

• Biomass and waste about 11 TPES
• Not always renewable, often unhealthy use
• Hydro about 2.3 world TPES
• But additional capabilities face social and
  environmental concerns
• Others less than 1 world TPES
• Rapid growth of wind energy
• Issues of costs and intermittence
• Space occupation may limit biomass
• Potential 9,000 times current TPES
• GHG increase the efficiency of Earth Atmosphere
  capturing solar energy
• If solar energy creates the problem it must be
  able to solve it

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An area issue?
Area needed to produce with solar power the same
yearly energy than the Assouan Dam (global
efficiency of 10)
Source Dennis Anderson, Imperial College, R.-U.
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Solar power plants exist!

• 354 MWe since 84-89 on Los Angeles grid
• Contrating solar power plants cheaper than PV
• Fossil fuel back-up or heat storage guarantees
  power
• Projects in Spain, Italy, Mexico, India, Egypt,
  Morocco, Algeria, Jordan, Israel, the US
• 70 millioninhab cities in suitable areas

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GHG Emissions Impacts of Biofuels
Well-to-wheel CO2-equivalent GHG emissions from
biofuels, per km, relative to base fuel
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Ethanol Cost Comparison, 2002 and Post 2010
2002
2002
Post2010
Post2010
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Biofuels Potential In IEA Countries

• In most countries, conventional biofuels
  (ethanol/grains, biodiesel/FAME) can probably
  provide 5 of motor gasoline/diesel fuel without
  major disruptions to other crop production,
  markets
• 5 in US, EU will require 15-20 of cropland
• Above 5 we could begin to see strong competition
  for crop use in many countries
• Biodiesel is much more land-intensive than
  ethanol
• Going to cellulosic feedstocks could increase
  potential by several-fold

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Global Technical Potential for Transport Energy
Requirements to be Provided by Biofuels, 2050
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Nearer Term A look at Ethanol from Sugar Cane in
2020
(Billion Litres)
Source Johnson, 2002
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Biofuels in sum

• Biofuels many types of impacts
• Biofuels use growing rapidly
• Conventional biofuels in IEA countries are
  expensive, modest GHG reductions
• Sugar cane ethanol is a bargain
• Advanced biofuels processes look promising
• Global potential appears substantial
• Development of trade in biofuels would benefit
  many countries

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• Maria R. Virdis
• 9th Session of the Conference of the Parties.
• 1-12 December. Milan, Italy

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SD Vision a normative scenario with 3 targets to
2050

• Energy security
• Our supply vulnerability concerns mostly oil.
  Transport is the most dependent sector.
• lt 40 of energy demand for transport satisfied
  by oil by 2050.
• Climate mitigation and environmental
  sustainability
• Target focuses on decarbonisation of energy
  supply and on transition to a non-fossil fuel
  energy base
• 60 of world TPES from zero-carbon sources by
  2050
• Access to energy
• Depends on economic growth and income gap
  reduction.
• Access to electricity to gt 95 of world
  population by 2050.
• Purpose to help identify a policy path and a
  technology roadmap to get to the desirable future
  world.

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Quantitative framework for 2050

• Needed to appreciate magnitude of the targets and
  scale of the challenges. Existing scenarios
  considered
• WEO 2002 (but horizon limited to 2030)
• IPCC SRES scenarios of the A1 family (A1B and
  A1T).
• A1T scenario (simulated by IIASA with MESSAGE)
  chosen as the initial basis for its
  characteristics.
• That scenario was further modified to produce our
  SD Vision scenario, whose characteristics are
• policy driven
• lower GDP (-5with respect to A1T value in 2050)
• lower energy demand (-15 w.r. to A1T value in
  2050)
• increased share of zero carbon technologies
  (renewables, nuclear) and introduction of carbon
  storage.

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The SD Vision scenario world total primary energy
46 of TPES from renewables nuclear by 2050
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Comparing carbon emissions
26 of CO2 emissions from fossil fuels is
captured and stored by 2050
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Energy in 2050 (SD Vision)

• Energy intensity would fall by 53 over the
  period.
• Gas would become the dominant fuel security of
  supply risks may surface in long term. Pipeline
  construction thrives.
• Oil to satisfy about 38 of transport energy
  demand
• Renewables a bigger share than coal and oil (35
  vs. 28).
• 46 of non-carbon based energy sources in TPES
  implies
• a 3-fold increase for biomass
• a 13-fold increase for other renewables
• a 14-fold increase for nuclear.
• Carbon capture storage up to 2.6 GtC in 2050.

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Share of Renewables in the Reference and
Alternative Policy Scenarios
Policies under consideration would increase the
share of renewables to 25 by 2030, compared to
17 in the RS
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OECD CO2 Emissions in Alternative and Reference
Scenarios OECD
Emissions in the Alternative Scenario stabilise
towards the end of the projection period
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OECD Investment in Alternative and Reference
Scenarios
Transmission and distribution investments are
much lower in Alternative Scenario, but
generation costs hardly fall
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Investment to Ensure Universal Electricity
Access 2001-2030
More than 660 billion is needed to supply basic
electricity services to the worlds very poor
mainly in Africa and South Asia
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Universal Electricity Access CO2 Emissions
Implications in 2030
Assuming no change in the fuel mix, universal
electricity access would increase global CO2
emissions by 1.4 in 2030
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Carbon Sequestration Scenario 2001-2030
Capacity with CO2 capture
Additional for CO2 capture
Carbon-capture technologies can remove 3.4 GT of
CO2 in the OECD by 2030
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BEYOND KYOTO What we have learned Cédric
Philibert
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From theory and experience

• Climate change is global, long-term and
  surrounded by (cost and benefit) uncertainties
• Growing energy needs will not make it easy!
• Price instruments would perform better
• Benefits relate to concentrations, costs to
  emissions
• But carbon taxes are unlikely to succeed
• And fixed binding targets hard to swallow (by
  nature arbitrary)
• Technology push useful, no silver bullet

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The ultimate objective dilemma

• Costs and benefits uncertain costs matter
• Dangerous climate change hard to define
• Inertia requires but constrains early action
• Possible way out Aim at low concentration levels
  with achievement conditional on costs
• From Hard laws, weak targets to Soft laws,
  strong targets but ensuring action
• Ambition matters, not emission certainty

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Suggestion 1/3 Keep emissions trading

• Cost-effective
• Environmentally effective
• Allows (some) free allocation
• Helps deal with vested interests
• Allows the rich to pay for the poor
• Mobilises private, not government funding

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Suggestion 2/3 Make it global

• Large, sector-wide, unilaterally-funded CDM
• Non-binding targets for developing countries
• Set targets close to baseline emissions
• No threat for economic development
• No need for tropical hot air up-front
• Commitment period reserve and buy-back option to
  prevent selling false carbon money

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Suggestion 3/3 Reduce cost uncertainty

• Index targets on economic output
• Intensity targets only a special case of
  indexation
• Only reduce uncertainty from unabated emissions
  trend
• and/or cap the costs (safety valve)
• Sell supplementary permits at a fixed price
• At international or domestic levels
• Set the price in the upper range of expectations
• A price cap is not a tax!
• Single price cap not that difficult nor
  necessary
• Use of the price cap money not a difficulty

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Dont worry

• Most likely, a more stringent target is achieved
  (thanks to lower expected abatement costs)
• Price cap in use if higher-than-projected costs
• ...a cost benefit analysis would have suggested
  higher emissions and concentration levels
• Price cap with more ambitious targets performs
  en route the CBA impossible today
• Price caps make short-term targets more
  palatable, long-term targets indicative only

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be happy!

• The EU (and other countries /stakeholders) with
  ambitious targets
• The US (and other countries /stakeholders) with
  price caps
• The developing countries with investment and
  technology inflows from emissions trading based
  on non-binding targets
• All, with effective global climate change
  mitigation and response to energy needs

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Thank you!

• For more information
• www.iea.org
• cedric.philibert_at_iea.org