THE ROLE OF KYOTO MECHANISMS: RESULTS FROM MARKAL ANALYSES

1
THE ROLE OF KYOTO MECHANISMS RESULTS FROM MARKAL
ANALYSES

• DOLF GIELEN
• TOM KRAM

BRUSSELS 29/8-30/8 2000
2
TOPICS

• NON-CO2 GHGs
• THE RELEVANCE OF JI AND CDM
• SECONDARY BENEFITS
• CARBON LEAKAGE
• GHG POLICY INSTRUMENTS SELECTION

3
PROJECTS

• POST-KYOTO EU (GIELEN ET.AL. 1998)/DUTCH
  GOVERNMENT
• POST-KYOTO GLOBAL (SIJM ET.AL. 2000)/DUTCH
  GOVERNMENT
• BRED (GIELEN ET.AL. 2000)/EU
• TOG (GIELEN AND PIETERS 2000)/OECD
• FREAK (GIELEN AND YAGITA 2000)/JAPANESE
  GOVERNMENT

4
METHOD

• MARKAL AS EXPERT SYSTEM
• ETSAP AS POOL OF KNOWLEDGE
• SMALLER, DEDICATED MODELS
• USE DATABASE (INPUT) OR ABATEMENT CURVES (OUTPUT)
  FROM MARKAL MODELS

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OPTIMAL EUROPEAN EMISSION REDUCTION, 2010
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OPTIMAL GLOBAL EMISSION REDUCTION, 2010
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GLOBAL EMISSION CREDITS TRADE

• PERMIT PRICE 3-8 EUR/t CO2eq
• TRADE 88 OF TOTAL REDUCTION (2365 Mt CO2eq)
• CDM 1447 Mt CO2eq, JI 900 Mt CO2eq
• NON-CO2 GHGs REDUCE THE AVERAGE COSTS FROM 6 TO 4
  EUR/t CO2eq

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EMISSION REDUCTION BENEFITS SHANGHAI, 2020
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EMISSION REDUCTION BENEFITS II
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COMMODITY PRICE EFFECTS, 2030
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FREAK LIFE CYCLE MODEL
BIOMASS
BIOMASS
CO2
BIOMASS
HTU LIQUEFACTION
FERMENTATION
GASIFCATION
HYDROGENATION
GAS OIL
NAPHTHA
LPG
VAC. RESID.
GAS
ETHANOL
METHANOL
ETHANE
CRACKING
CRACKING
CRACKING
CRACKING
MTO
OX. COUPLING
DCC
DEHYDROGENATION
DCC
MTO
ETHYLENE
PRODUCTION
POLYMERISATION
POLYETHYLENE
PRODUCTS
ASSEMBLY
USE
VEHICLES
PACKAGINGS
BUILDINGS
OTHER
RE-EXTRUSION
WASTE HANDLING
COKE
PYROLYSIS
HYDROGENATION
OIL
BLAST FURNACES
CEMENT KILNS
INCINERATION
ELECTRICITY
GASIFICATION
DISPOSAL
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CARBON LEAKAGE II2025
385 (40)
-564 (58)
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CARBON LEAKAGE II

• LEAKAGE DEFINED AS INCREASE EMISSIONS OUTSIDE THE
  POLICY REGION DIVIDED BY REDUCTION INSIDE THE
  REGION
• 178/357 100 50 LEAKAGE IN CASE OF A 150 EUR
  TAX WITHOUT RECYCLING (2025)
• TRADE INCREASE 60 (84 Mt product)

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CARBON LEAKAGE III2025
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Policy Simulations

• IDEAL POLICY FRAMEWORK (I)
• EQUAL MARGINAL COSTS
• ALL TOs
• POLICY CONTINUATION FRAMEWORK (C)
• ALL TOs, BUT NO COST INCREASES FOR THE EXPOSED
  SECTORS
• ADDITIONAL TRANSACTION COSTS (EUR 0-50/t
  CO2eq)
• AMBITIOUS TARGETS FOR PARTICULAR TOs (RENEWABLES,
  CARS)

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I (EM) VS. C (E)
-60
-40
17
E(I) vs. EM (I)
-30
-50
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CONCLUSIONS

• NON-CO2 25 OF TOTAL EMISSION REDUCTION
• VALUE OF CREDITS 3-8 EUR/t CO2eq (2010)
• SECONDARY BENEFITS OF SECONDARY IMPORTANCE
• CARBON LEAKAGE IMPORTANT ISSUE, THUS
  INTERNATIONAL CO-OPERATION REQUIRED
• APPLY GENERIC PRICE INSTRUMENTS
• CONSIDER MATERIALS EFFICIENCY