Modeling Representation of Brazil Baseline and Mitigation Scenarios

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Modeling Representation of Brazil Baseline and
Mitigation Scenarios

• Latin America Modeling and Scenarios Workshop

Emilio Lèbre La Rovere emilio_at_ppe.ufrj.br Rio de
Janeiro, Brazil September 13-14, 2006
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General Background from Modeling Exercises in
CentroClima/COPPE/UFRJ and Modeling Tools

• International Initiatives for Mitigation Costs
  Assessments (Common Methodological Framework)
• 1) Riso/UNEP Centre (RISO) and LNBL
• Technological Optimisation Model TOM
  MARKAL-like LP energy system optimization model
• 2) CIRED/EHESS (Paris)
• NEXUS-IMACLIM (Macro framework)
• 3) PNNL/EPA
• Second Generation Model - SGM

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General Background from Modeling Exercises in
CentroClima/COPPE/UFRJ and Modeling Tools

• 4) Development and Climate Project
• MESSAGE
• MAED
• 5) CCAP (Center for Clean Air Policy) Dialogue
  on Future International Actions to Address Global
  Climate Change

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Dialogue on Future International Actions to
Address Global Climate Change (FAD)

• Brings together senior climate negotiators from
  approx. 15 developed and 15 developing countries
• Informal, off-the-record forum to discuss options
  for future international climate framework
• CCAP produces FAD working papers and will produce
  a compendium in 2006 on the project and options
  discussed.
• For all presentations and working papers from the
  process, see http//www.ccap.org/International_Pr
  ogram.htmFAD

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MAJOR FEATURES OF THE BRAZILIAN ECONOMY - 2002

• GDP of US 500 billions
• Population of 174 millions inhabitants
• GDP/cap of US 2,800
• Land Area of 8.5 millions km2

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GHG Emissions in Brazil

• 1st National Communication Inventory of
• Brazilian GHG Emissions in 1990-1994
• CO2 emissions from LULUCF three times higher
  than emissions from the energy system
• GHG emissions from cattle raising activities
  nearly equal to CO2 emissions from fossil fuels
• Medium and long-term prospects
• CO2 emissions from energy will be dominant

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Challenges in Land-use Change Emissions

• Deforestation drivers go far beyond economic
  factors
• Key drivers from social policies
• Lack of access to land x agrarian reform
• Governance
• land-use planning x enforcement of laws
  regulations
• How far will Amazon deforestation go?
• Huge potential for reforestation of degraded land
  (30 million hectares).

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Energy demand and Intensity
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Domestic Energy Supply
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Primary Energy Consumption2002
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Domestic Energy Supply (DES) 2002
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CO2 Emissions from Energy
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CO2 Emissions from Energy - 2002
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Sectoral Emissions
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Brazilian Electrical System
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Electricity Generation Capacity in 2002 (Grid)
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Carbon Intensity
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Scenarios
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Driving Forces

• Demography
• Economy
• International Oil Price
• Technology
• Energy Policy

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GDP and Population
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Demographic Indicators
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Methodological Tools Economy
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Income Distribution in A2
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Income Distribution in B2
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Structure of the economy in A2
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Structure of the economy in B2
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Methodological Tools Energy Demand
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Methodological Tools Energy Supply
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Scenario Assumptions for Industrial Sectors
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A2 Scenarios Energy Consumption Industry
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B2 Scenarios Energy Consumption Industry
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CO2 Emissions from the use of Fossil Fuels in
Industry
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Transportation AssumptionsLight Vehicles
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A2 Scenarios Light Vehicles
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B2 Scenarios Light Vehicles
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CO2 Emissions from Light Vehicles
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Transportation Assumptions Heavy Duty Vehicles
1 /3
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Transportation Assumptions Heavy Duty Vehicles
2 / 3
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Transportation Assumptions Heavy Duty Vehicles
3 /3
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A2 Scenarios Heavy Duty
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B2 Scenarios Heavy Duty
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CO2 Emissions from Heavy Duty
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Assumptions for Residential Sector (Households)
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A2 Scenarios Households
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B2 Scenarios Households
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CO2 Emissions from the use of Fossil Fuels in
Households
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Assumptions for the Services Sector (includes
Commerce, Communications, Private and Public
Services)

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Energy Consumption from Services Sector
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CO2 Emissions from the use of Fossil Fuels in the
Services Sector
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Results for Power Sector
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CO2 Emissions from Power Sector
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MAC Curves Power Sector
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Total CO2 Emissions - Energy System
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Conclusion Additional Policies

• Energy efficiency in industry and transport
• Natural gas in industry residential and
  commercial sectors
• Hydropower potential to be tapped
• Ethanol domestic production exports
• Biodiesel in transport sector
• Renewable power generation in remote areas
  (access to electricity for rural population)

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Main Methodological Issues in the Brazilian
Context

• Reliability of Economic Data
• hyperinflation from late 70s to 1994
• uncertainties on input/output coefficients,
  price elasticities, interest rates
• skewed income distribution
• informal economy
• Specificities of National Circumstances
• energy resources endowment relevance of
  hydropower (250,000 MW, only 20 tapped) and of
  biomass (wood, charcoal, ethanol from sugarcane,
  vegetal oils)
• relevance of emissions from land-use change
  deforestation is the most important source in
  the short term

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Arbitrary Exogeneous Assumptions

• 1) Technical Change in Energy and Non-Energy
  sectors
• Capital stock turnover
• Autonomous energy efficiency improvements AEEI
  (particularly Government and household AEEI)
• Fuel mix electricity, oil products, gas, biomass
  x consumption patterns from different income
  distributions
• 2) General Economic Theoretical Background
• Labour productivity growth
• Types of production functions

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Treatment of Market Imperfections

• Methodological challenge are short-term market
  imperfections temporary or need structural change
  in the modeling? How far will power sector
  reforms go ? How long will it take to achieve
  them?
• Different agents have different expected returns
  on investments (eg natural gas x oil, power
  generation from sugarcane bagasse x increased
  sugar and/or ethanol production)
• Financial constraint upfront costs x financial
  market imperfections

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Relevance of Biomass in Brazil

• Share in total energy supply 30 (2004)
• Main biomass energy resources wood, charcoal,
  sugarcane bagasse, rice husks, ethanol from
  sugarcane, vegetal oils, biodiesel
• Agricultural land availability
• Land used by agriculture sector 50 million ha
• Land used by sugar cane crops 5 million ha
• Estimated land for ethanol production 2.5
  million ha
• Total Brazilian agricultural land 140 million ha
  (exclusive of land suitable for forest
  plantations)
• Land still available for agriculture 90 million
  ha.

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Challenges for addressing Bioenergy

• Disaggregation of biomass primary resources and
  secondary fuels
• Links between biofuels and international
  commodities markets (eg ethanol x sugar,
  biodiesel x castor oil, palm oil, soybeans)
  effects of price subsidies, WTO rounds, large
  scale bioenergy programs on international prices
  of feedstocks and final products.

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Challenges in Land-use Change Emissions

• Deforestation drivers go far beyond economic
  factors
• Key drivers from social policies
• Lack of access to land x agrarian reform
• Governance
• land-use planning x enforcement of laws
  regulations
• How far will Amazon deforestation go?
• Huge potential for reforestation of degraded land
  (30 million hectares).

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Conclusions and Recommendations

• Highlights of some key issues, not an exaustive
  recollection (need for systematic treatment of
  different methodological challenges)
• Further research needed for improvement of model
  treatment of these issues
• Expert judgement is crucial to adapt modeling
  frameworks to different regional contexts.