© OECD/IEA 2010 Energy and climate policy Richard Baron, head of Climate Change Unit, IEA IEA-FTS of Russia Workshop on Global Energy Market Scenarios Paris, 27 May 2010 [email protected]
Dec 23, 2015
© OECD/IEA 2010
Energy and climate policy
Richard Baron, head of Climate Change Unit, IEA
IEA-FTS of RussiaWorkshop on Global Energy Market Scenarios
Paris, 27 May 2010
© OECD/IEA 2010
IEA climate policy work
International climate policy after Copenhagen
Domestic policy choices for effective CO2 emission reductions
© OECD/IEA 2010
IEA climate change policy work
Advise UNFCCC process Climate Change Expert Group (formerly Annex I Expert Group
on the UNFCCC) Technical input to negotiations since 1994 After Copenhagen: focus on carbon market mechanisms and
reporting
Projects on energy and climate Design of domestic emissions trading systems Combining policy tools for least-cost climate strategies Nuclear power in a carbon constrained world Policy options for low-carbon electricity in China Monitoring progress in climate policy
Climate / energy efficiency / renewables policy databases
Evolution of CO2 emissions from power generation
© OECD/IEA 2010
International climate policy
Copenhagen did not deliver a full international climate policy framework
The Copenhagen Accord takes several steps forward
More is needed
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The Copenhagen Accord (1)
Increase in global temperature should be below 2oC
Aim of peak in global and national emissions “as soon as possible”
“Annex I” (developed) countries to set emissions targets for year 2020
Financing: Fast-track USD30 billion (2010-12) plus USD100 billion a year by 2020
The use of markets to pursue cost-effective mitigation actions
Technology mechanism
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The Copenhagen Accord (2)
“Non-Annex I” (developing) countries will implement mitigation actions by 2020 (pledges submitted)
Domestic monitoring, reporting and verification (MRV) for unilateral actions, with international consultation
Actions seeking international support to be recorded in a registry and subject to international MRV
Non-Annex 1 countries:
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World abatement emissions in the 450 ScenarioExcerpt from IEA Press Conference at COP15
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Source: IEA analysis based on pledges as of January 2010, and World Energy Outlook 2009
Current pledges point in the right direction but further efforts needed to close the gap and to reach the 450 Scenario for 2oC
26
28
30
32
34
36
38
40
42
2007 2010 2015 2020 2025 2030
Gt
450 Scenario
Reference Scenario
OECD+
OME
OC
3.8 Gt
13.8 Gt
27
29
31
33
35
2007 2010 2015 2020
Gt
Reference Scenario
450 Scenario
Current Pledges
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What is needed next, what is missing?
Resolve the future of the Kyoto Protocol and its carbon market instruments
How to get from current unilateral pledges to a more coordinated response to achieve the 2oC goal?
How to best support CO2 emission reductions in emerging economies?
Engage economies on a low-carbon development path – a true energy revolution
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World energy-related CO2 emissions and reductions per region and activity in 450 scenario
The mitigation challenge is daunting – 3.8 GtCO2 needed by 2020 in the energy sector alone globally, with much mitigation to
take place in emerging economies
Source: Early excerpt of WEO 2009 for Bangkok UNFCCC meeting2007 2015 2020 2025 2030
26
28
30
32
34
36
38
40
42
450 Scenario
Reference Scenario
OECD+
Other Major Economies
Other Countries
3.8 Gt
13.8 Gt
Nuclear– 10%
CCS – 10%
Efficiency – 45%
Renewables & biofuels – 21%Nuclear– 13%
CCS – 20%
Efficiency – 67%
Renewables & biofuels – 19%Nuclear – 8%
CCS – 6%Efficiency – 55%
Renewables & biofuels – 34%Nuclear– 9%
WorldBy regionAbatement by technology, 2030
Efficiency – 57%
Renewables & biofuels – 23%
Source: World Energy Outlook, IEA 2009
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What is in the policy tool-kit? Carbon pricing (tradeable emission permits / carbon
taxes)Relative energy prices must be changed if we are to achieve the
decarbonisation of energy systems
Energy efficiency policy measuresOur energy services can be met with much less primary energy,
and often at lower cost. How?
Targeted support to low-carbon technologiesRenewablesNuclearCarbon capture and storage
Targeted tool-kit for each technology, based on maturity and cost-competitiveness, and general market conditions
Domestic climate policy
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Carbon pricing: the EU Emissions Trading System More than 11,000 installations have been allocated a CO2
emissions goal – and corresponding CO2 allowances (EUAs)
27 countries. Power generation and heavy industry only = 45% of EU greenhouse gas emissions)
Penalties for non-compliance: EUR 40-100/tCO2
Three phases Trial: 2005-2007. Some over-allocation to industry Current (Kyoto): 2008-2012. Crisis affects industrial activity and
lowers CO2 price 2013-2020: Evolution towards auctioning of allowances (i.e.
government revenues). Reduction goal: -21% from 2005
Concerns: long-term price signal / competitiveness
Australia, Brazil, Japan, Korea, Mexico, New Zealand, US are considering adopting Emissions Trading Systems
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A price on CO2 now guides energy investments in Europe
Today’s EU electricity prices: EUR 50/MWhEUR 15/tCO2 adds about EUR 13/MWh for a coal-based plant
CO2 now a key component in EU electricity prices
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Energy efficiency: a prerequisite At the core of an effective response to reduce CO2
A large potential for cost-effective energy savings exist in all countries / economies
It is critical to tap that potential to allow cleaner, more expensive energy carriers needed for decarbonisation
Consumers face significant barriers (information, split incentives, transaction costs, access to capital)A CO2 price alone not likely to break these barriers
Targeted policy tools are neededMinimum energy performance standardsLabelling of end-use equipment (electric appliances)Fiscal measures
Check IEA 25 concrete recommendations on energy efficiency to G8 and progress to date:
http://www.iea.org/G8/docs/Efficiency_progress_g8july09.pdf
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Summarising challenges & opportunities
Still lacking an international framework to enhance the ambition of climate policy goals A matter for the international negotiation only?
Domestic climate policy is moving along in many developed and developing countries Climate policy goals are an integral part of energy policy in most
developed countries
Interest in the ‘upsides’ of climate policy for energy goals Lower reliance on fossil fuels and less tensions on international
markets Lower local pollution and improve air quality Lower energy cost through energy efficiency-driven savings
How to best manage the transition to low-carbon? Significant infrastructure change (e.g. to decarbonise electricity) How can all economic activities survive under a CO2 constraint? How to
manage winners and losers? Finding least-cost combinations of policies is essential for sustainable
climate policy