Recent developments at CIAM Markus Amann International Institute for Applied Systems Analysis.

Recent developments at CIAM

Markus AmannInternational Institute for Applied Systems Analysis

Issues

• Revision of the NEC Directive

• Revision of the Gothenburg Protocol

• New GAINS features to model energy efficiency improvements and fuel substitution

• Marginal costs of GHG mitigation in Annex1 countries

Revision of the NEC directive

• NEC report #6 published in July 2008

• Commission has postponed proposal on NEC until further notice

• New call for tenders for NEC follow-up analysis published – without specific dates for calculations

• New PRIMES 2009 baseline will be released in June 2009; will be used for EC4MACS interim assessment

Revision of the Gothenburg Protocol

• Call for national energy projections – deadline May 31, 2009.For appropriate format: contact Janusz Cofala

• Baseline projection for WGSR in September 2009; traditional GAINS analyses will be complemented by quantifications of impacts by the various WGE Task Forces and Centres

• Set of emission control scenario calculations for EB December 2009

EC4MACS schedule

• Model documentations are now on the Internet (www.ec4macs.eu)

• Internet consultation on methodology has been started – deadline for comments: June 15, 2009

• Interim assessment (full model chain with recent PRIMES + CAPRI baseline projections): August 31, 2009

• EC4MACS review workshop (together with Task Force on Integrated Assessment Modelling): October 2009

Marginal cost curves for GHG mitigation

• GAINS has been used compare GHG mitigation efforts between Annex 1 countries,

• all gases and sectors,

• at detailed technical level (several 100 source categories, 300+ mitigation measures, etc.)

• systems approach (integrated perspective covering demand and supply sectors),

• consistent with UNFCCC 2005 inventories

• Results, input data and an interactive calculator freely available in the public domain:

http://gains.iiasa.ac.at

New GAINS structure for domestic sectorto facilitate assessment of energy efficiency improvements

Separate treatment of Residential and Commercial energy useNeeds distinguished: – Space heating + ventilation + Air conditioning (HVAC)– Water heating– Cooking– Lighting– Large appliances– Small appliances,

Up to 10 climate regions, Flats/Single family houses,Built before/after 2010,For each source category:– Up to 3 efficiency stages – Switch to less carbon-intensive fuels (coal to gas or biomass, solar…), – District heat with CHP instead of local boilers

New GAINS structure for industrial sectorto facilitate assessment of energy efficiency improvements

- Iron and steel• Raw steel, Finished products, Scrap, Coke oven coke, Sinter, Pellets, Pig iron,

Direct reduced iron, Open hearth furnace, Basic oxygen, Electric arc furnace, Casting, rolling finishing, Thin slab casting, Other

– Non-ferrous metals• Aluminum (primary, secondary), Other metals (primary, secondary), Other

– Non-metallic minerals– Cement (of which clinker), Lime, Other– Chemicals

• Ammonia, Ethylene, Chlorine, Other

– Pulp and paper• Pulp (from wood, from recovered paper), Paper and paperboard, Other

– Other industries

Changes in production structure (e.g., primary vs. secondary metals, clinker content in cement) included in the baseline

Estimating mitigation potentialsFour steps

a) Inventory of ~300 mitigation measures, with technical and economic features

Mitigation measures ~300 options in each country

Structural measures CO2 measures N2O measures

F-gas measures

CH4 measures

Estimating mitigation potentialsFour steps

a) Inventory of ~300 mitigation measures, with technical and economic features

For each source sector in each country:

b) For 2005: Match emissions reported to UNFCCC

– with activity data from UNFCCC, IEA and national statistics,

– adjust implementation rates of mitigation measures.

Estimating mitigation potentialsFour steps

a) Inventory of ~300 mitigation measures, with technical and economic features

For each source sector in each country:

b) For 2005: Match emissions reported to UNFCCC

c) For 2020:

• Match baseline energy use of IEA World Energy Outlook 2008

- with activity rates projected by IEA modify implementation rates of energy efficiency measures to reproduce IEA energy projection.

• Develop baseline emission projection

- adjust implementation rates of mitigation measures as reported in National Communications.

Estimating mitigation potentialsFour steps

a) Inventory of ~300 mitigation measures, with technical and economic features

For each source sector in each country:

b) For 2005: Match emissions reported to UNFCCC

c) For 2020: Match baseline energy use and develop baseline emission projection

d) Determine further mitigation potential– from implementing the best available (energy efficiency and C mitigation)

measures that are not assumed in the baseline,– considering constraints on replacement of existing capital stock, structural

limits, etc.

Energy intensity of ethylene production

0

5

10

15

20

25

30

Australia Canada EU J apan New Zealand Russia Ukraine USA

GJ/

t Eth

yle

ne

2005 Change to 2020 implied in WEO2008

Energy intensity of ethylene production

0

5

10

15

20

25

30

Australia Canada EU J apan New Zealand Russia Ukraine USA

GJ/

t Eth

yle

ne

Best practice 2005 Change to 2020 implied in WEO2008

Efficiency frontier

Estimating mitigation costsThree steps:

1. Determine unit costs for each mitigation option:

– Annualized investments + operating costs – savings per unit of reduced emissions

– Reflect resource costs without transfers (no taxes, subsidies, profits, transaction costs, etc.)

– Alternative interest rates for annualization of investments:

• Social (4%/yr)

• Private (20%/yr)

2. For a given mitigation target:

- Determine least-cost portfolio of mitigation measures (i.e., including upstream effects), through optimization model

3. Cost curves: Series of optimizations between baseline emissions and maximum mitigation case

Marginal abatement cost curveAnnex I in 2020, 20% interest rate, excl. LULUCF

Analysis not completed yet for: Belarus, Croatia, Turkey, Cyprus, Malta

+7% +2% -3% -10% -16%

200

100

0

-100

-200 +3% -2% -7% -13% -20%

Rel. to 2005

Rel. to 1990

Car

bon

pric

e (€

/t C

O2e

q)

Baseline emissions

Maximum mitigation

case

Technical potential

Market potential(at 20% interest rate)

An initial implementation

• For largest Annex 1 countries (98% of 1990 emissions), EU27 presented in aggregate

• Based on activity projections of IEA World Energy Outlook 2008 and FAO World Agriculture Perspective

• Key assumptions:– Only currently available technologies– Natural turnover of capital stock, no premature scrapping– No behavioural changes– Domestic measures only– LULUCF excluded for now

• Initial analysis compiled from publicly available information, received only limited review by national experts up to now

Baseline GHG emissions projectionsfor IEA WEO2008 projection

40%

60%

80%

100%

120%

140%

160%

1990 2005 2020Yea r

Em

issi

on

s re

lati

ve t

o 1

990

A us tralia

New Z ealand

Canada

Norw ay

United S tates of A meric a

S w itz erland

J apan

A nnex-I

EU27

Rus s ian Federation

Ukraine

Analysis not completed yet for: Belarus, Croatia, Turkey, Cyprus, Malta

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

-25%-20%-15%-10%-5%0%5%

Emissions relative to 1990

Tota

l co

st (

% o

f G

DP2

02

0) 20%

4%

Total costs for GHG mitigation, Annex 1, 2020 for different interest rates (excl. LULUCF)

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

-25%-20%-15%-10%-5%0%5%

Emissions relative to 1990

Tota

l co

st (

% o

f G

DP2

02

0) 20%

4%

-0.2%

-0.1%

0.0%

0.1%

0.2%

0.3%

0.4%

-60%-50%-40%-30%-20%-10%0%10%20%30%40%50%

Emissions relative to 1990

Tota

l co

st (

share

of

GD

P2020)

Total cost curves for 2020 (% of GDP) (10% interest rate, excl. LULUCF)

AUS NZ CA NO US CH JP EU

RU UKR

Comparison of mitigation effortsfor a 16.5% reduction of total Annex 1 emissions Efficiency vs. equity

AUCAEUJPNZNORUCHUKRUS

Change Per- Carbon Costs Costs per-to 1990 capita price % GDP capita

AUCAEUJPNZNORUCHUKRUS

Change Per- Carbon Costs Costs per-to 1990 capita price % GDP capita

AUCAEUJPNZNORUCHUKRUS

Change Per- Carbon Costs Costs per-to 1990 capita price % GDP capita

AUCAEUJPNZNORUCHUKRUS

Change Per- Carbon Costs Costs per-to 1990 capita price % GDP capita

On-line calculator on the Internethttp://gains.iiasa.ac.at/MEC

Co-benefits on air pollutant emissionsAnnex 1, 2020

-15%

-10%

-5%

0%

-15%-10%-5%0%5%

GHG emissions (relative to 1990)

Air

pollu

tion e

mis

sions

rela

tive t

o B

ase

line 2

020

NOxSO2

PM2.5