Climate Change Mitigation in Latin America:

Policy implications for Brazil, Colombia, Mexico, and Colombia

James Falzon, Tom Kober

Our Common Future under Climate Change (CFCC)

International Scientific Conference, 7-10 July 2015, Paris, France

Supported by Supported by

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Informing national and international policy making, and INDC development

CLIMACAP POLICY RELEVANCE

• A set of policy briefs (11) has been produced to communicate the most policy relevant findings of the academic research published in Energy Economics.

• Cover topics such as technology pathways, investments, LULUCF, as well as national deep dives.

• In this presentation, I will present some of the key findings from the national level policy briefs:– Argentina

– Brazil

– Colombia

– Mexico

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Scenario Description

Core baseline Business-as-usual scenario including climate and energy policies enacted prior to 2010.

Policy baseline Business-as-usual scenario including “Copenhagen pledges” enacted since 2010.

Low CO2 price A carbon tax is levied of 10 $/tCO2e in 2020, growing at 4%/yr to reach 32$/tCO2e in 2050.

High CO2 price A carbon tax is levied of 50 $/tCO2e in 2020, growing at 4%/yr to reach 162$/tCO2e in 2050.

20% abatement (GHG) GHG emissions, excluding LUC CO2, are reduced by 5% in 2020, linearly increasing to 20% in 2050, w.r.t. 2010.

50% abatement (GHG) GHG emissions, excluding LUC CO2, are reduced by 12.5% in 2020, linearly increasing to 50% in 2050, w.r.t. 2010.

20% abatement (FF&I) Fossil fuel and industrial CO2 emissions are reduced by 5% in 2020, linearly increasing to 20% in 2050, w.r.t. 2010.

50% abatement (FF&I) Fossil fuel and industrial CO2 emissions are reduced by 12.5% in 2020, linearly increasing to 50% in 2050, w.r.t. 2010.

650 concentration Global radiative forcing is kept below 4.5 W/m2 (650 ppmv CO2e) throughout the century.

550 concentration Global radiative forcing is kept below 3.7 W/m2 (550 ppmv CO2e) throughout the century.

450 concentration Global radiative forcing is brought to 2.6 W/m2 (450 ppmv CO2e) by 2100 (concentration can overshoot before 2100).

A wide range of different baseline and mitigation scenarios were explored

SCENARIOS

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Options and pathways to reduce emissions in the Argentinian energy sector

POLICY BRIEF: ARGENTINA

• According to Argentina’s Second National Communication, the energy sector’s share of total greenhouse gas (GHG) emissions grew from 48% in 1990 to 55% in 2000 (SAyDS, 2007).

• Under a business-as–usual projection, energy sector emissions are expected to continue to grow rapidly in the coming years, at 3% per year, from approximately 155 MtCO2e in 2010 to 520 MtCO2e in 2050.

• What measures are available to Argentina to reduce emissions reductions in the energy sector, and what are the implications of ambitious climate policies for Argentina?

Nicolás Di Sbroiavacca, Gustavo Nadal, Francisco Lallana (FundaciónBariloche), James Falzon (ECN) and Katherine Calvin (PNNL)

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Options and pathways to reduce emissions in the Argentinian energy sector

POLICY BRIEF: ARGENTINA

Figure 1: Primary energy for core baseline and 20% abatement vs 2010 levels (di Sbroiavacca et. Al., 2015)

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Implications of different climate policy scenarios for the Brazilian energy sector

POLICY BRIEF: BRAZIL

• Brazil already has a relatively low-carbon energy supply. In 2013, more than over 40% of all primary energy produced in the country came from renewable sources, a value that is relatively high compared to the world average of around 13%.

• However, the country has nearly exhausted its environmentally feasible hydropower potential. To meet growing demand stemming from socioeconomic development, Brazil is expected to increase fossil fuel use, especially in light of recent oil discoveries in the pre-salt fields and the possibility of increased coal & gas-fired power generation. To avoid a higher emissions energy sector, low-carbon policies are needed.

• How does Brazil’s energy system respond to carbon taxes and absolute emissions reduction targets?

André F. P. Lucena, Leon Clarke, Roberto Schaeffer, Alexandre Szklo, Pedro R. R. Rochedo, Larissa P. P. Nogueira, Kathryn Daenzer, Angelo Gurgel, Alban Kitous, Tom

Kober

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Implications of different climate policy scenarios for the Brazilian energy sector

POLICY BRIEF: BRAZIL

Figure 2: Electricity generation mix under business-as-usual and ‘high’ carbon price scenarios (Lucena et. Al., 2015)

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Achieving CO2 reductions in Colombia: Effects of carbon taxes and abatement targets

POLICY BRIEF: COLOMBIA

• Colombia has a relatively low-carbon energy matrix due to the high share of hydropower.

• Models suggest that this is likely to change in future, with Colombia to become a much higher emitter, under weak (or absent) climate policy measures.

• Policy measures would need to be introduced to avoid a higher-carbon energy matrix.

• How does Colombia’s energy system respond to carbon taxes and absolute emissions reduction targets?

Silvia Calderon, Andres Camilo Alvarez, Ana Maria Loboguerrero, Santiago Arango, Katherine Calvin, Tom Kober, Kathryn Daenzer, Karen Fisher-Vanden

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Achieving CO2 reductions in Colombia: Effects of carbon taxes and abatement targets

POLICY BRIEF: COLOMBIA

Figure 3: Primary energy composition (left scale) and consumption (right scale). (Calderon et. Al., 2015)

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Pathways to Mexico’s climate mitigation targets: A multi-model analysis

POLICY BRIEF: MEXICO

• Mexico’s climate policy sets ambitious reduction targets: 30% versus a business-as-usual baseline by 2020, 50% versus 2000 by 2050.

• These goals are at odds with recent energy and emissions trends in the country, as both have grown substantially over the last two decades.

• What are potential pathways to reverse current trends and reach Mexico’s targets, based on energy system and economic modelling?

Jason Veysey, Claudia Octaviano, Katherine Calvin, Sara Herreras Martinez, Alban Kitous, James McFarland, Bob van der Zwaan

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Pathways to Mexico’s climate mitigation targets: A multi-model analysis

POLICY BRIEF: MEXICO

Figure 4: Electricity generation in 2050 by technology and scenario (Veysey et. Al., 2015)

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Policy implications of CLIMACAP for major Latin American economies

GENERAL CONCLUSIONS

• Most Latin American countries have a low carbon economy today.

• Due to an increase in economic activity and future limitations regarding deployment of low-carbon & low-cost energy sources, energy intensity might grow.

• GHG emission mitigation options are diverse across countries (RE / LULUCF / CCS).

• Within countries, several pathways exist, depending on assumptions regarding costs, trade, technology development & penetration, amongst others.

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James FalzonPolicy Studies | Global Sustainability

falzon@ecn.nl

Special issue in Energy Economics, and Policy briefs to be published soon!

Visit www.climacap.org

Thank you for your attention

The research that allowed the publication of this paper has been produced with the financial assistance of the European Union in the context of the CLIMACAP project (EuropeAid/131944/C/SER/Multi) and of the U.S. Agency for International Development and U.S. Environmental Protection Agency in the context of the LAMP project (under Interagency Agreements DW89923040 and DW89923951US). The contents of this publication are the sole responsibility of the authors and can in no way be taken to reflect the views of the European Union or the U.S. government. The authors would like to thank the feedback and efforts from all CLIMACAP and LAMP project partners for enabling the research results reported here.