mitigation of greenhouse gases: an overview ms&e 290 public policy analysis march 4, 2004
TRANSCRIPT
Mitigation of Greenhouse Gases:An Overview
MS&E 290
Public Policy Analysis
March 4, 2004
Cost/Benefit Modeling Approach:Balancing the Costs of Controlling Carbon Emissions Against the Costs of the Climate impacts They Cause
Value/Cost
of Emissions Reductions
Carbon Emissions
Marginal Cost of Climate Impacts
Marginal Cost of Emissions Control
MarginalCost/Price
($/ton)
Figure 1. Supply and Demand for Energy/Carbon
S
D
Pe or Pc
Qe or Qc
Tax
Use Energy Models to Project Costs of Mitigating Carbon Emissions
Types of Costing Models
• Process Engineering– Individual Technologies Represented– Need to Add in Market and Economy Wide Effects
• Energy Market Models– Bring in Energy Market Feedbacks– Weaker on Technology
• General Equilibrium Models– Bring in Economy-Wide Feedbacks– Weaker on Energy Markets and Technology
Five Key Factors Determine Projections of the Cost of Greenhouse Gas Emission Reductions.• Some of these factors concern how the economy will
adjust to policies designed to reduce GHG emissions.• Baseline Emissions
• The Policy Regime
• The Benefits of Emissions Reductions
• But others are external to the representation of the economic adjustment process and prescribe the conditions under which the adjustments must occur.
• Economic Substitution
• Technological Change
Important Determinants of the Costs of Controlling Carbon Emissions
Value/Cost
of Emissions Reductions
Carbon Emissions
More Economic Growth
More Macro Rigidities
More FactorSubstitutionMore Product Substitution
More Emissions Trading
Other Important FactorsTechnological ChangeRevenue RecyclingTrade EffectsAncillary/Co-Benefits
Four Kinds of Mitigation Policy Flexibilities
• Where Flexibility
• When Flexibility
• How Flexibility
• What Flexibility
MCa
RaRa,t
MCb
Rb Rb,t
Ta
Ta,t
Tb,t
Tb
Ra, Ra = Emission Reduction Targets for Country A and Country B.
MCa, MCb = Marginal Cost of Reducing Emissions for A and B.
Emission Reductions
Ta, Tb = Required Carbon Taxes Before Trading.Ra,t, Rb,t = Emission Reductions With
Trading.Ta,t, Tb,t = Carbon Tax With Trading.
Two Country Example of International Emissions Trading
Supply/Demand For Emissions Rights
Price
Quantityof Emissions Rights Traded
Supply of Emissions Rights
Demand for Emissions Rights
Regions That Have Reduction Obligations Motivating Them to Consider International Emissions Trading
Under the Kyoto Protocol
ANNEX I = ANNEX II plus Economies in TransitionANNEX I = ANNEX II plus Economies in Transition
1996 Carbon Emissions(6206 Million Metric Tons)
1687
1517613
228
805
230
1126 United States
Other Developed
Former Soviet Union
Eastern Europe
China
India
Other Developing
Projected 2100 Carbon Emissions(22,923 Million Metric Tons)
4584
4083
1856758
5161
1955
4526 United States
Other Developed
Former Soviet Union
Eastern Europe
China
India
Other Developing
4 Assumptions About International Emissions Trading
4 Assumptions About International Emissions Trading
• No emissions trading.
• Trading within Annex 1 only.
• Double Bubble. – separate EU and rest of Annex 1 trading blocks.
• Full global trading.
Benefits of International Emissions Trading
Year 2010 Carbon Tax Comparision for the United States
0
50
100
150
200
250
300
350
400
450
Ox
ford
AB
AR
E-G
TE
M
NE
MS
ME
RG
E3
MS
-MR
T
MIT
-EP
PA
SG
M
CE
TA
MA
RK
AL
-Mac
ro
AIM
RIC
E
Wo
rld
Sca
n
G-C
ub
ed
Model
Ca
rbo
n T
ax
(1
99
0$
US
/me
tric
to
n)
No Trading Annex I Trading Double Bubble Global Trading
Four Kinds of Mitigation Policy Flexibilities
• Where Flexibility
• When Flexibility
• How Flexibility
• What Flexibility
The Emissions Mitigation ChallengeThe Emissions Mitigation Challenge
Time
EmissionsBase Case Emissions
Controlled Emissions
Target
Target Time
0
5
10
15
20
25
1990 2040 2090 2140 2190 2240 2290 2340
Ind
ustr
ial Em
issio
ns
(GtC
/yr)
IS92aWRE-550WG1-550
Alternative Emission Paths for Stabilizing Atmospheric Concentrations of CO2 at 550 ppmv
(Parts Per Million by Volume)
Global Consumption Losses through 2100 Discounted to 1990 at 5% --
Kyoto Forever Vs. Three Scenarios for Stabilizing Concentrations at 550ppmv
0
500
1000
1500
2000
2500
Kyoto forever Kyoto followed by
arbitrary reductions
Kyoto followed by least-cost
least-cost
Bill
ion
s o
f 19
90 d
olla
rs
Results in 663 ppmv
Result in 550 ppmv
Four Kinds of Mitigation Policy Flexibilities
• Where Flexibility
• When Flexibility
• How Flexibility
• What Flexibility
0.00
200.00
400.00
600.00
800.00
1000.00
1200.00
1400.00
1600.00
1800.00
Exaj
oule
s
AIM
DNE
2100
GR
APE
MA
RIA
MIn
iCAM EP
PA
IIASA
IMA
GE
Model
World Primary Energy in 550 ppm Case in 2100
OtherBiomassWindSolarNuclearHydroCoalGasOil
Table 1: Technology Assumptions Year 2100
Technology units 1990 Base
Mini-CAM B2
Mini-CAM B2
AT US Automobiles mpg 18 60 100
Land-based Solar Electricity 1990 c/kWh 61 5.0 5.0 Nuclear Power 1990 c/kWh 5.8 5.7 5.7
Biomass Energy 1990$/gj $7.70 $6.30 $4.00
Hydrogen Production (CH4 feedstock) 1990$/gj $6.00 $6.00 $4.00 Fuel Cell mpg (equiv) 43 60 98
Fossil Fuel Power Plant Efficiency (Coal/Gas) % 33 42/52 60/70 Capture Efficiency % 90 90 90
Carbon Capture Power Penalty (Coal) % 25 15 5 Carbon Capture Power Penalty (Gas) % 13 10 3 Carbon Capture Capital Cost (Coal) % 88 63 5 Carbon Capture Capital Cost (Gas) % 89 72 3
Geologic Disposal (CO2) $/tC 37.0 37.0 23.0
The VALUE OF DEVELOPING ENERGY TECHNOLOGY
(Present Discounted Costs to Stabilize the Atmosphere)
Minimum Cost Based on Perfect Where & When
Flexibility Assumption.
Actual Cost Could be An
Order of Magnitude
Larger.BAU(1990)
BAU(Tech+)advancedtechnology
550
650
750
$1
$10
$100
$1,000
$10,000
$100,000
Presen
t Discou
nted
Cost, B
illions of 1990 U
S $
Technology Assumption
Steady-State CO2
Concentration (ppmv)
Battelle Pacific Northwest Laboratories
Global Climate and Energy Project (GCEP)
• A new project has been established at Stanford, with industry support
• (ExxonMobil, Schlumberger, GE, and Toyota), to investigate how to reduce emissions of greenhouse materials.
• The approach: look broadly across primary energy sources, transformations, and uses.
• Ask where university-based pre-commercial research can reduce barriers to implementing energy systems that have substantially lower greenhouse emissions.
Solar Energy
Photolysis Center
H+
O2
e-
H2O e-
Hydrogenase
H2
Reduced Ferredoxin
Oxidized Ferredoxin
Biological Hydrogen Production: Complete Pathway in Each Cell
Controlled Combustion
Controlled Combustion
Controlled Combustion
The Concept:
Unstable Combustion
Controlled Combustion Concept
High-TFlame
ConventionalFlame
Air Temperature.>800C
Conventional FlameCombustion
Dilution by combustion products, N2 or CO2
Air Temperature < 600C
Geologic Storage of CO2
• Use CO2 to recover methane in coal beds.
• Dissolve CO2 in deep aquifers that contain salt water.
• Inject CO2 to recover oil and gas.
• Volumes are very large: 1 GtCO2/yr = 25 million B/D.
Four New GCEP Projects
• Nanoengineering of Hybrid Carbon Nanotube – Metal Nanocluster Composite Materials for Hydrogen Storage (Cho, Clemens, Dai, and Nilsson)
• The Potential Effects of Hydrogen Fuel Cell Use on Climate, Stratospheric Ozone, and Air Pollution (Jacobsen and Golden)
• Solid-State NMR Studies of Oxide Ion Conducting Ceramics for Enhanced Fuel Cell Performance (Stebbins)
• Nanostructured Photovoltaic Cells for Electrolytic Creation of Hydrogen (McGehee)
Four Kinds of Mitigation Policy Flexibilities
• Where Flexibility
• When Flexibility
• How Flexibility
• What Flexibility
Why Multi-gas Mitigation?
2000 Global Net Emissions of CO2, CH4, N2O, F gases,and LUCF (Total 10,863 MMTCE)
Source: IEA 2002, CDIAC 2002, & EMF 21
F gases1%
CO2 - Fuel and
cement56%
N2O
9%
CH4
15%
CO2 - LUCF
19%
Non-Fuel CementEmissions = 44%
Non-CO2 GHG
Emissions = 25%
Atmospheric CO2 Concentration in Two Policy Scenarios:Stabilization With CO2 Only and Multi-Gases
300
350
400
450
500
550
600
2000 2025 2050 2075 2100
ppm
v C
O2
GRAPE [CO2]
IMAGE [CO2]
MERGE [CO2]
MESSAGE [CO2]
MiniCAM [CO2]
GRAPE [Multi]
IMAGE [Multi]
MERGE [Multi]
MESSAGE [Multi]
MiniCAM [Multi]
Atmospheric Methane Concentration in Two Policy Scenarios:Stabilization With CO2 Only and Multi-Gases
1000
1500
2000
2500
3000
3500
2000 2025 2050 2075 2100
ppb
v M
eth
ane
GRAPE [CO2]
IMAGE [CO2]
MERGE [CO2]
MESSAGE [CO2]
MiniCAM [CO2]
GRAPE [Multi]
IMAGE [Multi]
MERGE [Multi]
MESSAGE [Multi]
MiniCAM [Multi]
Carbon Permit Price ($USD 2000/tC) in CO2-Only Scenario
$0
$500
$1,000
$1,500
$2,000
$2,500
2000 2025 2050 2075 2100
AMIGA
EDGE
GEMINI-E3
IMAGE
MERGE
MESSAGE
MiniCAM
SGM
Carbon Permit Price ($USD 2000/tC) in Multigas Scenario
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
2000 2025 2050 2075 2100
AMIGA
CICERO
EDGE
GEMINI-E3
IMAGE
MERGE
MESSAGE
MiniCAM
SGM