Regional Analysis

Analyzing the Regional Impact of a Fossil Energy Cap in China

Decoupling fossil energy demand from economic growth is crucial to China’s sustainable development. In addition to energy and carbon intensity targets enacted under the Twelfth Five-Year Plan (2011–2015), a coal or fossil energy cap is under discussion as a way to constrain the absolute quantity of energy used. Importantly, implementation of such a cap may be compatible with existing policies and institutions. We evaluate the efficiency and distributional implications of alternative energy cap designs using a numerical general equilibrium model of China’s economy, built on the 2007 regional input-output tables for China and the Global Trade Analysis Project global data set. We find that a national cap on fossil energy implemented through a tax on final energy products and an energy saving allowance trading market is the most costeffective design, while a regional coal-only cap is the least cost-effective design. We further find that a regional coal cap results in large welfare losses in some provinces. Capping fossil energy use at the national level is found to be nearly as cost effective as a national CO2 emissions target that penalizes energy use based on carbon content.

Assessing the impact of carbon tax differentiation in the European Union

To what extent do the welfare costs associated with the implementation of the Burden Sharing Agreement in the European Union depend on sectoral allocation of emissions rights? What are the prospects for strategic climate policy to favor domestic production? This paper attempts to answer those questions using a CGE model featuring a detailed representation of the European economies. First, numerical simulations show that equalizing marginal abatement costs across domestic sectors greatly reduces the burden of the emissions constraint but also that other allocations may be preferable for some countries because of pre-existing tax distortions. Second, we show that the effect of a single country's attempt to undertake a strategic policy to limit impacts on its domestic energy-intensive industries has mixed effects. Exempting energy-intensive industries from the reduction program is a costly solution to maintain the international competitiveness of these industries; a tax-cum-subsidy approach is shown to be better than exemption policy to sustain exports. The welfare impact either policy — exemption or subsidy — on other European countries is likely to be small because of general equilibrium effects. © 2003 Kluwer Academic Publishers

Beyond 2020 - Strategies and Costs for Transforming the European Energy System

The Energy Modeling Forum 28 (EMF28) study systematically explores the energy system transition required to meet the European goal of reducing greenhouse gas (GHG) emissions by 80% by 2050. The 80% scenario is compared to a reference case that aims to achieve a 40% GHG reduction target. The paper investigates mitigation strategies beyond 2020 and the interplay between different decarbonization options. The models present different technology pathways for the decarbonization of Europe, but a common finding across the scenarios and models is the prominent role of energy efficiency and renewable energy sources. In particular, wind power and bioenergy increase considerably beyond current deployment levels. Up to 2030, the transformation strategies are similar across all models and for both levels of emission reduction. However, mitigation becomes more challenging after 2040. With some exceptions, our analysis agrees with the main findings of the “Energy Roadmap 2050” presented by the European Commission.

© 2013 the authors

Carbon co-benefits of tighter SO2 and NOx regulations in China

Air pollution has been recognized as a significant problem in China. In its Twelfth Five Year Plan, China proposes to reduce SO2 and NOx emissions significantly, and here we investigate the cost of achieving those reductions and the implications of doing so for CO2 emissions. We extend the analysis through 2050, and either hold emissions policy targets at the level specified in the Plan, or continue to reduce them gradually. We apply a computable general equilibrium model of the Chinese economy that includes a representation of pollution abatement derived from detailed assessment of abatement technology and costs. We find that China's SO2 and NOx emissions control targets would have substantial effects on CO2 emissions leading to emissions savings far beyond those we estimate would be needed to meet its CO2 intensity targets. However, the cost of achieving and maintaining the pollution targets can be quite high given the growing economy. In fact, we find that the near term pollution targets can be met while still expanding the use of coal, but if they are, then there is a lock-in effect that makes it more costly to maintain or further reduce emissions. That is, if firms were to look ahead to tighter targets, they would make different technology choices in the near term, largely turning away from increased use of coal immediately.

© 2013 Elsevier Ltd.
 

Carbon Leakage from Sub-national Climate Initiatives: The Case of California

With federal policies to curb greenhouse gas emissions in the US stagnating, California has taken action on its own. We estimate the impact of California’s cap-and-trade program on the leakage of emissions to other regions using a calibrated general equilibrium model. Sub-national policies can lead to high leakage rates as state economies are generally closely connected to other economies, including integration of electricity markets. Measures that will prevent leakage from California’s cap-and-trade program include requiring permits to be surrendered for emissions embodied in imported electricity and legislation banning “resource shuffling”. Under a cap-and-trade policy without measures to reduce leakage, the price of emission permits is $12 per ton of CO2 and emissions in other regions increase by 46% of the reduction in emissions in California. When imported electricity is included in the program and resource shuffling is banned, the carbon price is $65, there is negative leakage to regions exporting electricity to California, positive leakage to other regions and the overall leakage rate is 2%. We conclude that although there is potential for large increases in emissions elsewhere due to California’s cap-and-trade policy, enforcement of requirements for imported electricity will be effective at curtailing leakage.

Characterization of the Solar Power Resource in Europe and Assessing Benefits of Co-Location with Wind Power Installations

The extent, availability and reliability of solar power generation are assessed over Europe, and—following a previously developed methodology—special attention is given to the intermittency of solar power. Combined with estimates of wind power resource over Europe from a companion assessment, we assess the benefits of co-location of solar and wind power installations, particularly with respect to aggregate power generation and local mitigation of intermittency. Consistent with previous studies, our results show that the majority of solar potential is found in southern Europe, which also displays the strongest availability. We also found that higher latitude locations, around central Europe, benefit from medium to high solar power during the warm season. If a region’s availability of solar power is sufficient—as determined by a minimum technological threshold for photovoltaic extraction— it possesses the potential to reduce intermittency by aggregation and interconnection. We find these conditions occurring to a moderate extent over mainland central Europe. Finally, the result of co location of wind and solar power is increased power availability over the whole continent, especially in central Europe where neither resource is strong. In terms of local intermittency mitigation, the regions that benefit most are the Mediterranean and Baltic countries.

Characterization of the Wind Power Resource in Europe and its Intermittency

Wind power is assessed over Europe, with special attention given to the quantification of intermittency.  Using the methodology developed in Gunturu and Schlosser (2011), the MERRA boundary flux data was used to compute wind power density profiles over Europe. Besides of the analysis of capacity factor, other metrics are presented to further quantify the availability and reliability of this resource and the extent to which wind-power intermittency is coincident across Europe. The analyses find that, consistent with previous studies, the majority of European wind power resources are located offshore. The largest  wind power resources at onshore locations are found to be over Iceland, the United Kingdom, and along the northern coastlines of continental Europe. Other isolated pockets of higher wind power are found over Spain and along the Mediterranean coast of France. Overall, the availability of onshore wind power is low and is highly intermittent, while offshore locations show a high degree of persistence. However, for the strongest onshore locations of wind power—primarily over northern coastlines as well as the United Kingdom and Iceland—the evidence indicates that intermittency can be reduced by aggregation and interconnection of wind-power installations. 

Characterization of wind power resource in Australia

The wind resource in Australia has been reconstructed and characterized in terms of its geographical distribution, abundance, variability, availability, persistence and intermittency. The impact of raising the wind turbine hub height on these metrics is analyzed. The Modern Era Retrospective Analysis for Research and Applications (MERRA) boundary layer flux data was used to construct wind power density (WPD) and wind speed at 50 m, 80 m, 100 m, and 150 m, which represent current and potential wind turbine hub heights. The wind speeds at 80 m were quantitatively and spatially similar to a map of wind sp

Characterization of wind power resource in the United States

Wind resource in the continental and offshore United States has been reconstructed and characterized using metrics that describe, apart from abundance, its availability, persistence and intermittency. The Modern Era Retrospective-Analysis for Research and Applications (MERRA) boundary layer flux data has been used to construct wind profile at 50 m, 80 m, 100 m, 120 m turbine hub heights. The wind power density (WPD) estimates at 50 m are qualitatively similar to those in the US wind atlas developed by the National Renewable Energy Laboratory (NREL), but quantitatively a class less in some regions, but are within the limits of uncertainty. The wind speeds at 80 m were quantitatively and qualitatively close to the NREL wind map. The possible reasons for overestimation by NREL have been discussed. For long tailed distributions like those of the WPD, the mean is an overestimation and median is suggested for summary representation of the wind resource.

The impact of raising the wind turbine hub height on metrics of abundance, persistence, variability and intermittency is analyzed. There is a general increase in availability and abundance of wind resource but there is an increase in intermittency in terms of level crossing rate in low resource regions.

© 2012 the Authors

Climate Change and Economic Growth Prospects for Malawi: An Uncertainty Approach

Malawi confronts a growth and development imperative that it must meet in a context characterised by rising temperatures and deep uncertainty about trends in precipitation. This article evaluates the potential implications of climate change for overall growth and development prospects in Malawi. We combine climate, biophysical and economic models to develop a structural analysis focused on three primary impact channels: agriculture, road infrastructure and hydropower generation. We account explicitly for the uncertainty in climate forecasts by exploiting the best available information on the likely distribution of climate outcomes. We find that climate change is unlikely to substantially slow overall economic growth over the next couple of decades. However, assuming that global emissions remain effectively unconstrained, climate change implications become more pronounced over time. Reduced agricultural yields and increased damage to road infrastructure due to increased frequency and intensity of extreme events are the principal impact channels. Owing to the potential for positive impacts in the near term, the net present value of climate impacts from 2007 to 2050 (using a 5% discount rate) can be positive or negative with an average loss of about USD 610 million. The main implication of our findings is that Malawian policy makers should look to exploit the coming decade or two as these represent a window of opportunity to develop smart and forward looking adaptation policies. As many of these policies take time to develop, implement, and then execute, there is little cause for complacency.

© 2014 the authors.

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