Computable general equilibrium (CGE) models seeking to evaluate the impacts of electricity policy face difficulties incorporating detail on the variable nature of renewable energy resources. To improve the accuracy of modeling renewable energy and climate policies, detailed scientific and engineering data are used to inform the parameterization of wind electricity in a new regional CGE model of China. Wind power density (WPD) in China has been constructed using boundary layer flux data from the Modern Era Retrospective-analysis for Research and Applications (MERRA) dataset with a 0.5° latitude by 0.67° longitude spatial resolution. Wind resource data are used to generate production cost functions for wind at the provincial level and offshore, incorporating technological parameters and geographical constraints. With these updated wind production cost data to parameterize the wind electricity option in a CGE model, an illustrative policy analysis of the current feed-in tariff (FIT) for wind electricity is performed. Assuming a generous penetration rate and no interprovincial interconnection, we find that the contribution of wind to total electricity generation is 215 TWh, reducing CO2 emissions by 3.5%. We discuss the relative merits of the FIT by province. Our analysis shows how wind electricity resource can be differentiated based on location and quality in a CGE model and applied to a analyze climate and energy policies.

Estimates of greenhouse gas (GHG) emissions from shale gas production and use are controversial. Here we assess the level of GHG emissions from shale gas well hydraulic fracturing operations in the United States during 2010. Data from each of the approximately 4,000 horizontal shale gas wells brought online that year is used to show that about 900 Gg CH4 of potential fugitive emissions were generated by these operations, or 228 Mg CH4 per well—a figure inappropriately used in analyses of the GHG impact of shale gas. In fact, along with simply venting gas produced during the completion of shale gas wells, two additional techniques are widely used to handle these potential emissions, gas flaring, and reduced emissions “green” completions. The use of flaring and reduced emission completions reduce the levels of actual fugitive emissions from shale well completion operations to about 216 GgCH4, or 50 Mg CH4 per well, a release substantially lower than several widely quoted estimates. Although fugitive emissions from the overall natural gas sector are a proper concern, it is incorrect to suggest that shale gas-related hydraulic fracturing has substantially altered the overall GHG intensity of natural gas production.
 

The United States has adopted fuel economy standards that require increases in the on-road efficiency of new passenger vehicles, with the goal of reducing petroleum use and (more recently) greenhouse gas (GHG) emissions. Understanding the cost and effectiveness of fuel economy standards, alone and in combination with economy-wide policies that constrain GHG emissions, is essential to inform coordinated design of future climate and energy policy. We use a computable general equilibrium model, the MIT Emissions Prediction and Policy Analysis (EPPA) model, to investigate the effect of combining a fuel economy standard with an economy-wide GHG emissions constraint in the United States. First, a fuel economy standard is shown to be at least six to fourteen times less cost effective than a price instrument (fuel tax) when targeting an identical reduction in cumulative gasoline use. Second, when combined with a cap-and-trade (CAT) policy, a binding fuel economy standard increases the cost of meeting the GHG emissions constraint by forcing expensive reductions in passenger vehicle gasoline use, displacing more cost-effective abatement opportunities. Third, the impact of adding a fuel economy standard to the CAT policy depends on the availability and cost of abatement opportunities in transport—if advanced biofuels provide a cost-competitive, lowcarbon alternative to gasoline, the fuel economy standard does not bind and the use of lowcarbon fuels in passenger vehicles makes a significantly larger contribution to GHG emissions abatement relative to the casewhen biofuels are not available. This analysis underscores the potentially large costs of a fuel economy standard relative to alternative policies aimed at reducing petroleumuse and GHG emissions. It further emphasizes the need to consider sensitivity to vehicle technology and alternative fuel availability and costs as well as economy-wide responses when forecasting the energy, environmental, and economic outcomes of policy combinations.

© 2013 Elsevier B.V.

We estimate the potential synergy between pollution and climate control in the U.S. and China, summarizing the results as emissions cross-elasticities of control. We set a range of NOx and SO2 targets, and record the ancillary reduction in CO2 to calculate the percentage change in CO2 divided by the percentage change in NOx (SO2) denoted as ECO2,NOx (ECO2,SO2). Then we conduct the opposite experiment, setting targets for CO2 and recording the ancillary reduction in NOx and SO2 to compute ENOx,CO2 and ESO2,CO2. For ECO2,NOx and ECO2,SO2 we find low values (0.06"’0.23) in both countries with small (10%) reduction targets that rise to 0.40"’0.67 in the U.S. and 0.83"’1.03 in China when targets are more stringent (75% reduction). This pattern reflects the availability of pollution control to target individual pollutants for smaller reductions but the need for wholesale change toward non-fossil technologies when large reductions are required. We trace the especially high cross elasticities in China to its higher dependence on coal. These results are promising in that China may have more incentive to greatly reduce SO2 and NOx with readily apparent pollution benefits in China, that at the same time would significantly reduce CO2 emissions. The majority of existing studies have focused on the effect of CO2 abatement on other pollutants, typically finding strong cross effects. We find similar strong effects but with less dependence on the stringency of control, and stronger effects in the U.S. than in China.