JP

Capturing Natural Resource Dynamics in Top-Down Energy"‘Economic Equilibrium Models

Top-down energy-economic modeling approaches often use deliberately simple techniques to represent heterogeneous resource inputs to production. We show that for some policies, such as feed-in tariffs (FIT) for renewable electricity, detailed representation of renewable resource grades is required to describe the technology more precisely and identify cost-effective policy designs. We extend a hybrid approach for modeling heterogeneity in the quality of natural resource inputs required for renewable energy production in a stylized computable general equilibrium (CGE) framework. Importantly, this approach resolves nearflat or near-vertical sections of the resource supply curve that translate into key features of the marginal cost of wind resource supply, allowing for more realistic policy simulation. In a second step, we represent the shape of a resource supply curve based on more detailed data. We show that for the case of onshore wind development in China, a differentiated FIT design that can only be modeled with the hybrid approach requires less than half of the subsidy budget needed for a uniform FIT design and proves to be more cost-effective.

Capturing optically important constituents and properties in a marine biogeochemical and ecosystem model

We present a numerical model of the ocean that couples a three-stream radiative transfer component with a marine biogeochemical–ecosystem component in a dynamic three-dimensional physical framework. The radiative transfer component resolves the penetration of spectral irradiance as it is absorbed and scattered within the water column. We explicitly include the effect of several optically important water constituents (different phytoplankton functional types; detrital particles; and coloured dissolved organic matter, CDOM). The model is evaluated against in situ-observed and satellite-derived products. In particular we compare to concurrently measured biogeochemical, ecosystem, and optical data along a meridional transect of the Atlantic Ocean. The simulation captures the patterns and magnitudes of these data, and estimates surface upwelling irradiance analogous to that observed by ocean colour satellite instruments. We find that incorporating the different optically important constituents explicitly and including spectral irradiance was crucial to capture the variability in the depth of the subsurface chlorophyll a (Chl a) maximum. We conduct a series of sensitivity experiments to demonstrate, globally, the relative importance of each of the water constituents, as well as the crucial feedbacks between the light field, the relative fitness of phytoplankton types, and the biogeochemistry of the ocean. CDOM has proportionally more importance at attenuating light at short wavelengths and in more productive waters, phytoplankton absorption is relatively more important at the subsurface Chl a maximum, and water molecules have the greatest contribution when concentrations of other constituents are low, such as in the oligotrophic gyres. Scattering had less effect on attenuation, but since it is important for the amount and type of upwelling irradiance, it is crucial for setting sea surface reflectance. Strikingly, sensitivity experiments in which absorption by any of the optical constituents was increased led to a decrease in the size of the oligotrophic regions of the subtropical gyres: lateral nutrient supplies were enhanced as a result of decreasing high-latitude productivity. This new model that captures bio-optical feedbacks will be important for improving our understanding of the role of light and optical constituents on ocean biogeochemistry, especially in a changing environment. Further, resolving surface upwelling irradiance will make it easier to connect to satellite-derived products in the future.

Carbon emissions in China: How far can new efforts bend the curve?

While China is on track to meet its global climate commitments through 2020, China's post-2020 CO₂ emissions trajectory is highly uncertain, with projections varying widely across studies. Over the past year, the Chinese government has announced new policy directives to deepen economic reform, to protect the environment, and to limit fossil energy use in China. To evaluate how new policy directives could affect energy and climate change outcomes, we simulate two levels of policy effort—a continued effort scenario that extends current policies beyond 2020 and an accelerated effort scenario that reflects newly announced policies—on the evolution of China's energy and economic system over the next several decades. We perform simulations using the China-in-Global Energy Model, C-GEM, a bespoke recursive-dynamic computable general equilibrium model with global coverage and detailed calibration of China's economy and future trends. Importantly, we find that both levels of policy effort would bend down the CO₂ emissions trajectory before 2050 without undermining economic development. Specifically, in the accelerated effort scenario, we find that coal use peaks around 2020, and CO₂ emissions level off around 2030 at 10 bmt, without undermining continued economic growth consistent with China reaching the status of a “well-off society” by 2050.

Carbon taxes, deficits, and energy policy interactions

The United States faces the challenge of bringing its federal budget deficit under control, while also reducing its greenhouse gas emissions. Current energy policy has not been very effective in reducing greenhouse gas emissions, although that has not necessarily been its sole purpose. And rather than raise revenue, much energy policy involves subsidies through the tax system that reduce revenue or regulatory policy that may indirectly reduce revenue through its effects on economic activity. This paper focuses on the role of a carbon tax as one option to raise revenue while also reducing greenhouse gases. We also examine the interaction with other regulatory policies, namely renewable portfolio standards, which have been implemented in many states, and the corporate average fuel economy standards.

Changes in Inorganic Fine Particulate Matter Sensitivities to Precursors Due to Large-Scale US Emissions Reductions

We examined the impact of large US emissions changes, similar to those estimated to have occurred between 2005 and 2012 (high and low emissions cases, respectively), on inorganic PM_2.5 sensitivities to further NO_x, SO₂, and NH₃ emissions reductions using the chemical transport model GEOS-Chem. Sensitivities to SO₂ emissions are larger year-round and across the US in the low emissions case than the high emissions case due to more aqueous-phase SO₂ oxidation. Sensitivities to winter NO_x emissions are larger in the low emissions case, more than 2x those of the high emissions case in parts of the northern Midwest. Sensitivities to NH₃ emissions are smaller (∼40%) in the low emissions case, year-round, and across the US. Differences in NO_x and NH₃ sensitivities indicate an altered atmospheric acidity. Larger sensitivities to SO₂ and NO_x in the low emissions case imply that reducing these emissions may improve air quality more now than they would have in 2005; conversely, NH₃ reductions may not improve air quality as much as previously assumed.

Climate and Land: Tradeoffs and Opportunities

Land management for carbon sequestration offers an opportunity to avoid about 0.5°C of warming if landowners have full economic incentives to participate in a global greenhouse gas mitigation policy. In an energy-only policy aimed at about 550 ppm CO₂- eq stabilization the additional 0.5°C of avoided warming brings the world close to staying below the 2°C above preindustrial target. While greater incentives for mitigation from energy and land would be needed to actually meet the 2°C target even holding temperature to 2.2°C or so would be a great improvement over the path we are on now. Even with success at the 21^st meeting of the Conference of the Parties (COP21) in Paris in 2015, we would still be heading toward a global mean surface temperature increase is in the range of 1.9 to 2.6°C (central estimate 2.2°C) by mid-century relative to the pre-industrial level (1860–1880 mean), and 3.1 to 5.2°C (central estimate 3.7°C) by 2100. This preliminary assessment awaits a full interpretation of the implications of agreements at COP21 with greater clarity on just what countries pledges mean and how they will be implemented. But this first look estimates that the COP21 pledges would shave about 0.2°C more from warming compared with previous international commitments. From that perspective, a half-degree of avoided warming from land carbon sequestration and avoided deforestation, if we could achieve it, is significant. The relatively small contribution from the COP21 agreement says less about the significance of the commitments—many countries stepped up and offered important goals that will mean changes in their energy systems—but rather more about the challenge of weaning the global economy from its dependence on greenhouse gas emitting activities. It also highlights that no source (or potential sink) can be ignored.

Climate change impacts and greenhouse gas mitigation effects on U.S. water quality

Climate change will have potentially significant effects on freshwater quality due to increases in river and lake temperatures, changes in the magnitude and seasonality of river runoff, and more frequent and severe extreme events. These physical impacts will in turn have economic consequences through effects on riparian development, river and reservoir recreation, water treatment, harmful aquatic blooms, and a range of other sectors. In this paper, we analyze the physical and economic effects of changes in freshwater quality across the contiguous U.S. in futures with and without global-scale greenhouse gas mitigation. Using a water allocation and quality model of 2119 river basins, we estimate the impacts of various projected emissions outcomes on several key water quality indicators, and monetize these impacts with a water quality index approach. Under mitigation, we find that water temperatures decrease considerably and that dissolved oxygen levels rise in response. We find that the annual economic impacts on water quality of a high emissions scenario rise from $1.4 billion in 2050 to $4 billion in 2100, leading to present value mitigation benefits, discounted at 3%, of approximately $17.5 billion over the 2015–2100 period.

Climate Change Impacts on U.S. Crops

The Intergovernmental Panel on Climate Change’s (IPCC) Fifth Assessment Report (AR5) (Romero-Lankao et al., 2014) found that climate change is responsible in part for historical yield increases in the United States thanks to increased precipitation. Since 1999, however, yield losses have been attributed to extreme weather events, such as heat waves, storms, and droughts and the IPCC concludes that in many crop growing regions of North America optimum temperatures have been reached and further warming would be detrimental to crop yields. What to expect in the future?

Climate change policy in Brazil and Mexico: Results from the MIT EPPA model

Based on an in-depth analysis of results from the MIT Economic Projection and Policy Analysis (EPPA) model of climate policies for Brazil and Mexico, we demonstrate that commitments by Mexico and Brazil for 2020—made during the UN climate meetings in Copenhagen and Cancun—are reachable, but they come at different costs for each country. We find that Brazil's commitments will be met through reduced deforestation, and at no additional cost; however, Mexico's pledges will cost 4 billion US dollars in terms of reduced GDP in 2020. We explore short- and long-term implications of several policy scenarios after 2020, considering current policy debates in both countries. The comparative analysis of these two economies underscores the need for climate policy designed for the specific characteristics of each country, accounting for variables such as natural resources and current economic structure. Our results also suggest that both Brazil and Mexico may face other environmental and economic impacts from stringent global climate policies, affecting variables such as the value of energy resources in international trade.

Climate Change, Water Resources and Irrigated Crop Yields: A Modeling Framework for Integrated Assessment of the US

While the impact of climate change on rainfed crop yields has been extensively studied, the study of the effect on irrigated crop yields has been more challenging due to competing water uses. By combining a water model and a crop model within the MIT Integrated Global System Model (IGSM) framework (Sokolov et al., 2005), an integrated assessment of the effects of alternative climate policy scenarios on irrigated crop yields is applied to the United States (US). In this analysis, we consider the effect of water shortage for irrigation on the three most important crops for the U.S.: maize, soybean and spring wheat. We find that water shortage for irrigation is expected to reduce irrigated crop yields especially for maize.

MIT Global Change

JP

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