Energy Transition

Capturing key energy and emission trends in CGE models: Assessment of status and remaining challenges

Abstract: Limiting global warming in line with the goals in the Paris Agreement will require substantial technological and behavioural transformations. This challenge drives many of the current modelling trends. This article undertakes a review of 17 state-of-the-art recursive-dynamic computable general equilibrium (CGE) models and assesses the key methodologies and applied modules they use for representing sectoral energy and emission characteristics and dynamics. The purpose is to provide technical insight into recent advances in the modelling of current and future energy and abatement technologies and how they can be used to make baseline projections and scenarios 20-80 years ahead. Numerical illustrations are provided. In order to represent likely energy system transitions in the decades to come, modern CGE tools have learned from bottom-up studies. Three different approaches to baseline quantification can be distinguished: (a) exploiting bottom-up model characteristics to endogenize responses of technological investment and utilization, (b) relying on external information sources to feed the exogenous parameters and variables of the model, and (c) linking the model with more technology-rich, partial models to obtain bottom-up- and pathway-consistent parameters.

The Covid-19 pandemic could be a dry run for future impacts of climate change, with challenging and unprecedented situations requiring rapid and aggressive responses worldwide. A proactive approach to climate change aimed at minimizing such impacts will inevitably involve significant cuts in greenhouse gas (GHG) emissions and investment in more resilient infrastructure. Although current global mitigation and adaptation efforts are proceeding slowly, one emerging strategy could serve as an accelerant: the financial disclosure of climate risk by companies.

Can financial disclosure of climate risk accelerate climate action?
The economics of bioenergy with carbon capture and storage (BECCS) deployment in a 1.5°C or 2°C world

Abstract: Bioenergy with carbon capture and storage (BECCS) and afforestation are key negative emission technologies suggested in many studies under 2°C or 1.5°C scenarios. However, these large-scale land-based approaches have raised concerns about their economic impacts, particularly their impact on food prices, as well as their environmental impacts. Here we focus on quantifying the potential scale of BECCS and its impact on the economy, taking into account technology and economic considerations, but excluding sustainability and political aspects. To do so, we represent all major components of BECCS technology in the MIT Economic Projection and Policy Analysis model.

We find that BECCS could make a substantial contribution to emissions reductions in the second half of the century under 1.5 and 2°C climate stabilization goals, with its deployment driven by revenues from carbon dioxide permits. Results show that global economic costs and the carbon prices needed to hit the stabilization targets are substantially lower with the technology available, and BECCS acts as a true backstop technology at carbon prices around $240 per ton of carbon dioxide. If driven by economics alone, BECCS deployment increases the use of productive land for bioenergy production, causing substantial land use changes. However, the projected impact on commodity prices is quite limited at the global scale, with global commodity price indices increasing by less than 5% on average. The effect is larger at the regional scale (up to 15% in selected regions), though significantly lower than previous estimates.

While BECCS deployment is likely to be constrained for environmental and/or political reasons, this study shows that the large-scale deployment of BECCS is not detrimental to agricultural commodity prices and could reduce the costs of meeting stabilization targets. Still, it is crucial that policies consider carbon dioxide removal as a complement to drastic carbon dioxide emissions reductions, while establishing a credible accounting system and sustainable limits on BECCS.

Lost (and found) in Transition: Expert stakeholder insights on low-carbon energy transitions in Spain

Abstract: Despite losing its low-carbon energy transition path in the last decade, Spain, since 2017, has picked up its commitment to complying with the objectives set out in the Paris Agreement for ratcheting 2030 and 2050 ambitions. This research departs from an extensive in-depth expert stakeholder engagement, proposing a research process of scoping: reaching out to academics, NGOs, administrators, energy providers and the private sector among other agents that guide the future of transitions in Spain; listening: identifying, through interviews, the knowledge gaps; understanding: manifesting answers of the multitude of over 200 expert stakeholders and participating: extending out and disseminating results. We present five central emerging themes on: ambitions and temporalities of targets highlighting ambition gaps across stakeholder groups for 2030 and 2050 objectives; the future of carbon and nuclear energy pushing for eventual closure of both across distinct points in time; the rollout of renewable energy technologies in a transition pursuit; preferences on fiscal and policy measures to facilitate investments and priority sectors of action and ultimately discuss gender equality and justice, and the lack thereof, in energy decision making. Our research summons up the delicate intricacies of the transition debate in Spain, setting a discursive space in hopes of contributing to the future design of the Law on Climate Change and Energy Transition.

500-year floods. Persistent droughts and heat waves. More devastating wildfires. As these and other planetary perils become more commonplace, they pose serious risks to natural, managed and built environments around the world. Assessing the magnitude of these risks over multiple decades and identifying strategies to prepare for them at local, regional and national scales will be essential to making societies and economies more resilient and sustainable.

Reducing risk, empowering resilience to disruptive global change

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