sectoral economic costs and benefits of ghg mitigation - IPCC

Renewable Energy
4 Impacts of carbon constraints on power generation and renewable energy
technologies
A Reference Case, produced with the POLES model, provides a picture of the energy system to
2030 for a world with no emission constraints. In spite of the fact that international commitments
have been decided in Kyoto and should thus be part of the Reference, this “No Policy” case is
indeed essential for the assessment of the costs of emission control policies. The concept of
“Business as Usual projection” or “Reference Case” has been very much criticised as
representing a too narrow-minded and mechanistic approach to forecasting. It should obviously
be understood that the Reference Case presented hereafter, instead of proposing a narrow vision
of possible futures, on the contrary provides a benchmark for the evaluation of very contrasted
alternative policy cases. In the first sub-section we present the main features of the Reference
Case to 2030, the corresponding trends in power generation technologies and the CO 2 Constraint
Case. The second sub-section is the final point of the research and examines the impacts of the
CO 2 Constraint Case for power generation and renewable technologies in a perspective of
endogenous technical change.
4.1. The world energy system in 2030
Every POLES’ model simulation is built on three main sets of exogenous hypotheses, which are
introduced on a region by region basis: i. population, ii. GDP growth and iii. oil and gas resource
endowment. In the Reference Case the corresponding hypotheses are the following:
- the world population increases to 8.7 billion persons in 2030, in line with most other longterm
energy outlooks (Nakicenovic et al., 1998);
- a rapid recovery of the world economy from the 1997-1998 crisis is assumed and World
GDP is expected to rise at a sustained 3.3 % pa between 2000 and 2030; this corresponds to
an increase of 2.1 % pa in average per capita GDP, with a lower increase in the OECD
countries and some “catching-up” of the emerging regions of the world;
- finally, oil and gas resource endowment is based on the USGS’ “mode” estimates (Masters et
al., 1994), which amounts to 2 400 Gbl for oil Ultimate Recoverable Resources in 1990,
while rising recovery rates in the model substantially increases future recoverable resources.
Key features of the energy system in 2030
These key hypotheses and the results of the Reference Case in terms of primary energy
consumption and CO 2 emissions are summarised below in Table 7. According to this scenario
and in spite of a marked trend to increased energy efficiency (+1.1 % pa until 2030), world
energy consumption will increase by 2.2 % pa and almost double between now and 2030. Most
of the increase comes from developing regions as the growth in energy consumption is only of
0.8 % pa in the OECD region.
In terms of primary source this case, which as already noted does not incorporate any CO 2
constraint, implies significant increases in fossil fuel consumption. Coal consumption is strongly
stimulated by rising energy demand in China and India and experience the highest growth rate,
followed by natural gas and then by oil. As for the non fossil fuel options, their share in world
energy supply is decreasing as the growth of nuclear energy is very low and as renewables grow
quickly but from very low initial levels.
From these results, it thus appears that the secular trend of “decarbonisation” (Grübler and
Nakicenovic 1996) may experience some reversal in the next three decades. CO 2 emissions
indeed increase more rapidly than total energy consumption: total CO 2 emissions rise to 8.2 GtC
in 2010 and 13.4 GtC in 2030 from the 5.9 GtC level in 1990.
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