sectoral economic costs and benefits of ghg mitigation - IPCC

Patrick Criqui, Nikos Kouvaritakis and Leo Schrattenholzer
Figure 14
Carbon intensity of GDP, per capita GDP and per capita emissions in the
Reference and Kyoto II cases (1990-2010-2020-2030)
tC/1000 $
0.50
0.45
0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00
1 2 3 4 5 6 tC/per cap
0 20 40 60
North Am Ref
North Am K II
EU Ref
EU K II
Pac OECD Ref
Pac OECD K II
Rest Ann B Ref
Rest Ann B K II
Asia Ref
Asia K II
RoW Ref
RoW K II
1 000 $90 per cap
Source: POLES model
The consequences of the Kyoto II scenario in terms of per capita CO 2 endowments by world
region are illustrated in
Figure 14, which plots carbon intensity of GDP against per capita GDP and thus shows different
isoquants corresponding to constant levels of per capita emission. Two general characteristics of
this target and trade scenario must be highlighted:
- the emission trajectory implied is an ambitious one; it corresponds broadly to trajectories
examined in the IPCC process with a stabilisation of World emissions around 2030 as a
prelude for eventual reductions, which alone could in the long-term result in the stabilisation
of atmospheric concentrations;
- the intensity of the effort required is greater for Annex B countries than for the rest of the
World; this is naturally consistent with the debate within the international negotiation process
and is reflected in the very existence of a separate Annex for industrialised countries.
It should however be noted that for developing regions, the “Kyoto II” scenario, was expressly
designed to be as simple as possible, implying reductions in per capita emissions relative to the
reference, which are not negligible. This simply illustrates the fact that the global stabilisation
target adopted in this exercise may progressively impose severe constraints also on these
countries, unless Annex B countries accept much more stringent carbon entitlements than the
ones considered here. Given the secular increases in the share of non-Annex B countries in total
emissions in almost any scenario considered, it becomes clear that such stringency could acquire
unrealistic proportions.
4.2. The impacts of meeting a CO 2 constraint in 2030 with an endogenous technology
framework
Based on the learning curve approach, one of POLES’ main innovations is that it specifically
takes into account cumulated R&D as an explanatory variable for technological progress (see
above Sub-section 3.4.). The other salient feature is that it explicitly considers the market for
capital equipment identifying individual agents on the supply side, satisfying the demand for new
equipment obtained, for each simulation period, from the main model. Those agents devote a
share of their cash flow to energy technology R&D, allocating their R&D budget to the most
127