sectoral economic costs and benefits of ghg mitigation - IPCC

Patrick Criqui, Nikos Kouvaritakis and Leo Schrattenholzer
heavily affected among clean coal technologies as it was the winner in the reference case
while technologies like wind, solar thermal and photovoltaics see big gains in part precisely
because they failed to make significant inroads in the unconstrained case;
- the impact on electricity production by technology follows very closely that of installed
capacity. This is particularly true for base load technologies (nuclear and coal) and for most
small scale decentralised technologies where this occurs by assumption; an exception among
the latter is wind power, where the increased share of relatively low wind-speed sites results
in lower overall utilisation; for “middle” load technologies especially those that are gas fired
a significant increase in utilisation seems to have occurred when passing to the constrained
scenario;
- finally the impact on cumulative investments (2000-2030) reflects the degree of novelty of
the technology, the speed of its introduction, its technical life, but also the changed
investment costs presented above.
The new Marginal Abatement Cost for “Kyoto II” with world flexibility is exhibited in Figure
21. This curve is approximately comparable with the curve and equilibrium permit price obtained
with the exogenous technical change version. The results however, especially with regard to the
equilibrium permit price (132.5 $1990 instead of 175.4), are sufficiently contrasted to allow an
approximate evaluation of the role played by the endogenous technical change mechanism in
reducing the anticipated cost of meeting an ambitious CO 2 emission target.
Figure 19
Marginal Abatement Cost and “Kyoto II” scenario with endogenous technical
change
Marginal Cost of Emission
Reduction
$90/t of C
200
180
160
140
120
100
80
60
40
20
0
-10 0 10 20 30 40
World Emission Reductions as % of 2030
Reference
Source: POLES model
5 Conclusions
This synthetic presentation of the main results of the effort performed with the POLES model
only provides a “taste” of the type of conclusions that can be drawn from this type of energy
modelling exercise. It shows first the interest of models providing an explicit description of the
key energy sector technologies that may play a key role in achieving severe environmental
constraints. It also illustrates the advantages of combining a Reference Case, with a full
description of a consistent energy system, with alternative cases that explicit the changes and the
direct costs induced by political decisions on environmental constraints.
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