sectoral economic costs and benefits of ghg mitigation - IPCC

José R Moreira
a) increase of 12% in the price of cars, to yield a 20% increase in efficiency based in
available technology (no rebound effect). Total C abatement at the year 2020 is 147 MtC/yr at a
cost of US$ 133 billion/yr.
b) increase of 12% in the price of car, to yield a 50% increase in efficiency based in new
technologies (no rebound effect). Total C abatement at the year 2020 is 360 MtC /yr at a cost of
US$ 133 billion/yr.
c) full cost pricing, if applied in OECD, Central and Eastern Europe and CIS (excluding the
effect of OECD Europe gasoline price reduction) will cost 19.7 billion/yr (3 cents/l more for
USA, 8 cents more for Japan) and reduces by 4% total C emission.
d) fuel price changes for full social cost pricing if applied in USA will cost US$ 0.24 -
0.77/l and in Japan US$ 0.33/l and may reduce fuel use by 40% in USA and by16% in Japan.
Considering consumption of 954 million l/day in USA and 318 million l/day in Japan, as much
as 400 billion l/yr (348 billion l/yr and 51 billion l/yr) will be avoided at a cost of US$ 83 – 268
billion in USA and 38.3 billion in Japan, totaling US$121 - 306 billion/yr for the abatement of
130 MtC/yr 1 .
From the above results it is clear that fuel replacement using a renewable fuel like ethanol is the
least cost expensive solution for C abatements.
The transference of US$ 113 billion to tropical developing countries may promote significant
development and a simulation is made for Brazil. Figure 9 shows the evaluation of the country
external debt, in the period 1978-1986, if ethanol was exported in an amount varying from 2
billion gallon/yr, in 1978, to 6.3 billion gallon/yr (which is the present production in Brazil) at
the end of the period. Such exportation, which would be in excess of what has been exported
from goods and services, could reduce country external debt from the US$ 110 billion value to
US$ 10 billion in 1992, if we assume all other economic performances would be kept
unchangeable.
Another consideration is that total world sugarcane production is near 1 billion tonnes / yr
(Williams and Larson, 1993), which requires a planted area of 17 Mha (60 tonnes / ha / yr) in
tropical developing countries. We are talking about the possibility of increasing it to 45 Mha
(some areas are already in use for alcohol production, while other areas used for sugar production
could be replaced by alcohol considering the small international market and low value of sugar).
Such increase, if performed in a 10 years period would require a 10% / yr expansion rate, which
is not impossible but requires the use of high technology agricultural practices and the full
development of a lignocellulosic material conversion technology.
1 The model assumes that 40% of the total CO 2 emission from cars (which is 40% of the total
transportation emission in OECD – 2700 MtCO 2 ) and 16% of the total CO 2 emission from cars (which is
10% of the total transportation emission in the OECD – 2700 MtCO 2 ) will be achievable in USA and
Japan, respectively.
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