sectoral economic costs and benefits of ghg mitigation - IPCC

Households and Services
Ancilliary Costs and Benefits of Mitigation Options in the
Households and Tertiary Sectors
Gina Roos
Summary
Preliminary results of the South African Emissions Inventory for 1990 (van der Merwe and
Scholes, 1999) estimate that approximately 374 million tons of CO 2 equivalents were emitted.
Under the IPCC methodology, the total energy sector contributed 89% of the total CO 2
equivalent emissions. Of the energy demanded in 1996, the residential and commerce and
services contributed 14%. Energy efficiency and fuel switching options in these sectors could
lead to an emissions reduction of somewhat less than 550 million tons of CO 2 equivalents over
the next 30 years. Considering direct life cycle costs, a large amount of these savings can be
achieved at a negative cost. However, substantial barriers due exist in terms of high capital costs,
lack of awareness and technological support. Indirect costs and benefits were only considered
qualitatively. This poses serious problems for the decision-maker. If a mitigation option is
selected primarily on the basis of its’ cost-effectiveness, a less than optimal solution will be
achieved, as ancillary costs and benefits can be significant. It is essential that consistent
methodologies and experienced practitioners be applied to this problem. An additional problem
for policy makers is the unanticipated impacts that can arise. When trying to address one
problem, new problems could be created. This points to the need for good data, often lacking for
developing countries. Finally, indirect costs and benefits as well as unanticipated impacts will
vary depending on country specific situations.
Background
Emissions
Shackleton et al., (1996) estimated South Africa’s carbon dioxide (CO 2 ) emissions in 1992 at
between 236 and 399 million tons per annum. These figures are supported by preliminary results
of the South African Emissions Inventory for 1990 (van der Merwe and Scholes, 1999), where it
was estimated that approximately 374 million tons of CO 2 equivalents were emitted. Direct CO 2
emissions contributed 81.5% to this, methane (CH 4 ) emissions 12.5% and nitrous oxide (N 2 O)
emissions 6.5%. Under the IPCC methodology, the total energy sector contributed 89% of the
total CO 2 equivalent emissions. Of the energy demanded in 1996, industry was responsible for
62%, transport 21%, residential 10%, commerce and services 4% and agriculture 3% (SANEA,
1998).
Energy Demand in the Residential Sector
SANEA (1998) reports that final energy consumed in this sector during 1996 was split between
electricity (42%), biomass and renewables (24%), coal (21%), liquid fuels (10%) and gas (3%).
Further, consumption patterns vary tremendously across household types, where township
houses, established farms and suburban houses rely more on electricity (from 45 – 75% of their
energy requirements) while informal settlements and poorer rural settlements rely on a mixture of
low pressure gas, paraffin, coal and wood. In 1996, 55% of houses had electricity and the
electrification programme is continuing (grid and non-grid). Significant problems for nonelectrified
households have been identified (SANEA, 1998) as security of fuelwood supplies,
fuel costs and health and safety issues.
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