sectoral economic costs and benefits of ghg mitigation - IPCC

Households and Services
• Heating, Ventilation and Cooling Systems (HVAC) retrofit.
• Efficient new HVAC systems.
• Lighting retrofits.
• New lighting systems.
• Variable speed drives for fans.
• Heat pumps.
• Energy Star equipment.
• Solar water heating.
• Switching fuel to natural gas.
• Switching electricity to natural gas.
Of these options (given the assumptions made about penetration of the technology, cost of the
technology and fuel prices) it was found that the emissions reduction associated with nine of the
options could be achieved at a negative cost. Costs ranged from –R202/ton up to R213/ton and
the potential for emissions to be reduced by the individual options ranged from 9 to 80 million
tons per option. If the options had been additive (which they are not) a total reduction of 300
million tons of CO 2 equivalent would be possible from the commercial sector over the next 30
years. This amounts to about 80% of South Africa’s emissions in 1990.
In their analysis, de Villiers and Matibe (b, in draft) considered the capital engineering costs,
operating and maintenance costs and (where necessary) programme implementation costs.
Programme implementation costs were estimated, as no South African data was available. Direct
costs in terms of reduced future energy costs were also included in the operation costs.
Indirect costs and benefits were not quantified but considered qualitatively, examples include:
• reduced local input in installation,
• reduced maintenance requirements,
• technology transfer, and
• skills development.
Mitigation options were also evaluated with respect to other criteria, such as local environmental,
social and macroeconomic impacts. de Villiers and Matibe (b, in draft) considered that all of the
mitigation options would have a benefit in terms of reducing local air pollution, there would be
no social impacts except for some potential for job creation. Macroeconomic impacts could not
be evaluated at this stage. Substantial barriers to all options exist in the lack of institutional and
administrative capacity to drive campaigns and programmes and some of the options lacked local
technical support.
Conclusion
The discussion above has focussed on the potential for emissions reduction in the residential and
commercial sectors of the South African economy. As the profile of energy consumption differs
between developing countries, so will the mitigation options, potential and direct and indirect
costs differ. Ancillary costs and benefits can be of the same order of magnitude as the direct costs
and benefits, so that decision-makers who fail to consider secondary impacts on an equal footing
with simple cost-effectiveness measures may choose less than optimal solutions. Improved
methodologies and data for quantifying externalities is needed.
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