Linking the EU emissions trading scheme: economic implications of allowance allocation and global carbon constraints

We investigate the role of domestic allowance allocation and global emissions constraints for the carbon-market impacts of linking the EU Emissions Trading Scheme (ETS) internationally. Employing a quantitative simulation model of the global carbon market, we find that the economic benefits from connecting the European ETS to emerging non-EU schemes strongly depend on the regional allowance allocation of the linking participants: In a world of moderate carbon constraints, an economically efficient regional allowance allocation induces a much stronger fall in total compliance costs than a sub-optimal (i.e. too high) domestic allocation of emissions permits. However, a more efficient (i.e. stricter) allocation shifts abatement efforts and compliance costs to energy-intensive industries which are covered by the domestic ETS. We further find that committing to ambitious global emissions reduction targets (compatible with stabilizing CO₂ concentrations at 450 ppm) induces much stronger regional abatement efforts and substantially higher compliance costs for the abating regions. In such an ambitious climate policy regime, an efficient domestic allocation of allowances is even more important from an economic perspective: Here, linking emissions trading schemes diminishes the associated compliance costs on the largest scale.

Setting greenhouse gas emission targets under baseline uncertainty: the Bush Climate Change Initiative

There is substantial uncertainty regarding baseline greenhouse gas (GHG) emissions forecasts—i.e., how GHG emissions will grow over time in the absence of policy intervention. Thus baseline uncertainty should be a key consideration in setting GHG emissions targets as a mitigation strategy to respond to global climate change. At a minimum, the emissions target must be less than the baseline level to induce changing behavior and new investment. Despite this fundamental policy criterion, baseline considerations have played only a minor role in target setting under international climate policy. Baseline uncertainty applies to both absolute and intensity based emissions targets. It is demonstrated that one advantage of intensity targets is reduced uncertainty in the projected baseline, however there will always be some residual uncertainty in model projections. To illustrate the importance of considering baseline uncertainty in GHG target setting, the Bush Climate Change Initiative is analyzed against its projected baseline as a case study of a modest intensity target. Based on comparison with historical data, the range of projections by major energy-economic models, past discrepancies in the accuracy of model projections and the added complexity of sector-specific drivers for non-CO₂ GHGs, it is shown that the Bush Initiative cannot be guaranteed or even expected to deliver actual reductions against an uncertain baseline. This finding emphasizes the importance of setting a target that accounts for baseline uncertainty to achieve genuine mitigation of GHG emissions.

Fairness aspects of linking the European emissions trading scheme under a long-term stabilization scenario for CO2 concentration

Climate equity is a crucial but difficult element in negotiations on a post-2012 climate regime. With respect to the trading of greenhouse gas emissions the equity aspect is considered in the Kyoto Protocol which demands that emissions trading should be supplemental to domestic abatement efforts. The question arises whether a linking of the European Union Emissions Trading Scheme (EU ETS) to non-EU emission trading schemes or the Clean Development Mechanism (CDM) could have an impact on principles of climate justice and thus potentially affect ongoing negotiations. In this study, we present the results of a three step analysis: In a first step, it estimates mid-term greenhouse gas emission entitlements for Annex B and Non-Annex B countries for the year 2020 which keep within reach a stabilization of the CO₂ concentration at 450 ppmv in the long-term. In the second step, the resulting emission entitlements are used as an input to an economic partial-equilibrium model in order to assess the shift of abatement efforts under different scenarios of linking the EU ETS. In a third step, we analyze the outcome of the economic model with respect to the future trend of European per capita emissions under the current EU ETS relative to different scenarios of linking the EU ETS. The model results indicate that European per capita emissions have to be reduced to a considerably smaller extent if a linking of the EU ETS is accompanied by an optimal design of the National Allocation Plans and if low-cost CO₂ permits became available via the CDM to a large extent.

CDM potential of SPV lighting systems in India

In view of the increasing interest in the development and dissemination of technologies for harnessing new and renewable sources of energy in India, there have also been some efforts towards their use in the domestic lighting sector. However, the cumulative number of Solar Photovoltaic (SPV) lighting systems such as SPV lanterns and solar home lighting systems in India is far below their theoretical potential despite government subsidy programmes. One of the major barriers is the high capital investment in these systems. The Clean Development Mechanism (CDM) provides industrialized countries with an incentive to invest in emission reduction projects in developing countries to achieve a reduction in CO₂ emissions at lowest cost that also promotes sustainable development in the host country. SPV lanterns and solar home lighting systems could be of interest under the CDM because they directly displace greenhouse gas emissions while contributing to sustainable rural development. However, only two SPV projects have been submitted under the CDM so far. This study assesses the maximum theoretical as well as the realistically achievable CDM potential of SPV lanterns and solar home lighting systems in India. The SPV lantern project is financially viable at a certified emissions reductions (CER) price of 34 € whereas the solar home lighting project is financially viable at a CER price of 46 €. While the maximum mitigation volume is about 35 million tonne CO₂ on an annual basis, an estimate of achievable CER levels is done using the past diffusion trends of SPV systems. We find that annual CER volumes could reach 0.8 to 2.4 million by 2012 and 5.6 to 13.6 million by 2020. This would require that the government sets the subsidy level for SPV lighting systems at a level that allows them to become viable with the CER revenue. From a macro-economic point of view this makes sense if the sustainability benefits are deemed sufficiently high to warrant promotion of this type of project.

Tropical deforestation in a future international climate policy regime—lessons from the Brazilian Amazon

The possibility of adopting national targets for carbon dioxide (CO₂) emissions from tropical deforestation in a future international climate treaty has received increasing attention recently. This attention has been prompted by proposals to this end and more intensified talks on possible commitments for developing countries beyond the United Nations Framework Convention on Climate Change Kyoto Protocol. We analyze four main scientific and political challenges associated with national targets for emissions from tropical deforestation: (1) reducing the uncertainties in emission inventories, (2) preserving the environmental integrity of the treaty, (3) promoting political acceptance and participation in the regime, and (4) providing economic incentives for reduced deforestation. We draw the following conclusions. (1) Although there are large uncertainties in carbon flux from deforestation, these are in the same range as for other emissions included in the current Kyoto protocol (i.e., non-CO₂ GHGs), and they can be reduced. However, for forest degradation processes the uncertainties are larger. A large challenge lies in building competence and institutions for monitoring the full spectrum of land use changes in developing countries. (2 and 3) Setting targets for deforestation is difficult, and uncertainties in future emissions imply a risk of creating ‘tropical hot air’. However, there are proposals that may sufficiently deal with this, and these proposals may also have the advantage of making the targets more attractive, politically speaking. Moreover, we conclude that while a full carbon accounting system will likely be politically unacceptable for tropical countries, the current carbon accounting system should be broadened to include forest degradation in order to safeguard environmental integrity. (4) Doubts can be cast over the possible effect a climate regime alone will have on deforestation rates, though little thorough analysis of this issue has been made.

Application of the “Climafor” baseline to determine leakage: the case of Scolel Té

The acceptance of forestry-based project activities to mitigate greenhouse gases emissions has been subjected to a number of methodological questions to be answered, of which the most challenging are baseline establishment and identification of and measuring leakage. Here we pose hypotheses for and quantify leakage of the Scolel Té project in Chiapas, Mexico. In this project small-scale farmers are implementing forestry, agroforestry, and forest conservation activities, with carbon sequestration as one of the goals. The main leakage monitoring domain is defined as the area owned by the participating farmers or communities outside the area where the specific project activities take place. The null-hypothesis (no leakage) is that non-project land owned by the farmer or community will experience the same carbon stock changes as predicted by the regional baseline, specifically developed for the project. First we assessed the most likely causes and sources of leakage that may occur in the project. From this analysis, one type of leakage seems to be important, i.e., activity shifting. Second we estimated the leakage of a sample of participating farmers and communities. Actual land use was then compared with expected land use derived from the baseline. The Plan Vivo of each participant, complemented with readily available tools to identify the main sources and drivers of leakage are used to develop simple leakage assessment procedures, as demonstrated in this paper. Negative leakage was estimated to be negligible in this study. Incorporating these procedures already in the project planning stage will reduce the uncertainties related to the actual carbon mitigation potential of any forestry project.

Development of an agroforestry carbon sequestration project in Khammam district,India

This paper addresses methodological issues in estimating carbon (C) sequestration potential, baseline determination, additionality and leakage in Khammam district, Andhra Pradesh, southern part of India. Technical potential for afforestation on cultivable wastelands, fallow, and marginal croplands was considered for Eucalyptus clonal plantations. Field studies for aboveground and belowground biomass, woody litter, and soil organic carbon for baseline and project scenarios were conducted to estimate the carbon sequestration potential. The baseline carbon stock was estimated to be 45.3 t C/ha, predominately in soils. The additional carbon sequestration potential under the project scenario for 30 years is estimated to be 12.8 t C/ha/year inclusive of harvest regimes and carbon emissions due to biomass burning and fertilizer application. Considering carbon storage in harvested wood, an additional 45% carbon benefit can be accounted. The project scenario has a higher benefit/cost ratio compared to the baseline scenario. The initial investment cost requirement, however, is high and lack of access to investment is a significant barrier for adoption of agroforestry in the district.

Greenhouse gas mitigation in developing countries through technology transfer?: a survey of empirical evidence

While greenhouse gas (GHG) emissions are projected to rise primarily in the developing countries, the potential for developing new GHG mitigation technologies exists primarily in the industrialized countries. It is thus important, not only for predictions about future emission paths but also for climate change mitigation policies, to understand how the international diffusion of such technologies takes place and how it affects the energy infrastructure and GHG emissions in developing countries. This paper provides an overview of the channels through which these technologies diffuse and focuses on the empirical evidence pertaining to the effects these technologies have on GHG emissions in developing countries.

The Dutch National System for forest sector greenhouse gas reporting under UNFCCC

A full account for carbon dioxide (CO₂) and other greenhouse gas balance is presented for the Dutch forest and nature areas for 1990–2002 at a Tier 2.5 level. The paper outlines how complex guidelines can be turned into a practical system, appropriate for a small country, making use of the best knowledge and data available. The net total sink of all processes of the forest and other nature terrains balance is very stable through time around an average of 1.74 million tonnes of CO₂ per year. The sink is to a large extent determined by the growth of forest remaining forest, and the harvest taking place in there. Newly added processes in this new National System are significant as well, but they compensate each other. The sources from deforestation and nitrous oxide (N₂O) emissions (around 900 ktonne CO₂) are for two thirds compensated by the sinks from afforestation, dead wood, soil C changes due to land use changes, and trees outside the forest. The land use changes between 1990 and 2000 showed that The Netherlands has an annual deforestation of 2504 ha (0.7% of the forest area) and an afforestation of 3124 ha. Deforestation led in total over the 13 years of 1990–2002 to an emission of 11.2 million tonne CO₂ compensated by only 1.9 million tonne CO₂ due to afforestation.

Land use change and forestry climate project regional baselines: a review

Climate change programs have largely used the project-specific approach for estimating baseline emissions of climate mitigation projects. This approach is subjective, lacks transparency, can generate inconsistent baselines for similar projects, and is likely to have high transaction costs. The use of regional baselines, which partially addresses these issues, has been reported in the literature on forestry and agriculture projects, and in greenhouse gas (GHG) mitigation program guidance for them (e.g., WRI/WBCSD GHG Project Protocol, USDOE’s 1605(b) registry, UNFCCC’s Clean Development Mechanism). This paper provides an assessment of project-specific and regional baselines approaches for key baseline tasks, using project and program examples. The regional experience to date is then synthesized into generic steps that are referred to as Stratified Regional Baselines (SRB). Regional approaches generally, and SRB in particular explicitly acknowledge the heterogeneity of carbon density, land use change, and other key baseline driver variables across a landscape. SRB focuses on providing guidance on how to stratify lands into parcels with relatively homogeneous characteristics to estimate conservative baselines within a GHG assessment boundary, by applying systematic methods to determine the boundary and time period for input data.

Linking Russia with the European and global greenhouse gas emissions trading markets: three paths for greening the Russian assigned amount under the Kyoto Protocol

This article examines possibilities for linkage between the European Union Emissions Trading System (EU ETS) and Russia, with a view to enhancing cooperation on a broader scale than the project-based approaches that have been tested thus far. Three paths for possible EU-Russia linkage are presented by which the Russian Assigned Amount under the Kyoto Protocol can be greened in order to stimulate emissions trading: 1. Joint implementation—reductions earned via individual projects in Russia; 2. Greened allowances or green investment schemes; and 3. Linked cap-and-trade systems, in which a Russian domestic emissions trading system would link with the European Union Emissions Trading System. The authors conclude that the third option, emissions trading through linked domestic emissions trading systems, offers the best opportunities at the lowest transaction costs. The authors discuss useful innovative instruments like call options and slip level arrangements on government-to-government and business-to-business levels.

Ensuring the environmental effectiveness of linked emissions trading schemes over time

Linking emissions trading schemes allows the combined emissions cap to be achieved at lower cost. Linking is usually environmentally neutral, but some design features can lead to higher aggregate emissions if schemes are linked. Technical solutions to limit the potential emissions increases due to design differences implemented when schemes are linked are not sufficient to ensure the environmental effectiveness of the linked schemes over time. Technological, economic, administrative and other changes that can lead to higher aggregate emissions are inevitable. The administrators of the linked schemes must ensure the stringency of the emissions cap relative to the “business as usual” emissions of affected sources, the accuracy of the emissions reported by affected sources, the integrity of the allowance registry, effective compliance enforcement, and the environmental integrity of the credits issued for emission reduction projects over time. This will require a process for agreeing on revisions to the regulations of the linked schemes, a mechanism to provide assurance of the environmental effectiveness of each of the linked schemes, and a procedure for terminating the linking agreement.

Marginal costs of abating greenhouse gases in the global ruminant livestock sector

Livestock [inclusive of ruminant species, namely cattle (Bos Taurus and Bos indicus), sheep (Ovis aries), goats (Capra hircus), and buffaloes (Bubalus bubalis), and non-ruminant species, namely pigs (Sus scrofa domesticus) and chickens (Gallus domesticus)] are both affected by climate change and contribute as much as 14.5 % of global anthropogenic greenhouse gas (GHG) emissions, most of which is from ruminant animals (Gerber et al. 2013). This study aims to estimate the marginal costs of reducing GHG emissions for a selection of practices in the ruminant livestock sector (inclusive of the major ruminant species—cattle, sheep, and goats) globally. It advances on previous assessments by calculating marginal costs rather than commonly reported average costs of abatement and can thus provide insights about abatement responses at different carbon prices. We selected the most promising abatement options based on their effectiveness and feasibility. Improved grazing management and legume sowing are the main practices assessed in grazing systems. The urea (CO(NH₂)₂) treatment of crop straws is the main practice applied in mixed crop–livestock systems, while the feeding of dietary lipids and nitrates are confined to more intensive production systems. These practices were estimated to reduce emissions by up to 379 metric megatons of carbon dioxide (CO₂) equivalent emissions per year (MtCO₂-eq yr^?1). Two thirds of this reduction was estimated to be possible at a carbon price of 20 US dollars per metric ton of CO₂ equivalent emissions ($20 tCO₂-eq^?1). This study also provides strategic guidance as to where abatement efforts could be most cost effectively targeted. For example, improved grazing management was particularly cost effective in Latin America and Sub-Saharan Africa, while legume sowing appeared to work best in Western Europe and Latin America.     

Advancing the climate regime through linking domestic emission trading systems?

More and more countries are incorporating the instrument of emissions trading into their national climate policies. This emerging mosaic of emissions trading schemes (ETS) raises the question of whether they should be linked with each other. From an economic point of view, linking of domestic schemes is supposed to increase the economic efficiency of carbon markets. In addition, linking is also expected by some to yield substantial political benefits in terms of the evolution of the UNFCCC/Kyoto regime. However, these optimistic prospects are based on a best-case scenario where all major countries establish environmentally effective emissions trading systems and then link them with each other. Real-life politics might develop rather differently. This paper therefore examines to what extent the current status of emissions trading in industrialised countries provides a basis for reinforcing and moving forward the international climate regime through linking domestic ETS. After comparing emerging emissions trading schemes from an institutional perspective, it emerges that not only emissions trading is at a very early stage in most countries, in addition the emerging systems are probably going to be designed very differently from the EU ETS. While for some design features such as the coverage design differences do not matter, there are some areas where the plans in many non-EU countries look crucially different from the EU system. The outlook for a linked international ETS is therefore currently still very uncertain. Given this state of affairs, the EU should pro-actively engage with the non-EU countries to try to harmonise their developing national emissions trading schemes with the EU ETS, widely disseminate the lessons it has learned from the EU ETS, strongly make the case for environmental integrity and at the same time make clear that systems that want to link to the EU ETS will need to meet certain quality criteria.

生物炭添加对土壤温室气体排放影响的长短期效应研究进展

人类活动引起的大气温室气体浓度增加是气候变暖的主要原因,全球变暖已经成为了当今人类社会所面临的严峻挑战,应对气候变暖的关键是减少温室气体排放和增加生态系统碳汇,由于生物炭特有的理化和生物学特性,将其施入土壤被认为是一种有前景的减排增汇措施.因此进行生物炭对土壤温室气体排放的影响研究对于减缓温室效应和实现“碳中和”具有重要意义.通过综述生物炭对土壤温室气体排放影响的长短期效应及其影响机制,发现生物炭添加对土壤温室气体排放的影响因生物炭原料类型、热解温度、添加量、土壤和植被类型的不同而不同.此外,因老化时间、老化方式和培养方法的不同,老化生物炭对土壤温室气体的减排效应可能增强或减弱甚至消失.同时,在总结现有研究不足的基础上,对未来生物炭影响土壤温室气体排放研究的方向和重点进行了分析和展望,提出了今后应加强CO₂、 N₂O和CH₄排放影响的同步研究、减排与固碳效应的同步研究、不同老化方式生物炭和不同培养方法的联合研究和利用¹³C和¹⁵N示踪技术从过程层次上揭示影响机制.     

Emissions corridors for reducing the risk of a collapse of the Atlantic thermohaline circulation

In this paper, we present the integrated assessment model dimrise (dynamic integrated model of regular climate change impacts and singular events). This model is designed to investigate the stability of the Atlantic thermohaline circulation (THC) and to derive related climate policy recommendations. It is written in GAMS and comprises a dynamic model of the THC coupled to a climate model and a global economy model for assessing the monetary cost of climate protection. The THC model is a dynamic four-box interhemispheric extension of the classic Stommel model calibrated against results obtained using the CLIMBER-2 climate model. The reduced-form climate model used to drive the THC model is the ICLIPS multi-gas climate model, which is a computationally efficient, globally aggregated model able to mimic the response of more sophisticated carbon cycle and atmosphere-ocean general circulation models. The THC and climate modules are coupled to a globally aggregated Ramsey-type optimal growth model of the world economy derived from the Nordhaus DICE model. Together, these components create a novel dynamic fully coupled computationally efficient integrated assessment model. Illustrative applications demonstrate that dimrise is able to derive (constrained) economically optimal emissions paths that comply with prescribed bounds on admissible THC weakening imposed in order to avoid an irrevocable breakdown. In addition, emissions corridors are presented which contain all possible emissions paths that do not endanger the stability of the THC and that simultaneously obey restrictions on welfare loss arising from mitigation efforts. The presented results show that, under worst-case conditions, the stability of the THC may be threatened within two decades if global emissions would not deviate from the business-as-usual trajectory.

The value of energy efficiency programs for US residential and commercial buildings in a warmer world

US residential and commercial buildings were responsible for about 41 exajoules (EJ) of primary energy use per year in 2002, accounting for approximately 9% of the world fossil-fuel related anthropogenic carbon (C) emissions of 6.7 Gt that contribute to climate change. US Government-sponsored building energy efficiency research and implementation programs are focused on reducing energy consumption in US residential and commercial buildings and reducing these carbon (C) emissions. Although not specifically intended for adaptation to a warmer climate and less effective than under today’s cooler climate, these programs also could help reduce energy demand in a future warmer world. Warming scenarios projected by the United Nations Intergovernmental Panel on Climate Change (IPCC) in 2001 imply net overall decreases in both site energy and primary energy consumption in US residential and commercial buildings, largely because of the reduced need for heating. However, there would be as much as a 25% increase in building space cooling demand and a significant part of the increase could be offset by energy-efficiency improvements in buildings. Overall, in the US, buildings-related energy efficiency programs would reduce site energy consumption in buildings in the US by more than 2 EJ in 2020 and primary energy by more than 3.5 EJ, more than enough to offset the projected growth in cooling energy consumption due to climate change and growth in the US building stock. The savings would have an estimated annual net value at 2005 energy prices of between $45.0 and $47.3 billion to consumers.

The double trade-off between adaptation and mitigation for sea level rise: an application of FUND

This paper studies the effects of adaptation and mitigation on the impacts of sea level rise. Without adaptation, the impact of sea level rise would be substantial, almost wiping out entire countries by 2100, although the globally aggregate effect is much smaller. Adaptation would reduce potential impacts by a factor 10–100. Adaptation would come at a minor cost compared to the damage avoided. As adaptation depends on socio-economic status, the rank order of most vulnerable countries is different than the rank order of most exposed countries. Because the momentum of sea level rise is so large, mitigation can reduce impacts only to a limited extent. Stabilising carbon dioxide concentrations at 550 ppm would cut impacts in 2100 by about 10%. However, the costs of emission reduction lower the avoided impacts by up to 25% (average 10%). This is partly due to the reduced availability of resources for adaptation, and partly due to the increased sensitivity to wetland loss by adaptation.

Assessing the dynamic efficiency of internal mitigation projects. An evolutionary perspective

Internal mitigation projects have recently been proposed as an additional flexibility mechanism, particularly in the context of the European Union. Their main objective is to engage sectors not included in the European Union emissions trading scheme (EU ETS) in cost-effective emissions reductions. However, in this paper it is argued that, when assessed in terms of dynamic efficiency, the instrument is likely to be, at best, irrelevant to induce the scale of systemic technological changes which are required to tackle the climate change problem and, at worst, detrimental for this task. Insights from the Evolutionary Economics of technological change complemented with political economy considerations are used to support this claim.

Climate change adaptation and regional forest planning in southern Yukon,Canada

Recent interest in sustainable forest management planning in the Yukon has coincided with growing public awareness of climate change, providing an opportunity to explore how forestry plans are incorporating climate change. In this paper, the Strategic Forest Management Plans for the Champagne and Aishihik First Nations Traditional Territory (CATT) and the Teslin Tlingit Traditional Territory (TTTT) are examined for evidence of adaptation to climate change. For each plan, management policies and practices that are also recognized as ways to adapt to climate change are identified to provide information on the incremental costs and benefits of additional adaptation efforts. A typology for classifying sustainable forest management plans according to how they address climate change is proposed and applied to the CATT and TTTT plans. This typology, which may be useful to any future retrospective assessments on how successful these or other sustainable forest management plans have been in addressing and managing the risks posed by climate change, consists of a matrix that categorizes plans into one of four types; (1) proactive-direct, (2) proactive-indirect, (3) reactive-direct, and (4) reactive-indirect. Neither of the plans available for the southern Yukon explicitly identifies climate change vulnerabilities and actions that will be taken to reduce those vulnerabilities and manage risks. However, both plans have incorporated some examples of ‘best management practices’ for sustainable forest management that are also consistent with appropriate climate adaptation responses. Even in a jurisdiction facing rapid ecological changes driven by climate change, where there is a relatively high level of awareness of climate change and its implications, forestry planning processes have yet to grapple directly with the risks that climate change may pose to the ability of forest managers to achieve the stated goals and objectives of sustainable forest management plans.