Foresty offsets in emissions trading systems: a link between systems?

An important aspect in the linking of different emissions trading schemes is the degree to which these systems allow (or ban) external offset project categories. The EU Emission Trading Scheme (EU ETS) currently allows the use of credits from energy and industry projects developed under the Kyoto Protocol’s Joint Implementation (JI) and Clean Development Mechanism (CDM) but excludes the use of carbon credits from forestry projects for compliance in the EU ETS. Forestry credits generated by the CDM have a limited lifetime and expire at the end of a project’s crediting period, or earlier if the carbon stock for which the credits have been issued ceases to exist. According to the recently adopted amendment of the EU ETS Directive forestry credits will remain to be excluded until 2020. The present article reviews how the New South Wales Greenhouse Gas Abatement Scheme (Australia), the Regional Greenhouse Gas Initiative (US) and the voluntary scheme of the Chicago Climate Exchange integrate forestry offsets into the respective system and how they deal with the risk of losing stored and credited biomass. By comparing the results of different scenarios this article shows how differences in the treatment of forestry offsets could impact the efforts to link various emission trading systems in future.

Integrating Joint Implementation Projects for Energy Efficiency on the Built Environment with White Certificates in The Netherlands

In this paper we analyze policy interactions between two innovative climate and energy policy instruments, namely White Certificates (WhC) and Joint Implementation (JI) that target at energy efficiency improvement and reductions of Greenhouse Gas (GHG) emissions. We have selected The Netherlands and Bulgaria as a case study given that the former has a cumulated experience in energy efficiency policies and the latter for a growing potential in JI projects as a host country. Based on a method of analyzing policy interactions, we demonstrate how a possible design of such a scheme can take place and how it should function. A couple of parameters that deserve attention are a baseline definition and a conversion rate for credits. Our basic finding is that an integrated scheme is complementary and can assist substantially in achieving Dutch national United Nations Framework Convention on Climate Change (UNFCCC) Kyoto Protocol targets. Dutch electricity and gas suppliers (parties that receive energy efficiency obligations) can implement energy efficiency projects domestically and in other countries, hence reducing total abatement costs. Furthermore, such a scheme can stimulate further energy efficiency actions from other stakeholders participating in energy markets. Based on an ex-ante assessment, a carefully designed hybrid WhC and JI scheme appears to be effective in terms of targets, efficient, generating positive impacts on markets and society, while uncertain in stimulating innovation.

Future bioenergy trade in the EU: modelling trading options from a cost-effectiveness perspective

The purpose of this paper is to analyse under what conditions, with respect to CO₂ emission-reduction and biofuels-for-transport targets, the trading in the EU of CO₂ credits and solid and/or liquid biofuels is cost-effective from the perspective of an optimisation energy systems model. We use the PEEP model covering the EU27 (except Bulgaria, Malta, and Cyprus) to generate insights about the cost-effectiveness of different options under different policy scenarios. Trade in CO₂ credits is a cost-effective option, in all relevant policy scenarios. Trade in some biofuels (mainly from central and eastern European countries to the EU15) is cost-effective in all assessed scenarios. In the case of CO₂ targets (whether national or at the EU level) there is trade in solid biofuels. When biofuels-for-transport targets are also implemented, trading both solid and liquid biofuels is cost-effective.     

CO2-emission reduction costs for petroleum refineries in Sweden

Possibilities to reduce CO₂ emissions and related costs at Swedish petroleum refineries have been estimated. An evaluation of the direct impact on costs for emission-reducing measures due to the inclusion in the EU ETS is also made. Abatement measures possible to implement within the next 5–6 years at Shell refinery Gothenburg corresponding to a 8% reduction, and at Preemraff Lysekil corresponding to 22% of the estimated fossil CO₂ emissions in 2010 have been included. Many of the estimated abatement costs are negative, meaning cost savings for the companies if implemented. The cost estimates are strongly linked to the fuel prices. The inclusion of industries in the EU ETS increases the incentives for companies to implement CO₂ abatement measures.     

CO2 emission reduction costs for iron ore-based steelmaking in Sweden

Possibilities to reduce CO₂ emissions and related costs at Swedish iron-ore based steelmaking in Sweden have been estimated. An evaluation of the direct impact on costs for emission-reducing measures due to the inclusion in the EU ETS is also made.Two different abatement options, based on previously implemented measures at SSAB Oxelösund as well as some future measures that could be implemented at the company by 2010, have been investigated. The first option corresponds to a CO₂ emission reduction of 6.5% and the second to a 13% reduction. The abatement measure with the largest reduction potential is dependent on natural gas being available at SSAB Oxelösund by 2010, which is not certain.Several of the estimated abatement costs are negative, meaning cost savings for the company if implemented. The cost estimates are strongly linked to the fuel prices. The inclusion of industries in the EU ETS increases the incentives for companies to implement CO₂ abatement measures.     

Mitigation Options for Enteric Methane Emissions from Dairy Animals: An Evaluation for Potential CDM Projects in India

Enteric fermentation in livestock is an important source of anthropogenic methane emission. India, with its large livestock population, is estimated to contribute 10.8 Tg of methane annually from this source. An evaluation of various methane mitigation options indicate that some of the available technologies like, diet supplementation with feed additive and molasses urea product are highly cost effective in reducing enteric methane emissions. The gross cost of methane abatement from use of feed additive monensin premix ranges from €0.6 to €1.8/ton CO₂ equivalent, for buffaloes and indigenous cows, respectively. The gross cost of enteric methane mitigation from supplementing molasses urea products and dietary manipulation through increased concentrate feeding is much higher. But, as the monetary value of the increased milk production on application of these technologies was higher than the annual cost of reduction strategy for buffaloes and crossbred cows, the net costs of the former mitigation option was negative for buffaloes (€-28.1/ton CO₂) and of the latter for crossbred cows (€-7.0/ton CO₂,). The availability of cost-effective technologies suggest that the methane mitigation projects under CDM, can be planned in the Indian dairy sector to the mutual benefit of countries with emission targets and India. The vast dairy animal population of India and resulting methane emissions provide good opportunity these countries to buy reasonable quantum of emission credits from projects in India. Such projects will work to the benefit to India by providing a tool for technology transfer to increase animal productivity and attract capital that assists in more prosperous and environmental friendly milk production in the country.     

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.

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.

Carbon tax,emission trading,or the mixed policy: which is the most effective strategy for climate change mitigation in China?

China, as the world’s largest emitter, intends to achieve the peaking of carbon dioxide (CO₂) emissions around 2030 and to make best efforts to peak early to mitigate global change. Under this strategy, a dynamic, recursive computable general equilibrium (CGE) model is used to analyze the economy, energy, and environment impact of CO₂ emission reduction policy based on 17 scenarios in China: carbon tax, emission trading scheme (ETS), and the mixed policy in different price level, in order to find out which kind of emission reduction strategy is more feasible. The results show that CO₂ emission in 2030 will be reduced with the implementation of tax, ETS and mixed policy, by 10–13 %, 12–14 %, and 18–28 %, respectively. From 2016 to 2030, China can reduce 18,338–24,156 Mt CO₂ through the implementation of mixed policy. Furthermore, relative to single policy, mixed policy has stronger effects on primary energy consumption cut, by 738–1124 Mtoe or 18–28 %, which will make CO₂ emissions reach a peak before 2030 and the peak emission is not greater than 12 billion tons which is in line with the reduction demand in China. Thus, the mixed policy is the most effective strategy so that mixed policy is recommended to parties included in Annex I in United Nations Framework Convention on Climate Change Kyoto Protocol and other countries with large potential of emission reduction, while ETS is suggested to countries with low carbon emissions per capita which can balance economic development and CO₂ mitigation.     

三峡库区主要河流秋季pCO2及其影响因素

于2015年10月对三峡库区主要河流表层水体中的溶解性碳组成进行了测定,结合水文地质条件和水化学关键指标,对河流表层水体二氧化碳分压(p CO_2)的空间变化及影响因素进行了研究,并利用模型法分析了水-气界面CO_2通量特征.结果表明,三峡库区主要河流秋季pCO_2介于18.75~296.31 Pa之间,均值为(141.06±77.51)Pa;河流CO_2脱气通量平均值为(101.1±78.0)mmol·(m2·d)-1,其中86%的采样点位表现为大气CO_2源的特征.p CO_2与DO和pH显著负相关,与HCO-3显著正相关.由于山区河流流速快和水力停留时间短等特征,河流有机碳原位呼吸是导致p CO_2与DO和pH很强的负相关关系的主要原因.研究结果为准确估算三峡库区河流CO_2逸出量提供了重要的数据支撑.     

UNFCCC Kyoto Protocol Clean Development Mechanism Baseline Construction for Vietnam National Electricity Grid

For projects under the UNFCCC Kyoto Protocol Clean Development Mechanism (CDM), a baseline has to be set to allow calculation of the greenhouse gas emissions reductions achieved. An important obstacle to CDM project development is the lack of data for baseline definition; often project developers do not have access to data and therefore incur high transaction costs to collect them. The government of Vietnam has set up all necessary institutions for CDM, wants to promote CDM projects and thus is interested to reduce transaction costs. We calculate emission factors of the Vietnam electricity grid according to the rules defined by the CDM Executive Board for small scale projects and for large renewable electricity generation projects. The emission factors lie between 365 and 899 g CO₂/kWh depending on the specification. The weighted operating and build margin reaches 600 g for 2003, while grid average reaches 399 g. Using three-year averages, a combined build and operating margin of 705 g is calculated. We hope that these data facilitate CDM project development in the electricity supply and energy efficiency improvement in Vietnam.     

Impact assessment of climate policy on Poland's power sector

This article addresses the impact of the European Union Emissions Trading System (EU ETS) on Poland’s conventional energy sector in 2008–2020 and further till 2050. Poland is a country with over 80% dependence on coal in the power sector being under political pressure of the European Union’s (EU) ambitious climate policy. The impact of the increase of the European Emission Allowance (EUA) price on fossil fuel power sector has been modelled for different scenarios. The innovation of this article consists in proposing a methodology of estimation actual costs and benefits of power stations in a country with a heavily coal-dependent power sector in the process of transition to a low-carbon economy. Strong political and economic interdependence of coal and power sector has been demonstrated as well as the impact caused by the EU ETS participation in different technology groups of power plants. It has been shown that gas-fuelled combined heat and power units are less vulnerable to the EU ETS-related costs, whereas the hard coal-fired plants may lose their profitability soon after 2020. Lignite power plants, despite their high emissivity, may longer remain in operation owing to low operational costs. Additionally, the results of long-term, up to 2050, modelling of Poland’s energy sector supported an unavoidable need of deep decarbonisation of the power sector to meet the post-Paris climate objectives. It has been concluded that investing in coal-based power capacity may lead to a carbon lock-in of the power sector. Finally, the overall costs of such a transformation have been discussed and confronted with the financial support offered by the EU. The whole consideration has been made in a wide context of changes ongoing globally in energy markets and compared with some other countries seeking transformation paths from coal. Poland’s case can serve as a lesson for all countries trying to reduce coal dependence in power generation. Reforms in the energy sector shall from the very beginning be an essential part of a sustainable transition of the whole nation’s economy. They must scale the power capacity to the future demand avoiding stranded costs. The reforms must be wide-ranging, based on a wide political consensus and not biased against the coal sector. Future energy mix and corresponding technologies shall be carefully designed, matched and should remain stable in the long-term perspective. Coal-based power capacity being near the end of its lifetime provides an economically viable option to commence a fuel switch and the following technology replacement. Real benefits and costs of the energy transition shall be fairly allocated to all stakeholders and communicated to the society. The social costs and implications in coal-dependent regions may be high, especially in the short-term perspective, but then the transformation will bring profits to the whole society.     

The influence of operational flexibility on the exploitation of CO2 reduction potential in industrial energy production

Energy conservation is a key measure for reducing CO₂ emissions. However, realising the emission reduction potential of an energy conservation investment depends on many factors, such as energy prices. The EU emissions trading scheme has made the investment analysis more complicated and increased the economic value of operational flexibility under fluctuating carbon prices. The different operational options in industrial energy production complicate the estimation of CO₂ reduction potential in the investment phase. Increasing operational flexibility enables optimisation in the economic dimension, which may lead to less than optimum CO₂ reduction. In our case study, which analysed the effects of an energy conservation investment made in the pulp and paper industry, the deviation from the expected emission reduction was around 30% over the period from 2000 to 2007. However, it seems that with high carbon prices, increasing operational flexibility has no significant effect on the carbon emissions. In policy-making, the freedom of action that is made possible by increasing operational flexibility should be taken into account when evaluating the contribution of an individual energy efficiency investment towards meeting the national targets for energy efficiency improvement and CO₂ emission reduction.     

Linking the emissions trading schemes of Europe and China - Combining climate and energy policy instruments

Both Europe and China have announced targets for greenhouse gas emissions reduction and renewable energy development. To achieve their emissions targets, Europe has introduced emissions trading scheme (ETS) since 2005 and China has planned to establish a national ETS in 2015. We assess the impact of a joint Europe-China ETS when both climate and energy policy instruments are simulated in a multiregional general equilibrium model. Our results show that a joint ETS markedly increases total carbon emissions from fossil fuels even though global mitigation costs are reduced. Moreover, a joint ETS helps China achieve its renewable energy target, but for Europe, it works opposite. While the renewable energy target does not help Europe achieve additional abatement, the renewable energy target in China reduces mitigation costs and emissions, and increases renewable energy consumption and sales of carbon allowances. Financial transfer through a joint ETS remains marginal compared to China’s demand for renewable energy subsidies. We conclude that as long as an absolute emissions cap is missing in China, a joint ETS is not attractive for mitigation and China’s renewable energy target can reduce emissions.     

Toward a framework of environmental risk management for CO<Subscript>2</Subscript> geological storage in china: gaps and suggestions for future regulations

China encourages the demonstration of carbon capture and storage (CCS) projects. In an effort to identify gaps and provide suggestions for environmental risk management of carbon dioxide (CO₂) geological storage in China, this article presents a concise overview of potential health, safety and environmental (HSE) risks and environmental management regulations for CO₂ geological storage in Australia, Japan, the United States (USA), the European Union (EU), and the United Kingdom (UK). The environmental impact assessment (EIA) experience of Shenhua Ordos Coal-to-Liquid (CTL) Project and PetroChina Jilin Oil Field enhanced oil recovery (EOR) is subsequently analyzed in light of our field investigation, and gaps in current EIA guidelines that are applicable to CO₂ geological storage projects are identified. It is found that there are no specific environmental risk regulations suitable for CO₂ storage in China, and environmental risk management lags behind the development of CCS technology, which presents a challenge to demonstration enterprises in terms of assessing environmental risk. One major challenge is the overestimation or underestimation of this risk on the part of the enterprise, and another is a lack of applicable regulations for government sectors to supervise the risk throughout CCS projects. Therefore, there is a pressing need for China to formulate environmental management regulations that include environmental risk assessment, mandatory monitoring schemes, environmental emergency plans, and related issues.     

Estimating carbon in savanna ecosystems: rational distribution of effort

Minimising the cost of repeatedly estimating C (C) stocks is crucial to the financial viability of projects that seek to sell C credits. Depending on the price of C, this may imply less or more sampling effort than would be applied for science objectives. In systems with heterogeneous C pools, such as savannas, this translates into a variable-effort sampling strategy that maximises the marginal additional C that can be claimed per incremental unit of effort expended. Analysis of a savanna in north-eastern South Africa indicates relatively modest returns per hectare due to the small C quantities and low sequestration rates. Under these conditions, areas in excess of 1,000 ha and infrequent sampling frequencies of 5–10 years are required to make such projects financially viable. For such projects the sample variance, number of samples, cost per sample and establishment costs have negligible impacts on financial viability. It was also found that the soil-C pool contributes up to three times the net returns of the aboveground C pool and provides a strong argument to monitor soil C for certification and market trading. The financial viability estimates, however, do not include the management or opportunity costs incurred in changing the land use. The economies of scale identified in this study combined with the massive area covered by savannas indicate that these additional costs can be covered. Further research is recommended to quantify these costs and interrogate the feasibility of large scale (in excess of 10,000 ha) C-sink projects in savanna systems.     

The ‘hidden’ social costs of forestry offsets

The article quantifies the size of ‘hidden’ social costs that are incurred by forestry offsets in the voluntary market that promise to offset present emissions sometime in the future. It does this by estimating the difference between the social costs of carbon (C) emitted and of costs offset by removal of C from the atmosphere by reforestation/afforestation. All current attempts to make forestry offsets more reliable focus on quality control rather than the mismatch of the timing of emissions and their offset. Recommendations that follow from the analysis are twofold. First, that markets for carbon dioxide equivalent (CO2e) removals by voluntary offsets should be confined to the annual incremental removals actually achieved. Second, the promoters of voluntary offsets projects should declare the annual stream of carbon credits and debits expected so that buyers can place a present value on such projects.     

Reconciling Emissions Trading with a Technology-Based Response to Potential Abrupt Climate Change

It has been shown that preparedness to respond effectively to imminent abrupt climate change, getting CO₂ levels down towards pre-industrial in a few decades, involves the promotion of specific technology types that can be the basis for a negative emissions energy system (Read and Lermit 2003/5). In particular, Bio-Energy technologies linked to technologies for CO₂ Capture and Storage (BECS) or to other carbon disposal technologies, if done on a sufficiently large scale, can achieve this result given a context of policy urgency that also yields advances in energy efficiency and the take up of ambient energy technologies (wind, solar, etc.) in line with low emissions energy scenarios (e.g. the fossil free energy scenario developed by the Tellus Institute for Greenpeace International (Lazarus et al. 1993). It has also been shown (Read 1999, 2000, 2000a) that, if account is taken of inter-temporal beneficial learning externalities, it is efficient to reward innovation in policy-desirable technology types (e.g. through project-based schemes that embody such technology types) by a greater amount than the penalty on emissions. Such dynamic efficiency can be achieved through establishing a secondary market for project based credits exchanged for a number of emissions permits M(t) (M > 1 for t < H, the time horizon for policy) and with the variation of M(t) over time corresponding to the dynamically efficient path. This results in the incentive for project based emissions reductions being M(t) times greater than the penalty on emissions. By making use of the initial allocation of permits in each time period, an aspect of emissions permit trading that has no efficiency function under either auctioning or ‘grand-fathering’, this arrangement enables project based credits to be administered flexibly whilst ensuring the integrity of the emissions cap. The purpose of this article is to link these two bodies of work to show how a dynamically efficient response to the threat of abrupt climate change can be implemented in a way that is compatible with the response to gradual climate change that has been negotiated in the Kyoto Protocol. The design of such a dynamically efficient mechanism is considered, having as its objective the promotion of the two technology types mentioned above. A particular institutional model for implementing such a mechanism is described that mimics managerial behaviour in the adoption of new technology, avoids the additionality requirement that burdens the operation of the CDM in its current form, and aims to achieve ‘industry friendliness’ as a necessary condition of effective implementation.     

Estimating carbon supply curves from afforestation of agricultural land in the Northeastern U.S.

The Regional Greenhouse Gas Initiative for the northeastern states of the U.S. allows for terrestrial carbon (C) sequestration offsets generated by afforestation activities only. This paper estimates the maximum potential quantity and associated costs of increasing the storage of carbon by afforestation of existing agricultural land in the 11 states of the Northeast United States. The focus of the work was to describe location, the quantity, and at what cost it would be economically attractive to shift agricultural production to afforestation to increase carbon storage in the region. Widely available data sets were used to (1) identify spatially-explicit areas for lower costs carbon offsets and (2) estimate carbon supply curves related to afforestation of agricultural land over three time periods (10, 20, and 40 years). Carbon accumulation and total carbon offset project costs were estimated at a county scale and combined to identify expected costs per ton of carbon dioxide equivalents (CO₂e). Large variation in estimated costs per ton of CO₂e are driven by varying carbon accumulation potentials and opportunity costs of taking land out of agricultural production, as well as the duration of the project activity. Results show that the lowest cost carbon offset projects will be in certain counties of Maine, Vermont, and New York. Pasture land, with lower opportunity costs, generally presents the opportunity for lower cost carbon offset projects relative to cropland. This analysis estimates that afforestation of pasture land in the northeast will not become economically attractive until the price rises above 10 per metric tonne (MT) CO < sub > 2 < /sub > e and that up to 583 million MT could be economically sequestered if the price were to rise to10 per metric tonne (MT) CO₂e and that up to 583 million MT could be economically sequestered if the price were to rise to 50 per MT CO₂e, based on a 40-year project life. With regard to cropland in the northeast, afforestation does not become economically advantageous for land owners until the price rises above $40 per MT CO₂e. It is estimated that up to 487,000 MT could be sequestered from cropland if the price were to rise to $40 per MT CO₂e. It is estimated that up to 487,000 MT could be sequestered from cropland if the price were to rise to 50 per MT CO₂e, based on a 40-year project life.     

融冰期与非融冰期水库CO2逸出昼夜变化及CO2分压影响因素研究

以位于黄土高原北洛河流域的南沟水库为研究对象，采用Li-850静态箱法，于融冰期（3月）、非融冰期（5月）对水体CO₂分压（p（CO₂））和水-气界面CO₂逸出（F（CO₂））分别进行了5 d 40次昼夜监测，同时测定了各种水体理化指标，着重对比了水体p（CO₂）在两个时期间的差异和两时期内的昼夜变化特征，系统分析了水体p（CO₂）的影响因素.结果表明：融冰期p（CO₂）（（324.8±59.4）Pa）比非融冰期（（124.9±14.1）Pa）高出近3倍，差异性显著（p<0.05），但两个时期内昼夜p（CO₂）值并无显著性差异（p>0.05）；水体p（CO₂）与水温、pH、叶绿素（Chla）、溶解氧（DO）呈显著负相关，与溶解无机碳（DIC）、溶解有机碳（DOC）呈显著正相关，水体p（CO₂）受流域碳酸盐体系和水温影响最大，相关系数分别达0.92和-0.91，光合呼吸作用的影响其次；研究区小水库F（CO₂）范围为101~1589 g·m^-2·a^-1，是大气持续碳"源"，其平均排放量与个别温带、亚热带小型水库接近，但低于热带水库.