Professional Documents
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November 2009
Acknowledgements:
This report was prepared by Matthew Ogonowski, Haibing Ma, and Thomas Polzin of the
Center for Clean Air Policy.
The authors would like to thank Jos Wheatley, Sarah Love and Aditi Maheshwari (formerly)
of the UK Department for International Development (DFID) for their generous financial
support for the project.
For avoidance of any doubt and for the purpose of clarity, the authors would like to state
that this report is based on an independent study, and the contents of the report reflect
their views and not necessarily the views of the governments of UK, Brazil, China and
India.
In Contraction and Convergence, both developed and developing countries would arrive at
the same per capita emissions level during a specified time frame. As a prerequisite, all
countries agree upon a stabilization level (for example, 550 ppm) and an emissions pathway
to reach this target. However, because the goal is equal per capita emissions, some countries
with low per capita emissions rates such as India could gain excess allowances, or “hot air.”
These could be sold in a future carbon market, but the framework does not specifically
include emissions trading.
Common but Differentiated Convergence is also based on eventually achieving an equal per
capita emission allowance, but countries would have different time periods within which to
reach this goal. Annex I emissions would converge by, most likely, 2050, and would have a
commitment to reach the convergence level. Non-Annex I countries would be required to
begin their emissions convergence once their per capita emissions reach a certain percentage
of the global average (this global average would continually decline due to Annex I
commitments). Non-Annex I countries that do not exceed the percentage threshold are not
required to achieve an emissions target.
The Multistage approach suggests four stages of progressively more intense mitigation
actions. Countries pass through the stages, ultimately arriving at an absolute reduction
target. The first stage is “no commitments,” appropriate for less developed countries. The
second stage, “enhanced sustainable development,” consists of improved environmental
policies such as new standards of energy efficiency and other climate-friendly policies and
measures. In the third stage, countries commit to a “moderate absolute target” below a
reference scenario. This leads to the fourth stage of the “absolute reduction target” where
countries reduce their emissions and achieve a per capita target. Time scales for these stages
would vary by country.
The Global Triptych approach specifies a set of indicators used to determine countries’
national emissions allowances. It calculates sectoral emission allowances and adds them to
1
Höhne, Niklas, D. Phylipsen, and S. Moltmann, Factors Underpinning Future Action, October 2006.
Ecofys: Cologne, Germany. Available at
http://www.fiacc.net/data/Factors_underpinning_future_action.pdf.
The Sectoral Approach generally calculates emissions per sector, and proposes adherence to a
benchmark or “no lose” emissions intensity target in specific sectors. Sectors could include
iron and steel, cement, electricity, pulp and paper, transport, refineries, and forestry.
Intensity Targets have also been proposed, with targets usually set as emissions per unit of
GDP (economy-wide) or per unit of industry output (in individual sectors). In this analysis,
intensity targets were specified as a reduction in emissions per unit of GDP, with the
improvement occurring at the same rate for all countries.
The table below presents the projected emission reductions under each international policy
scenario. The results were developed assuming a goal of stabilizing atmospheric
concentration of GHG emissions at 550 ppm CO2e. The emissions pathway adopted to meet
this stabilization level achieves global emissions 30% above 1990 levels in 2020 and 10%
below 1990 levels in 2050. In all cases, these data represent the median values of the six
SRES2 scenarios. Stabilization would require that global emissions in 2020 decline to
below 40,000 million metric tons carbon dioxide-equivalent (MMTCO2e), with proportional
reductions around 22-23% below business-as-usual (BAU). (Note that the results shown
here do not account for potential international trading of emission allowances; final emissions
after trading could therefore differ in some cases.)
2
The Intergovernmental Panel on Climate Change (IPCC) developed long-term emission scenarios in
1990 and 1992. In 1995, the IPCC 1992 scenarios were evaluated. The evaluation recommended that
significant changes (since 1992) in the understanding of driving forces of emissions and methodologies
should be addressed. Thus the Special Report on Emissions Scenarios (SRES) was developed to
represent the range of driving forces and emissions in the scenario literature so as to reflect current
understanding and knowledge about underlying uncertainties. The scenarios cover a wide range of the
main demographic, economic, and technological driving forces of GHG and sulphur emissions.
(Source: IPCC)
The original report data is very appropriate for this analysis, and is one of the key sources that
provide economy-wide emission projections for all GHGs for specific countries in future
years. It does have several limitations, however. One is that the country baselines include
only some of the future impacts of existing energy efficiency and emission reduction options
already implemented in these countries (referred to as “recent policies”). As highlighted in
CCAP’s 2006 report,3 these actions can contribute significantly to reducing BAU emissions,
thereby making future reduction goals easier to meet. It should also be noted that the
country data does not include emissions from deforestation, a significant limitation in Brazil
where such emissions account for the majority of national GHG emissions. The potential
impact of this factor has been evaluated in the policy discussion sections, where appropriate.
In the Ecofys report, future BAU emissions were developed from projections of emissions,
while the national emissions budgets under each policy were developed from bottom-up
estimates (i.e. emissions per capita, emissions per sector or emissions per unit of GDP). The
emissions budgets are therefore likely to be more realistic than the BAU emissions. The
BAU emissions and the reductions below BAU for each policy are presented for the three
countries, but they should be understood as conservative (i.e. high) estimates for China and
India, but very low estimates for Brazil due to the exclusion of deforestation. The future
BAU emissions and the actual reductions that would be required are thus likely to be lower
than presented here in many cases.
These estimates include five sectors: electricity, cement, iron and steel, pulp and paper, and
transportation, and account for CO2 emissions only. Combined CO2 emission estimates for
three additional sectors (residential, service/commercial, and agriculture) were available from
the World Energy Outlook 2006.4 The US Environmental Protection Agency (EPA) has
developed detailed BAU emissions estimates and mitigation potentials for the five non-CO2
gases in these countries.5 By combining these estimates we can then calculate a combined
GHG emission estimate that covers the CO2 emissions from eight major sectors and the
3
Center for Clean Air Policy. Greenhouse Gas Mitigation in Brazil, China and India: Scenarios and
Opportunities through 2025 (Conclusion and Recommendations). November 2006. Available at
http://www.ccap.org/international/Conclusions-Developing%20Country.pdf
4
OECD/IEA. World Energy Outlook 2006.
5
Emissions data from Global Anthropogenic Non-CO2 Greenhouse Gas Emissions: 1990 – 2020.
June 2006 Revised. Mitigation data provided to CCAP from US EPA, from Global Mitigation of
Non-CO2 Greenhouse Gases. June 2006.
CCAP estimates that the five-sector CO2 emissions alone in 2000 accounted for over 70% of
economy-wide CO2 emissions (not including land-use change and forestry) in China, India,
and Brazil. With CO2 emissions from three other sectors and the non-CO2 numbers added in,
the final total emissions will capture most of each country’s total GHG emissions, excluding
LUCF emissions. However, there remains a share of CO2 emissions from sectors such as
chemicals, oil refining and aluminum production that are not captured in this framework; in
this paper we refer to these emissions as the Residual GHG (RG) emissions. CCAP
attempted but was unable to develop estimates for these emissions due to a lack of
comparable data. We therefore developed an alternative methodology.
The CCAP report and the US EPA data also provide estimates for the GHG emission
reductions that could be obtained from implementation of mitigation measures in 2020. We
used this data to assemble the total GHG emissions at each mitigation cost level, and compare
them to the emissions budgets under each policy. In most cases, at some cost level the total
emissions after mitigation (without the RG emissions) will fall below the emissions budget.
At this cost and those above it, we can conclude that the country could achieve the emissions
budget under the international policy by a) implementing all mitigation measures at and
below that cost level, and b) holding the RG emissions to a level at or lower than the gap
between the emissions budget minus the total emissions after mitigation.
The CCAP report presents CO2 emissions for mitigation measures in four cost categories:
options less than $0/tonne of CO2, less than $5/tonne, less than $10/tonne, and all options at
all cost levels. The non-CO2 reductions were taken from the US EPA data, which breaks
them out into five cost categories: less than $0, $15, $30, $45 and $60 per tonne
CO2-equivalent. In this analysis, we do not show the less than $5/tonne option since the
difference between $5 and $10 option in most cases is not large enough to affect the result
significantly. The emissions were combined to present emission estimates after mitigation
of CO2 and non-CO2 gases at two cost levels (<$0/tonne and <$15/tonne), and
implementation of all CO2 options combined with non-CO2 options at <$15/tonne, $30/tonne,
$45/tonne and $60/tonne.
The table below shows the results of this analysis for each country, with the emission levels
used in the analysis of each international policy. Since the CCAP report does not have a $15
cost level, the < $15 emissions estimates use the <$10/tonne for CO2 and the <$15 for
non-CO2 gases. In the case of China, total emissions after mitigation (without the RG
emissions) begin at 7,624 MMTCO2e from implementation of only the <$0 CO2 reduction
measures in the five original sectors in the CCAP report. These would decline to 7,537
MMTCO2e by combining these measures with the <$0 non-CO2 gas mitigation measures.
The analysis indicates that China’s GHG emissions from all sectors except the RC sectors
could be reduced to nearly 6,100 MMTCO2e in 2020 if all CO2 measures in the CCAP report
were implemented in the five sectors along with all non-CO2 measures identified by US EPA
(up to <$60 per tonne). India’s 2020 emissions (with the RC sectors) after mitigation range
from 3,128 MMTCO2e with only CO2 measures <$0/tonne to less than 2,600 MMTCO2e at
$30/tonne or greater, while Brazil’s range from 1,342 MMTCO2e to just over 1,100
MMTCO2e for these same levels and measures.
Under Contraction and Convergence, all countries would reach the same eventual per capita
emissions level. For a stabilization goal of 550 ppm CO2 equivalent, convergence at about 3
MMTCO2e per capita in 2050 is required. This would yield a 2020 goal of approximately 5
MMTCO2e per person.
Of the three countries examined, India currently has the lowest GHG emissions per capita
(1.9 tons CO2e in 2000), less than one-half that in China and Brazil (3.9 and 4.9, respectively).
These patterns are expected to continue through 2020. As a result, the reductions India
would undertake under this policy would be relatively small (less than 200 MMTCO2e), only
5% of its BAU emissions. The total effort required in China and Brazil would be
significantly greater. China’s emissions budget would be almost one-quarter lower than its
projected BAU emissions, or 6,744 MMTCO2e – an amount only about 10% greater than its
total 2004 annual GHG emissions. Total reductions in Brazil would be about 2.5 times those
undertaken in India, or about 450 MMTCO2e, for a large proportional reduction in 2020 BAU
emissions of 28%. If current trends in population and GHG emissions continue, the
reduction effort required in Brazil and China under Contraction and Convergence would thus
be very large, with India needing a much smaller reduction to meet the goal.
To evaluate whether and how each country could achieve its emissions goal under each policy,
we conduct an analysis to determine the gap between the value of the emissions in Table 1
minus the emissions budget. To simplify, we only show three gap values and their
corresponding cost levels: the gap at the mitigation cost level just before the emissions
achieve the goal; the gap at the next cost step after the emissions are achieved (after the
meeting point), and the final gap after all evaluated measures are applied at all cost levels.
The table below shows the total gaps between the emissions budget under the Contraction and
Convergence framework and the estimated total emissions (eight-sector CO2 plus all non-CO2
gas emissions, in MMTCO2e) after mitigation at a specific cost level, for each country in year
2020. From left to right, we first present the 2020 emissions budget for the specific policy
(e.g., Contraction and Convergence). Next are the highest mitigation costs levels for CO2
and non-CO2 gases at which the total eight-sector CO2 plus non-CO2 gas emissions remain
larger than the budget (“Gap before meeting point”). At this point an increase in either the
CO2 or the non-CO2 reductions (at a higher cost) can achieve the emissions goal, as shown in
the next group of data. The gap therefore changes from positive to negative. With a
negative gap, if the country could hold its Residual GHG (RG) emissions from chemicals, oil
refining, aluminum production etc. to a level smaller than the gap, mitigation of GHGs at the
associated cost levels could achieve the emissions goal. If the RG emissions are larger than
the “gap after meeting point,” however, the country would have to apply more expensive
mitigation options. The “Maximum Gap” and its corresponding cost level shows the
maximum limit of each country’s RG emissions. At this cost level, the emission goal under
the policy could be achieved by implementing all measures at all cost levels if RG emissions
are no larger than the maximum gap. But if RG emissions in 2020 were larger than the
maximum gap emissions, we would conclude that the country would find it very difficult and
costly to achieve the goal envisioned under the policy framework.
Reduction Cost level Gap before Reduction Cost level Gap after Reduction Cost level Maximum
Country Target
CO2 cost non-CO2 cost meeting point CO2 cost non-CO2 cost meeting point CO2 cost non-CO2 cost Gap
China 6744 <$10 <$15 225 All <$15 -170 All <$60 -613
India* 3424 N/A N/A N/A 0 0 -242 All <$60 -883
Brazil 1148 All <$15 30 All <$30 -16 All <$60 -30
*Achieves goal with only recent policies already enacted
For the Contraction and Convergence framework, the results indicate that if China could hold
its RG emissions to less than the 170 MMTCO2e benchmark, China could achieve the
emissions goal. It would need to utilize all evaluated CO2 reduction measures at all cost
levels, combined with the non-CO2 mitigation options that cost less than $15 per ton of CO2e.
If the RG emissions exceed 170 MMTCO2e, China would then have to apply higher cost
non-CO2 measures. Implementing all non-CO2 reduction measures costing up to $60 per
tonne CO2e, China could have emissions (eight-sector CO2 plus non-CO2 gases) about 613
MMTCO2e (almost 10%) below the emissions goal. This may be a more realistic limit for
the country’s RG emissions, and we can thus conclude that achievement of the emissions
levels under Contraction and Convergence would likely be expensive for China.
The data indicates that India would find it much easier to meet the emission goals envisioned.
Under the contraction and convergence framework, in China almost half (45%) of the likely
CO2 reductions are in the electricity sector, with over one-fifth available in cement and
transportation. China could achieve potential reductions of 137 MMTCO2eq in 2020 by
expediting the development of nuclear power at a cost of $19 per tonne. Hydro power
would make the largest single contribution to China’s GHG reductions (about 170
MMTCO2eq) at a higher cost of $30 per ton CO2eq. China’s National Climate Change Plan
has in fact placed great emphasis on development of these two measures. Among China’s
non-CO2 options, livestock and agriculture soil management, landfills, HCFC-22 production
and coal management can contribute to the GHG reduction at a lower cost (most of these
measures are less than $15 per tonne).
In India, emissions are below the policy emissions budget even without applying additional
mitigation measures. If measures at higher costs were needed, reductions would come
primarily from the electricity and transportation sectors. Developing nuclear power plants
would be a major contributor (a reduction potential of nearly 150 MMTCO2e), with vehicle
efficiency improvements in transportation sector at a net cost savings providing another 120
MMTCO2e. If needed, reductions from non-CO2 gases in India would be obtained through
measures similar to those discussed for China. Brazil would need to utilize all CO2
mitigation measures at all cost levels. Transportation and electricity would be two key
sectors likely targeted for reductions. Specifically, expansion of flex fuel vehicles, using
sugar-cane bagasse and building more wind generators are top priorities for technology
development and expansion. These measures together would reduce emissions by about 60
MMTCO2e, but at a relatively high cost (>$30/tonne). But the results make it clear that even
undertaking very expensive measures might not allow Brazil to meet the emissions budget.
As shown in the above table, the results for the three countries are similar to those obtained
for contraction and convergence. India’s per capita emissions in 2020 would be low enough
Reduction Cost level Gap before Reduction Cost level Gap after Reduction Cost level Maximum
Country Target
CO2 cost non-CO2 cost meeting point CO2 cost non-CO2 cost meeting point CO2 cost non-CO2 cost Gap
China 6658 <$10 <$15 311 All <$15 -84 All <$60 -527
India* 3619 N/A N/A N/A 0 0 -437 All <$60 -1078
Brazil 1112 N/A N/A N/A N/A N/A N/A All <$60 6
*Achieves goal with only recent policies already enacted
The results of the cost analysis are not significantly different from those under Contraction
and Convergence. China and India could achieve the emissions goal, while Brazil would
find it difficult if not impossible to do so. Even when Brazil exhausted all evaluated
mitigation measures, it would still not achieve the goal, despite the fact that the RC and
deforestation emissions are not included.
China would need to apply all evaluated CO2 mitigation options to reach the goal. Nuclear
and hydro power would thus still be the key areas of mitigation. For the non-CO2
measurements, China could focus on options costing less than $15 per tonne, including
livestock management, agriculture soil management, landfills and other measures. India
could achieve its emissions goal merely by implementing all the recent policies. In Brazil,
in addition to livestock and agriculture soil management, increasing the use of natural gas
using would be another effective option.
III.C Multistage
Under the Multistage policy framework examined in this analysis, for stabilization at 550
ppm the second stage (i.e. the enhanced sustainable development stage) would require a
15%-20% reduction below BAU. Stage 3 would require reductions of 25-30% below
reference, with national emissions declining by three to six percent annually through 2050 in
the final stage. The threshold to enter Stage 2 would be 5 MMTCO2e per capita in 2020 and
3 MMTCO2e in 2050, while the threshold for no additional reductions in Stage 4 would be 2.0
and 1.5 MMTCO2e in those years, respectively.
The analysis indicates that the level of effort in 2020 by India under this policy would be
minimal (no reductions), while China and Brazil would need to make significant reductions in
their 2020 BAU emissions (17% and 22%, respectively). This result largely reflects
differences in the level of development: with the largest per capita GDP of the three Brazil
would be expected to undertake the largest proportional effort, while India (with the lowest)
would not make any reductions in the short-term. In addition, while each country would be
expected to achieve a per capita emissions goal, unlike both the Contraction and Convergence
and Common but Differentiated Convergence frameworks efforts to meet a given level could
be implemented over a longer period. (Multistage requires that countries meet the same per
Reduction Cost level Gap before Reduction Cost level Gap after Reduction Cost level Maximum
Country Target
CO2 cost non-CO2 cost meeting point CO2 cost non-CO2 cost meeting point CO2 cost non-CO2 cost Gap
China 7296 <$0 <$0 241 <$10 <$15 -327 All <$60 -1165
India* 3619 N/A N/A N/A 0 0 -437 All <$60 -1078
Brazil 1253 <$10 <$15 30 All <$15 -75 All <$60 -135
*Achieves goal with only recent policies already enacted
As we can see from the table, in contrast to the earlier approaches Brazil could potentially
achieve the goals envisioned under the Multistage approach. It could do so by limiting its
RG emissions to 75 MMTCO2 in 2020, and applying all evaluated CO2 mitigation measures
and those non-CO2 measures that cost less than $15 per tonne. With RG emissions were
greater than 75 MMTCO2e, Brazil would need to utilize higher-cost non-CO2 options. If all of
these options under $60 per ton were implemented, Brazil could still have RG emissions up to
135 MMTCO2e, which may be a more realistic goal.
Although the non-CO2 cost level remains the same, China could meet the Multistage goal by
applying less expensive CO2 measures (less than $10 per ton) than under the previous
framework, if the RG emissions could be limited to no more than 327 MMTCO2e. Among
all CO2 mitigation measures with costs less than $10 per ton, applying more advanced engine
technologies in transportation, reconstructing conventional thermal power units and building
supercritical/ultra supercritical plants in the electricity sector are good choices. The largest
contribution could come from the cement sector, using measures like conversion to
multi-stage pre-heater kilns, combustion system improvement, and high-efficiency powder
classifiers. For the non-CO2 gases, China could continue to focus on options costing less
than $15 per tonne such as livestock management, agriculture soil management, and landfills.
Since India’s BAU emissions are below the emissions budget, implementation of the available
recent policies would allow India to meet the emissions budget without any additional
mitigation. In the case of Brazil, in addition to livestock and agriculture soil management,
reforming the aluminum sector and increasing the level of natural gas using would also be
effective options.
The Triptych approach determines sectoral allowances based on a set of indicators, and then
adds them to form an aggregate national goal. In this analysis the sectors included are
industry, electricity, domestic, fossil fuel production, agriculture, and waste. The national
goal is binding, but the sectoral levels are not. In contrast to the above three programs,
Triptych allocates allowances based on different criteria in each sector, and only some sectors
consider per capita emissions. As a result, India would make significant reductions along
with China and Brazil. Each country’s proportional reduction in 2020 would be almost the
same, more than one-fifth of BAU emissions. China’s absolute reductions would total
almost 2,000 MMTCO2e, with reductions in India and Brazil falling by more than 750 and
330 MMTCO2e, respectively. The proportional reduction undertaken by China would also
be slightly greater than in Brazil, unlike the previous approaches examined.
Under the Global Triptych framework, compared to the first two approaches the emissions
budgets are somewhat higher for China and Brazil but much lower for India. By applying
all possible CO2 mitigation measures and non-CO2 measures with costs up to less than $15
per ton, China, India and Brazil could have emission gaps as large as 253, 179, and 86
MMTCO2e, respectively. Holding RG emissions to below these levels would then achieve
each country’s emissions goal. Brazil would find this approach the easiest to achieve
compared to previous frameworks, while the effort required in India would be greater.
All three countries would still need to implement all CO2 mitigation options evaluated in the
CCAP study. For China, hydro and nuclear power would remain the focus area, with some
relatively lower cost measures in the transportation and electricity sectors also contribute.
With respect to the non-CO2 measures, in addition to the relatively inexpensive options like
livestock management (less than $10 per tonne), China might need to apply other more
expensive measures like fully utilizing coal production measures such as methane reduction
(potentially $50 per tonne or higher) to achieve a more robust reduction goal. For India,
nuclear power would also be a central strategy; replacing diesel by bio-diesel would also
contribute significantly, but at a higher cost. India would also need to implement some
non-CO2 measures in areas such as agriculture soil management, landfills, and HCFC-22
production. In Brazil, the reduction measures utilized would be nearly the same as under the
Multistage approach.
Emissions Reduction
Country BAU Emissions Budget (MMT) Reduction (%)
China 7,870 5,746 2,124 27%
India 3,934 2,978 956 24%
Brazil 1,514 1,492 22 1%
The Sectoral approach examined here would focus on the achievement of “no lose” intensity
benchmarks in key sectors. Ecofys conducted an analysis for CCAP of the application of the
Sectoral approach in the electricity, cement, and iron and steel sectors in the year 2020. This
study was conducted earlier than the other analyses, so different BAU projections were used.
The results therefore are not directly comparable, but do offer some insights into an
application of the sectoral approach.
As shown above, China and India would make significant reductions in their emissions.
With their heavy use of coal for electric power generation and industrial production, both
China and India would reduce their emissions by about one-quarter in 2020. The results for
Brazil are very different under this policy, however: unlike all the other approaches examined,
Brazil’s reductions would be minimal (only about 22 MMTCO2e, 1% of BAU emissions).
Brazil’s electricity sector is very low emitting: hydropower provides the overwhelming
majority of Brazil’s electricity, and its domestic supply of coal is minimal and generally low
quality. The emissions intensity of its iron and steel industry is also relatively low. The
additional emission reduction potential that could be achieved in Brazil through a Sectoral
approach is thus limited in these sectors.
Due to the difference in baselines used, a full mitigation and cost analysis of the sectoral
approach was conducted only for the six-sector analysis, presented below.
A more recent Sectoral approach analysis was conducted for the study, using the same
baseline as in the analyses of Contraction and Convergence and other approaches. This
analysis (also for 2020) includes more sectors than the previous one: electricity, iron and steel,
and cement as before, but also oil refineries, transportation, and pulp and paper. With their
heavy use of coal China and India would reduce their emissions by about one-fifth in 2020,
their reductions being only slightly below those obtained for both countries in the Global
Triptych policy analysis. The results for Brazil mirror those in the earlier sectoral analysis:
Brazil’s reductions would be only about 60 MMTCO2e, or 4% of BAU emissions. As noted
above, emission intensities in electricity and industry are relatively low. In addition, the
transportation sector is also low emitting due to its ethanol fuels program.
The earlier sectoral analysis uses different baselines and assumptions, which contributes to
the significant differences in the results. With respect to China, both absolute and
proportional reductions decrease despite the addition of three sectors and the larger (by 12%)
baseline. This is in part due to the inclusion of the other sectors, which under the
assumptions used for the analysis reduces the reduction activities required in the electricity
sector and leads to a relatively higher use of coal compared to the first sectoral analysis.
Lower reductions are also observed in India, due mostly to the lower emissions baseline
assumed. In Brazil the results are as expected: both absolute and proportional reductions are
increased by including the three additional sectors.
Reduction Cost level Gap before Reduction Cost level Gap after Reduction Cost level Maximum
Country Target
CO2 cost non-CO2 cost meeting point CO2 cost non-CO2 cost meeting point CO2 cost non-CO2 cost Gap
China 6996 <$0 <$0 541 <$10 <$15 -27 All <$60 -865
India 2898 <$0 <$0 57 <$10 <$15 -223 All <$60 -357
Brazil* 1542 N/A N/A N/A 0 0 -251 All <$60 -424
*Achieves goal with only recent policies already enacted
The most prominent change under the six sector approach is that Brazil would have a good
chance to achieve the emissions goal, if its RG emissions could be limited to no more than
251 MMTCO2e. This appears feasible considering the high ratio of RG emissions relative to
the goal (about 16%). To reach that point, Brazil needs only to fully implement all available
recent policies in the CO2 report; no additional CO2 or non-CO2 gas measures would be
required.
In contrast, China and India require a significantly greater effort. India might achieve the
mitigation goal at a cost <$15 per tonne if its RG emissions could be held below 223
MMTCO2e, while China would find this more difficult with RG emissions limited to just 27
MMTCO2e for this cost level. When all available CO2 mitigation options and non-CO2
measures up to $60 per ton are implemented, China could have RG emissions as high as 865
MMTCO2e. The country would thus most likely need to utilize many options with cost
higher than $15 per tonne to achieve the emissions goal. For India, lower cost CO2
mitigation measures < $10 per tonne such as wind and nuclear power (net cost saving
measures) would be key options. For the non-CO2 gases, India could apply some of the
measures discussed in the Triptych approach.
The Intensity Target framework assumes an equal effort (achievement of either an absolute
final goal or an annual proportional reduction) of reduction in GHG emissions per unit of
GDP for all countries. This analysis assumed a 4% annual reduction of GHG intensity for
all countries through 2020, with stabilization in 2050. Under such a scenario China’s GHG
reduction in 2020 would be 1,500 MMTCO2e, or 18% below BAU, lower than in all of the
other scenarios except for the Multistage policy. In contrast, India’s 24% reduction would
be its largest compared to all the other policies. Brazil would also make a large reduction
(26%), comparable to its largest reduction under Contraction and Convergence. The
relatively lower scale of China’s reductions may reflect differences in the rate of GDP growth
relative to population or production in some cases.
Reduction Cost level Gap before Reduction Cost level Gap after Reduction Cost level Maximum
Country Target
CO2 cost non-CO2 cost meeting point CO2 cost non-CO2 cost meeting point CO2 cost non-CO2 cost Gap
China 7264 <$0 <$0 273 <$10 <$15 -295 All <$60 -1133
India 2764 <$0 <$0 191 <$10 <$15 -89 All <$60 -223
Brazil 1191 <$10 <$15 93 All <$15 -13 All <$60 -73
Under the intensity framework, China would likely find it easier to achieve the emission goal
compared to many of the other policy frameworks. It might even be able to accomplish this
at a cost of less than $15 per tonne, provided the country’s RG emissions did not exceed 295
MMTCO2e. In contrast, both India and Brazil would find this policy more difficult. Even
all possible measures were used, India and Brazil would still have only a relatively small
range (less than 10% of the target) within which their RG emissions would need to be held to
achieve their intensity targets.
Sectoral GHG
Policy C&C CDC Multistage Triptych (6 sectors) Intensity
Emissions Budget 11,316 11,389 12,168 10,945 11,436 11,219
Reduction (MMT) 2,713 2,640 1,861 3,084 2,593 2,810
Reduction (%) 5.4% 5.2% 3.7% 6.1% 5.1% 5.5%
Share of global reductions 24% 24% 16% 26% 23% 25%
The results indicate that in these scenarios, reductions in these three countries combined
would reduce global emissions by a maximum of 6%. Under the two primarily per capita
The lowest level of reductions is achieved in these three countries under the Multistage
approach. Under this policy China, India and Brazil would achieve only about 1,900
MMTCO2e, a 3.7% reduction in global emissions, much lower than in the other scenarios.
This policy would allow for considerable flexibility in the time frames required for countries
to implement emission reductions, contributing to the lower level of reductions achieved
compared to the other policies.
The results of this study indicate that significant reductions would be achieved by each
country under many of the frameworks examined. China would implement significant
reductions under each scenario, from 17-27% below BAU levels in 2020. India would
achieve low or zero levels of emission reductions under Contraction and Convergence,
Common but Differentiated Convergence, and Multistage scenarios due to its relatively low
level of emissions per capita, but would reduce emissions by 20-25% under the other policies
evaluated. Brazil’s reductions would be high (about 20-30%) in most scenarios, but would
be low under a Sectoral approach as its economy is less carbon-intensive in many sectors.
The results further indicate that many of the policies may require implementation of policies
costing at least $15/tonne in each country. The costs for China would likely be higher in
some cases (e.g., Common but Differentiated Convergence), while in India the per
capita-based approaches would be the least and the Triptych and Intensity Target approaches
the most expensive. Brazil would likely find it very expensive to meet the goals envisioned
under all but the Sectoral policy, although the inclusion of deforestation could change the
relative reductions and costs required significantly.
Option 1 for emitting under budget Option 2 for emitting under budget
A) Contraction All cost $15 per ton All cost $60 per ton
8807 6744 1860 22% 170 613
and Convergence levels of CO2e levels of CO2e
B) Common but
All cost $15 per ton All cost $60 per ton
Differentiated 8807 6658 2149 24% 84 527
levels of CO2e levels of CO2e
Convergence
$10 per ton $15 per ton All cost $60 per ton
C) Multistage 8807 7296 1511 17% 327 1165
of CO2 of CO2e levels of CO2e
D) Global All cost $15 per ton All cost $60 per ton
8807 6827 1980 22% 253 696
Triptych levels of CO2e levels of CO2e
$10 per ton $15 per ton All cost $60 per ton
F) Sectoral 8807 6996 1811 21% 27 865
of CO2 of CO2e levels of CO2e
G) Intensity $10 per ton $15 per ton All cost $60 per ton
8807 7264 1543 18% 295 1133
Targets of CO2 of CO2e levels of CO2e
Second step is to find the way of how to model the mitigation of CO2 and non-CO2 gases, although
Reviewing the micro-level changes in A) B) C) and G) as well as those in D) and F), technically, the
changes in the GTAP-E model should be different (in the sectors they affect); however, due to the fact that
all CO2-mitigation actions need to be done, there will be no big differences between the sectors and the
scale of mitigation actions they used. Therefore, finally, we judge that the implications of the proposed 6
types of international climate policies will fall into two categories:
Although GTAP-E is a global CGE model, here we only impose a carbon tax and present the results as follows.
China will experience a GDP loss due to the levying of carbon tax. In the context of levying $10 carbon
tax, 0.128% of GDP (equal to 14 billion Yuan6 in the year 2001 price) will be lost. In addition to the $15
carbon tax, 0.205% of GDP will be lost, equal to 22.5 billion Yuan (price in 2001). GDP in India will be
benefited most (increase by 0.011%), followed by EU and other Annex-I countries.
Due to the constraints of carbon emissions and the levying of carbon tax, all the sectoral productions in
China will be decreased in these international climate policies. The largest micro-level changes will be
given to natural gas exploitation sector, followed by coal mining, petroleum and coking, as well as power
generation. These are all power supply and power transformation sectors. In contrary, those less
emission-intensive sectors such as service and agriculture will be affected to the least extent.
6
GDP in 2001 in China was 10965.5 billion Yuan (price in 2001).
Various effects are shown in sectoral products’ market prices. First, coal mining, the sector that produces
the most carbon-intensive product – coal, will have the biggest fall in product’s market price, because
carbon tax reduces the demand for coal. The oil extraction sector will have the same effect, but not that
severe as the coal mining sector. Second, we witness big price increases of natural gas and electricity.
Stringent policy on carbon emission will increase the demand for less carbon-intensive energy – natural
gas, which turns out to be a good alternative in terms of the lower price compared to the new energy and
the lower emissions compared to coal and oil. The power generation sector, the top emitting sector in
China, will be largely constrained by the carbon tax policy, so it will change its generation fleet into a
cleaner direction, which also increases the generation costs and finally raises the electricity price. For the
normal manufacturing sectors, the carbon tax will also influence production techniques and increase the
costs for production.
Due to the levying of carbon tax, China will have more net exports, increased by 0.0033% in multistage
and intensity target frameworks, and by more – 0. 0049% in other frameworks.
Where does this growth in net exports come from? We can tell from the table above that other
manufacturing, oil extraction, coal mining and service sectors are the main contributors to the net export
growth, because their prices are falling more rapidly than in other countries. Chemical, iron and steel and
non-ferrous metal sectors will suffer major losses in export goods, because the prices increase.
In all, multistage and intensity targets framework will achieve the emission budget with less GDP loss
(about 0.128%); whereas, the other three frameworks – contraction and convergence, common but
differentiated convergence, and sectoral will result in more GDP loss (about 0.205%).
The limitations of this macroeconomic analysis should be noted. In theory, modeling the real impacts of
these frameworks will need information on reduction levels in all countries in the world; however, here
we are only informed by the needed emission reductions in China, India and Brazil. Frankly speaking,
modeling the emission reductions only in China is unrealistic; yet modeling the emission reductions in
these three developing countries at the same time would be even more unrealistic. Therefore, in terms of
the condition that we don’t have extra information on the mitigation level of major developed countries in
these policy frameworks, we’d rather choose to model the emission reductions only in China, to clearly
inform about policies’ effects’ to different elements in China’s macro-economy, which will provide a good
base for the further simulation of mitigation in more countries.