INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE Technology and Trading Systems A...

INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE

Technology and Trading Systems

A Comment

Dolf GielenSenior Analyst

IEA


Topics

The importance of technologyIssues for options/sectorsSpecific comments


ETP Scenarios & Strategies 2050

“The WEO scenarios are not sustainable” (Claude Mandil)

ETP supplements WEO as it shows new pathways to a sustainable future

Emissions can be stabilised by 2050, if proper energy policies are implemented

Assumes incentive $25/t CO2 worldwide Technology plays a key roleKey technology options and policies have

been identified

INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIETECH Plus: More optimistic on progress for certain key technologies

Mt CO2

Global CO2 Emissions 2003-2050Baseline, ACT and TECH plus Scenarios

0

10 000

20 000

30 000

40 000

50 000

60 000

2003 Baseline2030

Baseline2050

Map No CCS LowEfficiency

TECH Plus2050

Other

Buildings

Transport

Industry

Transformation

PowerGeneration

ACT Scenarios 2050

-16%

+137%

+6%+21% +27%

32 Gt CO2


Map: OECD Emissions 32% below 2003 level, while emissions in Developing Countries are 65% higher

CO2 EmissionsBaseline and Map Scenarios

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

2003 Baseline2050

ACT Map2050

2003 Baseline2050

ACT Map2050

Mt C

O2

OECD Developing Countries

-32%

+65%

+70%

+250%


Issues for Sectors


Emission Reduction by Technology AreaACT Map Scenario

Improved energy efficiency most important contributor to reduced emissions

Other renewables 6%Biomass 2%

Fossil fuel gen eff 1%Nuclear 6%

Coal to gas 5%

Hydro 2%

CCS 12%

Fuel mix in building 5% and industry 2%

Power Gen34%

End-use efficiency

45%

Biofuels in transport 6%

CCS in fuel transformation 3%CCS in industry 5%

MAP Scenario – 205032 Gt CO2 Reduction

Materials & products efficiency 1% Energy & feedstock efficiency 6%

Cogeneration & steam 2% Pocess innovation 1%

Industry 10%

Appliances 7.5%Water heat. cooking 1%

Space heating 3%

Lighting, misc. 3.5%Air conditioning 3%

Buildings 18%

Fuel economy in transport 17%

Transport 17%


Energy Efficiency - A top PriorityImproved energy efficiency saves

about 15 Gt CO2 by 2050 - equivalent to 60% of current emissions

Improved efficiency halves expected growth in electricity demand and reduces the need for generation capacity by a third

Not a pricing issue, an issue of barriers and market inefficiencies

Trading systems usually do not helpINTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE


CO2 Emissions in Power Generation

0

5000

10000

15000

20000

25000

30000

2003

Baseli

ne 20

50

ACT Map

ACT Low N

uclea

r

ACT Low R

enew

ables

ACT No C

CS

ACT Low E

fficien

cy

TECH Plus

Mt o

f CO

2

End-useEfficiency

Fossil fuelmix

Generationefficiency

Nuclear

Hydropower

Otherrenewables

Biomass

CCS

Baseline Emissions 2050

Savi

ngs


Electricity Generation

Power plant efficiencies – autonomous trend

CCS – not yet ready, further cost reduction needed

Nuclear – not really a cost issueRenewables – cost matter, trading

systems are not sufficient (learning needed)



Manufacturing IndustryCarbon leakage: more global coverage may

helpETS does not capture industry complexity fully:

Commodity trade Life cycle effects/competition (e.g. plastic waste

incineration)Progress is not rewarded (revised permit

allocation): no incentive for technological change

Half of world industry emissions part of AP6 (benchmarking)

Sectoral approaches as alternative ?INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE


Specific Comments


Linking ETSLinking is almost always technically possible, and

some difficulties might be overstated: Price cap issue: only countries in compliance can be sellers Market segmentation with caps may or may not occur Indexed vs. non-indexed targets: little difference (e.g.

Spain, Greece)

Linkage creates winners and losers and therefore acceptance problems

Linkage difficult for key countries outside Europe (Japan)



CDM/JI and Technology Transfer

Technology transfer is more than installing foreign equipment

Interests of technology suppliers and governments differ

May work for non-CO2 (important reductions per project, low cost, limited economic relevance)

Less relevant for energy related CO2 (higher cost, high economic relevance)


Thank You

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