Italy’s route to Kyoto: a wishful thinking? · CIPE 2002 vs. NAP 2004 (Mton GHGs) Residences...
Transcript of Italy’s route to Kyoto: a wishful thinking? · CIPE 2002 vs. NAP 2004 (Mton GHGs) Residences...
Italy’s route to Kyoto: a wishful thinking?
USAEE/IAEEUSAEE/IAEE –– Washington DC,Washington DC, JulyJuly 20042004
byEnzo Di Giulio - Scuola Mattei – Eni Corporate UniversityStefania Migliavacca - Scuola Mattei - Eni Corporate UniversityAlessandro Vaglio – University of Bergamo
Which sectors are mainly responsible?
GHGs Emissions in 2001 (EU Countries)
Household and Services
17%
Industry20%
Transportation21%
Electricity Generation and
refineries28%
Others4%
Agriculture10%
Italy and Kyoto: ambitions and reality
Ambitions- 6.5% with respect to 1990
521 Mton CO2 eq in 1990- 6.5%
= 487.1 Mton CO2 eq in the first commitment period 2008-2012
KYOTO TARGET
Distinctive features of Italian Energy System
Dependent abroadNo nuclearThe “cool” questionPrivatization-liberalization-regulation
Reality
Energy saving life-style originated by a
strong energy dependence
Non energyintensiveeconomic structure
climate, high population
density
High energyprices
A low energy intensity
due to
2002 Law 39/2002 to enforce the EU Directive for the promotion of renewables June: Italy ratified the Kyoto ProtocolDecember: the new CIPE resolution
200420 April a draft National Allocation Plan
Is it enough?
Political Actions
CipeCipe ResolutionResolution 2002 2002 (MtCO2 (MtCO2 eqeq))
2000 Emissions(546,8)
2010BASE Scenario
(579,7)
2010 ReferenceScenario
(528,1)
Already located measures(39,6)
+ CDM – JI (12)
Further measures(32,5 - 47,8)
Riforestation(10,2)
FurtherCDM - JI (20,5 - 48)
Surplus(92,6)
Surplus(41)TARGETTARGET
(487,1)
Now we have “the number”The gap is around 92.6 Mton CO2 eq
ET40.8FCJ
FDP12ASCJ
39.8ASDP
7.5Transportation
6.3Household & services
26Power Generation
Import
CombinatedCycles
Renewable
= 92.6
How much CDM and JI?
Italian firms have a low propensity to invest abroad
FDI towards Developed countries and service sector
Which policies and measures could support CDM and JI decisions?
2004…Time to wake up !
Model specifications:discount rate 5%;the net cost of most P&M is assumed to be zero; simulations from 2002 but policies effective from 2004; the abatement grows linearly; price for ET = 15 Euro/tonCO2
How much will it cost?
TIME plays a crucial role:Opportunity costTechnical limit
We want to estimate the cost of reaching Kyoto assuming different degree of implementation of CIPE Guidelines
0.04415
0.00000 0.30000
R SUR
0.02
0.00 0.30
U
R CC
0.02
0.00 0.30
U
R RENEW
0.02
0.00 0.40
U
R IMP
0.02
0.00 0.40
U
R RES
0.02
0.00 0.40
R TRANS
0.00
0.00 0.50
U
R CDM
0.00
0.00 0.50
U
R FOREST
0.00
0.00 0.50
U
R OT P&M
0.00
0.00 0.50
U
R OT CDM
0
CO CC
0
CO RENEW
0
CO ELE IMP
0
CO RES
9
CO TRANS
10U
CO CDM & JI
1
CO FOREST
5
CO OTHER P&M
3
CO OT CDM&JI
15.000
CO ET
SWITCH ELE SWITCH R&T SWITCH CDM&JI SWITCH ET SWITCH THE OTHERS
CO ET Graph
NEW CC Graph NEW RENEW Graph NEW IMP Graph
RES Graph TRANS Graph CDM&JI Graph
FOREST Graph OTHER P&M Graph OTHER CDM&JI G…
CO2 PRICE THE OTHERS
P&M + CDM&JI
Degree of implementation of the Italian policies in 4 scenarios
Total cost in different Scenarios (MilEuro)
-200
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2200
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
scenario 1 (15Euro/ton)
scenario 1 (5Euro/ton)
scenario 1 (40Euro/ton)
scenario 2 (15Euro/ton)
scenario 2 (5Euro/ton)
scenario 2 (40Euro/ton)
scenario 3 (15Euro/ton)
scenario 3 (5EUro/ton)
scenario 3 (40Euro/ton)
scenario 4 (15Euro/ton)
scenario 4 (5Euro/ton)
scenario 4 (40Euro/ton)
Scenario 1, 2, 3 and 4: annual total cost assuming different CO2 prices (5-15-40 Euro/ton CO2)
Scenario 1, 2, 3 and 4: weight of ET and other actions cost in millions of Euro (CO2 price:15 Euro/tonCO2)
Emissions Trading and other actions cumulative costs (2002-2012 in MilEuro)
-500
0
500
1000
1500
2000
2500
3000
3500
4000
4500
SCENARIO 1 SCENARIO 2 SCENARIO 3 SCENARIO 4
ET other actions
The Italian NAPItaly published on 20 April 2004 a draft National Allocation Plan (NAP) under the EU emissions trading scheme.
The non-cogeneration power sector gets the larger share
The new entrants’ reserve is based on sectorial level
279.2279.7278.5Total
98.9103.2105.6Non-cogeneration power sector
200720062005Mton CO2
Allocation criteria
Historical emissions paper, refining, glassHistorical production Iron and steel, lime, clay, cogenerationEmissions projections Power sector
CIPE 2002 vs. NAP 2004 (Mton GHGs)
068.068.0Residences Reference Scenario2136.7134.7Transportation Reference Scenario282.280.2Industry Reference Scenario
28.3172.7144.4Power Industry Reference Scenario23.2541.1517.9Scenario with P&M to 2010 (with CDM)
39131.692.6Distance from Kyoto target28607.7579.7BAU Scenario to 2010-2544.0546.0Emissions in 2000-11476.1487.1Kyoto Target-13508.0521.0Emissions in 1990
DeltaNap 2004Cipe 2002
24,4GHGs Abatement by NAP
131,6 (+27,6%)Surplus in 2010
607,7BAU Scenario to 2010
476,1 Kyoto Target
A New SurplusA New Surplus
CO2 Abatement Cost in UE (4% discount rate, all sectors, EU15 – Euro/ton. CO2 eq.)
Source: EU 2001, “Bottom-up Analysis of Emission Reduction Potentials and Costs for Greenhouse Gases in the EU”
ConclusionsSurplus in 2010: about + 27%
Domestic P&M cannot solve the problem because of…
time and costs,
current political orientation
CDM-JI ? …. maybe, but let’s avoid exaggerations
Thus, Emissions Trading: how much does it cost?
Thank you for your attention!