Our Common Future Under Climate Change

International Scientific Conference 7-10 JULY 2015 Paris, France

Menu
  • Home
  • Zoom Interactive Programme
Cliquer pour fermer

Thursday 9 July - 14:30-16:00 UNESCO Bonvin - ROOM XIV

3335 - Climate Change Mitigation in Latin America

Parallel Session

Lead Convener(s): T. Kober (Energy reserach Centre on the Netherlands, Amsterdam, Netherlands)

Convener(s): B. Van Der Zwaan (ECN / University of Amsterdam, Amsterdam, Netherlands), J. Falzon (Energy reserach Centre on the Netherlands (ECN), Amsterdam, Netherlands), P. Summerton (Cambridge Econometrics, Cambridge, United Kingdom), A.M. Rojas (University of Cape Town - MAPS Programme, Cape Town, South Africa)

14:30

Energy Technology Roll-Out for Climate Change Mitigation: A Multi-Model Study for Latin America

B. Van Der Zwaan (ECN / University of Amsterdam, Amsterdam, Netherlands)

Abstract details
Energy Technology Roll-Out for Climate Change Mitigation: A Multi-Model Study for Latin America

B. Van Der Zwaan (1)
(1) ECN / University of Amsterdam, Amsterdam, Netherlands

Abstract content

In this paper we investigate energy technology deployment under climate change mitigation efforts in Latin America. Through several carbon tax and CO2 abatement scenarios we analyse what technologies in the energy sector, and particularly electricity generation, could best be used until 2050 to significantly reduce CO2 emissions in the region. By way of sensitivity test we perform a cross-model comparison analysis and inspect whether robust conclusions can be drawn across results from not only different models but also different types of models (that is, bottom-up versus top-down, and general equilibrium versus partial equilibrium models). Given the abundance of biomass resources in Latin America, they are likely to play a large role in energy supply in all the scenarios we inspect, especially in the climate policy scenarios since some use of biomass can be combined with CCS. We find that hydropower, which today already contributes about 800 TWh to overall power production in the region, could be significantly expanded to meet the climate policies we investigate, on average by 50% but perhaps by as much as 75%. According to all models, electricity generation increases exponentially with a two- to three-fold expansion between 2010 and 2050. We find that renewables such as wind and solar power typically expand at double-digit growth rates, but the robustness of our findings differs substantially between these two options: the climate policies represented in our models raise wind power in 2050 on average to half the production level that hydropower provides today, while they raise solar power to either a substantially higher or a much lower level than hydropower supplies at present, depending on which model is used. For CCS we also observe a large diversity in model outcomes, which reflects the uncertainties with regard to its future implementation potential given the challenges this CO2 abatement technology currently faces. The extent to which different mitigation options can be used in practice varies a lot between countries within Latin America, depending on factors such as resource potentials, economic performance, environmental impacts, and availability of technical expertise. We provide concise assessments of possible deployment opportunities for some low-carbon energy options, mostly for the region at large but with some country-level detail in specific cases. A similar climate scenario study of technology diffusion in Latin America has not yet been made, so we contribute a new piece of work to the existing literature. This study possesses particular relevance for the ongoing climate negotiations leading up to COP-21 in Paris, as was demonstrated by the attention we received by the presentation of this work during COP-20 in Lima in December 2014. Given the theme of this paper, our work, if accepted, could best be presented in session N° 3335 - Latin America pathways. This has been a multi-authored exercise, lead by Bob van der Zwaan, with contributions from Tom Kober, Silvia Calderon, Leon Clarke, Katie Daenzer, Alban Kitous, Maryse Labriet, Andre Frossard Pereira de Lucena, Claudia Octaviano and Nicolas di Sbroiavacca.

14:50

Climate Change Mitigation in Latin America

T. Kober (Energy reserach Centre on the Netherlands, Amsterdam, Netherlands), B. Van Der Zwaan (University of Amsterdam, Amsterdam, Netherlands)

Abstract details
Climate Change Mitigation in Latin America

T. Kober (1) ; B. Van Der Zwaan (2)
(1) Energy reserach Centre on the Netherlands, Policy Studies, Amsterdam, Netherlands; (2) University of Amsterdam, Faculty of science, Amsterdam, Netherlands

Abstract content

In this keynote speech we present an overview of today’s structure of the energy sector of Latin America and provide a long-term outlook of possible future developments associated to different levels of climate change mitigation ambition in the region. This conference contribution largely builds on the CLIMACAP-LAMP research project (see www.CLIMACAP.org) and highlights its main outcomes. Key findings of the project have already been presented at COP 20 in Lima, and a compilation of the major results scoping on selected regional and topic ‘deep-dives’ is forthcoming in a dedicated special issue in Energy Economics expected in spring 2015. Almost 20 research teams are involved in this project delivering new energy and climate policy analysis, which is derived from a broad application of model-based assessment tools.

Before highlighting climate change mitigation in Latin America, we discuss the baseline projections for the set of models participating in the CLIMACAP-LAMP project and identify key differences between model projections including how these projections compare to historic trends. We find that population and GDP projections across models span a broad range, comparable to the range represented by the set of Shared Socioeconomic Pathways. Kaya-factor decomposition indicates that the set of baseline scenarios mirrors trends experienced over the past decades. Emissions in Latin America are projected to rise as result of GDP and population growth and a minor shift in the energy mix towards fossil fuels. For the future most models assume a somewhat higher GDP growth than historically observed and continued decline of population growth. We observe minor changes in energy intensity or energy mix are projected over the next few decades.

The climate policy scenarios perform around three main clusters of policy measures: carbon taxes, greenhouse gas emission caps applied to Latin American countries and a globally harmonized scheme for cap and trade of emission certificates to attain different levels of temperature stabilization. Regarding the latter, we explicitly investigate pathways reach a stabilization of the mean temperature increase at 2ËšC compared to pre-industrial level. We find that an overall energy emissions reduction of roughly 50% across Latin America is consistent with meeting a 2°C goal at lowest cost. However, a range of other mitigation levels will also be consistent with meeting this goal. Our study confirms the results of previous research that the variation in mitigation costs across models may vary by as much as an order of magnitude. For Latin America as a whole, currently discussed country level policies lower 2030 emissions to a level that are not inconsistent with a 3°C long-term target, but may be inconsistent with a 2°C target. Besides greenhouse gas emission reduction potential related to energy conversion, avoidance of land use and land use change emissions will play an pivotal role, particularly for Colombia and Brazil. These emissions may be alternatively affected by efforts to store more carbon in land and those aimed at producing more bioenergy for low-carbon energy

One of the major economies in Latin America is Brazil for which our results show an increase over time in emissions in baseline scenarios due, largely, to higher penetration of natural gas and coal. Climate policy scenarios, however, indicate that such a pathway can be avoided. While carbon taxes up to 32 US$/tCO2e do not significantly reduce emissions, higher taxes (from 50 US$/tCO2e in 2020 to 162 US$/tCO2e in 2050) induce average emissions reductions around 60% when compared to baseline. Emission constraint scenarios yield even lower reductions in most models. Emission reductions are mostly based on lower energy consumption, increased penetration of renewable energy (especially biomass and wind) and of carbon capture and storage technologies for fossil and/or biomass fuels. The range of mitigation options resulting from the model runs generally fall within the limits found for specific energy sources in the country, although infrastructure investments and technology improvements are needed for the projected mitigation scenarios to achieve actual feasibility.

15:10

The macroeconomic impact of climate mitigation action in Latin America: a model comparison

P. Summerton (Cambridge Econometrics, Cambridge, United Kingdom)

Abstract details
The macroeconomic impact of climate mitigation action in Latin America: a model comparison

P. Summerton (1)
(1) Cambridge Econometrics, Cambridge, United Kingdom

Abstract content

In this paper we investigate economic impacts under climate change mitigation efforts in Latin America. Through several carbon tax scenarios we analyse the impact that climate change mitigation policy might have on income, trade and investment in the region. By way of sensitivity test we perform a cross-model comparison analysis and inspect whether robust conclusions can be drawn across results from not only different models but also different types of modelling approach (that is, a hybrid modelling approach that links an energy system model, TIAM-ECN, with a macro-simulation modelling, E3ME, compared to the mainstream general equilibrium modelling approach).

The paper presents the first detailed multi-model comparison of the macroeconomic consequences of carbon pricing action in Latin America. In the short term at carbon prices reaching around $15/tCO2 by 2030 the models agree that the reduction in consumer spending, as a proxy for welfare, is expected to be limited in all countries modelled and across the continent. However, by 2050 and at carbon prices of $165/tCO2, there is much more divergence in the estimated impact on GDP and consumer spending across models and across countries in Latin America reflecting the uncertainty about the cost of technology and substitution between technology options. The insight of the hybrid modelling approach comes through in the comparison of increasingly higher carbon prices in each model. The negative impact of reduced consumer spending and GDP are linear in the CGE models and increase as the carbon price increases; but divergent and non-linear in E3ME-TIAM-ECN reflecting step-changes in technology substitution in TIAM-ECN and the non-linear impact of each technology (its cost, cost composition and supply chain implications) on the economy as represented in E3ME.

A similar mulit-model scenario analysis of economic impacts of mitigation policy in Latin America has not yet been made, so we contribute a new piece of work to the existing literature. This study possesses particular relevance for the ongoing climate negotiations leading up to COP-21 in Paris, as was demonstrated by the attention we received by the presentation of this work during COP-20 in Lima in December 2014. Given the theme of this paper, our work, if accepted, could best be presented in session N° 3335 - Latin America pathways. This has been a multiauthored exercise, led by Philip Summerton, with contributions from Hector Pollitt (Cambridge Econometrics), Unnada Chewpreecha (Cambridge Econometrics), Xiaolin Ren (National Centre for Atmospheric Research), William Wills (Energy Planning Program, Federal University of Rio de Janeiro), Claudia Octaviano (MIT Joint Program on the Science and Policy of Global Change), James McFarland (US Environmental Protection Agency), Robert Beach (RTI International), Andres Camilo Alvare Espinosa (National Planning Department, Colombia), Silvia Calderon (National Planning Department, Colombia), Karen Fisher-Vanden (Penn State University), Katie Daenzer (Penn State University), and Ana Maria Loboguerro Rodriguez (CIAT-CCAFS).

15:25

Scenario building and macroeconomic modeling in response to climate change challenges: an overview of the modeling results from MAPS Latin America

A.M. Rojas (University of Cape Town - MAPS Programme, Cape Town, South Africa)

Abstract details
Scenario building and macroeconomic modeling in response to climate change challenges: an overview of the modeling results from MAPS Latin America

AM. Rojas (1)
(1) University of Cape Town - MAPS Programme, Energy Research Centre, Cape Town, South Africa

Abstract content

The Mitigation Action Plans and Scenarios (MAPS) programme is a collaboration amongst developing countries to establish the evidence base for long-term transition to robust economies that are carbon efficient and climate resilient. The programme aims to contribute to ambitious climate change mitigation aligned with economic development. Central to MAPS is the way it combines research and stakeholder interest with policy and planning, through providing robust research to underpin national policy processes. This paper focuses on the scenario building and macro-modelling experiences in each of the four MAPS Latin America countries: Brazil, Chile, Colombia and Peru.

The paper starts with a description of the results on national feasible GHG abatement options and mitigation options that were identified in each case. We then evaluate cross-cutting assumptions, most recurrent/common actions in the four countries and mitigation scenarios packaging criteria. Later, we compare Required by Science and Required Equity scenarios to the mitigation scenarios to assess ambition and equity levels in the four countries.

Next, the paper explains the economy-wide impacts associated to these mitigation options and scenarios. This section includes a summary of the macroeconomic modelling approaches key features and cross-cutting assumptions of each country model (closure rules, exogenous drivers, world prices and sectoral rigidities). This is followed by an analysis of the related impacts of these assumptions on the socio-economic indicators such as GDP, welfare and employment.

Through out the paper, benchmarks and indicators are calculated to evaluate the results.

This analysis draws on four unique Latin American country experiences that could inform and support policy makers in other Latin American countries when examining policy interventions to transition a low carbon economy. 

15:40

Energy Supply Investments in Latin America under Climate Control Policy

T. Kober (Energy reserach Centre on the Netherlands, Amsterdam, Netherlands), J. Falzon (Energy reserach Centre on the Netherlands (ECN), Amsterdam, Netherlands), B. Van Der Zwaan (ECN / University of Amsterdam, Amsterdam, Netherlands), K. Calvin (JGCRI, Joint Global Change Research Institute , College Park, United States of America), A. Kanudia (KanORS-EMR, NOIDA, UP, India), A. Kitous, (DG JRC - European Commission, Seville, Spain), M. Labriet (Eneris Environment Energy Consultants, Madrid, Spain)

Abstract details
Energy Supply Investments in Latin America under Climate Control Policy

T. Kober (1) ; J. Falzon (2) ; B. Van Der Zwaan (3) ; K. Calvin (4) ; A. Kanudia (5) ; A. Kitous, (6) ; M. Labriet (7)
(1) Energy reserach Centre on the Netherlands, Policy Studies, Amsterdam, Netherlands; (2) Energy reserach Centre on the Netherlands (ECN), Policy studies, Amsterdam, Netherlands; (3) ECN / University of Amsterdam, Amsterdam, Netherlands; (4) JGCRI, Joint Global Change Research Institute , College Park, United States of America; (5) KanORS-EMR, NOIDA, UP, India; (6) DG JRC - European Commission, Institute for prospective technological studies, Seville, Spain; (7) Eneris Environment Energy Consultants, Madrid, Spain

Abstract content

Abstract to the International Scientific Conference “Our Common Future Under Climate Change” (7 to 10 July 2015 in Paris)

Day 3 Responding to Climate Change Challenges: Session 3335 Latin America Pathways

 

In this conference contribution we present our findings on energy supply investment requirements in Latin America until 2050 investigated through a multi-model approach as jointly applied in the CLIMACAP-LAMP research project. Key findings of the project have already been presented at COP 20 in Lima and are forthcoming in a dedicated special issue in Energy Economics expected in spring 2015. In our analysis we compare a business-as-usual scenario needed to satisfy anticipated future energy demand with a set of scenarios that significantly reduce CO2 emissions in the region. We find that more than a doubling of investments, in absolute terms, occurs in the business-as-usual scenario between 2010 and 2050, while investments may be multiplied by up to three over the same time horizon when climate policies are introduced. However, investment costs as share of GDP decline over time in the business-as-usual scenario, and even under the most ambitious climate policy scenario, due to the rapid economic growth in the region. For the electricity supply sub-sector business-as-usual cumulative investments of 1.4 trillion US$ are anticipated between 2010 and 2050, and become increasingly important when additional climate policies are introduced: under a carbon tax of 50 $/tCO2e in 2020 increasing with a rate of 4% per year, an additional 0.6 trillion US$ (+45%) investment is needed. Further, our analysis suggests that compared to the business-as-usual case an additional 21 billion US$ per year of electricity supply investments is required in Latin America until 2050 under a climate policy aiming at 2ËšC climate stabilization, which, when compared to the 100 billion US$2020 targeted to be mobilized globally under the Copenhagen accord by 2020, is substantial. In terms of specific low carbon electricity technologies, model results reveal that wind, solar, and CCS applied to fossil fuels and biomass will play an important role under climate policy scenarios, while nuclear power does not. Significant investment opportunities in renewable energy exist in the short- to medium-term, even in the absence of climate policy measures. If climate change mitigation is envisaged policy frameworks with ambitious long-term goals provide stronger signals to investors than a policy mix with weak goals and fragmented instruments.

These findings have clear implications for policy makers. Moving forward, increased absolute investment in energy supply, even in the absence of climate control policies, is needed to underpin economic and energy demand growth in the region. Mobilizing necessary additional investment capital, in particular for low-carbon technologies, will be a challenge, and suitable frameworks and enabling environments for a scale-up in public and private investment will be critical to help reach required levels.