Our Common Future Under Climate Change

International Scientific Conference 7-10 JULY 2015 Paris, France

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Wednesday 8 July - 15:00-16:30 UPMC Jussieu - ROOM 201 - Block 24/34

3322 (a) - Representation of technological dynamics and societal transformation

Parallel Session

Chair(s): F. Lecoq (CIRED, Nogent sur Marne, France)

Lead Convener(s): N. Nakicenovic (International Institute for Applied Systems Analysis, Laxenburg, Austria), J.C. Hourcade (International Research Center on Environment and Development (CIRED), Paris, France)

Convener(s): S. Dasgupta (Fondazione Eni Enrico Mattei (FEEM), Venezia, Italy), M. Labriet (Eneris Environment Energy Consultants, Madrid, Spain), K. Steininger (University of Graz, Graz, Austria)

15:00

Frank Lecocq, CIRED, lecocq@centre-cired.fr, Chairperson

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Frank Lecocq, CIRED, lecocq@centre-cired.fr, Chairperson
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15:10

Unprecedented urbanization and challenges to model them in IAMs

S. Dhakal (Asian Institute of Technology, Pathumthani, Thailand)

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Unprecedented urbanization and challenges to model them in IAMs

S. Dhakal (1)
(1) Asian Institute of Technology, School of Environment, Resources and Development, Pathumthani, Thailand

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World has witnessed unprecedented urbanization- with 2.8 billion urban residents added between 1950 to 2000 and more 2.8 billion more by 2050. Projections show that future population rise will mostly comprise of the urban population. Rapid urbanization leads into rapid rise in energy use and CO2 emission since such urbanization in taking place rapidly in economically growing regions of the developing world where per capita CO2 emission in urban areas are far higher than the national averages. Our analysis shows that urbanization is the key and irreversible global trend for now. Recent IPCC Mitigation report makes it explicitly clear that the next 2-3 decades are crucial for low carbon development and our ability to orient new urbanization to low carbon pathway will define our ability to tame global emissions trends. New urbanization calls for rapid deployment of infrastructure in small and medium scale cities and lock-on cities into particular carbon trajectory. For example, China has unveiled a new urbanization plan in March 2014 to boost urbanization to 60% by 2020 that aim to invest 7-8 trillion dollars in urban infrastructure by 2020. The implications of the choice of urban forms, urban design and infrastructure in new urbanization on global emission occurs though embodied emission in materials used in infrastructure, such as cement, steel, aluminum and others which are carbon intensive as well as through the direct emissions due to use of those infrastructure which also lock urban system into particular technological choice. Studies based on Integrated Assessment Models have shown our cumulative carbon budget for 2000-2050 to be about 1000 GtCO2 to stay under 2°C climate stabilization; some early studies are showing that over one third of that could come from infrastructure sector alone assuming residents in the developing countries catch up to the level of per capita infrastructure stock of the average developed country residents. However, given the enormous potential of urbanization to influence global carbon emission and its multi-faceted implications, our analysis suggests that the ability to model urbanization and its implications in the current Integrated Assessment Models and other large scale global models remains extremely poor. We argue that the next frontier in global and regional IAM models lie in addressing the full scale implications of the type and extent of urbanization in economic, infrastructural, social, geosphere and bio-spherical domains. This presentation will dwell on these issues and opens much needed dialogues and discussions on how to take-on this challenges in the modelling community to develop a new generation of Integrated Assessment Models.

15:20

Earth system modeling as part of integrated assessment

P. Ciais (LSCE, Gif sur Yvette, France)

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Earth system modeling as part of integrated assessment
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15:30

Links between energy systems models and economic models: learning from the IEA ETSAP experience

B. O Gallachoir (University College Cork, Cork, Ireland), J. Glynn (University College Cork, Cork, Ireland)

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Links between energy systems models and economic models: learning from the IEA ETSAP experience

B. O Gallachoir (1) ; J. Glynn (1)
(1) University College Cork, Environmental Research Institute, Cork, Ireland

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In a climate constrained future, hybrid energy-economy model coupling gives additional insights into interregional competition, trade, industrial delocalisation and overall macroeconomic consequences of decarbonising the energy system. Decarbonising the energy system is critical in mitigating climate change. In this paper, we summarise modelling methodologies developed in the IEA ETSAP (Energy Technology Systems Analysis Programme) community to assess economic impacts of decarbonising energy systems at a global level and at a national level.

ETSAP is a unique network of energy modelling teams from approximately seventy countries involving 177 institutions over the world, well beyond the number of its contracting parties, who are the governments of eighteen countries and the European Commission. ETSAP was one of the multilateral technology initiatives (formally called Implementing Agreements) initiated in 1976 under the aegis of the IEA. ETSAP evolved from initially analysing existing tools to evaluate R&D strategies to the combination of the energy flow optimization approach with macroeconomic top-down modelling, technology learning and stochastic modelling.

This paper summarises a range of different methodological approaches to developing linkages between energy systems modelling and economic modelling, drawing on a significant and rich and body of analysis. The energy systems models discussed are bottom-up (BU) techno-economic linear optimisation engineering TIMES models. TIMES is a techno-economic model generator for local, national or multi-regional energy systems, which provides a technology rich basis for estimating energy dynamics over a long-term (20-50 years), multi-period time horizon. TIMES computes a time varying inter-temporal partial equilibrium on inter-regional markets. The objective function maximises total surplus. This is equivalent to minimising the discounted total energy system cost while respecting environmental, technical and scenario constraints. This system cost includes investment, operation and maintenance and fuel import costs, less export income, terminal technology values and salvage values. The top-down (TD) macroeconomic models range from single producer-consumer agent production function models, to multi-region structural computable general equilibrium (CGE) models. The paper compares soft-linking approaches (e.g. between TIMES and CGE models) and hard-linking (e.g. TIMES-MACRO).  

The analysis demonstrates that the range of economic impacts of decarbonisation is regionally dependent upon the stage of economic development, the level of industrialisation, energy intensity of exports, and competition effects due to rates of relative decarbonisation. Developed nation’s decarbonisation targets are estimated to result in a manageable GDP loss in the region of 2% by 2050. Energy intensive export driven developing countries such as China and India, and fossil fuel exporting nations can expect significantly higher GDP loss of up to 5% GDP per year by mid-century.

The national modelling studies outlined here show that burden sharing rules and national revenue recycling schemes for carbon tax are critical for the long-term viability of economic growth and equitable engagement on combating climate change. Traditional computable general equilibrium models and energy systems models solved in isolation can misrepresent the long run carbon cost and underestimate the demand response caused by technological paradigm shifts in a decarbonised energy system. The approaches outlined here have guided the first evidence based decarbonisation legislation. They continue to provide additional insights as increased sectoral disaggregation in hybrid modelling approaches is achieved.

The paper concludes with a number of challenges that are necessary to address, including i) the uncertainty in exchanging price information from BU to TD models in soft-linking hybrid models and ii) the difficulty in capturing satisfactorily the changes in investment flows that arise due to large structural changes in the energy system. 

15:40

Developing pathways for zero poverty and zero emissions

H. Winkler (University of Cape Town, Cape Town, South Africa)

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Developing pathways for zero poverty and zero emissions

H. Winkler (1)
(1) University of Cape Town, Energy Research Centre, Rondebosch, South Africa

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Poverty eradication has been a priority of developing countries for a long time, and this is reflected in the UNFCCC. Much more recently, framing a global goal on mitigation has been advanced, aiming at net zero emissions by 2050. In the post-2015 development agenda, the first Sustainable Development Goal is to “end poverty in all its forms everywhere”.  How to achieve zero poverty and zero emissions?

The problem is easy to state, any ‘solutions’ are hard to realise. It is easy to support Oxfam excellent slogan, to “make poverty history”.  And relatively easy to model zero emissions – though at what cost. Yet in developing countries, climate action needs to be  in a way that reduces poverty and inequality.

Among South Africa’s many development challenges, the National Development Plan identifies poverty and inequality as the foremost [1]. The same plan also refers to reducing emissions, and the climate policy of GHG emissions following a ‘peak, plateau and decline’ trajectory [2]. To achive both zero poverty and emissions in South Africa’s energy economy is challenging [3]. 

Ongoing research seeks to model multiple development-climate objectives in SA’s energy economy, aiming to provide information that is credible, analytically rigorous and is a story that enables interest to imagine themselves in a different future. This builds on a long-standing energy model development at the ERC, and more recently links with top-down economy-wide models, also with teams in other developing countries [4, 5]. 

Scenario of deep decarbonisation for South Africa – 14 Gt CO2-eq in SA’s energy sector (scenario 14 Gt energy) from 2016 to 2050 [3] – and meeting the multiple development objectives is possible. The results of linked modeling of the 14 Gt energy scenario suggest it  is technically plausible, but has negative welfare effects.

Earlier work has made the case instruments such as sustainable development policies and measures (SD-PAMs) would better frame action in developing countries [6-11]. But if zero poverty cannot be achieved, as recent results suggest, what is the implication for ambitious climate action? The ERC’s research agenda will continue to analyse these wicked problems, and can only benefit from exchange of creative thinking with others grappling with this trilemma [12].  

We do not think, however, that mathematical models alone will provide any ‘solution space’ (we tend to think of it more as a process). Through experience with long-term mitigation scenarios for South Africa [13, 14] and the Mitigation Action Plans and Scenarios (MAPS) programme in Brazil, Chile, Colombia and Peru, we think that the co-production of knowledge and its use of facilitated stakeholder process is powerful in helping a transition to zero poverty and zero emissions societies.

To realise zero poverty and zero emissions, a new social contract is needed [15]. What might the general idea of a social contract look like in a story of a different South Africa?  SA has unemployment of 25% (40% by a broader definition), with even higher shares among youth. This emerged with past industrial policy focused on energy intensive sector growth. But if employment were reduced in mining, energy supply and beneficiation, where would it be created? One cannot simply assume unemployed are absorbed by an economy-wide model, without asking whether unskilled youth with no work experience would indeed find real jobs. Some SA economists believe employment-intensive sectors like agriculture and textiles are dead-ends. Others think more employment-intensive growth is possible, and may be helped by a small wage subsidy.  We will continue to research, in various ways, the goals of zero poverty and zero emissions. 

15:50

Tipping point policies for energy transformation - assessing their likely effect

M. Jaccard (Simon Fraser University, Burnaby, British Columbia, France)

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Tipping point policies for energy transformation - assessing their likely effect

M. Jaccard (1)
(1) Simon Fraser University, Resource and Environmental Management, Burnaby, British Columbia, France

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A global climate agreement will not soon lead to a single global carbon price. But 10 years of efforts by individual and groups of jurisdictions have provided valuable lessons on the design of other types of market-oriented and regulatory policies that can foster tipping points in the costs (financial and psychological) of energy system transformation. Assessing the likely effect of such policies is a challenge for energy-economy-emissions modelers. This talk summarizes some of the challenges and possible solutions.

16:00

Panel discussion

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Panel discussion
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