The low-carbon transition and the energy crisis pose new challenges for sustainableeconomic growth in the European Union. The high import dependency and the still insufficient share of renewable energy sources threaten the competitiveness of the European economy, especially in small open economies. The article aims to introduce the term “industrial energy vulnerability” to investigate impact…
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Facing the Energy Transition: An Introduction
To reconcile sustainable economic growth and climate change mitigation, it is necessary to re-think the current energy model. The commitments of the Paris Climate
Agreement and the Sustainable Development Goals will not be achieved unless
energy systems around the world are fundamentally transformed. The energy architecture of the future requires an appropriate framework to cope with different
strategies of how this transformation might be approached. The special issue aims
to shed light on the role of markets and networks for the energy transition and
analyses the appropriate economic, regulatory and policy framework to enable
highly integrated, flexible, clean, and efficient energy systems. It is related to the VI
International Academic Symposium “Facing the Energy Transition: Markets and
Networks” organized in February 2018 by the Chair of Energy Sustainability at
the University of Barcelona
From COP21 pledges to a fair 2°C pathway
At the COP21, about 160 countries proposed the so-called INDCs that define GHG abatement objectives by 2030. While encouraging, these commitments are not ambitious enough to achieve the 2°C threshold by 2100, and further negotiations are needed. There is, therefore, a necessity to assess the economic consequence of a pathway to 2°C and the fair sharing of this burden. In this paper, we use a game theoretic approach for the design of fair agreements concerning additional abatements up to 2050. The simulations performed with our model confirm the weakness of INDC pledges but show that, with political determination, an equitable burden-sharing agreement can be achieved with very reasonable costs for all nations of approximately 0.8% of total discounted household consumption. With a more ambitious 1.5°C target, global cost is multiplied by a factor of four revealing the stringency of such an objective. Numerical results also show that the implementation of an international carbon market and participation of all countries in the game are crucial elements for reaching equitable burden-sharing among countries. For example, considering a reduced G20 coalition, welfare losses are multiplied by a factor of three for coalition members. Our simulations also permit a first evaluation of the possible impacts of the recently announced USA withdrawal from the Paris agreement.
Keywords: Climate negotiations, Burden sharing, COP21, Meta-game, Fair agreement, Computable general equilibrium, USA withdrawal
China’s National Carbon Dioxide Emission Trading System: An Introduction
China is on the verge of launching what is expected to be the world’s largest carbon dioxide
(CO2) emissions trading system (ETS). When fully implemented, this program will likely
double the share of the world’s greenhouse gases covered by cap and trade.1 Under current
plans, the facilities covered by the program will eventually account for over 50 percent of China’s
GHG emissions. Internationally, much seems to be riding on this program. If perceived
as successful, it could serve as a model for other countries wishing to implement an ETS. If
viewed as a failure, it could impede the adoption of emissions trading programs in many parts
of the world.
Energy Transition Pathways to a low-carbon Europe in 2050: the degree of cooperation and the level of decentralization
In the framework of the Paris Agreement, the European Union (EU) will have to firmly set decarbonization targets to 2050. However, the viability on these targets is an ongoing discussion. The European Commission has made several propositions for energy and climate “roadmaps”. In this regard, this paper contributes by analyzing alternative pathways derived in a unique modelling process. As part of the SET-Nav project, we defined four pathways to a clean, secure and efficient energy system—taking different routes. Two key uncertainties shape the SET-Nav pathways: the level of cooperation (i.e. cooperation versus entrenchment) and the level of decentralization (i.e. decentralization versus path dependency). All four pathways achieve an 85-95% emissions reduction by 2050. We include a broad portfolio of options under distinct framework conditions by comprehensively analyzing all energy-consuming and energy-providing sectors as well as the general economic conditions. We do this by applying a unique suite of linked models developed in the SET-Nav project. By linking more than ten models, we overcome the traditional limitation of models that cover one single sector while at the same time having access to detail sectoral data and expertise. In this paper, we focus on the implications for the energy demand sectors (buildings, transport, and industry) and the electricity supply mix in Europe and compare our insights of the electricity sector to the scenarios of the recent European Commission (2018a) report “A clean Planet for all”.
The Impact of Efficient Carbon and Gas Pricing on the Russian Electricity Market
The paper examines the possible interactions of various policy proposals to introduce carbon taxation, adjust the domestic price of gas to export parity and build a major electricity interconnector, and their impact on carbon emissions and the fuel mix of the Russian electricity supply industry. Without raising gas prices, a carbon tax of €25/tonne CO2 reduces emissions by 13% and the output of coal-fired plant by nearly 50%, with the major impact at €6.3-12.5/tonne. Moving gas prices to export parity substantially offsets this effect, and requires higher carbon taxes to reduce emissions by the same amount, as does building the prospective interconnector “Ural-Siberia”.
Keywords: Carbon tax, Russian electricity industry, Gas tariffs, Export parity
Evaluation of the Winter Pollution Mitigation Policy in China
Rapid industrialization in China has come with substantial increases in local air pollution. This paper quantifies the health benefits of the Winter Pollution Mitigation Policy of 2017. We estimate that this policy caused an 18% reduction in fine particulate concentration levels, resulting in 19,400 deaths avoided in 2017 due to pollution exposure in Beijing, Tianjin,…
Book Reviews
The Texas Deep Freeze of February 2021: What Happened and Lessons Learned?
Although various factors were blamed for the extended power outage on the ERCOT electricity grid in February 2021, no single problem fully explains the calamity. All forms of generation experienced capacity deratings, but failure to identify and address risks along fuel supply chains was a major contributor. Moreover, most proposed remedies do not fundamentally address…
Are energy performance certificates a strong predictor of actual energy use? Evidence from high-frequency thermostat panel data
This paper examines the extent with which Energy Performance Certificates (EPCs) reflect observed energy used for heating. We use high-frequency smart thermostat panel data in combination with building characteristics and hourly weather information. We exploit variations in boiler operation in the neighborhood of a steady state indoor temperature to elicit the predictive power of an…