The reference forecast of the German energy transition—An outlook on electricity markets

The enactment of the Energy Concept by the German Government in 2010 set ambitious targets for the future energy transition in Germany. The most prominent goals include a greenhouse gas (GHG) emission reduction of the economy and an increase in the share of renewable energy in the whole energy sector. Since the long run effects of these policy measures are hard to assess, science-based policy evaluation methods are needed to identify weak points and areas with a need for action. This paper presents the results of the German Energy Reference Forecast with a focus on the electricity sector. It is based on an investment and dispatch model for the European electricity sector over the planning horizon of the ‘Energiewende’ up to 2050, with an emphasis on the time period up to 2030. We find that almost all targets of the German ‘Energiewende’ are not reached, for the case in which no further measures are undertaken. In particular reductions in GHG emissions fall short to the target value. Contrary to the negative results, e.g., regarding GHG-emissions as well as gross electricity consumption, generation from renewable energy sources will exceed the policy's target value.     

A system dynamics approach to scenario analysis for urban passenger transport energy consumption and CO2 emissions: A case study of Beijing

With the accelerating process of urbanization, developing countries are facing growing pressure to pursue energy savings and emission reductions, especially in urban passenger transport. In this paper, we built a Beijing urban passenger transport carbon model, including an economy subsystem, population subsystem, transport subsystem, and energy consumption and CO₂ emissions subsystem using System Dynamics. Furthermore, we constructed a variety of policy scenarios based on management experience in Beijing. The analysis showed that priority to the development of public transport (PDPT) could significantly increase the proportion of public transport locally and would be helpful in pursuing energy savings and emission reductions as well. Travel demand management (TDM) had a distinctive effect on energy savings and emission reductions in the short term, while technical progress (TP) was more conducive to realizing emission reduction targets. Administrative rules and regulations management (ARM) had the best overall effect of the individual policies on both energy savings and emission reductions. However, the effect of comprehensive policy (CP) was better than any of the individual policies pursued separately. Furthermore, the optimal implementation sequence of each individual policy in CP was TP→PDPT→TDM→ARM.     

Greenhouse gas reduction benefits and costs of a large-scale transition to hydrogen in the USA

Hydrogen is an energy carrier able to be produced from domestic, zero-carbon sources and consumed by zero-pollution devices. A transition to a hydrogen-based economy could therefore potentially respond to climate, air quality, and energy security concerns. In a hydrogen economy, both mobile and stationary energy needs could be met through the reaction of hydrogen (H₂) with oxygen (O₂). This study applies a full fuel cycle approach to quantify the energy, greenhouse gas emissions (GHGs), and cost implications associated with a large transition to hydrogen in the United States. It explores a national and four metropolitan area transitions in two contrasting policy contexts: a “business-as-usual” (BAU) context with continued reliance on fossil fuels, and a “GHG-constrained” context with policies aimed at reducing greenhouse gas emissions. A transition in either policy context faces serious challenges, foremost among them from the highly inertial investments over the past century or so in technology and infrastructure based on petroleum, natural gas, and coal. A hydrogen transition in the USA could contribute to an effective response to climate change by helping to achieve deep reductions in GHG emissions by mid-century across all sectors of the economy; however, these reductions depend on the use of hydrogen to exploit clean, zero-carbon energy supply options.     

Energy policy in transport and transport policy

Explanations for, and indirect evidence of, imperfections in the market for private passenger vehicle fuel economy suggest there is a reasonable case for combining fuel economy standards and fuel or carbon taxes to contribute to an energy policy that aims to reduce greenhouse gas emissions and improve energy security. Estimates of key elasticities, including the rebound effect, indicate that the positive and negative side-effects of fuel economy measures on transport activities and external costs are limited. However, an energy policy for transport does not replace a transport policy that aims to manage the main transport externalities including congestion and local pollution. Conventional marginal cost estimates and standard cost-benefit reasoning suggest that policies that address congestion and local pollution likely bring benefits at least as large as those from fuel economy measures. But the large uncertainty on the possible effects of greenhouse gas emissions constitutes a strong challenge for standard cost-benefit reasoning. Emerging results from methods to cope with this uncertainty suggest that policies to stimulate the widespread adoption of low-carbon technologies in transport are justified.     

Alternative policy impacts on US GHG emissions and energy security: A hybrid modeling approach

This study addresses the possible impacts of energy and climate policies, namely corporate average fleet efficiency (CAFE) standard, renewable fuel standard (RFS) and clean energy standard (CES), and an economy wide equivalent carbon tax on GHG emissions in the US to the year 2045. Bottom–up and top–down modeling approaches find widespread use in energy economic modeling and policy analysis, in which they differ mainly with respect to the emphasis placed on technology of the energy system and/or the comprehensiveness of endogenous market adjustments. For this study, we use a hybrid energy modeling approach, MARKAL–Macro, that combines the characteristics of two divergent approaches, in order to investigate and quantify the cost of climate policies for the US and an equivalent carbon tax. The approach incorporates Macro-economic feedbacks through a single sector neoclassical growth model while maintaining sectoral and technological detail of the bottom–up optimization framework with endogenous aggregated energy demand. Our analysis is done for two important objectives of the US energy policy: GHG reduction and increased energy security. Our results suggest that the emission tax achieves results quite similar to the CES policy but very different results in the transportation sector. The CAFE standard and RFS are more expensive than a carbon tax for emission reductions. However, the CAFE standard and RFS are much more efficient at achieving crude oil import reductions. The GDP losses are 2.0% and 1.2% relative to the base case for the policy case and carbon tax. That difference may be perceived as being small given the increased energy security gained from the CAFE and RFS policy measures and the uncertainty inherent in this type of analysis.     

How ambitious are China and India’s emissions intensity targets?

Several developing economies have announced carbon emissions targets for 2020 as part of the negotiating process for a post-Kyoto climate policy regime. China and India’s commitments are framed as reductions in the emissions intensity of the economy by 40–45% and 20–25%, respectively, between 2005 and 2020. How feasible are the proposed reductions in emissions intensity for China and India, and how do they compare with the targeted reductions in the US and the EU? In this paper, we use a stochastic frontier model of energy intensity to decompose energy intensity into the effects of input and output mix, climate, and a residual technology variable. We use the model to produce emissions projections for China and India under a number of scenarios regarding the pace of technological change and changes in the share of non-fossil energy. We find that China is likely to need to adopt ambitious carbon mitigation policies in order to achieve its stated target, and that its targeted reductions in emissions intensity are on par with those implicit in the US and EU targets. India’s target is less ambitious and might be met with only limited or even no dedicated mitigation policies.     

Should a vehicle fuel economy standard be combined with an economy-wide greenhouse gas emissions constraint? Implications for energy and climate policy in the United States

The United States has adopted fuel economy standards that require increases in the on-road efficiency of new passenger vehicles, with the goal of reducing petroleum use and (more recently) greenhouse gas (GHG) emissions. Understanding the cost and effectiveness of fuel economy standards, alone and in combination with economy-wide policies that constrain GHG emissions, is essential to inform coordinated design of future climate and energy policy. We use a computable general equilibrium model, the MIT Emissions Prediction and Policy Analysis (EPPA) model, to investigate the effect of combining a fuel economy standard with an economy-wide GHG emissions constraint in the United States. First, a fuel economy standard is shown to be at least six to fourteen times less cost effective than a price instrument (fuel tax) when targeting an identical reduction in cumulative gasoline use. Second, when combined with a cap-and-trade (CAT) policy, a binding fuel economy standard increases the cost of meeting the GHG emissions constraint by forcing expensive reductions in passenger vehicle gasoline use, displacing more cost-effective abatement opportunities. Third, the impact of adding a fuel economy standard to the CAT policy depends on the availability and cost of abatement opportunities in transport—if advanced biofuels provide a cost-competitive, low carbon alternative to gasoline, the fuel economy standard does not bind and the use of low carbon fuels in passenger vehicles makes a significantly larger contribution to GHG emissions abatement relative to the case when biofuels are not available. This analysis underscores the potentially large costs of a fuel economy standard relative to alternative policies aimed at reducing petroleum use and GHG emissions. It further emphasizes the need to consider sensitivity to vehicle technology and alternative fuel availability and costs as well as economy-wide responses when forecasting the energy, environmental, and economic outcomes of policy combinations.     

Evaluation of potential reductions in carbon emissions in Chinese provinces based on environmental DEA

The estimation of CO₂ emissions reduction potential in China is an important issue for China's energy policy. In this paper, data envelopment analysis (DEA) is used to evaluate the carbon emission performance of 29 Chinese provincial administrative regions (Tibet and Taiwan are not included since of data lack) by computing potential carbon emission reductions for energy conservation technology (ECT) and energy structural adjustment (ESA). The results reveal that ECT promotion and reductions in inter-regional technological disparity would be effective in reducing carbon emissions in technically inefficient regions. However, most of the provincial administrative regions investigated have an irrational energy structure and exhibit an overdependence on coal consumption, so ESA is required to reduce carbon emissions. Therefore, enormous emission reductions could be achieved by promoting ECT, developing renewable energy, increasing the proportion of non-fossil energy, delivering low-carbon energy and applying ESA. Based on the estimation, some policy implications and suitable suggestions are proposed for policy makers.     

Implications of a US electricity standard for final energy demand

This paper analyzes the emissions impact of an emissions intensity standard (metric tons of CO₂ per MWh of electricity) for the US power sector on US final energy demand — i.e. the manufacturing, residential, commercial, and transportation sectors. An emissions intensity standard, although geared towards the power sector, will have implications for these other sectors of the economy through its effect on economy-wide energy prices. Using a hybrid energy-economy simulation model (CIMS), we find the effect on aggregate emissions from final demand to mostly be small. However, after disaggregating final demand, we find significant changes in CO₂e emissions for several of sub-sectors. Given that emissions reductions in final energy demand are needed alongside power sector reductions for the US to achieve deep emissions cuts, our findings provide needed insight as to whether these eventual reductions will be helped or hindered by a US electricity standard.     

Policies to reduce energy use and carbon emissions in the UK

The UK differs from may other industrialized nations in that its carbon dioxide (CO₂) emissions from energy use have declined in recent years despite relatively rapid economic growth. In all sectors but transport, substantial reductions have already occurred in the level of carbon emissions per unit of GDP output. At the same time, a number of official and unofficial studies have pointed out that the UK has one of the largest remaining potentials amongst comparable industrialized countries for achieving further CO₂ reductions through the implementation of cost-effective energy efficiency and fuel switching measures. This paper discusses past and present patterns of energy use and carbons emissions in the UK. The analysis then examines historical trends in UK energy policy and presents policy options for further reducing the UK's energy-use and carbon emissions in the future.     

System-level energy efficiency is the greatest barrier to development of the hydrogen economy

Current energy research investment policy in New Zealand is based on assumed benefits of transitioning to hydrogen as a transport fuel and as storage for electricity from renewable resources. The hydrogen economy concept, as set out in recent commissioned research investment policy advice documents, includes a range of hydrogen energy supply and consumption chains for transport and residential energy services. The benefits of research and development investments in these advice documents were not fully analyzed by cost or improvements in energy efficiency or green house gas emissions reduction. This paper sets out a straightforward method to quantify the system-level efficiency of these energy chains. The method was applied to transportation and stationary heat and power, with hydrogen generated from wind energy, natural gas and coal. The system-level efficiencies for the hydrogen chains were compared to direct use of conventionally generated electricity, and with internal combustion engines operating on gas- or coal-derived fuel. The hydrogen energy chains were shown to provide little or no system-level efficiency improvement over conventional technology. The current research investment policy is aimed at enabling a hydrogen economy without considering the dramatic loss of efficiency that would result from using this energy carrier.     

An analytical framework for energy policy evaluation

This paper presents a framework to evaluate the effectiveness of energy policies and provides a contextual view of measures on energy polices in linking with the objective of a sustainable economy. Firstly, Taiwan’s energy policy is overviewed by analyzing the energy-related data to examine its deficit according to the framework presented. This paper finds that the energy policy adopted fails to attain the objective of a sustainable economy because energy consumption and CO₂ emissions still keep upward trends. It also concludes that an energy policy should focus on (1) improving energy efficiency, (2) reshaping industry structure and (3) improving energy structure. In other words, the energy policy maker should create an environment that can motivate the development of clean energy supply and utilization for the achievement of energy policy objectives.     

The savings of energy saving: interactions between energy supply and demand-side options—quantification for Portugal

Reducing demand by increasing end-use energy efficiency on the demand side of energy systems may also have advantages in reducing fossil dependency and greenhouse gas (GHG) emissions on the supply side. This paper addresses interactions between energy supply- and demand-side policies, by estimating the impact of measures addressing end-use energy efficiency and small-scale renewables uses in terms of (1) avoided large-scale electricity generation capacity, (2) final energy consumption, (3) share of renewables in final energy and (4) reduction of GHG emissions. The Portuguese energy system is used as a case study. The TIMES_PT bottom-up model was used to generate four scenarios covering the period up to 2020, corresponding to different levels of efficiency of equipment in buildings, transport and industry. In the current policy scenario, the deployment of end-use equipment follows the 2000–2005 trends and the National Energy Efficiency Action Plan targets. In the efficient scenarios, all types of equipment can be replaced by more efficient ones. Results show that aggressive demand-side options for the industry and buildings sector and the small-scale use of renewables can remove the need for the increase in large-scale renewable electricity capacity by 4.7 GW currently discussed by policy makers. Although these measures reduce total final energy by only 0–2 %, this represents reductions of 11–14 % in the commercial sector, with savings in total energy system costs of approximately 3,000 million euros₂₀₀₀—roughly equivalent to 2 % of the 2010 Portuguese GDP. The cost-effectiveness of policy measures should guide choices between supply shifts and demand reduction. Such balanced policy development can lead to substantial cost reductions in climate and energy policy.     

An energy development strategy for the USSR Minimizing greenhouse gas emissions

The second largest national consumer of commercial energy in the world, the USSR also emits large quantities of energy-related CO₂. This study uses four long-term scenarios of energy use and related emissions to investigate opportunities for reducing the USSR's greenhouse gas emissions over the next 30 years. This paper shows that if no measures are taken to control these emissions, CO₂ and methane will increase by 1.5 to 2 times the 1990 level by the year 2020. However, this growth can be restrained dramatically through structural changes in the Soviet economy, improved energy efficiency and interfuel substitutions. Abating emissions of carbon in the USSR would entail the widespread implementation of energy policies and, for more substantial reductions, higher investments from the Soviet economy. Achieving these goals would also require broad support from the international community.     

Carbon pricing and energy efficiency improvement -- why to miss the interaction for developing economies? An illustrative CGE based application to the Pakistan case

Carbon/energy taxes and energy efficiency improvement are studied well in the recent years for their potential adverse impacts on economy, especially for lost production and international competitiveness, and rebound effects. However, little attention has been paid to investigate them jointly, which can not only prevent fall of energy services cost and thereby rebound effect but reduce the associated macroeconomic costs. This study thus employs a 20 sector CGE model to explore separately the impacts of carbon tax and its coordinated implementation with energy efficiency improvement on the Pakistan economy. The country underwent enormous pressure of energy security issues as well as climate change fallouts in the last couple of years and can be regarded as a suitable candidate for energy/environmental conservation policies to be considered at a broader context with more concrete efforts. The simulation results show that the impact of carbon tax on GDP is negative but resulting reductions in pollutant emissions are relatively high. Moreover, the GDP is expected to grow comparatively positive when analyzed with improvements in energy efficiency, with even higher decline in energy consumption demand and so emissions. This simultaneous economic and environmental improvement would thus have positive implications regarding sustainable development of the country.     

The rebound effect,gender and social justice: A case study in Germany

Energy efficiency increases are essential in reducing energy consumption and CO₂ emissions. Policy is therefore rightly concerned about rebound effects, which cause energy and CO₂ emission reductions to be less than anticipated. A policy dilemma is emerging in that less economically privileged groups tend to show the highest rebound effects. Some studies suggest policymakers may therefore be reluctant to support energy efficiency upgrades among such groups. This paper argues this is based on a misunderstanding of the conceptual structure of the rebound effect. Firstly, a mathematical analysis confirms that the rebound effect is merely a comparison of proportions, not a measure of absolute levels of energy consumption, which are the real cause of increased CO₂ emissions. Secondly, an empirical study of commute distances in North-Rhine-Westphalia, Germany’s largest state, reveals that female commuters show considerably higher rebound effects than male commuters, both in time and cross-sectional analyses. However, male commuters consume the most energy and produce the most CO₂ emissions, by every measure. This resonates with recent studies showing the same disjunction between rebound effects and absolute consumption, in home heating among poorer and wealthier households. Policy needs to focus on absolute consumption levels and be cautious in interpreting rebound effects.     

Analysis of policies to reduce oil consumption and greenhouse-gas emissions from the US transportation sector

Even as the US debates an economy-wide CO₂ cap-and-trade policy the transportation sector remains a significant oil security and climate change concern. Transportation alone consumes the majority of the US’s imported oil and produces a third of total US Greenhouse-Gas (GHG) emissions. This study examines different sector-specific policy scenarios for reducing GHG emissions and oil consumption in the US transportation sector under economy-wide CO₂ prices. The 2009 version of the Energy Information Administration’s (EIA) National Energy Modeling System (NEMS), a general equilibrium model of US energy markets, enables quantitative estimates of the impact of economy-wide CO₂ prices and various transportation-specific policy options. We analyze fuel taxes, continued increases in fuel economy standards, and purchase tax credits for new vehicle purchases, as well as the impacts of combining these policies. All policy scenarios modeled fail to meet the Obama administration’s goal of reducing GHG emissions 14% below 2005 levels by 2020. Purchase tax credits are expensive and ineffective at reducing emissions, while the largest reductions in GHG emissions result from increasing the cost of driving, thereby damping growth in vehicle miles traveled.     

Modelling the UK residential energy sector under long-term decarbonisation scenarios: Comparison between energy systems and sectoral modelling approaches

The UK government has set a groundbreaking target of a 60% reduction in carbon dioxide (CO₂) emissions by 2050. Scenario and modelling assessment of this stringent target consistently finds that all sectors need to contribute to emissions reductions. The UK residential sector accounts for around 30% of the total final energy use and more than one-quarter of CO₂ emissions. This paper focuses on modelling of the residential sector in a system wide energy–economy models (UK MARKAL) and key UK sectoral housing stock models. The UK residential energy demand and CO₂ emission from the both approaches are compared. In an energy system with 60% economy-wide CO₂ reductions, the residential sector plays a commensurate role. Energy systems analysis finds this reduction is primarily driven by energy systems interactions notably decarbonisation of the power sector combined with increased appliance efficiency. The stock models find alternate decarbonisation pathways based on assumptions related to the future building stock and behavioural changes. The paper concludes with a discussion on the assumptions and drivers of emission reductions in different models of the residential energy sector.     

Main drivers of changes in CO2 emissions in the Spanish economy: A structural decomposition analysis

The aim of this paper is the analysis of structural decomposition of changes in CO₂ emissions in Spain by using an enhanced Structural Decomposition Analysis (SDA) supported by detailed Input–Output tables from the World Input–Output Database (2013) (WIOD) for the period 1995–2009. The decomposition of changes in CO₂ emissions at sectoral level are broken down into six effects: carbonization, energy intensity, technology, structural demand, consumption pattern and scale. The results are interesting, not only for researchers but also for utility companies and policy-makers as soon as past and current political mitigation measures are analyzed in line with such results. The results allow us to conclude that the implementation of the Kyoto Protocol together with European Directives related to the promotion of RES seem to have a positive impact on CO₂ emissions trends in Spain. After reviewing the current mitigation measures in Spain, one policy recommendation is suggested to avoid the rebound effect and to enhance the fight against Climate Change that is tax benefits for those companies that prove reductions in their energy intensity ratios.     

Indicators for industrial energy efficiency in India

India accounts for 4.5% of industrial energy use worldwide. This share is projected to increase as the economy expands rapidly. The level of industrial energy efficiency in India varies widely. Certain sectors, such as cement, are relatively efficient, while others, such as pulp and paper, are relatively inefficient. Future energy efficiency efforts should focus on direct reduced iron, pulp and paper and small-scale cement kilns because the potentials for improvement are important in both percentage and absolute terms. Under business as usual, industrial energy use is projected to rise faster than total final energy use. A strong focus on energy efficiency can reduce this growth, but CO₂ emissions will still rise substantially. If more substantial CO₂ emissions reductions are to be achieved then energy efficiency will need to be combined with measures that reduce the carbon intensity of the industrial fuel mix.