Pollution control under emission constraints: Switching between regimes

In this paper we develop a model of pollution control. The aim of the society is to maximize the net social benefits which are negatively affected by the emission of pollutants. We show that the presence of an upper constraint on pollution growth rate affects the actual trajectory of emissions even when emissions are far below the level where the constraint binds. We get three main results. First, we find that for a society it is optimal to take into account the impact of the latent constraint at the outset of the planning horizon and to modify the emission flows even when the constraint is still slack. Second, we analyze how the constraint works effectively in the intermediate phases before the constraint binds. One crucial result is that the constraint on pollution growth may generate the unexpected result of increasing, instead of reducing, the emissions at the beginning and in the intermediate phases before the constraint binds. Finally, we state the boundary conditions to compute the optimal trajectory of emissions switching between regimes.     

A two-stage inexact-stochastic programming model for planning carbon dioxide emission trading under uncertainty

In this study, a two-stage inexact-stochastic programming (TISP) method is developed for planning carbon dioxide (CO₂) emission trading under uncertainty. The developed TISP incorporates techniques of interval-parameter programming (IPP) and two-stage stochastic programming (TSP) within a general optimization framework. The TISP can not only tackle uncertainties expressed as probabilistic distributions and discrete intervals, but also provide an effective linkage between the pre-regulated greenhouse gas (GHG) management policies and the associated economic implications. The developed method is applied to a case study of energy systems and CO₂ emission trading planning under uncertainty. The results indicate that reasonable solutions have been generated. They can be used for generating decision alternatives and thus help decision makers identify desired GHG abatement policies under various economic and system-reliability constraints.     

碳排放交易现状及其在中航工业的发展展望

介绍碳交易的起源、基本原理及碳交易的市场机制,分析了国内外碳交易市场现状及未来发展方向,阐述减少碳排放已经成为全球共同减缓气候变暖的原因,并对碳交易在中航工业的应用进行了展望。     

Renewable energy sources in European energy supply and interactions with emission trading

This paper presents a model-based approach, which allows to determine the optimised structure and operation of the EU-15 electricity supply under different political and economic framework conditions, with a focus on the integration of renewable energy sources for electricity generation (RES-E) in the EU-15 countries. The approach is designed to take into account the characteristics of power production from both renewable and conventional sources, including the technological and economic characteristics of existing plants as well as those of future capacity expansion options. Beyond that, fuel supply structures are modelled, as well as the international markets for power and CO₂-certificates with their restrictions. Thus, a profound evaluation of the exploitation of mid-term renewable potentials and an assessment of the market penetration of the various renewable power generation technologies under the (normative) premise of a cost-optimised evolution of the power system becomes possible. Results show that a promotion of renewable energies reduces the scarcity of CO₂-emission allowances and thus lowers marginal costs of CO₂ reduction up to 30% in 2030. Despite the higher overall costs, a diversification of the energy resource base by RES-E use is observed, as primarily natural gas and nuclear fuels are replaced.     

Impact assessment of emissions stabilization scenarios with and without induced technological change

The main aim of this paper is to investigate quantitatively the economic impacts of emissions stabilization scenarios with and without the inclusion of induced technological change (ITC). Improved technological innovations are triggered by increased research and development (R&D) expenditures that advance energy efficiencies. Model results show that ITCs due to increased investment in R&D reduce compliance costs. Although R&D expenditures compete with other investment expenditures, we find that increased R&D expenditures improve energy efficiency, which substantially lowers abatement costs. Without the inclusion of ITC, emissions targets are primarily reached by declines in production, resulting in overall welfare reductions. With the inclusion of ITCs, emissions mitigation can result in fewer production and GDP drawbacks.     

Flame stabilization and emission of small Swiss-roll combustors as heaters

The characteristics of small Swiss-roll combustors were investigated experimentally in detail. Three types of Swiss-roll combustors of different designs and two cases of heat transfer conditions were studied. The effects of design parameters on the performance of these combustors were examined. Each combustor consisted of a combustion region at the center (called the combustion room) and double spiral-shaped channels, the widths of which were smaller than the minimum quenching distance of a propane premixed flame at a normal state. Flames could be stabilized successfully for a wide range of equivalence ratios and mean velocities by using the recirculated heat from the burned gas, and blow-off was not observed. Temperature distributions of the combustors, variation of gas temperature, and the concentrations of the exhaust gas from the combustors were also investigated. Mean temperatures of the combustors were found to be governed by both the radiant heat loss from the combustors and the total chemical energy liberated by the combustors. Efficiencies of the combustors as heaters were evaluated. As a combustor became smaller, its thermal efficiency as a heater increased and its NO_x emission decreased, while the emission of CO increased. By adding a catalytic reactor at the exhaust port, it was found that the emission of CO could be eliminated. This study provides new experimental results for a small Swiss-roll combustor, which represents an essential step toward the development of a microcombustor.     

A MERGE model with endogenous technological change and the cost of carbon stabilization

Two stylized backstop systems with endogenous technological learning (ETL) are introduced in the “model for evaluating regional and global effects” (MERGE): one for the electric and the other for the non-electric markets. Then the model is applied to analyze the impacts of ETL on carbon-mitigation policy, contrasting the resulting impacts with the situation without ETL. We model research and development (R&D) spending and learning subsidies for the demonstration and deployment stage as control variables, and we investigate the ability of this extra spending to create path-dependent experience and knowledge to aid in the implementation of carbon-free technologies. Based on model estimations and sensitivity analyses, we conclude that increased commitments for the development of new technologies to advance along their learning curves has a potential for substantial reductions in the cost of mitigating climate change and thereby helping to reach safe concentrations of carbon in the atmosphere.     

Waste gas emission control and constraints of energy and economy in China

This paper studies the characteristics of waste gas emission (WGE), energy consumption (EC) and economic development in China, and analyzes the reason for the change of waste gas intensity (WI) in order to provide necessary information for policy maker. Firstly, this paper describes the situation of WGE and the primary factors in China in general to describe the relationship among energy, economy and environmental at the national level. Then we detect the main sectors for WGE that have notable effectiveness for economic and EC through the comparison of the percentage of EC, value added (VA) and industrial WGE from combustion in 39 industrial sectors. Then with the calculation of energy intensity (EI), clean level (CL) and WI, this paper selects those crucial sectors for waste gas control and shows the efficiency of waste gas control in these sectors from 2001 to 2005. The result showed most waste gas came from heavy industrial sectors. However, heavy industrial sectors usually have lower CL than light industries. Moreover, within these sectors, some sectors, particularly Production and supply of electric power and heat power, showed the tendency of worsening efficiency for waste gas control from 2001 to 2005.     

Analysis of the impacts of combining carbon taxation and emission trading on different industry sectors

Application of price mechanisms has been the important instrument for carbon reduction, among which the carbon tax has been frequently advocated as a cost-effective economic tool. However, blanket taxes applied to all industries in a country might not always be fair or successful. It should therefore be implemented together with other economic tools, such as emission trading, for CO₂ reduction. This study aims to analyze the impacts of combining a carbon tax and emission trading on different industry sectors. Results indicate that the “grandfathering rule (RCE2000)” is the more feasible approach in allocating the emission permit to each industry sector. Results also find that the accumulated GDP loss of the petrochemical industry by the carbon tax during the period 2011–2020 is 5.7%. However, the accumulated value of GDP will drop by only 4.7% if carbon taxation is implemented together with emission trading. Besides, among petrochemical-related industry sectors, up-stream sectors earn profit from emission trading, while down-stream sectors have to purchase additional emission permits due to failure to achieve their emission targets.     

The effect of financial constraints,technological progress and long-term contracts on tradable green certificates

Tradable green certificates (TGCs) have recently become a diffuse instrument to support renewable electricity in OECD countries. Although it is perhaps too early to draw a conclusive judgement on the effectiveness of this instrument in increasing renewable capacity and decreasing the price of certificates, one view in the literature maintains that long-term contracts are of particular importance for TGCs to be effective. This paper contributes to this debate by analysing how financial constraints and technological progress can induce investors to hold pessimistic expectations of their ability to sell green certificates and still make a profit. Clearly, these expectations will prevent investors from building new capacity to fulfil the quota comprised in TGCs and will keep the price of certificates traded in the market high. As this kind of expectation is not influenced by most design features of TGCs, one can conclude that long-term contracts are particularly important in determining the effectiveness and cost-effectiveness of these instruments. Some attention should therefore be paid to the features of the TGCs, which induce obliged parties to offer long-term contracts to renewable generators.     

Intra- and extra-union flexibility in meeting the European Union's emission reduction targets

The EU has proposed four flexibility mechanisms for the regulation of greenhouse gas emissions in the period 2013–2020: (1) the Emissions Trade Scheme (ETS), a permit market between selected companies; (2) trade in non-ETS allotments between Member States; (3) the Clean Development Mechanism (CDM) to purchase offsets in developing countries; and (4) trade in CDM warrants between Member States. This paper shows that aggregate abatement costs fall as flexibility increases. However, limited flexibility creates rents so that increasing flexibility raises costs in some Member States. Costs are reduced more by the CDM than by non-ETS trade. The CDM warrants market reduces costs by a small amount only; market power is a real issue. However, the warrants market is obsolete in case there is non-ETS trade. The CDM leads to price convergence between the ETS and non-ETS market. There would be one price for carbon in the European Union if the proposed limits on CDM access are relaxed slightly.     

Environmental and economic effects of the Copenhagen pledges and more ambitious emission reduction targets

A multi-region, multi-sector dynamic computable general equilibrium model is applied to explore the economic and welfare effects of the pledges submitted by developed countries (Annex I countries) and major developing (non-Annex I) countries for 2020 under the Copenhagen Accord. In addition to analyzing scenarios reflecting the upper and lower bounds of the Copenhagen Pledges, one additional policy scenario where Annex I countries as a group reduce CO₂-emissions by 30% in 2020 compared to 1990 levels, and where major non-Annex I countries reduce CO₂ emissions 15% below baseline, is also analyzed. Economic effects are measured as changes in GDP compared to baseline and welfare effects are measured via the equivalent variation. Assuming that countries with emission targets may trade certificates, average reductions in GDP for countries with targets range between 0.1% and 0.7% in 2020 for the policy scenarios. While the GDP losses are larger for major non-Annex I countries with emission targets compared to Annex I countries, this is not the case for the changes in welfare. With the exception of Mexico, the welfare losses for the major non-Annex I regions, as a percentage of projected GDP in 2020, are lower than for the large Annex I countries.     

Atmospheric stabilization of CO2 emissions: Near-term reductions and absolute versus intensity-based targets

This study analyzes CO₂ emissions reduction targets for various countries and geopolitical regions by the year 2030 to stabilize atmospheric concentrations of CO₂ at 450 ppm (550 ppm including non-CO₂ greenhouse gases) level. It also determines CO₂ intensity cuts that would be required in those countries and regions if the emission reductions were to be achieved through intensity-based targets without curtailing their expected economic growth. Considering that the stabilization of CO₂ concentrations at 450 ppm requires the global trend of CO₂ emissions to be reversed before 2030, this study develops two scenarios: reversing the global CO₂ trend in (i) 2020 and (ii) 2025. The study shows that global CO₂ emissions would be limited at 42 percent above 1990 level in 2030 if the increasing trend of global CO₂ emissions were to be reversed by 2020. If reversing the trend is delayed by 5 years, global CO₂ emissions in 2030 would be 52 percent higher than the 1990 level. The study also finds that to achieve these targets while maintaining expected economic growth, the global average CO₂ intensity would require a 68 percent drop from the 1990 level or a 60 percent drop from the 2004 level by 2030.     

Impacts and implications of implementing voluntary greenhouse gas emission reduction targets in major countries and Korea

This study analyses the pledges submitted by Korea and other major parties to the UNFCCC secretariat as part of the Copenhagen Accord, using the global CGE model. The analysis shows that the greenhouse gas (GHG) emissions of the developed countries decrease by up to 14.0% by 2020 compared to the 1990 level. These results show the need to raise the targets amongst developed countries in order to reach to the reduction levels (25–40%) recommended by the IPCC to meet 450 ppm CO₂ eq. On the other hand, the full implementation of those pledges of Annex I and non-Annex I countries was found to contribute to the decrease of the global GHG emissions by about 15.9% compared to Business as Usual (BaU). Such results imply the need for developed countries to step up their reduction targets, as well as for developing ones to participate comprehensively and to reduce GHG emissions at a considerable level in order to enhance the environmental effectiveness of the Post-Kyoto framework hereafter. Meanwhile, it is analyzed that the implementation of voluntary target among major countries would reduce the global real GDP by 1.2%, and in the case of Korea, the real GDP was projected to diminish by 1.5%.     

The mechanisms of flame stabilization and low NOx emission in an eccentric jet pulverized coal combustor

The mechanisms of flame stabilization and low NO_x emission features of an eccentric jet pulverized coal combustor were studied through numerical modelling and experimental investigation. The results show that the formation of the unique flowfield structure is closely related to the interaction among combustor configuration, the primary jet and the control jet; and that certain rules should be followed in order to obtain the optimum condition for flame stabilization. The distributions of temperature and concentrations of NO, O₂, CO and CO₂ inside the combustor were experimentally measured. The effects of structural and operational parameters on combustion and NO formation were studied. It was found that reduction of primary air, suitable use of control jet and reasonable uptilt angle of the primary jet all contributed to the reduction of NO_x at the combustor exit. A new hypothesis, that reasonable separation of oxygen and fuel within the fuel-rich zone is beneficial to further reduction of NO_x emission, is given. The study showed that good compatibility existed between the capability of flame stabilization and low NO_x emission for this type of combustor. This project was supported by the National Natural Science Foundation of China     

Forecasting the real prices of crude oil under economic and statistical constraints

Forecasting the real oil prices is important but notoriously difficult. In this paper, we apply both economic and statistical restrictions to parameters of predictive regressions of real oil prices. We employ two popular criteria, mean predictive error (MSPE) and success ratio, to evaluate forecasting accuracy. Our out-of-sample results show that the benchmark of no-change model can be significantly outperformed by a model selection strategy with restricted models for longer horizons. The revealed predictability is further demonstrated to be robust to the adjustment of estimation windows and to an alternative benchmark model.     

Effects of technological learning and uranium price on nuclear cost: Preliminary insights from a multiple factors learning curve and uranium market modeling

This paper studies the effects of returns to scale, technological learning, i.e. learning-by-doing and learning-by-searching, and uranium price on the prospects of nuclear cost decrease. We use an extended learning curve specification, named multiple factors learning curve (MFLC). In a first stage, we estimate a single MFLC. In a second stage, we estimate the MFLC under the framework of simultaneous system of equations which takes into account the uranium supply and demand. This permits not only to enhance the reliability of the estimation by incorporating the uranium price formation mechanisms in the MFLC via the price variable, but also to give preliminary insights about uranium supply and demand behaviors and the associated effects on the nuclear expansion.Results point out that the nuclear cost has important prospects for decrease via capacity expansion, i.e. learning-by-doing effects. In contrast, they show that the learning-by-searching as well as the scale effects have a limited effect on the cost decrease prospects. Conversely, results also show that uranium price exerts a positive and significant effect on nuclear cost, implying that when the uranium price increases, the nuclear power generation cost decreases. Since uranium is characterized by important physical availability, and since it represents only a minor part in the total nuclear cost, we consider that in a context of increasing demand for nuclear energy the latter result can be explained by the fact that the positive learning effects on the cost of nuclear act in a way to dissipate the negative ones that an increase in uranium price may exert. Further, results give evidence of important inertia in the supply and demand sides as well as evidence of slow correlation between the uranium market and oil market which may limit the inter-fuels substituability effects, that is, nuclear capacity expansion and associated learning-by-doing benefits.     

CO2 emission trading within the European Union and Annex B countries: the cement industry case

The cement industry is the third largest carbon emitting industrial sector in the EU. This article presents the foreseeable technological evolution of the cement industry under business as usual circumstances, and examines the effects on the sector of carbon trading. For those purposes a global dynamic simulation model of the cement industry (CEMSIM) has been developed. The model is composed of a series of interconnected modules on cement consumption and production, international trade and capacity planning. This study quantifies the benefits achieved from emission trading in different markets (EU15, EU27 and Annex B), derived both from the revenues of emission trading, and from the lower compliance costs. The magnitude of the potential carbon leakage effect is also assessed.     

Energy and environmental implications of carbon emission reduction targets: Case of Kathmandu Valley,Nepal

This paper analyzes the sectoral energy consumption pattern and emissions of CO₂ and local air pollutants in the Kathmandu Valley, Nepal. It also discusses the evolution of energy service demands, structure of energy supply system and emissions from various sectors under the base case scenario during 2005–2050. A long term energy system planning model of the Kathmandu Valley based on the MARKet ALlocation (MARKAL) framework is used for the analyses. Furthermore, the paper analyzes the least cost options to achieve CO₂ emission reduction targets of 10%, 20% and 30% below the cumulative emission level in the base case and also discusses their implications for total cost, technology-mix, energy-mix and local pollutant emissions. The paper shows that a major switch in energy use pattern from oil and gas to electricity would be needed in the Valley to achieve the cumulative CO₂ emission reduction target of 30% (ER30). Further, the share of electricity in the cumulative energy consumption of the transport sector would increase from 12% in the base case to 24% in the ER30 case.     

The impact of international GHG trading regimes on penetration of new energy technologies and feasibility to implement EU Energy and Climate Package targets

The EU's new energy and environment policy - agreed by government leaders in their Council meeting in March 2007 - established a political agenda to tackle three core energy objectives: sustainability, economic competitiveness and security of supply. A triad of specific policies addresses these challenges: first, the 20/20/20 targets of the EU; then, the Second Strategic Energy Review of the European Commission; and finally, plans to liberalise energy markets. The European Union's ‘20/20/20′ targets for 2020: reduce greenhouse gas emissions by 20% comparing with 1990 level (to become a 30% reduction if other major global economies join), increase the share of renewables in the final energy consumption to 20% and to achieve 20% improvement in energy efficiency compared to the level in 2020 if existing trends were to continue.The aim of the paper is to analyse the feasibility of EU to implement 20/20/20 targets under the various international GHG trading regimes. GHG trading regimes were addressed by developing 10 energy scenarios until 2020 for EU by applying several energy modelling tools ranging from top down partial equilibrium to detailed technology based bottom up models.