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Type: Text × Publisher: Amsterdam [u.a.] : Elsevier Science × Subject: Carbon leakage ×

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    Carbon leakage in a fragmented climate regime: The dynamic response of global energy markets
    (Amsterdam [u.a.] : Elsevier Science, 2013) Arroyo-Currás, Tabaré; Bauer, Nico; Kriegler, Elmar; Schwanitz, Valeria Jana; Luderer, Gunnar; Aboumahboub, Tino; Giannousakis, Anastasis; Hilaire, Jérôme
    As a global climate agreement has not yet been achieved, a variety of national climate policy agendas are being pursued in different parts of the world. Regionally fragmented climate policy regimes are prone to carbon leakage between regions, which has given rise to concerns about the environmental effectiveness of this approach. This study investigates carbon leakage through energy markets and the resulting macro-economic effects by exploring the sensitivity of leakage to the size and composition of pioneering regions that adopt ambitious climate action early on. The study uses the multi-regional energy–economy–climate model REMIND 1.5 to analyze the implications of Europe, China and the United States taking unilateral or joint early action. We find that carbon leakage is the combined effect of fossil fuel and capital market re-allocation. Leakage is limited to 15% of the emission reductions in the pioneering regions, and depends on the size and composition of the pioneering coalition and the decarbonization strategy in the energy sector. There is an incentive to delay action to avoid near-term costs, but the immediate GDP losses after acceding to a global climate regime can be higher in the case of delayed action compared to early action. We conclude that carbon leakage is not a strong counter-argument against early action by pioneers to induce other regions to adopt more stringent mitigation.
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    CO2 emission mitigation and fossil fuel markets: Dynamic and international aspects of climate policies
    (Amsterdam [u.a.] : Elsevier Science, 2013) Bauer, Nico; Bosetti, Valentina; Hamdi-Cherif, Meriem; Kitous, Alban; McCollum, David; Méjean, Aurélie; Rao, Shilpa; Turton, Hal; Paroussos, Leonidas; Ashina, Shuichi; Calvin, Katherine; Wada, Kenichi; van Vuuren, Detlef
    This paper explores a multi-model scenario ensemble to assess the impacts of idealized and non-idealized climate change stabilization policies on fossil fuel markets. Under idealized conditions climate policies significantly reduce coal use in the short- and long-term. Reductions in oil and gas use are much smaller, particularly until 2030, but revenues decrease much more because oil and gas prices are higher than coal prices. A first deviation from optimal transition pathways is delayed action that relaxes global emission targets until 2030 in accordance with the Copenhagen pledges. Fossil fuel markets revert back to the no-policy case: though coal use increases strongest, revenue gains are higher for oil and gas. To balance the carbon budget over the 21st century, the long-term reallocation of fossil fuels is significantly larger—twice and more—than the short-term distortion. This amplifying effect results from coal lock-in and inter-fuel substitution effects to balance the full-century carbon budget. The second deviation from the optimal transition pathway relaxes the global participation assumption. The result here is less clear-cut across models, as we find carbon leakage effects ranging from positive to negative because trade and substitution patterns of coal, oil, and gas differ across models. In summary, distortions of fossil fuel markets resulting from relaxed short-term global emission targets are more important and less uncertain than the issue of carbon leakage from early mover action.
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    Making or breaking climate targets: The AMPERE study on staged accession scenarios for climate policy
    (Amsterdam [u.a.] : Elsevier Science, 2014) Kriegler, Elmar; Riahi, Keywan; Bauer, Nico; Schwanitz, Valeria Jana; Petermann, Nils; Bosetti, Valentina; Marcucci, Adriana; Otto, Sander; Paroussos, Leonidas; Rao, Shilpa; Currás, Tabaré Arroyo; Ashina, Shuichi; Bollen, Johannes; Eom, Jiyong; Hamdi-Cherif, Meriem; Longden, Thomas; Kitous, Alban; Méjean, Aurélie; Sano, Fuminori; Schaeffer, Michiel; Wada, Kenichi; Capros, Pantelis; van Vuuren, Detlef P.; Edenhofer, Ottmar
    This study explores a situation of staged accession to a global climate policy regime from the current situation of regionally fragmented and moderate climate action. The analysis is based on scenarios in which a front runner coalition – the EU or the EU and China – embarks on immediate ambitious climate action while the rest of the world makes a transition to a global climate regime between 2030 and 2050. We assume that the ensuing regime involves strong mitigation efforts but does not require late joiners to compensate for their initially higher emissions. Thus, climate targets are relaxed, and although staged accession can achieve significant reductions of global warming, the resulting climate outcome is unlikely to be consistent with the goal of limiting global warming to 2 degrees. The addition of China to the front runner coalition can reduce pre-2050 excess emissions by 20–30%, increasing the likelihood of staying below 2 degrees. Not accounting for potential co-benefits, the cost of front runner action is found to be lower for the EU than for China. Regions that delay their accession to the climate regime face a trade-off between reduced short term costs and higher transitional requirements due to larger carbon lock-ins and more rapidly increasing carbon prices during the accession period.