Abstract
There is presently an urgent demand for efficient and/or renewable energy technologies to correct global warming. However, these energy technologies are limited mainly by political and economic constraints of high costs and the lack of subsidy. Carbon-pricing strategies, such as carbon-emission taxes and carbon-emission trading schemes, may reduce this gap between sustainable and unsustainable energy technologies. Therefore, this paper seeks to analyze both of these carbon-pricing instruments in the Mexican energy sector to promote upgrading biogas investment and to substitute liquified petroleum gas consumption using an optimization approach. Furthermore, we propose a multi-objective optimization approach to encourage investment in the biogas supply chain supported by an effective use of carbon-pricing schemes. A case study of the central western region of Mexico was made to analyze the performance of the proposed methodologies. The results show that carbon-emission taxes and carbon-emission trading systems stimulate, with some limitations, the investment in biogas projects for fossil fuel substitution. Nevertheless, using the proposed multi-objective optimization formulation leads the discovery of a more efficient use of the above-mentioned carbon-pricing schemes, thus reaching higher economic and environmental benefits than traditional carbon-pricing policies, with a lower cost/price per ton of carbon dioxide equivalent.
Highlights
Global demand of resources and energy has grown exponentially to such extent that one sustainable development goal is to “take urgent action to combat climate change and its impacts” [1]
The analysis corresponds to maximize the profit for sales of biogas and liquified petroleum gas (LPG) considering that the energy demand is satisfied 10%, 20%, 50% and 100% for each town in the studied geographical region by either biogas or LPG
For 10% of the energy demand, when the profit, and the green line represents the greenhouse gas (GHG) emissions.−1For 10% of the energy demand, when carbon emissions have a price between 2.68 and 8.93 € ton CO eq, to invest in a biogas project carbon emissions have a price between 2.68 and 8.93 € ton−1 CO2eq, 2to invest in a biogas project is not is not convenient, so the GHG emissions remain in the maximum value
Summary
Global demand of resources and energy has grown exponentially to such extent that one sustainable development goal is to “take urgent action to combat climate change and its impacts” [1]. The steps to obtain the final product represent a challenge in terms of capital and operating costs and energy consumption that represent disadvantages to introduce biogas in a market to compete with other fuel despite the potential environmental benefits; even so, an effective carbon-pricing scheme can increase the cost/price of intense carbon-emitting technologies and activities, and at the same time can provide a financial incentive for consumers and producers to invest in technologies to reduce GHG emissions This encourages the adoption of existing low-carbon technologies, and indirectly promotes the development of new ones [5]. We combined a multi-objective optimization method with ETS to improve the environmental and economic advantages of this scheme
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