INTRODUCTION OF A SECTORAL APPROACH TO TRANSPORT SECTOR FOR POST-2012 CLIMATE REGIME: A Preliminary Analysis Using Marginal Abatement Cost Curves

Abstract

Recently, the concept of sectoral approaches has been discussed actively under the UNFCCC framework as it could realize GHG mitigations for the Kyoto Protocol and beyond. However, most studies have not introduced this approach to the transport sector explicitly or analyzed its impacts quantitatively. In this paper, a sectoral approach is introduced that aims to set sector-specific emission reduction targets for the transport sector for the post-2012 climate regime. It is supposed that developed countries will commit to the sectoral reduction target and key developing countries such as China and India will have the sectoral no-lose targets--no penalties for the failure to meet targets but the right to sell exceeding reductions--for the medium term commitment (i.e,. 2013-2020). Six scenarios of total CO2 emission reduction target in the transport sector in 2020, varying from 5-30% reductions from the 2005 level are established. The paper analyzes shares of emission reductions and abatement costs to meet targets for key developed countries including the United States, EU-15, Russia, Japan, and Canada. To analyze impacts of the proposed approach, sectoral marginal abatement cost (MAC) curves are generated by region through extending a top-down economic model, namely the AIM/CGE model. The total emission reduction targets are analyzed against the developed MAC curves for the transport sector in order to obtain an equal marginal abatement cost that derives optimal emission reduction for each country and minimizes total abatement cost. The results indicate that the United States will play a crucial role in GHG mitigations in the transport sector as it is most responsible for emission reductions (i.e., accounts for over 70%) while Japan will least reduce (i.e., accounts for about 3%) for all scenarios. In the case of a 5% reduction, the total abatement is equal to 171.1 MtCO2 with a total cost of $1.61 billion; and in the case of a 30% reduction, the total abatement is equal to 1,026.4 MtCO2 with a total cost of $116.17 billion. The emission reductions according to total targets of the 5 developed regions could cover 3-15% of global CO2 emissions in the transport sector in 2020.