Carbon Constraints Research Articles

Coal-to-liquids projects in China under water and carbon constraints

Coal-to-liquids projects have become more and more significant in China, while water and carbon constraints as well as profitability concerns make them highly controversial for policy makers. This article analyzes the situations and shows that the limitation of coal resources could be relaxed through using coal in far regions, especially in Xinjiang, which are less developed at present. Coal-to-liquids projects could greatly reduce the negative influence of transportation costs. The limitation of water resources might also be solved with desalinating fossil water from deep saline aquifers. Since water costs are only a small fraction of the total cost, the economy of coal-to-liquids projects are not affected much. In addition, the use of fossil water could promote carbon dioxide capture and storage (CCS) and reduce CO2 emissions. However, given the current coal and oil prices, the potential profitability of those projects with or without CCS is seriously negative in all major coal producing regions.

Converting Primary Resources into Useful Energy: The Pollution Ceiling Efficiency Paradox

We study an economy producing energy services from a polluting fossil fuel and a carbon free renewable resource under a constraint on the admissible atmospheric carbon concentration, equivalently under a constraint on the admissible temperature. The transformation rates of natural primary resources energy into useful energy are costly endogenous variables. Choosing higher efficiency rates requires to bring into operation more sophisticated energy transformation devices, that is more costly ones. We show that, independently of technical progress, along an optimal path, the transformation rate of any exploited resource should increase throughout time, excepted within the period during which the carbon constraint is binding, a phenomenon we call the ‘ceiling paradox’. The effects of technical progress in the fossil fuel and the renewable energy sectors are strongly contrasted. JEL Codes: Q00, Q32, Q43, Q54. Keywords: Energy Efficiency, Carbon Pollution, Non-Renewable Resources, Renewable Resources.

Using Emissions Trading Schemes to Reduce Heterogeneous Distortionary Taxes: the Case of Recycling Carbon Auction Revenues to Support Renewable Energy

While emissions trading schemes are developed by nations to mitigate their greenhouse gas emissions, behavioural studies have shown that the political and public acceptability of these market-based instruments depends on the way the associated revenues are used. One option the general public approves of is to use them to support renewable energy. If this consists in reducing a pre-existing electricity levy that heterogeneously applies to the various sectors of the economy, the reduction of this distortionary tax thanks to the carbon revenues results in general equilibrium effects that may have unequal sectoral impacts. This is what we examine in the case of the European Union. With a modelling approach including a detailed disaggregation of European sectors, we find that using auction revenues from the Emissions Trading Scheme (ETS) to support electricity generation from renewable sources results in a 2% rise in electricity demand in the whole economy due to the reduced electricity levy that electricity consumers have to pay to support renewable energy. This results in a 1.8% ETS carbon price increase. The carbon constraint for the non-ETS sectors is 5.9% looser as a consequence of the larger electricity use by these sectors. While the energy intensive sectors generally benefit from electricity levy exemptions, we observe that, due to the energy and ETS price increase, the combination of these exemptions and of the use of carbon auction revenues to support renewable energy makes the ETS sectors worse off than if carbon revenues are transferred to households. In aggregate, the recycling option analysed here results in a GDP gain due to its impacts on the non-ETS sectors, the reduction of the electricity levy and associated distortionary effects.

Low-Carbon Planning and Design in B&R Logistics Service: A Case Study of an E-Commerce Big Data Platform in China

The concept of sustainable development requires us to explore a completeness model of low carbon transport and service in the light of the advancement of changes in world cooperation policy. Various kinds of carbon constraints not only limit emissions of contaminants from E-commerce Enterprise of different countries, but they also ensure the market activity around the Belt and Road, so as to avoid the implementation reducing the company’s profits significantly. This paper discusses of the strictest periodic low-carbon constraints_(PLC) and the expansion of the mainstream with three relatively weak attributes—cumulative_(CLC), full cycle_(FCLC), and volatility_(VLC)—taking into account the offline delivery of lead time and the online relationship between supply and demand on the platform. We have established four decision models with different carbon confinement intensities and inferred the impact of more detailed carbon constraints on E-commerce delivery strategies. The appropriate operational decisions, under a wide spectrum of carbon constraints, help e-companies develop scientific delivery plans, and provide some inspiration for the promotion of low carbon economy system construction and environmental significance.

Study on the U-shaped relationship of carbon constraint on the large thermal power plants’ profitability

With the contradiction between resources and environment in China is becoming more and more serious, China has taken energy saving and emission reduction as a national strategic planning policy. Enterprise, as an important participant in the social and economic development, is an important main body of the implementation of energy-saving and emission-reduction strategy, especially traditional high-polluting thermal power enterprises. Research on the influence of low-carbon constraint on profitability from the angle of enterprises is necessary. From the view of the core factor of the enterprise profitability, and with the help of MATLAB and least squares polynomial fitting method, a theoretical model is established to analyze the relationship between low-carbon constraint and corporate profitability. Both theoretical analysis and empirical results show that there is a U-shaped relationship between carbon constraints and the profitability of large thermal power enterprises. Namely, in the early stage, because of the cost of R and D, the profitability of the enterprise has declined. Once this input becomes the heterogeneous resource that difficult to replace, profitability will increase with the decrease of carbon emissions.

A carbon-constrained stochastic optimization model with augmented multi-criteria scenario-based risk-averse solution for reverse logistics network design under uncertainty

With the increase of the concern from the public for environmental pollution and waste of resources, the value recovery through reuse, repair, remanufacturing and recycling from the end-of-use (EOU) and end-of-life (EOL) products have become increasingly important. Reverse logistics is the process for capturing the remaining value from the EOU and EOL products and also for the proper disposal of the non-reusable and non-recyclable parts. A well-designed reverse logistics system will yield both economic and environmental benefits, so the development of an advanced decision-making tool for reverse logistics system design is of significant importance. The paper presents a novel multi-product multi-echelon stochastic programming model with carbon constraint for sustainable reverse logistics design under uncertainty. Compared with the previous stochastic optimization models in reverse logistics system design, which mainly focuses on the expectation of the optimal value, this paper, however, emphasizes on both optimal value expectation and its reliability in decision-making. Due to this reason, a multi-criteria scenario-based risk-averse solution method is developed based on a latest research in order to obtain the optimal solution with high level of confidence. Later in this paper, the application of the model and the augmented solution method is illustrated and the managerial implications are discussed through the numerical experiment and sensitivity analysis. The result of the study shows that the model can be used for providing decision-makers with a deep insight into the relationship between profit and carbon emission requirement, understanding and resolution of the infeasibility caused by capacity limitation, the use of flexible manufacturing system in reverse logistics, and proper use of the government subsidy as a leverage in reverse logistics design.

Manufacturers’/remanufacturers’ inventory control strategies with cap-and-trade regulation

The increased awareness of the need for protecting the environment and policies relating to carbon emissions has resulted in manufacturers viewing carbon emissions as one of the most critical elements affecting production decisions. As a gradually maturing production form, remanufacturing plays an increasingly pivotal role in economy, environment and society. This paper extends the classical EOQ model, considers carbon emissions in (re)manufacturing activities and product transportation and builds an inventory cost model with carbon constraints. The optimal batch and quantity of manufacturing/remanufacturing and the frequency of cyclic remanufacturing are derived with and without carbon constraints through analysis of the model. At the same time, this paper investigates the impact of carbon emissions quota and its trade prices, remanufacturing ratio and different means of transportation on manufacturers’ decisions. The examples show that the batch size of manufacturing and remanufacturing is identical within the period with carbon constraints; the batch size of manufacturing without carbon constraints is less than remanufacturing with carbon constraints; the results are just the opposite in terms of the batch of remanufacturing and the number of remanufactured products. In other words, the (re)manufacturers’ total cost and carbon emissions with carbon constraints are lower than those without carbon constraints. Starting from the real-life circumstances, this article considers manufacturers’ total cost with imperfect remanufacturing, varied means of transportation, carbon quota and its trade, which have not been taken into account previously, the manufacturer’s optimal decisions are derived. Meanwhile, the analysis of carbon quota can provide some insights for governments and enterprises in terms of carbon emissions rights allocation.

Extended Electric System Cascade Analysis (ESCA) for a Carbon Constraint Energy Generation System

Growing concerns of energy security and environmental issues have posed a great challenge in sustainable energy planning. Renewable energy (RE) resources as well as carbon capture and storage (CCS) are the common alternatives to reduce the impact of carbon emission. However, integration of RE and CCS into the current energy system requires thorough planning. With consideration of existing power fossil based power plant, this paper aims to provide a carbon-constraint energy generation that includes optimal capacities of new power plants and energy storage to meet with the increasing energy demand by using an extended version of the Electric System Cascade Analysis (ESCA) methodology. This method is applied on an hourly scale of a hypothetical case study. The demand side is supplied by an existing 40 MW coal-fired power plant, subjected to a maximum carbon emission constraint of 850 ton CO2/day. The result reveals that additional of 15 MW of new solar photovoltaic power plant and 82 MW of new natural gas power plant with CCS are required to meet with the increasing demand under carbon constraint. The system is integrated with an energy storage of 86 MW in capacity.

Global reverse supply chain design for solid waste recycling under uncertainties and carbon emission constraint

The emergence of concerns over environmental protection, resource conservation as well as the development of logistics operations and manufacturing technology has led several countries to implement formal collection and recycling systems of solid waste. Such recycling system has the benefits of reducing environmental pollution, boosting the economy by creating new jobs, and generating income from trading the recyclable materials. This leads to the formation of a global reverse supply chain (GRSC) of solid waste. In this paper, we investigate the design of such a GRSC with a special emphasis on three aspects; (1) uncertainty of waste collection levels, (2) associated carbon emissions, and (3) challenges posed by the supply chain’s global aspect, particularly the maritime transportation costs and currency exchange rates. To the best of our knowledge, this paper is the first attempt to integrate the three above-mentioned important aspects in the design of a GRSC. We have used mixed integer-linear programming method along with robust optimization to develop the model which is validated using a sample case study of e-waste management. Our results show that using a robust model by taking the complex interactions characterizing global reverse supply chain networks into account, we can create a better GRSC. The effect of uncertainties and carbon constraints on decisions to reduce costs and emissions are also shown.

Low carbon development and local sustainability from a carbon balance perspective

Urbanization raises great challenges for global sustainability and natural resources. With the increasing carbon constraints in the context of climate change, the capacity of carbon sequestration becomes an important resource to address regional sustainable development. However, there is still a lack of an integrated methodology to evaluate urban sustainability within a local urbanization process from a carbon cycle perspective. This paper presents a new way of understanding regional sustainability, which assumes that the status of carbon balance is closely related to low carbon management and local sustainability. The concept of carbon neutral coefficient (CNC) is proposed based on the estimation of carbon emissions and sinks, which emphasizes the fundamental role of carbon sinks in achieving low carbon development and improving local sustainability. Taking Chongming Island (China), the largest alluvial island in the world, as a case study, carbon emissions and sinks are calculated respectively according to an integrated carbon inventory and local coefficients. From 2005–2013, a temporal-spatial variation of CNC was observed on Chongming Island, owing to the different growth rate of carbon emissions and sinks. Furthermore, a spatial variation of change of CNC was detected, caused by the imbalanced spatial distribution of carbon emissions and sinks. Remote Sensing based analysis shows that the change of land use and cover which was induced by human activities can greatly influence local carbon balance and sustainable development. It is also found that the CNC results can help explaining the positive impacts and limitations of ecological environment policies in Chongming Island during the same period. Consequently, the approach of carbon balance analysis serves as an additional tool for monitoring policy effectiveness, which contributes to the debate of sustainable carbon management for local sustainable development.

Strategic airline operation considering the carbon constrained air transport industry

The EU emissions trading system (EU-ETS) is the EU's policy to combat climate change by reducing greenhouse gas emissions cost-effectively. CO2 emissions from aviation have been included in the EU-ETS since 2012, and all airlines operating in Europe are required to report and submit allowances against those emissions. The EU-ETS is only applied to flights that begin or end in EU territory, therefore one of the options non-EU based airlines use to deal with the EU-ETS requirements is aircraft reassignment or flight route adjustment. We investigate strategic airline operations that address the carbon constraints on the air transport industry. A mathematical model and algorithm are developed to derive efficient strategies for airline operations in terms of aircraft reassignment and route adjustment. The proposed mathematical model and heuristic algorithm are verified with a numerical example. The results of this study provide practitioners with insights when dealing with environmental restrictions on airlines.

Progressive IRP Models for Power Resources Including EPP

In the view of optimizing regional power supply and demand, the paper makes effective planning scheduling of supply and demand side resources including energy efficiency power plant (EPP), to achieve the target of benefit, cost, and environmental constraints. In order to highlight the characteristics of different supply and demand resources in economic, environmental, and carbon constraints, three planning models with progressive constraints are constructed. Results of three models by the same example show that the best solutions to different models are different. The planning model including EPP has obvious advantages considering pollutant and carbon emission constraints, which confirms the advantages of low cost and emissions of EPP. The construction of progressive IRP models for power resources considering EPP has a certain reference value for guiding the planning and layout of EPP within other power resources and achieving cost and environmental objectives.

Stochastic Lot-Sizing under Carbon Emission Control for Profit Optimisation in MTO Manufacturing

Aggravating global warming has heightened the imminent need by the world to step up forceful efforts on curbing emission of greenhouse gases. Although manufacturing is a major resource of carbon emission, few research works have studied the impacts of carbon constraints on manufacturing, leading to environmentally unsustainable production strategies and operations. This paper incorporates carbon emission management into production planning for make-to-order (MTO) manufacturing. This paper proposes a model that solves lot-sizing problems to maximise profits under carbon emission caps. The model adopts stochastic interarrival times for customer orders to enhance the practicality of the results for real-world manufacturing. Numerical experiments show that reducing carbon emission undercuts short-term profits of a company. However, it is conducive to the company’s market image as being socially responsible which would attract more customers who concern about environmental protection. Hence, reducing carbon emission in manufacturing is beneficial to long-term profitability and sustainability. The results provide managerial insights into manufacture operations for balancing profitability and carbon control.

China's low carbon competitiveness: an assessment based on international comparison

Today, national competitiveness has evolved into the low carbon competitiveness. This paper attempts to assess China's low carbon competitiveness, measure the overall level of China's low carbon competitiveness based on international comparisons, and then offer some recommendations to improve China's low carbon competitiveness. Specially, it includes: 1) the concept of national low carbon competitiveness is defined; 2) a new national low carbon competitiveness index is designed, which is made up of two comprehensive indexes, national low carbon development ability and national low carbon constraints; 3) the corresponding evaluation system and calculation method are built. National low carbon development ability mainly includes the ability of national economic growth, the ability of national low carbon technology development and the ability of governmental low carbon management. And national low carbon constraints include saturating force of energy consumption and carbon emission, national environmental carrying capacity and national expansion capability of consumption; 4) 19 countries with relatively strong global competitiveness and international influence are selected for low carbon competitiveness assessment. The results show that China's low carbon competitiveness ranks 18 in the 19 countries; 5) several suggestions to enhance China's low carbon competitiveness are proposed.

Underground storage as a solution for stranded associated gas in oil fields

In the absence of a gas market, the management of associated gas (AG) often poses a serious challenge to the development of oil fields, resulting in potentially stranded gas resources. While gas flaring was the default solution, increasingly stringent carbon constraints have rendered this solution unattractive. One potential solution entails injecting the otherwise stranded AG into underground geologic systems for temporary storage, but re-producing same when a viable gas market becomes available. Seeking a robust temporary AG solution for a new oil development in the shallow offshore area of the Niger Delta, this paper presents an overview of common AG solutions, examining their relative strengths and weaknesses relative to this case study.Employing analytic and numerical-simulation studies, temporary AG storage in a non-associated gas (NAG) reservoir as well as the later development of both the native NAG and alien (injected) AG resources have been investigated. The main factors that control both the injection and production phases are highlighted. For a given set of abandonment conditions, effects of the gas volume injected prior to the production phase on the ultimate recovery factors of the native and alien gas resources are presented. Additionally, matrix, pseudo-fractured, and fractured injection modes are explored.Based on selected technical and economic indicators, underground storage in a virgin gas reservoir is found to be the most attractive solution to address stranded AG in this example field, and possibly others.

Financial sustainability for a lignocellulosic biorefinery under carbon constraints and price downside risk

The development of an environmentally sustainable and financially viable replacement for fossil fuels continues to elude industry investors even though the benefits of replacing them is undisputed. Biofuels are among the promising replacements for fossil fuels. However, the development and production process for bio-based fuels creates uncertainty for industry investors. In order to increase process profitability, financial tools can be implemented with current technology. This paper proposes the use of forward contracts to mitigate risk, and it also considers the impact of carbon tax constraints and price uncertainty. Specifically, a stochastic optimization approach is implemented to develop strategies, which increases the net present value (NPV) of a production facility through determination of an optimal production schedule, as well as the creation of a portfolio of forward contracts to reduce product price risk. Results of numerical case studies show that if the policymaker is risk averse, production is higher in the early planning period rather than the later period. This paper also investigates the ability to maintain inventory in order to create additional financial benefit.

Operationalizing equity and supporting ambition: identifying a more robust approach to ‘respective capabilities’

‘Common but Differentiated Responsibilities and Respective Capabilities’ (CBDR-RC) is a core principle in the United Nations Framework Convention on Climate Change (UNFCCC) used to operationalize equity, but it could be defined in many ways. To date, the bulk of attention has been on the first part of this principle – CBDR – because of the importance of addressing responsibility. However, we propose that a more robust notion of RC is possible, useful and timely as countries are currently articulating their first Nationally Determined Contributions, a process that is expected to ratchet up over time under the new regime. We combine Sen and Nussbaum's notion of a ‘capabilities approach’ with the framework provided by the UNFCCC to identify five sub-elements of RC and propose metrics for each of them. These sub-elements are human development, economic capacity, resilience to climate impacts, governance capacity, and technical and innovation capacity. We are not proposing replacing discussions of responsibility with those of capabilities. Responsibility remains central to the climate equity discussion. However, differentiation based on responsibility alone may not be adequate to address climate impacts or human development needs, both of which are central to climate equity. Providing countries with a robust approach for articulating RC enhances the overall ability for the principle of CBDR-RC to address the trio of climate equity challenges posed by unequal climate impacts, development status, and responsibility. Moreover, including a more robust notion of capabilities in the operationalization of equity may identify additional means for supporting specific domestic climate policies able to address core development needs in the context of increased carbon constraints and climate impacts.

Achieving development and mitigation objectives through a decarbonization development pathway in South Africa

Achieving the international 2 °C limit climate policy requires stringent reductions in GHG emissions by mid-century, with some countries simultaneously facing development-related challenges. South Africa is a middle-income developing country with high rates of unemployment and high levels of poverty, as well as an emissions-intensive economy. South Africa takes into account an assessment of what a fair contribution to reducing global emissions might be, and is committed to a ‘peak, plateau and decline' emissions trajectory with absolute emissions specified for 2025 and 2030, while noting the need to address development imperatives. This work utilizes an economy-wide computable general equilibrium model (e-SAGE) linked to an energy-system optimization model (TIMES) to explore improving development metrics within a 14 GtCO2e cumulative energy sector carbon constraint through to 2050 for South Africa. The electricity sector decarbonizes by retiring coal-fired power plants or replacing with concentrated solar power, solar photovoltaics and wind generation. Industry and tertiary-sector growth remains strong throughout the time period, with reduced energy intensity via fuel-switching and efficiency improvements. From 2010 to 2050, the model results in the unemployment rate decreasing from 25% to 12%, and the percentage of people living below the poverty line decreasing from 49% to 18%. Total energy GHG emissions were reduced by 39% and per capita emissions decreased by 62%.Policy relevanceLower poverty and inequality are goals that cannot be subordinated to lower GHG emissions. Policy documents in South Africa outline objectives such as reducing poverty and inequality with a key focus on education and employment. In its climate policy and Intended Nationally Determined Contribution (INDC), South Africa is committed to a peak, plateau and decline GHG emissions trajectory. As in many developing countries, these policy goals require major transformations in the energy system while simultaneously increasing affordable access to safe and convenient energy services for those living in energy poverty. The modelled scenario in this work focuses on employment and poverty reduction under a carbon constraint, a novel combination with results that can provide information for a holistic climate and development policy framework. This study has focused on the long term, which is important in generating clear policy signals for the necessary large-scale investments.

Réduire au-delà de 20 % les émissions de gaz à effet de serre dans l’Union européenne : quelles conséquences sur les secteurs intensifs en énergie européens ?

Should the EU Move Beyond 20% GHG Emissions Reduction by 2020 ? Addressing Sectoral Carbon Leakage Concerns. The greenhouse gas emissions trading scheme (EU ETS) is a cornerstone of European climate policy. The recent economic crisis has led to a significant reduction in the price signal produced by the instrument and may delay the investments needed for the transition to a low-carbon society. The European Commission has proposed amore stringent emission reduction target for the scheme, but this could increase carbon leakage in the industrial sectors exposed to international competition. We analyse the impact of this increased carbon constraint using a static partial equilibrium model representing the EU ETS. Different allocation modes are evaluated, focusing on their impact on sectoral carbon leakage but also on industrial production.

Impacts of low-carbon power policy on carbon mitigation in Guangdong Province, China

This paper analyzes the impacts of the low-carbon policy in the power sector of Guangdong Province in China on its energy and carbon emission targets by 2020, as well as their costs and co-benefits, using a regional CGE model with seven scenarios: business as usual (BaU), renewable energy (RE), renewable energy and natural gas (RE–NG), CAP only (CAP), CAP and RE–NG (CAP–RE–NG), carbon emission trading (ETS), and ETS with RE–NG (ETS–RE–NG). Analysis results reveal that provincial energy and carbon intensity targets can be achieved in the assumed carbon mitigation scenarios with carbon cap, ETS, and clean energy development policies. While the carbon constraint exerts negative impacts on the economy, GDP loss could be lowered by the ETS and RE policies. The RE scenario is more economically efficient than the ETS scenario, and coupling the RE and ETS scenarios appears to be the most economically efficient scenario to achieve the desired carbon and energy intensity targets. One of the benefits of the low-carbon policy is its improvement of the energy security of Guangdong in terms of reduced reliance on external coal and oil; in particular, Guangdong coal consumption could peak in 2017–2019.