Carbon Mitigation Policies Research Articles

Emissions inequality: Disparities in income, expenditure, and the carbon footprint in Austria

The social consequences of carbon taxation are closely related to the income and expenditure patterns of private households. This paper combines the national Household Budget Survey with EXIOBASE3 emissions data to analyse the distribution of the carbon footprint and differences in the exposure to carbon taxation in Austria. The results indicate a strong variation in greenhouse gas (CO2e) emissions along the income distribution, with the top income decile emitting 4.1 times more than the bottom income decile. We distinguish between local, EU-based, and rest-of-the-world (RoW) emissions and study how various approaches to CO2e taxation would affect households with different incomes. Finally, we compare the implications of taxing direct domestic emissions only versus taxing the carbon footprint and find socio-demographic factors that explain why some households have higher tax-to-income ratios. Socially balanced carbon mitigation policies should focus on these emitters as they might be particularly exposed to CO2e taxation.

The financial impact of carbon risk and mitigation strategies: Insights from the automotive industry

The automotive industry is one of the most polluting manufacturing industries and one of the most important in terms of the workforce employed. Therefore, understanding the impact of climate change on this industry is of interest to policymakers, capital providers, and managers. To this end, this study provides insights into the financial impact of carbon risk and mitigation policies adopted by automobile companies. It adopts an accounting-based approach based on profitability ratios and a market-based perspective based on Tobin's q measures. The sample includes car manufacturers and component manufacturers, thus providing a comprehensive overview of the automotive industry along its supply chain. The results suggest possible difficulties in accessing capital in the future, or more expensive conditions, for higher-polluting firms, which are the most in need to make the transition to cleaner production. The findings indicate a robust and consistently negative association between carbon emissions and financial performance, which are related to lower returns on sales and capital inefficiency for higher-emitting firms. Evidence also suggests a negative impact of carbon emission mitigation strategies on financial performance measures, which increases with carbon risk. Results are not compelling for climate-related disclosure.

Current relationship between coal consumption and the economic development and China's future carbon mitigation policies

China is the largest emitter worldwide, and coal consumption contributes the most. So the key to emission mitigation is to reduce coal consumption. The paper applies panel data during 1998–2017 to analyze the relationship between coal consumption and economic development. The results indicate that the relationship is now weakening, and find evidence of inter-provincial relocation of the coal-intensive industries. The reduction of the marginal contribution provides the possibility for China's economic emission mitigation. Then, the paper applies a dynamic recursive computable general equilibrium model to simulate carbon mitigation policies during 2017–2030 at the same emission reduction level, including coal capacity cut, Emission Trading Scheme (ETS), carbon tax with ETS, and resource tax. The results show that different policies have specific advantages: coal capacity cut reduces coal consumption the most; ETS significantly improves the share of renewable energy; carbon tax with ETS could optimize economic structure; resource tax is good at protecting the economic aggregate. Based on these conclusions, specific policy implications are proposed, such as measurements of increasing energy cost and collaborative regional environmental regulation.

Spatial-temporal evolution and driving forces of provincial carbon footprints in China: An integrated EE-MRIO and WA-SDA approach

The reduction of carbon footprint (CF) induced by cross-province trade is equally important for China with unbalanced economic development under the background of “double carbon” and “dual circulation” strategy. Based on the environmentally-extended multi-regional input-output (EE-MRIO) and weighted average structural decomposition analysis (WA-SDA) model, this study explored the distribution characteristics and spatial-temporal evolution process of three-perspective CFs (By province, Per capita, and Per ¥GDP) at the provincial level, and accurately revealed the socio-economic driving factors of provincial CFs from 2007 to 2017. Here we show that China's CF increased from 6151.4 Mt. in 2007 to 8778.6 Mt. in 2017, with an average annual growth rate of 3.6%. With the socioeconomic development, the gravity centers of CFs and per capita CFs were gradually shifting from eastern affluent provinces and populous municipalities to underdeveloped western China, while the provinces with relatively low carbon footprint intensities (CFIs) were still concentrated in affluent eastern coastal areas. It will be conductive to the overall improvement of national emission mitigation effective through introducing the advanced production technologies and scientific consumption awareness of developed provinces to eastern China in the future. Meanwhile, the corresponding control measures on CF reduction should pay attention to the changes of per capita consumption and population especially for economically-developed populous regions such as Shandong, Jiangsu, Guangdong, and Zhejiang. For Inner Mongolia, the bidirectional adjustment of emission intensity and production structure will be necessary for its CF reduction. Moreover, the continuous optimization of consumption structure will be expected to contribute more impacts on CF reduction under the demand-side reform. The obtained results and policy implications are expected to provide corresponding and holistic reference for decision-makers to develop more efficient carbon mitigation and management policies.

A hybrid instrument for China's post-2020 mitigation commitments: A sectoral coverage perspective

Sectoral coverage is a chief challenge in the design of carbon mitigation policies, this paper addresses such a concern within a hybrid regulation setting in which a carbon tax is adopted for complementary regulation of emission sources outside the Emission Trading System (ETS) in China. With a focus on the efficiency of the hybrid system, the regulated sectors are identified by linkage analysis and the resulting price changes is captured by the input-output (I-O) price model. The simulation shows that, in terms of the price incentives, the proposed carbon tax is a necessary complement to the ETS, in respect of both magnitude and structure. As a result, a mixed policy setting can be expected to have an efficiency advantage over the ETS alone. Understanding of the joint determination of the sectoral coverage and the corresponding price incentive effect is a new contribution to the theoretical literature on designing market-based carbon policies, which has substantial policy implication for the future design of instruments targeted at achieving China’s post-2020 mitigation commitments.

Valuing the economic impacts of seed dispersal loss on voluntary carbon markets

Seed dispersal is an ecosystem service strongly affected by the loss of mutualist dispersers, with economic consequences in terms of carbon sequestration and climate change mitigation policies. Especially, large frugivores are important contributors to carbon sequestration because they are the main disperser of large-seeded trees, which store a high amount of carbon. The effect of seed dispersers defaunation on carbon sequestration is particularly significant in tropical forests, where frugivores disperse 70–94% of the woody plant species and where ∼59% of the world’s forest carbon above ground is stored. However, the economic impacts of the defaunation of large frugivores on ecosystem services, such as seed dispersal and carbon sequestration, are poorly valued. Here, we simulate the effects of the loss of three large frugivores (Brachyteles arachnoides, Alouatta guariba, and Pipile jacutinga) on the recruitment of hardwood tree species and its economic impact on carbon markets. We found that the combined loss of the large frugivores would reduce the standing carbon sequestration by 2.5%. However, defaunation also affects seed predator communities, which influences the contribution of the frugivores. By adding the loss of large seed predators, the reduction in carbon sequestration would rise to 3.5%. In summary, the potential economic contribution of the seed dispersal services provided by our target dispersers ranges from US$3.94 ha−1 year−1 to US$15.42 ha−1 year−1. We highlight the importance of conserving seed disperser and predator communities to guarantee the long-term viability of forest carbon sequestration. We argue that knowledge of the economic consequences of defaunation should be included in carbon mitigation policies and encourage animal conservation and forest restoration.

Co-benefits of deep carbon reduction on air quality and health improvement in Sichuan Province of China

Facing the dual challenges of air pollution and climate change, China has set ambitious goals and made decisive efforts to reduce its carbon emission and win the ‘Battle for Blue Sky’. However, how the low-carbon transition and air quality targets could be simultaneously achieved at the sub-national levels remains unclear. The questions arise whether province-level climate change mitigation strategies could help ease the air pollution and close the air quality gap, and how these co-benefits can be compared with the cost of the green transition. Here, using an integrated modeling framework, we combined with local air pollutant emission inventories and issued policy documents to quantitatively evaluated the current situation and targets of the air quality and health co-benefits of deep carbon mitigation in Sichuan, a fast-developing inland province in China. We found that by 2035, without system-wide energy transformation induced by carbon mitigation policies, the improvement in air quality in Sichuan Province might be limited, even under stringent end-of-pipe emission control measures. On the contrary, the co-benefits of low-carbon policies would be significant. On top of stringent end-of-pipe controls, the implementation of carbon mitigation policy in line with China’s enhanced climate target could further reduce the average PM2.5 concentration in Sichuan by as much as 2.8 µg m−3, or the population-weighted PM2.5 concentration by 5.9 µg m−3 in 2035. The monetized health co-benefits in Sichuan Province would amount to 23 billion USD under the stringent carbon mitigation scenario, exceeding 1.7 billion USD of the mitigation cost by 2035. The results indicate that significant air quality and health benefits could both be achieved from carbon mitigation at the provincial level. Both air-pollution or carbon-reduction oriented policies would be important for improving environmental quality and public health.

Bioenergy production from sugarcane bagasse with carbon capture and storage: Surrogate models for techno-economic decisions

The use of biomass in cogeneration is a sustainable alternative of energy production, allowing replacing fossil fuels and reduction of greenhouse gas emissions. This work discloses an integrated process analyzer framework comprising surrogate models for estimation of fixed capital investment, revenues, costs of manufacturing as well as several performance responses of cogeneration units of sugarcane-biorefineries burning bagasse, with/without post-combustion carbon capture and storage. A restricted number of inputs are required, namely bagasse availability and heat requirements of the sugarcane-biorefinery. To develop the investment models, a 3³ factorial computational-experimental design was performed, where AspenOne Portfolio was used in each run to simulate the process allowing estimating the fixed capital investment. Surrogate models were adjusted to fit capital estimates, resulting in 1.9% and 1.3% mean errors for the cogeneration and the post-combustion capture steps, respectively. Capture costs were estimated by analytical equations using the investment values and other estimates from the process analyzer framework, reaching 262 USD/t, but can be as low as 17.2 USD/t if limitations from the agricultural sector are disregarded; namely seasonality, operating time and capacity. The developed framework can assist in sugarcane-biorefinery investment decision making regarding bioenergy with carbon capture and storage or to develop carbon mitigation policies.

Energy technological innovation and carbon emissions mitigation: evidence from China

PurposeThe purpose of this paper is to examine the effects of energy technological innovation on carbon emissions in China from 2001 to 2016.Design/methodology/approachConditional mean (CM) methods are first applied to implement our investigation. Then, considering the tremendous heterogeneity in China, quantile regression is further employed to comprehensively investigate the potential heterogeneous effect between energy technological innovation and carbon emission intensity.FindingsThe results suggest that renewable energy technological innovation has a significantly positive effect on carbon emission intensity in lower quantile areas and a negative effect in higher quantile areas. Contrarily, fossil energy technological innovation exerts a negative correlation with carbon emission intensity in lower quantile areas and a positive effect on carbon emission intensity in higher quantiles areas.Originality/valueConsidering that energy consumption is the main source of CO2 emissions, it is of great importance to study the impact of energy technological innovation on carbon emissions. However, the previous studies mainly focus on the impact of integrated technological innovation on carbon emissions, ignoring the impact of energy technological innovation on carbon emissions mitigation. To fill this gap, we construct an extended STIRPAT model to examine the effects of renewable energy technological innovation and fossil energy technological innovation on carbon emissions in this paper. The results can provide a reference for the government to formulate carbon mitigation policies.

Energy poor need more energy, but do they need more carbon? Evaluation of people's basic carbon needs

In the era of low-carbon energy transitions, both climate and energy justice studies have raised concerns about the deterioration of energy poverty triggered by carbon mitigation policies. Nevertheless, no in-depth analysis has thus far examined the relationship between people suffering energy poverty and their carbon dioxide emissions. This study addresses the issue by presenting a novel approach to measuring people's basic carbon needs (BCN), which are defined as the amount of carbon emissions needed to achieve (socially and materially) adequate levels of domestic energy services. The results, using Japan as a case study, reveal the differences in people's BCN based on climatic, socio-demographic, and dwelling factors, showing that people in energy poverty need greater carbon emissions to fulfil their basic energy needs than the affluent population. In upcoming low-carbon energy transitions, people's BCN must be reduced while satisfying their basic energy needs. However, this study shows that the carbon intensity of domestic energy services for energy poverty households is high, leading carbon mitigation policies such as carbon pricing to adversely affect them without suitable countermeasures. Hence, ensuring access to low-carbon energy for all, including the energy poor, is essential to engender an inclusive low-carbon energy transition.

Status quo bias and public policy: evidence in the context of carbon mitigation

This article examines whether individuals’ preferences for government policy are affected by status quo bias. We designed a contingent valuation survey that asks respondents directly about their willingness to pay (WTP) for their state to be a part of a regional carbon mitigation policy. The survey has two randomized frames, which differ in whether or not their state is already part of the policy. We distributed the survey to a representative sample of Rhode Island residents (N = 844). We find that respondents who believe that Rhode Island would be joining the policy for the first time have a WTP to join of $170 (quite similar to previous research at a national scale), whereas those who believe Rhode Island is already part of the policy are willing to pay 2.5 times more, or $420, to stay in the program. Our results suggest that citizens greatly prefer existing carbon mitigation policies to new policies, which implies that carbon policy will be more successful if enacted through the legislature instead of popular vote.

Fossil fuel energy and environmental performance in an extended STIRPAT model

Recent reports by the Intergovernmental Panel on Climate Change (2018 and 2019) have revealed that world’s human activities have contributed to around 1°C of global warming above the pre-industrial levels (expected to reach 1.5°C between 2030 and 2052) with the burning of fossil fuel contributing to over three-quarters of world’s emissions. Rising demand for energy is expected to add another 39 billion tonnes of carbon-dioxide, threatening the climate action plan of achieving net-zero by 2050. Given the expected worsening of emissions from fossil fuels’ burning, this paper’s main objective is to empirically examine the supply-side effect of energy generation from fossil fuels (coal, natural gas and oil) on environmental quality. In doing so, an extended Stochastic Impacts by Regression on Population Affluence and Technology (STIRPAT) model is adopted that controls for a range of economic, social and institutional factors. The panel data estimation technique is applied to the model that includes a balanced panel of 59 countries using coal, 77 countries using gas and 96 countries using oil for 2002 to 2016. The results revealed coefficient coal is negative and statistically significant at the 1 per cent level (α = −0.052 with ρ = 0.01) and oil is negative and statistically significant at 5 per cent level (α = −0.020 with ρ = 0.05). These results support supply-side energy generation through the burning of coal and oil as vital contributors to environmental quality degradation. Other than confirming the Environmental Kuznets Curve (EKC) effect, forest cover, schooling, the rule of law and nations commitments to international environmental treaties are other strong correlates of environmental performance. The findings also revealed strong adverse effects of agriculture and industrial intensification on environmental quality. The main conclusion is the urgency for the worlds fossil fuel energy-dependent countries to transit from fossil fuel energy to the production of frontier renewable (cleaner forms) sources of energy to minimise degradation of the environment. Other than exploring supply-side carbon mitigation policies, there is a need for active co-operation of all countries of the world in the enforcement of international treaties to minimise further environmental damage.

Electric Power Development Associated with the Belt and Road Initiative and its Implications for Carbon Mitigation Policies and Technologies

The Belt and Road Initiative (BRI), proposed by China in Fall 2013, includes large-scale development of energy infrastructures in Eurasia and Africa, and therefore has the potential to affect global climate. In this work, we analyze BRI-associated development of the electric power sector in 15 representative countries from the Belt and Road regions and find that in the period between October 2013 and June 2019, 75% of newly added power generating capacity has gone to fossil fuel-burning power plants while the remaining 25% has gone to renewable energy, mostly hydropower. Although the installed solar photovoltaics capacity and the number of solar photovoltaics projects have experienced significant increases since 2017, the total solar photovoltaics capacity is still small compared to fossil-fuel power generating capacity. Based on current trends, the total BRI-associated power development by the end of 2030 could generate 56 (range 40-72) billion metric tons of carbon dioxide over the lifetime of the power plants. This corresponds to 7-17% of the remaining carbon budget for the 1.5 C climate goal.

A factorial CGE model for analyzing the impacts of stepped carbon tax on Chinese economy and carbon emission

Carbon tax is a powerful incentive to mitigate carbon emissions and promote energy revolutions. It is of vital importance to systematically explore and examine the socio-economic impacts of levying a carbon tax, such that desired compromises among socio-economic and environmental objectives can be identified. In order to fill the research gap on the stepped carbon tax, this study is to develop a factorial computable general equilibrium (FCGE) model for examining the interactive effects of multiple policy options (e.g., grouping of emission intensity/level, and relevant tax rates), and supporting the formulation of desired carbon-mitigation policies. It is discovered that (1) carbon tax of 18.37 to 38.25 Yuan/ton is a reasonable policy alternative for China; (2) the stepped carbon tax (high level on coal-related fuels) is more efficiency than conventional carbon tax policy; (3) the positive effects for reducing carbon emission intensity can be strengthened with an increasing step range; (4) interactive effects between stepped carbon taxes on coal-related energies and crude oil related energies should be jointly considered by the policy makers.

The Relationship between On-Road FFCO2 Emissions and Socio-Economic/Urban Form Factors for Global Cities: Significance, Robustness and Implications

Transportation accounts for 18% of global fossil fuel carbon dioxide (FFCO2) emissions, especially in urban areas. An improved understanding of on-road FFCO2 emissions is essential to both carbon science and mitigation policy. Previous studies have identified the driving factors and quantified their relationship to on-road FFCO2 emissions. However, they have been primarily based on case studies conducted in individual cities, and the research results remain inconclusive due to the considerable heterogeneity of cities and associated outcomes. In order to achieve more general results and to further understand their uncertainties, this study explored the relationships between socio-economic/urban form data and self-reported on-road FFCO2 emissions for a sample of global cities based on the adjusted Stochastic Impacts by Regression on Population, Affluence and Technology (STIRPAT) model. The robustness and sensitivity of these relationships was evaluated by introducing artificial errors, conducting cross-validation, and examining various model specifications. Results indicated that fuel economy (p-value < 3.1 × 10−8), vehicle ownership (p-value < 3.0 × 10−4), road density (p-value < 4.4 × 10−3) and population density (p-value < 3.1 × 10−3) were statistically significant factors that correlate with on-road FFCO2 emissions. Of these four variables, fuel economy and vehicle ownership had the most robust relationships. These results offer potential policy insights into on-road FFCO2 emissions mitigation in cities, in addition to offering a means to generate emissions estimates without detailed bottom-up information.

Energy Poor Need More Energy, But do They Need More Carbon?

In the era of low-carbon energy transitions, both climate and energy justice studies are concerned about the deterioration of energy poverty in line with deeper carbon mitigation. Nevertheless, no in-depth analysis has thus far examined the relationship between the energy poor and their carbon dioxide emissions. This study presents a novel approach to measuring people’s basic carbon needs (BCN), defined as the amount of carbon emissions needed to achieve (socially and materially) adequate levels of domestic energy services, and clarifies the distribution of people’s BCN using Japan as a case study. The results reveal the differences in people’s BCN based on climatic, socio-demographic, and dwelling factors as well as show that the energy poor need greater carbon emissions to fulfil their basic energy needs than the affluent population. Going forward, people’s BCN must be reduced, with satisfying their basic energy needs, through low-carbon energy transitions. However, the carbon intensity of domestic energy services for the energy poor is high, inevitably leading deep carbon mitigation policies to adversely affect them without suitable countermeasures. Hence, ensuring access to low-carbon energy for all, including the energy poor, is crucial to engender an inclusive low-carbon energy transition.

Coal phase-outs and carbon prices: Interactions between EU emission trading and national carbon mitigation policies

The European Union Emission Trading System (EU ETS) constitutes the core instrument of the European Union climate protection policy. It limits greenhouse gas emissions of its member states and aims at facilitating an efficient allocation of emission reduction across national borders. Accompanying this policy at the European level, individual member states have introduced national mitigation policies, including renewable energy (RES) expansion measures or coal phase-outs.This study examines to what extent national policies affect the effectiveness of the EU ETS and to what degree the impact is reflected in prices for European Union Allowances (EUA). To investigate this question, a fundamental optimization model of the European electricity markets is deployed and model endogenous EUA prices are derived with a set of future market scenarios. Overall findings indicate that fundamental market forces strongly affect EUA prices. Furthermore, national policies play a critical role: The expansion of RES does not affect the capacity of the EU ETS to provide sufficient price signals for the desired level of decarbonization but a coal phase-out has a strong price-suppressing effect. A withdrawal of certificates can re-establish the effectiveness of the EU ETS but prices can rise drastically when overestimating the necessary amount.

Optimization and analysis of a bioelectricity generation supply chain under routine and disruptive uncertainty and carbon mitigation policies

AbstractIncreasing greenhouse gas emissions and negative environmental consequences have raised worldwide attention to ecological issues. The development of carbon regulations (CRs) beside carbon capture and storage (CCS) systems is part of carbon mitigation policies (CMPs), which are following in recent years to control and manage carbon liberation. Along with environemtal policies, the utilization of renewable energy resources have been promoted significantly. However, the economic opportunities for renewable energy development considering CMPs have not addressed extensively. In this study, a stochastic mathematical programming model has been presented to minimize cost and downside risk (DSR) of the bioelectricity generation supply chain considering the pre‐ and postdisaster conditions. The role of several CMPs on the economic behavior of the system has been analyzed by investigating the potential uncertainties on material availability, material quality, and consumer demand. To consider disruption effects, the postdisaster stage has been classified into several substages including damage, recovery, and back to the sustainability stages. Mississippi State after the Katrina Hurricane is addressed as a case study to examine the performance of the proposed model. The results demonstrated that the occurrence of disruptive uncertainties creates 8,978,502 $, 8,864,335 $ and 8,884,055 $ as the DSR, under carbon tax policy (CTP), carbon offset policy (COP), and CCS, respectively. The effect of disruptive scenario with a 15% reduction of resource has led to the greatest postdisaster supply chain costs in comparison with other scenarios. Although the financial analysis showed CTP has the greatest DSR after the occurrence of disaster, this policy has the most investment attractions, as well as COP, with the internal rate of return (IRR) of 9%. While implementing the CCS policy with the IRR of 2% creates 7% missed opportunity costs compared with other CMPs.

Research on a single policy or policy mix in carbon emissions reduction

Existing literature on the optimal type of carbon mitigation policy and whether it is better to apply a policy mix instead of a single policy is still unclear. This paper assesses the policy effectiveness under exogenous shocks by applying a dynamic stochastic general equilibrium (DSGE) model. Comparing the differences between the carbon mitigation and economic impacts of a policy mix versus a single policy (carbon tax or carbon trading scheme), the results showed that energy demand is rigid in response to technological shocks. Therefore, there is no significant difference for the energy consumption related carbon emissions in response to the technological progress under three different policy scenarios: a carbon tax (scenario I), a carbon trading scheme (scenario II), and a carbon policy mix (scenario III). Overall, carbon emissions policy has a negative impact on the economy, compared to the other two policies, a carbon trading scheme has a relatively slight impact on the economy. A mandatory carbon price would have a more significant impact than would a market-based carbon price. The policy mix formed by a carbon tax and a carbon trading is comprehensive in terms of both price flexibility and coverage scope.

Impacts of Water Resources and Carbon Mitigation Policies on Electric Power Systems under Multiple Uncertainties

A bi-level multistage joint-probabilistic left-hand-side chance-constrained programming model is proposed to plan energy-water-carbon nexus systems under multiple uncertainties. The model can address randomness in constraints right- and left- hands as well as handling leader-follower problem in decision-making processes. A variety of scenarios associated with different left-hand side constraint-violation risks as well as a range of levels relate to available water, electricity demand, and carbon mitigation are examined. Results reveal that multiple uncertainties significantly affect the nexus system planning policies (energy supply, electricity generation, imported electricity, water utilization, and carbon emission). Results also disclose that local authorities would vigorously develop wind power and biomass power; available water has the greatest magnitude of the main effect upon the total cost; the interaction among the carbon mitigation and available water have obvious effect on total cost.