Emission Abatement Costs Research Articles

An assessment of China’s methane mitigation potential and costs and uncertainties through 2060

China, the world’s largest methane emitter, is increasingly focused on methane mitigation in support of its climate goals, but gaps exist in the understanding of key methane sources, as well as mitigation opportunities and their associated uncertainties. We use a bottom-up modeling approach with updated methane emission projections and abatement cost analysis to account for additional sources, uncertainties, and mitigation measures in China’s energy and agricultural sectors. Here we show the significant cost-effective potential for reducing methane emissions in China by 2030, with 660 million tonnes of carbon dioxide equivalent possible with average negative abatement costs of US$6.40 per tonne CO2e. Most of this potential exists in the energy sector, particularly coal mining, but the greater potential will shift towards agriculture by 2060. Aquaculture and biochar applications in rice cultivation have net economic benefits but need greater support for deployment, while new mitigation measures will be needed for remaining emissions from enteric fermentation, rice cultivation, and wastewater.

The synergetic competition of cross-regional integrated energy systems with low-carbon technology heterogeneity under carbon emission trading mechanism to achieve carbon reduction target

The integration of renewable and fossil energy in a Region Integrated Energy System (RIES) is recognized as an effective measure for carbon emission reduction. The emergence of carbon emission trading (CET) markets worldwide has raised the need to combine RIES optimal planning with CET to achieve carbon reduction targets. This study focuses on the synergetic competition of a cross-RIES system with low-carbon technology heterogeneity under the CET mechanism. A cross-RIES model is constructed, incorporating fossil Carbon Capture System (fossil-CCS), renewable Combined Cooling Heating and Power (renewable-CCHP), and cleaner production paradigms. An improved version of the Non-dominated Sorting Genetic Algorithm-II (NSGA-II) is used to propose a bi-level multi-objective optimal planning framework for the cross-RIES model, employing a grandfather permit allocation method. Comparative analysis is conducted between cross-RIES optimal planning with and without considering the CET mechanism, with a focus on environmental indexes such as carbon emission, carbon intensity, and marginal abatement cost. Sensitivity studies are also performed to explore the impact of key CET design parameters on the system's environmental performance. The simulation results demonstrate that the CET mechanism effectively reduces carbon emission, primary energy consumption, and carbon intensity by promoting synergetic competition among the low-carbon technology heterogeneity of RIESs. Furthermore, the environmental performance varies among the three types of RIES. In terms of CET parameter design, lowering the cap constraint, reducing the allowance allocation ratio of fossil-CCS RIES, and increasing the trading price contribute significantly to reducing carbon emission and carbon intensity, albeit at the expense of higher marginal abatement cost.

The cost of CO2 emissions abatement in a micro energy community in a Belgian context

This paper investigates and quantifies the benefits and the cost of CO2 emissions abatement of a Micro Energy Community (MEC) in a tiny residential cluster of three houses in a Belgian context. A simulation-based comparative analysis is performed of two individual and two MEC concepts, i.e. a reference scenario, an individual electrification scenario, an electricity sharing scenario, and an energy community scenario. A deterministic dynamic white-box modelling approach, including optimal control, is used, considering heat for space heating and domestic hot water, and electricity for electrical appliances. The energy system that achieves the greatest emission reduction at the lowest cost, has a collective heat pump and a photovoltaic installation sized based on the plug load demand. This system reduces the annual CO2 emissions by 11.48 tons at a cost of 179 EUR/ton CO2 considering 2021 dynamic retail electricity prices with a median of 251 EUR/MWh and a fixed retail gas price of 64 EUR/MWh. However, the results are strongly dependent on the gas-electricity price ratio. The highest value of the retail gas price in 2021 leads to a negative CO2 emissions abatement cost of 154 EUR/ton CO2, putting energy community concepts on the radar for a cost-effective energy transition.

Techno-economic analysis of geothermal combined with direct and biomass-based carbon dioxide removal for high-temperature hydrothermal systems

Limiting global temperature rise to between 1.5 and 2 °C will likely require widespread deployment of carbon dioxide removal (CDR) to offset sectors with hard-to-abate emissions. As financial resources for decarbonization are finite, strategic deployment of CDR technologies is essential for maximizing atmospheric CO2 reductions. Carbon capture and sequestration (CCS), using either direct air capture (DACCS) or bioenergy (BECCS) technologies has a particular synergy with geothermal electricity generation. This is because expensive geothermal infrastructure can be leveraged to transport dissolved CO2 for storage in subsurface reservoirs.Here, we present a techno-economic comparison of renewable electricity generation coupled with either BECCS or DACCS at high-temperature, low-gas hydrothermal systems. We use a systems model that quantifies energy, carbon and financial flows through a generic hybrid power plant. At a CO2 market price of $100/tonne, the geothermal-BECCS system has a lower median cost of electricity generation ($88/MWh) than geothermal-DACCS ($181/MWh) and conventional geothermal ($89/MWh).Geothermal-BECCS also had the lowest costs of overall emissions abatement, $122/tCO2, accounting for carbon removal and assuming displacement of fossil-fuel generation. Abatement costs are even lower, $45/tCO2, for BECCS retrofit of existing geothermal plants, owing to discounted costs of pre-existing injection wells, steam fields, and plant equipment.For a case study based on a geothermal field in New Zealand's Taupō Volcanic Zone (TVZ), we determined that achieving CDR rates of 1 MtCO2/year via new geothermal-BECCS builds would require 62 standard geothermal wells and 790 kt/year of feedstock and result in 511 MWe in installed capacity. In contrast, geothermal-DACCS would need 49 wells and no external fuel source to achieve 1 MtCO2/year scale but result in only 190 MWe in installed capacity. Both pathways are calculated to require similar upfront investment costs at $2.2 billion and $2.3 billion for geothermal-BECCS and geothermal-DACCS respectively.Although geothermal-DACCS removes CO2 at high rates, its high parasitic load increases the overall decarbonization cost ($187/tCO2). In contrast, when biomass hybridization is considered, geothermal-BECCS has a lower cost of emissions abatement and produces 20 % more electricity than the benchmark geothermal plant. We conclude that this increase in electricity production makes geothermal-BECCS the more cost-effective geothermal-based CDR configuration. Finally, we argue that revenues from net-negative CO2 emissions and increased power production make geothermal-CDR a cost-competitive decarbonization technology.

Least-cost decarbonization pathways for electricity generation in Finland: A convex quantile regression approach

This study investigates the least-cost decarbonization pathways in the Finnish electricity generation industry in order to achieve the national carbon neutrality goal by 2035. Various abatement measures, such as downscaling production, capital investment, and increasing labor and intermediate inputs, are considered. The marginal abatement costs (MACs) of greenhouse gas emissions are estimated using the convex quantile regression method and applied to unique register-based firm-level greenhouse gas emission data merged with financial statement data. We adjust the MAC estimates for the sample selection bias caused by zero-emission firms by applying the two-stage Heckman correction. Our empirical findings reveal that the median MAC ranges from 0.1 to 3.5 euros per tonne of CO2 equivalent. The projected economic cost of a 90% reduction in emissions is 62 million euros, while the estimated cost of achieving zero emissions is 83 million euros.

Costless CO2 emissions abatement through improved government effectiveness

ABSTRACT The withdrawal of Canada, Japan, New Zealand, and Russia from the Kyoto Protocol, the non-ratification of the United States at the onset, and the exemption given to China and India indicate that five out of the ten largest economies in the world, accounting for approximately 50% of the world GDP (as of 2021), have turned away from the Kyoto Protocol. This apprehension can plausibly be explained by the potential loss of productivity resulting from abatement of CO2 emissions. Therefore, this study examines the marginal effect of CO2 emission abatement on technical efficiency and how it can be moderated by government effectiveness. The following are the findings of this study: (1) inclusion of the pollution effect in the modelling of technical efficiency is necessary as it significantly changes the technical efficiency score ranking; (2) the opportunity cost of CO2 emissions abatement exists in the form of productivity loss but is significantly moderated by government effectiveness. These findings are important as they aid policymakers in mapping out a strategy for the desired costless abatement of CO2 emissions.

Redesign for flexibility through electrification: Multi-objective optimization of the operation of a multi-energy industrial steam network

Steam networks are attractive for contributing to the decarbonization of energy systems. The partial or complete electrification of steam generators is expected to reduce direct carbon emissions by replacing fossil fuels. Still, this solution poses challenges in the operation of industrial sites. Most studies on the optimization of steam networks focus on single-period problems that disregard the dynamic operation of flexibility and consider only costs or profit as their objective function. In this study, we analyze the effects of the electrification of steam generators in a multi-period, multi-objective problem, which accounts for profit from energy exchanges, direct and indirect emissions, and steam blow-off. To that end, we use data from an industrial steam network and model it as a multi-objective mixed integer linear program. Five different design scenarios based on flexibility measures in steam networks are formulated with data from an industrial case study. Each problem is solved iteratively using the AUGMENCON-R algorithm to obtain points in the Pareto front efficiently. Electrification together with the inherent storage capacity of the steam network resulted in a potential average profit increase of 488 EUR/day, a potential average emissions reduction of 17.8 tCO2/day, and a potential average blow-off steam reduction of 5.7 t/day. Furthermore, our multi-objective approach reveals an operational carbon emissions abatement cost ranging from 62.5 to 363.6 EUR/tCO2, depending on exogenous data.

Emissions Reduction Target Plan and Export Product Quality: Evidence from China’s 11th Five-Year Plan

Determining how environmental policy affects export competitiveness is essential for achieving win–win objectives in environmental governance and trade development. We examine whether and how China’s emissions reduction policy declines the firm’s export product quality during the 11th five-year plan via the difference-in-difference-in-difference method. The main findings of this paper are as follows: (i) Compared with less polluting industries, the export production quality declines 5.74% and 3.31%, respectively, as the pollution reduction targets of SO2 and chemical oxygen demand (COD) are set 1 unit higher in more polluting industries. (ii) The negative effect is greater in Western regions as well as state-owned firms. (iii) Local officials facing promotion pressure are more incentivized to raise emissions reduction goals, as well as greater increasing emissions abatement costs, thus leading to greater declines in export quality. However, the innovation compensation effect still remains. (iv) The negative effects can be mitigated through product switching that contributes to resource allocation within firms towards their core products, or executing the first-mover advantage in response to the emissions reduction plan.

Setting a Permissible Target for Carbon Dioxide Removal

Meeting the net zero emission targets set by many states after the Paris Agreement to help keep global warming well below 2°C above pre-industrial levels will require carbon dioxide removal technologies (CDRs). Several moral concerns arise if the contribution of CDRs to achieving net zero is not specified, but such concerns can be met by defining a permissible target for CDRs. This paper proposes a framework for defining the permissible contribution of CDRs to the net zero targets of individual states. The framework identifies three categories of emissions for which the permissibility of CDRs varies depending on the ethical costs of both emission abatement and CDRs. We argue that a) luxury emissions should be reduced without using CDRs; b) emissions for full membership in society should be abated by structural efforts, although using CDRs is permissible, given certain conditions; and c) CDRs are permissible for residual emissions because otherwise net zero targets cannot be reached.

A Novel Approach to Identify Industrial Logistics Decarbonization Opportunities: Method Development and Preliminary Validation

This article explores how different types of inventories affect the costs of decarbonizing transportation in manufacturing companies. For these companies, it is difficult to find affordable ways to reduce emissions from transportation given their resource scarcity. Additionally, they handle numerous inventory items that have varying transportation needs based on their order frequency and value, which necessitates the development of tailored inventory management strategies. One tool to do so efficiently is the ABC/XYZ analysis, which classifies items into nine different inventory categories. These groups have different economic importance and predictability, which impacts total logistics costs. Our literature analysis contends that lower-carbon transportation alternatives yield varying abatement costs contingent upon the specific inventory categories. Subsequently, we empirically validate this proposition through discrete-event simulations in two case studies involving Austrian manufacturing enterprises, employing combined road-rail transportation as an illustrative decarbonization measure. Statistical tests substantiate the significance of the XYZ dimension in influencing carbon emission abatement costs during the transition from road to rail transportation. In conclusion, our study offers a novel perspective on decarbonization efforts, underscoring the importance of leveraging established management tools to inform strategic decarbonization decisions. This research holds promise for catalyzing progress in overcoming entrenched challenges associated with decarbonization initiatives within industrial logistics.

CO2 emissions abatement costs and drivers for Indian thermal power industry

Indian power industry contributes nearly half of its overall CO2 emissions. In this study, we answer three related questions. First, what is the abatement cost of CO2 emissions for the Indian thermal power industry under three different policy scenarios - business as usual, emissions reduction only, and simultaneous emissions reduction and energy efficiency enhancement. Second, what are the determinants of these abatement costs of CO2 emissions. Third, which abatement policy scenario is more beneficial. For this, we employ a plant level dataset covering 93% of installed capacity and use a parametric quadratic directional output distance function to estimate marginal abatement costs by applying deterministic linear programming methods. Our findings are: First, the abatement costs range between US$ 46.43–71.11 per ton CO2, depending on the policy scenario chosen. Second, plant age, location, size, ownership, and CO2 intensity are all significant drivers of abatement costs. Third, while greater emissions reductions are possible under the emissions reduction only scenario vis-à-vis simultaneous emissions reduction and energy efficiency enhancement scenario, both scenarios are compatible with meeting the Paris agreement goals. This paper helps decision makers to allocate CO2 abatement targets to plants in line with their abatement costs and potential.

Compete or cooperate? Effects of channel relationships on government policies for sustainability

The importance of sustainability has led governments worldwide to impose emission regulations on manufacturers. However, it is largely unknown how channel relationships between manufacturers (i.e., competitive or cooperative) affect government policies, such as the emission tax price. In this paper, we address this pertinent yet underexplored issue by building formal analytical models. In the context of different channel relationships and with the goal of increasing social welfare, we also explore whether providing positive incentives is more effective than imposing taxes. We show that although cooperation leads to better economic performance, competition may be the channel relationship that better improves sustainability and social welfare. We find that government incentives to promote green technology need not be effective in enhancing sustainability. If investment is needed to fund green technology, increasing taxes on greenhouse gas emissions (hereafter “emissions”) can protect the environment only if the product's initial emission intensity is sufficiently high. We also reveal that the total emissions are not necessarily decreased when (i) the consumers are more environmentally aware and (ii) there is a reduction in emission-abatement costs. Finally, we generalize our model to the extended modeling cases with (i) N-manufacturer and (ii) market segments with a proportion of environmentally aware consumers. Our main conclusions remain valid in the extended cases. The practical relevance and real-world implications of these results are discussed.

U.S. Re-entry into the 2015 Paris Climate Agreement and Implications for the EU, Korea, China, and Japan: A CGE Approach

Purpose - With renewed greenhouse gas (GHG) emissions, abatement commitments and the rejoining of the Paris Climate Agreement of 2015 by the U.S., this study assesses the impact of carbon dioxide (CO₂) emissions reduction, and the opportunity cost of the U.S. in implementing its nationally determined commitments (NDCs).
 Design/Methodology/Approach - The study employs the GTAP-E model, an extension of the static GTAP model with CO₂ emissions trading, and GTAP DB version 10A with a base year of 2014. Model implementation includes a baseline scenario that projects the global economy from 2014 to 2030, and four policy scenarios representing the implementation of U.S. NDC targets without and with emissions trading.
 Findings - Simulation results suggest that CO₂ emissions reduction with trading significantly lowers the emissions abatement cost compared to CO₂ emissions reduction with no trading. Furthermore, the study finds that CO₂ emissions reduction leads to a drop in industry output by all energy and most non-energy sectors. Simulation results illustrate that CO₂ emissions reduction by the U.S. significantly affects most of its trading partners’ real GDPs, welfare, export and import flows, and industry outputs.
 Research Implications - The study provides a comprehensive impact assessment of global CO₂ emissions reduction, including U.S. contributions to addressing climate change. Moreover, the study has quantified the opportunity cost the U.S. will likely pay for meeting its NDC targets, and the likely impact of CO₂ emissions reduction by the U.S. on its major trading partners, especially the EU, Korea, Japan, and China.

A techno-economic quantification of carbon reduction strategies in the Trinidad and Tobago power generation sector using Carbon Emission Pinch Analysis (CEPA)

Trinidad and Tobago’s (T&T) conditional commitment to the Paris Agreement requires an overall power emission avoidance (EAT) of 28.7 MtCO2-e from Business-As-Usual by 2030, dependent on international financing. T&T has outlined several initiatives to achieve this, including zero-carbon renewable energy (RE) introduction. However, other technologies such as Carbon Capture and Storage (CCS) can also be used in support of achieving EAT.Using a specific scenario (S3), this study assesses the techno-economics of CCS within the sector to minimize the requirement of RE using a carbon measuring tool called Carbon Emission Pinch Analysis (CEPA) to achieve EAT. Local power plants were screened, and a CCS retrofit was then technically designed using a validated software called Aspen HYSYS. Multi-period CEPA methodology was then applied to quantify ∼17% of grid energy from RE along with CCS to achieve EAT. Economic models were also used to determine the grid unit cost of emission abatement for S3 to be 64 USD/tCO2-e; a doubling of initial projection requirements. With T&T’s current dynamics, these findings can help guide actions to reduce the requirements of RE onto the grid through the supplemental introduction of CCS to achieve its EAT.

Does the energy-related greenhouse gas emission abatement cost depend on the optimization direction: shadow pricing based on the weak disposability technology in the European Union agriculture

Does the energy-related greenhouse gas emission abatement cost depend on the optimization direction: shadow pricing based on the weak disposability technology in the European Union agriculture

Effect of Nuclear Energy Flexibility on Integrating Large-Scale Distributed Solar PV in an Existing Power Network

This paper estimates the maximum integration level of residential rooftop solar photovoltaic (PV) capacity within the power network of the Duke Energy Progress (DEP) and Duke Energy Carolinas (DEC) under two scenarios embodying different assumptions about the flexibility of nuclear power plant (NPP) operations. A mixed-integer optimization model was constructed and simulated to find out the maximum solar penetration level under each scenario and to calculate the expected total system’s electricity generation costs, energy mix, atmospheric emission reductions, and emission abatement costs. Analysis reveals that improving NPP operation maneuverability would increase the maximum solar PV penetration level in the DEP and DEC power networks by 39%, from 8.9% to 12.4% of the total system’s electricity generation. Consequently, it would further improve the electricity generations’ unit costs and CO2 emission reductions by 3% and 8% points, respectively. On the other hand, increasing the solar PV penetration limit under high flexible NPP operation scenario leads to increase in the CO2 emission abatement costs by 8% points. The results of the study indicate that the flexibility of existing power system resources may present a barrier for a large uptake of solar energy.

Can fossil energy make a soft landing？— the carbon-neutral pathway in China accompanying CCS

Carbon capture and storage (CCS) is an essential technology in the portfolio of emission mitigation solutions. The trade-off between fossil energy substitution and CCS has essential implications for achieving carbon-neutral at an affordable cost. This study couples the technology cost curve of CCS with a dynamic computable general equilibrium (DCGE) model and explores the carbon emission scale, energy structure, and emission abatement cost in the path of carbon neutrality under different CCS penetration scenarios. The results illustrate that the emission abatement cost increases fast if only relying on the emission trading scheme (ETS). Even at a high carbon price (3500 CNY/Ton), the net carbon dioxide emission will remain at 1.5 Gt in 2060, and the average emission abatement cost is 1211 CNY/Ton. The realization of net-zero emission requires synergy between ETS and CCS. The integration of CCS can significantly alleviate the economic cost when the emission mitigation scale is more remarkable than 5.2 Gt/year. The average emission abatement cost in 2060 is 557CNY/Ton under the high CCS penetration (4.3 Gt/year) and low carbon price (700CNY/Ton) carbon-neutral scenario.

ANALYSIS OF CO2 ABATEMENT COSTS İN TURKEY USING THE TIMES-MACRO ENERGY MODELİNG SYSTEM

Turkey submitted its INDC to the UNFCCC in 2015, through which committed to reach 21% reduction in GHG emissions from the Business-as- Usual scenario by 2030, signed the Paris Agreement in 2016; and ratified in October 2021 after concurring to reach net zero emissions by 2053. It is therefore needed to examine Turkey’s energy sector to understand the leading cause of emissions and elaborate the policy options to reduce emissions. The TIMES-MACRO modeling framework, a hybrid energy system and economic growth model, is employed in this study to evaluate Turkey’s energy sector and CO2 emissions under various emission reduction scenarios together with associated economic implications. The results show that in the absence of scenario constraints, coal dominates the primary energy supply mix, implying that without mitigation measures, emissions will grow rapidly. The abatement costs of emissions vary according to policy, ranging from 45-265 $/ton CO2 by 2050, while the GDP loss range fluctuates between 0.4% and 1.5%.

A fairly and effectively analysis for the sharing of CO2 emissions reduction responsibility in China's provincial building sectors

China's goal to peak CO2 emissions by 2030—in accordance with the Paris agreement—is being jeopardized by the increasing carbon emissions from the building sector. Allocating CO2 emission reduction (CER) responsibilities for the building sector to the provinces fairly and efficiently remains challenging. In this study, we first quantify the government leading targets regarding CER responsibilities, while clarifying the extent to which China considers the principles of equity and efficiency while allocating provincial CER responsibilities. Subsequently, based on the carbon emission efficiency, CER potential, and abatement cost of China's building sector, we establish a more equitable and effective model for sharing the CER responsibilities in the building sector at the provincial level. Using data from the building sector in 30 provinces in China between 2005 and 2019, we define and compare the CER responsibilities that the building sector in each province should bear with the CER responsibility-sharing scheme under multiple perspectives. Results show that the Chinese government has not fully considered the principles of equity and efficiency in setting the CER targets for each province in the past 15 years. Our model for sharing the CER responsibility in the local building sector appears more reasonable and adequate: The marginal abatement cost (i.e., economic loss of abatement) is about 7% less than those of other schemes; additionally, it guarantees the fairness of development power. Overall, this study furthers the CER responsibility-sharing theory and constitutes a reference for implementing more effective energy saving and CER policies.

Dispatch model for analysing the impacts of electric vehicles charging patterns on power system scheduling, grid emissions intensity, and emissions abatement costs

Dispatching of generating resources at Power Stations is a complex task based on the balance of economics, contractual agreement, regulations, and environmental consciousness in terms of emissions produced in the course of electricity generation. The complexity of the task could be exacerbated with the integration of a large percentage of Electric Vehicles (EVs) in the quest to reduce CO2 emissions in the transportation sector. In this paper, a dispatch model, which is suitable for analysing the impacts of charging patterns of EVs on grid emissions intensity and emissions abatement costs, is described and developed for dispatching generating resources/technologies. The dispatch model is based on the correlation between historical system load and capacity factors of generating units. The dispatch model is tested on data from the UK power system on a typical winter day in December 2015 with an assumed 50% integration of EVs on the system. Results show amongst others that charging of EVs in the off-peak period may affect the optimal deployment of generating technologies/resources with storage capacity and could produce a higher average grid emissions intensity.