Costs Of Greenhouse Gas Emissions Research Articles

Social choice, uncertainty about external costs and trade-off between intergenerational environmental impacts: The emblematic case of gas-based energy supply decentralization

The performance of the small natural gas-fired power technologies has improved remarkably over the last decade. This has aroused the interest of operators, regulators and legislators in natural gas-fired distributed generation (gas-fired DG), namely, the integrated or stand-alone use of small, modular gas-fired power generation close to the point of consumption as an alternative to large power generation and electricity transport over long distances. Gas-fired DG can provide an important benefit from the environmental point of view. Customer proximity, in fact, greatly increases the potential for combined heat and power generation, involving energy saving and reduced greenhouse gas (GHG) emissions. Unfortunately this kind of decentralized supply also determines higher non-GHG emissions (mainly NO x, compared to the best available central power technology) which occur in urban areas (high populated) instead of extra-urban areas (where large power plants are generally located). It is therefore difficult to make a reliable evaluation of gas-fired DG environmental benefits without comparing centralized and decentralized models in terms of external costs, that is without an analysis which allows us to compare the extent of global and local–regional impacts in terms of monetary damage. If, on the one hand, this underlines the (potential) importance of the methods adopted to assess the economic value of environmental externalities (even for policy decisions that are binary, i.e. the choice between different energy technologies), on the other, it raises the crucial question of the uncertainty about the economic estimates. This article aims at demonstrating that the uncertainty about external costs, even if large, does not undermine the possibility of verifying whether gas-fired DG is preferable (or not) to centralized supply. The paper compares centralized and decentralized models in terms of the external environmental costs which are calculated by using the results of the available studies in this field (in particular the results of the dissemination process of the so-called ExternE project, one of the most recent and accurate methodologies, and the results of a meta-analysis, with regard to the marginal cost of GHG emissions). The uncertainty about external costs is substantial but not so large that it is not possible to say anything about the environmental raking of alternative technology solutions involving trade-off between the impacts of different pollutants (or between different kinds of impacts). The literature on external costs provides several studies accounting for a large part of uncertainty by means of appropriate statistical and sensitive analysis. By using and elaborating these results, the analysis described in this paper seems to support the conclusion that centralized supply, and especially the completely electric solution (based on the reversible electric heat pump), is still preferable to natural gas-fired CHP distributed generation. This is not a definitive conclusion but, we hope, a useful (scientific based) contribution for policy decisions under the state of the art. In fact, this result has an interesting policy implication. It suggests unless questioning the current enthusiasm on natural gas-fired CHP distributed generation deployment (e.g. the European Commission is indeed advocating DG as a contribution to GHG emission reduction) and helps us to reflect upon gas-fired DG supporting environmental policies which focus on the reduction of GHG emissions and totally disregard the possible trade-off between the impacts of global and local-regional pollutants. Unless one denies the rationality attributed to making tradeoffs, on the basis of ethical limits of economic valuations. Even in this case, however, cost-benefit analysis seems to be legitimate and a necessary step of the public discourse. We think that the results of this paper are emblematic, from this point of view.

The Marginal Costs of Greenhouse Gas Emissions

Estimates of the marginal costs of greenhouse gas emissions are an important input to the decision how much society would want to spend on greenhouse gas emission reduction. Marginal cost estimates in the literature range between $5 and $25 per tonne of carbon. Using similar assumptions, the FUND model finds marginal costs of $9 23/tC, depending on the discount rate. If the aggregation of impacts over countries accounts for inequalities in income of 3. Marginal costs per region are an order of magnitude smaller than global marginal costs. The ratios between the marginal costs of CO2 and those of CH4 and N2O are roughly equal to the global warming potentials of these gases. The uncertainty about the marginal costs is large and right-skewed. The expected value of the marginal costs lies about 35% above the best guess, the 95-percentile about 250%.

Agriculture-based biomass energy supply — a survey of economic issues

There is a large potential for the production of energy crops on agricultural land. Most of the biomass produced has alternative use as food, feed or fiber. In most cases, energy utilization of the biomass is far from competitive given today's prices. If dedicated energy crops are to be more competitive in the future, fossil energy prices must increase relative to the price of food, feed and fiber. Considerable spread exists among published future fossil fuel price forecasts. From currently available evidence, there is small hope that fossil energy prices will increase relative to the price of food and feed. The impact on the greenhouse gas balance is the most important positive factor for biomass energy, compared with fossil energy. For the time being there is no consensus among economists about the magnitude of the environmental costs of greenhouse gas emissions. Reasonable values on the external effects are in most cases not enough to make agriculture-based biomass energy competitive. Considerable government subsidies are needed. There is, however, no economic justification for such subsidies. Biomass energy systems using low quality biomass, originating as a by-product from the production of food, feed and/or fiber, is the most promising niche for energy from agricultural biomass.

Policies and measures to address climate change in Central and Eastern European Countries

Pursuant to the commitments under the Framework Convention of Climate Change (FCCC), all Annex I Parties of FCCC have compiled their National Communications on Climate Change. There, Parties have reported the national greenhouse gas inventories, policies, and measures to address climate change, the greenhouse gas emissions projections, vulnerability and adaptation to climate change, and education and public awareness. Implementation of policies and measures to address climate change in economies in transition (EIT) is very complicated due to the experienced deep economic crisis. It is important to outline the efforts of EIT countries to identify their climate change policy and to recognize the most effective policies and measures achieved under these countries' special circumstances. This paper compiles information from the policies and measures section of the National Communications of nine EIT countries. The analysis has been carried out in the framework of overall policy context and the national circumstances of EIT countries in terms of energy and economy development. In general, policies and measures in EIT countries tend to follow the trends observed in the other Annex I Parties to the FCCC. They address primarily carbon dioxide from fossil fuel combustion as the most important greenhouse gas and the energy transformation sector as the major greenhouse emissions source. The most effective mitigation measures — in terms of both greenhouse gas emission reduction and costs — were energy efficiency and the promotion of non-fossil energy sources. A prevailing part of policies and measures implemented or under implementation in EIT countries were cost-effective and no-regret measures. It was considered very difficult in these countries to go beyond no-regret measures in a situation of deep economic crisis and insufficient investments.

The Social Costs of Greenhouse Gas Emissions: An Expected Value Approach*

This paper provides an order-of-magnitude assessment of the marginal social costs of greenhouse gas emissions. The calculations are based on a stochastic greenhouse damage model in which key parameters are random. This allows a closer representation of current scientific understanding and also enables calculation of a damage probability distribution. Thus, we account explicitly for the uncertain nature of the global warming phenomenon. We estimate social costs of C02 emissions in the order of 20 $/tC for emissions between 1991 and 2000, a value which rises over time to about 28 $/tC in 20212030. Similar figures for CH4 and N20 are also provided. As a consequence of the prevailing uncertainty, the standard deviation of the estimates is rather high. The distribution is positively skewed, which implies that the currently predominant method of using best guess values will lead to an underestimation of the expected costs of emissions.