Abstract
Finance is vital for the green energy transition, but access to low cost finance is uneven as the cost of capital differs substantially between regions. This study shows how modelled ...decarbonisation pathways for developing economies are disproportionately impacted by different weighted average cost of capital (WACC) assumptions. For example, representing regionally-specific WACC values indicates 35% lower green electricity production in Africa for a cost-optimal 2 °C pathway than when regional considerations are ignored. Moreover, policy interventions lowering WACC values for low-carbon and high-carbon technologies by 2050 would allow Africa to reach net-zero emissions approximately 10 years earlier than when the cost of capital reduction is not considered. A climate investment trap arises for developing economies when climate-related investments remain chronically insufficient. Current finance frameworks present barriers to these finance flows and radical changes are needed so that capital is more equitably distributed.
This article examines the implications for the EU's energy system if an 80% reduction in CO
2
emissions is to be achieved by 2050 against 1990 levels, using the European TIMES Model (ETM-UCL) to ...project a least-cost pathway that meets this CO
2
constraint ('Policy Success'), along with milestone targets for 2020. A Reference scenario (no CO
2
constraints post-2020) was analysed to allow for comparison. The key conclusions are as follows: (a) the achievement of negative emissions in the power sector via the use of biomass with carbon capture and storage (BECCS) allows for much more limited decarbonization in the buildings and transport sectors; (b) CCS is also extensively used for decarbonization of the industrial sector; (c) because of the absence in the model of options for transport mode-switching and building fabric efficiency improvements, the transport and buildings sectors achieve relatively little abatement by 2050 - the inclusion of these options could considerably reduce the need for BECCS and the cost of abatement; (d) decarbonization of the EU's energy system by 2050 would increase energy system costs by 14% compared to a Reference scenario with no CO
2
constraints; and (e) average EU-wide marginal CO
2
abatement costs in Policy Success reach $300/tCO
2
in 2050. Such a value is within the (wide) range of marginal carbon prices produced by comparable scenarios in other studies.
Policy relevance
The EU has set itself a target of reducing its greenhouse gas emissions by at least 80% by 2050, against 1990 levels. This will require a reduction of at least 80% in CO
2
emissions from the energy system. This article, using results from the European TIMES Model (ETM-UCL), demonstrates that in the absence of significant decarbonization in the buildings and road transport sectors, substantial negative emissions in the power sector must be achieved, through as-yet unproven technologies (involving BECCS) . Therefore, a comprehensive strategy to reduce emissions across all energy-using sectors is required if this outcome is to be avoided. In addition, this article adds further evidence to the notion that substantial decarbonization of the EU's energy system may be achieved through a relatively small additional investment above that required anyway.
We conduct a systematic and interdisciplinary review of empirical literature assessing evidence on induced innovation in energy and related technologies. We explore links between demand-drivers (both ...market-wide and targeted); indicators of innovation (principally, patents); and outcomes (cost reduction, efficiency, and multi-sector/macro consequences). We build on existing reviews in different fields and assess over 200 papers containing original data analysis. Papers linking drivers to patents, and indicators of cumulative capacity to cost reductions (experience curves), dominate the literature. The former does not directly link patents to outcomes; the latter does not directly test for the causal impact of on cost reductions. Diverse other literatures provide additional evidence concerning the links between deployment, innovation activities, and outcomes. We derive three main conclusions. (a) Demand-pull forces enhance patenting; econometric studies find positive impacts in industry, electricity and transport sectors in all but a few specific cases. This applies to all drivers—general energy prices, carbon prices, and targeted interventions that build markets. (b) Technology costs decline with cumulative investment for almost every technology studied across all time periods, when controlled for other factors. Numerous lines of evidence point to dominant causality from at-scale deployment (prior to self-sustaining diffusion) to cost reduction in this relationship. (c) Overall innovation is cumulative, multi-faceted, and self-reinforcing in its direction (path-dependent). We conclude with brief observations on implications for modelling and policy. In interpreting these results, we suggest distinguishing the economics of active deployment, from more passive diffusion processes, and draw the following implications. There is a role for policy diversity and experimentation, with evaluation of potential gains from innovation in the broadest sense. Consequently, endogenising innovation in large-scale models is important for deriving policy-relevant conclusions. Finally, seeking to relate quantitative economic evaluation to the qualitative socio-technical transitions literatures could be a fruitful area for future research.
City-level decisions are crucial for delivering a low carbon transition, particularly as urban population dynamics and environments change in response to the COVID-19 pandemic. Ensuring appropriate ...governance structures, mechanisms and resources to facilitate these decisions is therefore essential. Based on a systematic literature review by van der Heijden (2019), this paper develops a simple framework to assess the state of ten enabling factors for effective urban climate governance, and applies it to low-carbon passenger mobility in London. Drawing on documentary evidence and a series of semi-structured expert interviews, it finds that London’s city authorities have a strong capacity for autonomy, stakeholder participation, local leadership and coordination on climate action and mobility, of which they make extensive use. The national legal and political framework remains broadly supportive following the UK’s departure from the EU, but multi-level co-ordination is thin, and funding issues have intensified conflict over political jurisdiction since the pandemic began. Spatial variation in urban form and infrastructure, coupled with dual-layer city administration, complicate the socio-political landscape and drive for climate action in mobility.
Global trends in production and consumption and the associated use of natural resources are far from sustainable. There is a growing recognition of the need to tackle overexploitation of resources, ...including materials, land, water and carbon. However, transformations to a more resource-efficient economy and society are complex. This paper elaborates three possible scenarios for a resource-efficient economy in Europe. We describe three scenarios and characterize the key differences between them. The basis of the three scenarios - Global Cooperation, Europe Goes Ahead and Civil Society Leads - is very different governance models, worldviews and actors who drive the process. Each scenario encompasses a number of challenges, which are also described. A resource-efficient economy could be advanced through top-down agreements, through market-based mechanisms driving technological solutions, and through bottom-up behavioural changes and community based initiatives focusing on both efficiency and sufficiency. In reality, a combination of these approaches is likely to be required for the achievement of ambitious resource-efficiency targets in Europe.
This article seeks to provide an overview of the potential ability of the current EU climate policy suite to deliver a cost-effective, low-carbon transition, based on the sectoral characteristics of ...such a transition projected by four modelling studies for 2030 and 2050. Assessments are made on a sectoral level, based on theoretical considerations and the empirical literature. In the power generation and industry sectors, reforms to the EU ETS (EU Emission Trading System) are unlikely to achieve their stated objectives; however they are likely to induce abatement commensurate with minimum requirements. A more pressing issue in the power sector is electricity market design, currently incompatible with increasing penetration of renewables. In the industry sector, the continuation of free permit allocation into Phase 4 of the EU ETS is likely to prevent substantial change in the short to medium term. In the residential building and passenger car sectors, practical underachievement despite reported compliance against the targets set by their primary instruments, along with a lack of instrument credibility, long-term clarity and requirements, may prove substantial barriers to achieving required milestones. The presence of non-climate policy instruments that act to dull the effect of the climate policy landscape, or induce perverse financial incentives, is also a significant obstacle.
Policy relevance
This article synthesizes the results of key modelling studies that seek to project pathways for a cost-effective, low-carbon transition, and highlights whether the existing suite of EU-level policy instruments are likely to be suitable for driving the changes required to achieve key milestones in 2030 and 2050, as projected by the modelling results. We summarize the key elements of the policy landscape on a sectoral basis (power generation, heavy industry, passenger car transport and residential buildings), and examine potential effectiveness based on a priori considerations and the empirical literature. As a result, priority elements for policy attention may be distilled.
Reducing CO2 emissions from residential energy use Drummond, Paul; Ekins, Paul
Building research and information : the international journal of research, development and demonstration,
08/2016, Letnik:
44, Številka:
5-6
Journal Article
Recenzirano
Odprti dostop
To achieve European Union (EU) greenhouse gas emissions of 80-95% below 1990 levels by 2050, CO
2
emissions from residential energy consumption must be substantially reduced. Recognition of this has ...led to the introduction of a range of policy instruments at both EU and member state level. These policies are examined for the EU and the UK, first by grouping them into three 'pillars of policy' - standards and engagement, markets and pricing, and strategic investment (each of which focus on different 'domains of change' embodying different economic processes) - and then by assessing the strengths and weaknesses of each pillar in terms of instrument coverage and effectiveness. Strengths and weaknesses common to both UK and EU policy landscapes are found, including a comprehensive but broadly ineffective standards and engagement pillar of policy, and an ineffective markets and pricing landscape (including effective subsidization of energy consumption in the UK, permitted by the EU), with poor coverage. The strategic investment landscape is found (until recently) to be substantially stronger in the UK compared with EU instruments and requirements. Priority reform actions are also proposed to address the weaknesses identified. The paper also offers discussion of recent policy developments in the UK.
The sheer complexity of sustainability transitions makes it vital to develop simplifying conceptual frameworks. Starting from the contrast between the mainstream innovation-economics and ...systems-innovation/evolutionary literatures, this paper begins by summarising the “Three Domains” framework, which relates technology innovation and adoption choices to different domains of socio-economic decision-making, at successively larger scales of time and social structures. We note the high-level implications for policy mixes and illustrate the main themes through three electricity technology examples (lighting, fossil fuel generation, and low carbon power systems), and use these also to show that the relative importance of different policy pillars may differ substantially according to the technology and context. We then relate this to the “innovation chain” (another simplifying framework) approach to vertical innovation and show how this can help to explain radical differences in innovation intensities between different sectors. We then expand the innovation chain framework from technology to the multiple journeys required for successful innovation, ordered according to levels of decision-making and hence domains. We conclude by indicating how this can help identify key blockages in energy transformations, and potentially help to reconcile the classical innovation-economics with systems innovation/evolutionary perspectives, and explain their currently divergent policy recommendations.
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