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Future CO2 Emissions Allowances and Inequality Assessment under Different Allocation Regimes
Available online at www.sciencedirect.com
ScienceDirect Energy Procedia 61 (2014) 523 – 526
The 6th International Conference on Applied Energy – ICAE2014
Future CO2 Emissions Allowances and Inequality Assessment under Different Allocation Regimes Lining Wanga,b, Ding Maa,b, Wenying Chena,b* a
Research Center for Contemporary Management, Key Research Institute of Humanities and Social Sciences at Universities, Tsinghua University,Beijing 100084,China b Institute of Energy, Environment and Economy, Tsinghua University, Beijing 100084, China
Abstract
The Summary for Policymakers of Working Group I (WGI) contribution to the Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report (AR5) presents three probabilities with different cumulative emissions to limit the global temperature rise to 2°C or less. In this paper, based on the latest information, allocation quotas for major countries and regions were determined under typical schemes between 2011 and 2100. It was found that the countries’ allocation quotas all increase with enlarging global emissions permit but with different growth rates under each allocation regime, and given global emission permit, changing in scheme parameters also has some impact on each country’s allocation quota. Allocation regimes were also evaluated from the perspective of equality based on cumulative emission per capita, finding that the regimes considering historical responsibility for emissions can effectively reduce the inequalities of global emissions; And regimes incorporating ability to pay are useful in further reducing emissions inequalities between Annex I and non-Annex I groups. © Published by Elsevier Ltd. This © 2014 2014The TheAuthors. Authors. Published by Elsevier Ltd.is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/3.0/). Selection and/or peer-review under responsibility of ICAE Peer-review under responsibility of the Organizing Committee of ICAE2014
Keywords: Climate change; IPCC fifth assessment report (WGI); emission rights allocation regimes; carbon emissions inequality
1. Introduction Climate change is a global issue that can only be resolved by all countries working together, yet it is doubtful that each country’s interest is currently aligned with this goal. To determine emission allowances, institutions and scholars worldwide have, from various perspectives, proposed burden-sharing regimes [1-5]. These regimes can be rationally analyzed, compared and fairly assessed to find advantages and disadvantages that will be helpful in future negotiations. In this paper, the allowances of the major countries or regions are first calculated for different burden-sharing regimes under global emission * Corresponding author. Tel.: +86 010 62772756. E-mail address: [email protected]
1876-6102 © 2014 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/3.0/). Peer-review under responsibility of the Organizing Committee of ICAE2014 doi:10.1016/j.egypro.2014.11.1162
524
Lining Wang et al. / Energy Procedia 61 (2014) 523 – 526
constraints established in the IPCC Fifth Assessment report (WGI). The paper then discusses the allocation equality of each regime from the perspective of per capita cumulative emissions. 2. Allocation regimes and datasets There are a large number of effort-sharing approaches applied to emissions allocation. This study included the following typical schemes, which specific descriptions seen Refs.[1-5]: ability to pay (AP); contraction and convergence (CC); common but differentiated convergence (CDC); convergence for per capita and per capita cumulative emission (C2C); equal per capita cumulative emission (EPCCE); emission intensity convergence (EIC); emission intensity targets (EIT); equal per capita annual emission (EPC); greenhouse development rights (GDR); grandfathering (GF); multi-criteria convergence (MCC); multi-stage approach (MS); and the similar Brazilian proposal (SBP). In order to evaluate the impact of different scheme parameters, name like AP5000 (AP7500) was used in this paper, which means that the participation threshold was 5000$ (7500). The data sets used in CO2 emissions allowances—historical data, a baseline scenario, and global pathways, where the global emission pathways were constructed based on the IPCC’s Fifth Assessment Report (AR5), which provides the cumulative data since 1860 to limit temperature rise to less than 2°C, with a probability of >33%, 50% and 66%. In the following sections, P33, P50 and P66 represent a 33%, 50% or 66% chance of limiting the temperature rise to 2°C. 3. Results 3.1 Allocation allowances
Fig. 1. Main countries’ emissions quota allocations (a)in 2030; (b) in 2050
Fig.1a and Fig.1b present the emission quota allocations for China, India, the European Union, the United States, non-Annex I countries and Annex I countries as a whole for 2030 and 2050. The three columns from left to right correspond to P66, P50 and P33. As the likelihood of limiting the temperature rise to 2°C decreased from 66% to 33% (with commensurate growth in global emissions), the allocation under the each scheme increased, although the rate of increase varied. As can be seen in Fig. 1a, under P33, the quotas of China, India, and non-Annex I countries in 2030 show a dissimilar degree increase over the values in 2010 with most regimes. However, under the stricter constraint of P66, the allocations for China, India and non-Annex I would decrease slightly relative to 2010 levels under some regimes. Conversely, even under the weaker constraint, the allocation allowances for the EU, the U.S. and Annex I countries would be lower than those in 2010 for all regimes, except MCC, EIC and GF. Under the more stringent conditions, allocations would decrease compared with the values in 2010 with all regimes. Notably, the EPCCE, SBP, GDR and C2C schemes would require the Annex I countries to achieve negative emissions. Fig.1a also indicates that Annex I countries would need immediate substantial
Lining Wang et al. / Energy Procedia 61 (2014) 523 – 526
reductions in 2030 to meet their targets. In 2050, as shown in Fig. 1b, not only Annex I countries would need to have a significant decline compared with the 2010 values, but non-Annex I countries must also achieve different degrees of decline except those regimes considering historical responsibility. Broadly, non-Annex I countries would get higher quotas under the regimes based on historical responsibility, and lower quotas under regimes based on the status quo and emission intensity, contrary to Annex I countries. The future allocation quotas reflect equity principles underlying the various schemes, along with their relevant parameters. Using the CC and MCC as examples, when the convergence end-year changes from 2050 to 2100, it is more beneficial for Annex I countries. Convergence date postponement gives developed countries longer periods of existing high per capita emissions than developing countries. By comparing the AP5000 and AP7500, it is evident that higher participation thresholds are more favorable for non-Annex I countries. This is because raising the threshold enables developing countries to achieve absolute emissions reductions later. 3.2 Trade-off reduction targets: Annex I vs. non-Annex I Fig.2 shows the trade-off in relative targets for Annex I and non-Annex I countries as they achieve reduction target under different probabilities over the period 2010–2100. Under specific levels of global permit emissions, the reduction rates relative to the baselines of Annex I and non-Annex I countries have fixed relationships, illustrated in Fig.2. The three formulae have the same slope but with different intercepts, indicating that with lowering total emissions constraints the reduction rates for Annex I would fall significantly(when fixed reduction rates for non-Annex I). This indicates that to determine countries specific reduction rates need take the impact of global emissions permit into account. By increasing global emissions permit, the distribution of the schemes becomes increasingly dispersed, indicating that allocation allowances are simultaneously influenced by both regimes and constraints. For most schemes, as the possibility of limiting temperature rise declines, the gap between reduction rates of Annex I and non-Annex I countries widens. The regimes based on the proportion of the population, such as EPC, CC, C2C and EPCCE, display a trend whereby as the total emission constraint increases, the value of nonAnnex I reduction rate relative to the baseline minus the value of Annex I also grows. This indicates that these regimes are more beneficial for non-Annex I countries under higher total emissions constraints. However, the regimes based on the status quo and GDP are opposite to above situations. Other regimes such GDR, MS and AP have no fixed character that indicate similar results. These results suggest that with the increase of global emissions, countries quotas enlarge with different rates under each scheme.
Fig. 2. Trade-off between Annex I and non-Annex I
3.3 Emission equality assessment
Fig. 3. Total and between-group Theil index
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Lining Wang et al. / Energy Procedia 61 (2014) 523 – 526
Theil index as an important equality assessment indicator is widely used in economics and resources areas, which was depicted in Ref. [6]. Fig.3 illustrates the total and between-group inequality under each allocation scheme. It can be seen that the regimes incorporating historical responsibility, namely EPCCE, SBP, C2C and GDR, have the lowest Theil index of all schemes. Fig.3 also shows that the changing sequences of total and between-group Theil indexes with various allocation regimes are not identical, indicating that some schemes are more effective than others in reducing between-group (Annex I and non-Annex I) inequality. This is true of the AP7500 regime; its between-group Thiel index is smaller than MS,CDC and EPC regimes, although its total inequality is larger than each. In addition, the regimes of GF, EIC, MCC and CC have higher total and between-group Theil indexes, which means that such schemes could not effectively reduce existing inequities. Generally, the regimes based on historical responsibility, such as EPCCE, SBP, C2C and GDR schemes, can effectively lower total unfairness. The earlier the cumulative initial years, the lower the fairness, demonstrated by the changing Theil index from C2C to EPCCE. This shows that those regimes considering historical responsibility can reduce historical emissions unfairness and maintain reasonable rights for developing countries. The regimes based on the capacity principle (GDR and AP schemes) are very effective in reducing between-group inequalities. The effect is also more obvious under enhanced thresholds, such as the change of AP5000 to AP7500. 4. Conclusion Based on latest data of global emissions permit, this paper derives allocation allowances for major countries and regions under typical allocation schemes. In 2030, the allocation quotas for Annex I countries (in aggregate) would have declined significantly compared with those in 2010, especially under strict cumulative constraints, while the quotas for non-Annex I countries would have, as a whole, increased slightly under most schemes. This indicates that Annex I countries should take the lead in emissions reduction. Through the analysing each regime, it was found that the countries’ allocation quotas all increase with enhancing global emissions permit but with different growth rates under each allocation regime, and given global emission permit, changing in scheme parameters also has some impact on each country’s allocation quota. Finally, allocation regimes were evaluated from the perspective of equality, revealing that the regimes considering historical responsibilities (such as EPCCE, SBP, C2C and GDR) can effectively reduce global emissions inequality and safeguard reasonable rights for developing countries. In addition, the regimes based on ability to pay (such as AP and GDR) are useful in further reducing existing inequity between Annex I and non-Annex I. Acknowledgements This work is supported by the Ministry of Education Project of Key Research Institute of Humanities and Social Sciences at Universities (12JJD630002) and the Ministry of Science and Technology of China (2012BAC20B01). References [1] Höhne N, Taylor C, Elias R, et al. National GHG emissions reduction pledges and 2° C: comparison of studies. Clim Policy 2012; 12(3): 356-377. [2] Höhne N, den Elzen M and Escalante D. Regional GHG reduction targets based on effort sharing: a comparison of studies. Clim Policy, 2013: 1-26. [3] J He, W Chen, F Teng, et al. Long-term climate change mitigation target and carbon permit allocation. Adv Clim Change Res, 2009;5:78-85. [4]Chen W, Wu Z, He, J. Two-convergece approach for future global carbon permit allocation. J Tsinghua Univ (Sci & Tech),2005;45(6)850-853 (Chinese). [5] Chen W, Wu Z. Historical responsibility for climate change and carbon emission right allocation. China Environmental Science. 1998; 18(6) : 481485 (Chinese). [6] Padilla E and Serrano A. Inequality in CO2 emissions across countries and relationship with income inequality: a distributive approach. Energ Policy 2006; 34: 1762-1772.
Biography Lining Wang is from Institute of Energy, Environment and Economy of Tsinghua University (Beijing). His research focuses on climate change, emissions rights allocation regimes, carbon equity assessment and energy system analysis.
ScienceDirect Energy Procedia 61 (2014) 523 – 526
The 6th International Conference on Applied Energy – ICAE2014
Future CO2 Emissions Allowances and Inequality Assessment under Different Allocation Regimes Lining Wanga,b, Ding Maa,b, Wenying Chena,b* a
Research Center for Contemporary Management, Key Research Institute of Humanities and Social Sciences at Universities, Tsinghua University,Beijing 100084,China b Institute of Energy, Environment and Economy, Tsinghua University, Beijing 100084, China
Abstract
The Summary for Policymakers of Working Group I (WGI) contribution to the Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report (AR5) presents three probabilities with different cumulative emissions to limit the global temperature rise to 2°C or less. In this paper, based on the latest information, allocation quotas for major countries and regions were determined under typical schemes between 2011 and 2100. It was found that the countries’ allocation quotas all increase with enlarging global emissions permit but with different growth rates under each allocation regime, and given global emission permit, changing in scheme parameters also has some impact on each country’s allocation quota. Allocation regimes were also evaluated from the perspective of equality based on cumulative emission per capita, finding that the regimes considering historical responsibility for emissions can effectively reduce the inequalities of global emissions; And regimes incorporating ability to pay are useful in further reducing emissions inequalities between Annex I and non-Annex I groups. © Published by Elsevier Ltd. This © 2014 2014The TheAuthors. Authors. Published by Elsevier Ltd.is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/3.0/). Selection and/or peer-review under responsibility of ICAE Peer-review under responsibility of the Organizing Committee of ICAE2014
Keywords: Climate change; IPCC fifth assessment report (WGI); emission rights allocation regimes; carbon emissions inequality
1. Introduction Climate change is a global issue that can only be resolved by all countries working together, yet it is doubtful that each country’s interest is currently aligned with this goal. To determine emission allowances, institutions and scholars worldwide have, from various perspectives, proposed burden-sharing regimes [1-5]. These regimes can be rationally analyzed, compared and fairly assessed to find advantages and disadvantages that will be helpful in future negotiations. In this paper, the allowances of the major countries or regions are first calculated for different burden-sharing regimes under global emission * Corresponding author. Tel.: +86 010 62772756. E-mail address: [email protected]
1876-6102 © 2014 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/3.0/). Peer-review under responsibility of the Organizing Committee of ICAE2014 doi:10.1016/j.egypro.2014.11.1162
524
Lining Wang et al. / Energy Procedia 61 (2014) 523 – 526
constraints established in the IPCC Fifth Assessment report (WGI). The paper then discusses the allocation equality of each regime from the perspective of per capita cumulative emissions. 2. Allocation regimes and datasets There are a large number of effort-sharing approaches applied to emissions allocation. This study included the following typical schemes, which specific descriptions seen Refs.[1-5]: ability to pay (AP); contraction and convergence (CC); common but differentiated convergence (CDC); convergence for per capita and per capita cumulative emission (C2C); equal per capita cumulative emission (EPCCE); emission intensity convergence (EIC); emission intensity targets (EIT); equal per capita annual emission (EPC); greenhouse development rights (GDR); grandfathering (GF); multi-criteria convergence (MCC); multi-stage approach (MS); and the similar Brazilian proposal (SBP). In order to evaluate the impact of different scheme parameters, name like AP5000 (AP7500) was used in this paper, which means that the participation threshold was 5000$ (7500). The data sets used in CO2 emissions allowances—historical data, a baseline scenario, and global pathways, where the global emission pathways were constructed based on the IPCC’s Fifth Assessment Report (AR5), which provides the cumulative data since 1860 to limit temperature rise to less than 2°C, with a probability of >33%, 50% and 66%. In the following sections, P33, P50 and P66 represent a 33%, 50% or 66% chance of limiting the temperature rise to 2°C. 3. Results 3.1 Allocation allowances
Fig. 1. Main countries’ emissions quota allocations (a)in 2030; (b) in 2050
Fig.1a and Fig.1b present the emission quota allocations for China, India, the European Union, the United States, non-Annex I countries and Annex I countries as a whole for 2030 and 2050. The three columns from left to right correspond to P66, P50 and P33. As the likelihood of limiting the temperature rise to 2°C decreased from 66% to 33% (with commensurate growth in global emissions), the allocation under the each scheme increased, although the rate of increase varied. As can be seen in Fig. 1a, under P33, the quotas of China, India, and non-Annex I countries in 2030 show a dissimilar degree increase over the values in 2010 with most regimes. However, under the stricter constraint of P66, the allocations for China, India and non-Annex I would decrease slightly relative to 2010 levels under some regimes. Conversely, even under the weaker constraint, the allocation allowances for the EU, the U.S. and Annex I countries would be lower than those in 2010 for all regimes, except MCC, EIC and GF. Under the more stringent conditions, allocations would decrease compared with the values in 2010 with all regimes. Notably, the EPCCE, SBP, GDR and C2C schemes would require the Annex I countries to achieve negative emissions. Fig.1a also indicates that Annex I countries would need immediate substantial
Lining Wang et al. / Energy Procedia 61 (2014) 523 – 526
reductions in 2030 to meet their targets. In 2050, as shown in Fig. 1b, not only Annex I countries would need to have a significant decline compared with the 2010 values, but non-Annex I countries must also achieve different degrees of decline except those regimes considering historical responsibility. Broadly, non-Annex I countries would get higher quotas under the regimes based on historical responsibility, and lower quotas under regimes based on the status quo and emission intensity, contrary to Annex I countries. The future allocation quotas reflect equity principles underlying the various schemes, along with their relevant parameters. Using the CC and MCC as examples, when the convergence end-year changes from 2050 to 2100, it is more beneficial for Annex I countries. Convergence date postponement gives developed countries longer periods of existing high per capita emissions than developing countries. By comparing the AP5000 and AP7500, it is evident that higher participation thresholds are more favorable for non-Annex I countries. This is because raising the threshold enables developing countries to achieve absolute emissions reductions later. 3.2 Trade-off reduction targets: Annex I vs. non-Annex I Fig.2 shows the trade-off in relative targets for Annex I and non-Annex I countries as they achieve reduction target under different probabilities over the period 2010–2100. Under specific levels of global permit emissions, the reduction rates relative to the baselines of Annex I and non-Annex I countries have fixed relationships, illustrated in Fig.2. The three formulae have the same slope but with different intercepts, indicating that with lowering total emissions constraints the reduction rates for Annex I would fall significantly(when fixed reduction rates for non-Annex I). This indicates that to determine countries specific reduction rates need take the impact of global emissions permit into account. By increasing global emissions permit, the distribution of the schemes becomes increasingly dispersed, indicating that allocation allowances are simultaneously influenced by both regimes and constraints. For most schemes, as the possibility of limiting temperature rise declines, the gap between reduction rates of Annex I and non-Annex I countries widens. The regimes based on the proportion of the population, such as EPC, CC, C2C and EPCCE, display a trend whereby as the total emission constraint increases, the value of nonAnnex I reduction rate relative to the baseline minus the value of Annex I also grows. This indicates that these regimes are more beneficial for non-Annex I countries under higher total emissions constraints. However, the regimes based on the status quo and GDP are opposite to above situations. Other regimes such GDR, MS and AP have no fixed character that indicate similar results. These results suggest that with the increase of global emissions, countries quotas enlarge with different rates under each scheme.
Fig. 2. Trade-off between Annex I and non-Annex I
3.3 Emission equality assessment
Fig. 3. Total and between-group Theil index
525
526
Lining Wang et al. / Energy Procedia 61 (2014) 523 – 526
Theil index as an important equality assessment indicator is widely used in economics and resources areas, which was depicted in Ref. [6]. Fig.3 illustrates the total and between-group inequality under each allocation scheme. It can be seen that the regimes incorporating historical responsibility, namely EPCCE, SBP, C2C and GDR, have the lowest Theil index of all schemes. Fig.3 also shows that the changing sequences of total and between-group Theil indexes with various allocation regimes are not identical, indicating that some schemes are more effective than others in reducing between-group (Annex I and non-Annex I) inequality. This is true of the AP7500 regime; its between-group Thiel index is smaller than MS,CDC and EPC regimes, although its total inequality is larger than each. In addition, the regimes of GF, EIC, MCC and CC have higher total and between-group Theil indexes, which means that such schemes could not effectively reduce existing inequities. Generally, the regimes based on historical responsibility, such as EPCCE, SBP, C2C and GDR schemes, can effectively lower total unfairness. The earlier the cumulative initial years, the lower the fairness, demonstrated by the changing Theil index from C2C to EPCCE. This shows that those regimes considering historical responsibility can reduce historical emissions unfairness and maintain reasonable rights for developing countries. The regimes based on the capacity principle (GDR and AP schemes) are very effective in reducing between-group inequalities. The effect is also more obvious under enhanced thresholds, such as the change of AP5000 to AP7500. 4. Conclusion Based on latest data of global emissions permit, this paper derives allocation allowances for major countries and regions under typical allocation schemes. In 2030, the allocation quotas for Annex I countries (in aggregate) would have declined significantly compared with those in 2010, especially under strict cumulative constraints, while the quotas for non-Annex I countries would have, as a whole, increased slightly under most schemes. This indicates that Annex I countries should take the lead in emissions reduction. Through the analysing each regime, it was found that the countries’ allocation quotas all increase with enhancing global emissions permit but with different growth rates under each allocation regime, and given global emission permit, changing in scheme parameters also has some impact on each country’s allocation quota. Finally, allocation regimes were evaluated from the perspective of equality, revealing that the regimes considering historical responsibilities (such as EPCCE, SBP, C2C and GDR) can effectively reduce global emissions inequality and safeguard reasonable rights for developing countries. In addition, the regimes based on ability to pay (such as AP and GDR) are useful in further reducing existing inequity between Annex I and non-Annex I. Acknowledgements This work is supported by the Ministry of Education Project of Key Research Institute of Humanities and Social Sciences at Universities (12JJD630002) and the Ministry of Science and Technology of China (2012BAC20B01). References [1] Höhne N, Taylor C, Elias R, et al. National GHG emissions reduction pledges and 2° C: comparison of studies. Clim Policy 2012; 12(3): 356-377. [2] Höhne N, den Elzen M and Escalante D. Regional GHG reduction targets based on effort sharing: a comparison of studies. Clim Policy, 2013: 1-26. [3] J He, W Chen, F Teng, et al. Long-term climate change mitigation target and carbon permit allocation. Adv Clim Change Res, 2009;5:78-85. [4]Chen W, Wu Z, He, J. Two-convergece approach for future global carbon permit allocation. J Tsinghua Univ (Sci & Tech),2005;45(6)850-853 (Chinese). [5] Chen W, Wu Z. Historical responsibility for climate change and carbon emission right allocation. China Environmental Science. 1998; 18(6) : 481485 (Chinese). [6] Padilla E and Serrano A. Inequality in CO2 emissions across countries and relationship with income inequality: a distributive approach. Energ Policy 2006; 34: 1762-1772.
Biography Lining Wang is from Institute of Energy, Environment and Economy of Tsinghua University (Beijing). His research focuses on climate change, emissions rights allocation regimes, carbon equity assessment and energy system analysis.