Nolose sectoral targets EuropeAsia dialogue on the climate challenge of the 21st century 78 Septembe

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No-lose sectoral targetsEurope-Asia dialogue
on the climate challenge of the 21st century7-8
September 2006Helsinki, Finland

• Dr. Niklas Höhne, n.hoehne_at_ecofys.de
• Ecofys Cologne, Germany

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European research and consultancy company Since
1984 300 employees
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Future international action on climate change
network

• Collecting information
• Activities
• Institutions
• Ideas
• Discussion forum
• www.fiacc.net
• Funded by
• German Federal Environmental Agency
• EU Commission DG Environment

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Acknowledgements

• Related work funded by
• European Commission
• German Federal Environmental Agency
• CCAP
• RIVM
• Special thanks to
• Michel den Elzen (RIVM)
• Jake Schmidt (CCAP)

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Content

• No lose targets in a staged system
• The concept in detail
• Possible emission reductions
• Conclusions

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A staged future system
Absolute reductions (current Annex I)
e.g. slowing of emission growth
e.g. sustainable development policies and measures
No reduction commitments (current non-Annex I)

• Countries graduate into the next steps (based
  on thresholds emissions/cap, GDP/cap, human
  development index)
• Support from scientific community (RIVM,
  Wuppertal Institut), NGOs (CAN proposal), EU
  countries

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A staged future system

• Towards 450 ppmv CO2 (550 ppmv CO2eq.) in 2020

Very few
Absolute reductions
1.5-4 p.a.
Above world average
e.g. slowing of emission growth
20 to 25 below BAU
Above Non-Annex I average
e.g. sustainable development policies and
measures
10 below BAU
No commitments
Source Höhne, Phylipsen, Ullrich, Blok, 2005
Options for the second commitment period of the
Kyoto Protocol http//www.umweltdaten.de/publika
tionen/fpdf-l/2847.pdf
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Alternatives to national binding absolute
emission targets

• Scope
• National
• Only selected sectors
• Compliance
• Binding
• No-lose
• Non-binding
• Flexible
• Absolute emission limits
• Dynamic emission limits per GDP or per sectoral
  output

Incentive to participate
Taking into account uncertainty in future
development
See also Höhne and Lahme 2005 Types of future
commitments under the UNFCCC and the Kyoto
Protocol post 2012, Briefing paper for WWF
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Content

• No lose targets in a staged system
• The concept in detail
• Possible emission reductions
• Conclusions

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2. The concept in detail

• Based on detailed, national, transparent analysis
  for each sector assessing feasibility and
  cost-effectiveness
• Informed by international benchmarks (e.g. tCO2/
  t steel)
• Learning by doing for a next stage
• No lose allowances can be sold if target
  achieved, no penalty if not achieved
• Needs demand for credits, i.e. stringent
  reduction commitments by other countries

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Concept of the CDM
Baseline without the project
Emissions of a project
Tradable allowances
Real emissions
Time
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No lose sectoral target is set below BAU
BAU
GHG intensity (kgCO2/kWh)
Contribution to the atmosphere
No lose sectoral target
Tradable allowances
Real emissions
Time
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For which sectors?
Industry Cement Iron and steel Pulp and
paper Refineries Electricity Transport (?)
(Source CO2, CH4, N2O, HFCs, PFCs and SF6 from
submissions to the UNFCCC, IEA and others as
collected in EVOC model for 2000. Land-use change
from EDGAR. Industry includes energy and process
emissions. Domestic includes transport,
residential and commercial. Energy related
emissions from agriculture are included under
domestic.)
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Does it meet criteria?

_

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Content

• No lose targets in a staged system
• The concept in detail
• Possible emission reductions
• Conclusions

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Share in electricity production
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Scenarios
Production growth per region (from industrial
value added from IMAGE implementation of SRES
scenarios)
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Sectoral approach until 2020 and necessary
reductions afterwards
Reference BAU Mild Annex B -15 below 1990
levels, USA 10 above 1990 level, all other
reference Sectoral only all countries follow
the sectoral scenarios Strong Annex I -30
below 1990 levels, USA at 1990 level, all others
follow the sectoral scenarios

• Strong scenario keeps 450 ppmv CO2 (550 ppmv
  CO2eq.) open
• Waiting 5-10 years makes 450 ppmv CO2 (550 ppmv
  CO2 eq.) unreachable

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6. Conclusions

• No lose sectoral targets can be a viable option
  for some advanced developing countries as
  incentive and stepping stone
• High data needs, capacity is already built
• Substantial emission reductions are possible in
  electricity, iron and steel and cement sectors by
  moving to todays best available technology
• Strong scenario can keep option for 450 ppmv
  CO2 (550 ppmv CO2eq.) open
• Concept needs to be tested with real cases.
  Ongoing work by CCAP (soon available) and
  reporting template by GCCC and Ecofys (just
  started)

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Further reading

• CCAP (2006). Sectoral pledge approach,
  www.ccap.org (various country studies soon
  available)
• Baron, Richard and Jane Ellis (2006). Sectoral
  crediting mechanisms for greenhouse gas
  mitigation Institutions and operational issues.
  COM/ENV/EPOC/IEA/SLT(2006)4. Paris OECD/IEA
  http//www.oecd.org/dataoecd/36/6/36737940.pdf.
• Ward, Murray (2006). Climate policy solutions a
  sectoral approach. Global Climate Change
  Consultancy, New Zealand http//homepages.paradise
  .net.nz/murrayw3/documents/pdf/A20sectoral20appr
  oach.pdf
• Höhne and Moltmann (2006) CO2 emission reduction
  potential under a sectoral approach post 2012,
  soon available at www.ecofys.com

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Backup slides
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5. Global scenarios
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Reductions after 2020 towards 450
450 ppmv CO2 550 ppmv CO2eq.
Maximum annual reduction rate
-2.2
-4
-6.5
-10
Global emission levels necessary to stay below
450 ppmv CO2 (550 ppmv CO2eq.) concentration
assuming that all greenhouse gases are reduced in
the same proportion and that the global trend
cannot change be faster than 0.5 percentage
points per year using the MAGICC model. For 550
ppmv (650 ppmv CO2eq.)the difference between the
cases is less pronounced (maximum annual
reduction rate of 0.6, 0.9, 0.9, 1 for
immediate reductions after 2020)
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2. Comparison electricity

• Important factors
• Thermal efficiency of fossil power plants
• Carbon content of the fuel (e.g. different types
  of coal)
• Share of energy sources

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Generation efficiency
Coal
Oil
Gas
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Electricity production reference
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Scenarios electricity
Growth in electricity production from IMAGE
implementation of SRES scenarios for regions
applied to countries. Reduced by 0.5 for
improvements in energy efficiency in appliances
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Scenarios electricity
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Content

• Method
• Comparison electricity
• Comparison iron and steel
• Comparison cement
• Global scenarios
• Conclusions

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3. Comparison iron and steel

• Important factors
• Primary steel (fossil fuels) vs. secondary steel
  (electricity)
• Product mix (cold rolled vs. construction steel
  (less intensive))
• Fuel sources Coal (high emissions) , charcoal
  (not counted as from wood), electricity mix
• Efficiency of process

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Comparison iron and steel
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Iron and steel frozen technology
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Scenarios iron and steel
Growth from industrial value added from IMAGE
implementation of SRES scenarios for regions
applied to countries. Growth in IVA reduced by
1.5 for Annex I and 1 for Non-Annex I to
translate to physical production growth
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Scenarios iron and steel
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Content

• Method
• Comparison electricity
• Comparison iron and steel
• Comparison cement
• Global scenarios
• Conclusions

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4. Comparison cement

• Important factors
• Energy efficiency in clinker production
• Fuels used in clinker production (coal, waste
  fuels (e.g. tires))
• Ratio of clinker in cement (98 - 55)

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Comparison cement
Expert judgement for EU 15, Japan, Russia and
India
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Cement frozen technology
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Scenarios cement
Growth from industrial value added from IMAGE
implementation of SRES scenarios for regions
applied to countries. Growth in IVA reduced by
1.5 for Annex I and 1 for Non-Annex I (2 for
China) to translate to physical production growth
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Scenarios cement
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Total reductions
Reference minus the most ambitious scenario for
each sector Error bars show the variation due to
use of different growth rates
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Content

• Method
• Comparison electricity
• Comparison iron and steel
• Comparison cement
• Global scenarios
• Conclusions

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5. Global scenarios
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Global scenarios
Above 1990 level 67 55 50 36
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Stabilization pathways
550ppm
450ppm
400/350ppm
Source post SRES scenarios (stabilization
paths), CO2 only
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Growth rates electricity
Average annual growth from 2000 to 2020 in
electricity production from IMAGE implementation
of SRES scenarios for regions applied to
countries. South Korea (in one region with China)
reduced by 1
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Growth rates iron and steel/cement
Average annual growth from 2000 to 2020 from
industrial value added from IMAGE
implementation of SRES scenarios for regions
applied to countries. Growth in IVA reduced by
1.5 for Annex I and 1 for Non-Annex I to
translate to physical production growth. South
Korea (in one region with China) further reduced
by 1.
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Scenarios electricity
Error bars show the variation over using
different reference scenarios
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Scenarios iron and steel
Error bars show the variation over using
different reference scenarios
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Scenarios cement
Error bars show the variation over using
different reference scenarios
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Global scenarios
Error bars show the variation over using
different reference scenarios
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Position of Turkey
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UNFCCC process

• Open ended ad-hoc working group (AWG) for new
  reduction targets for Annex I countries

Review of the Kyoto Protocol
2005
2006
2007
Future system
Dialogue on future steps for cooperative action
under the Convention
Other efforts like the G8, Asia Pacific
Partnership
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Two alternative views

• EU et al.
• Continuing Kyoto with additional stages in
  between Annex I and Non-Annex I

USA et al. Emphasis on technology development
and reductions in the future
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Possible multi-stage agreement
Source K. Blok, N. Höhne, A. Torvanger, R.
Janzic, 2005 Towards a Post-2012 Climate Change
Regime, http//europa.eu.int/comm/environment/cli
mat/pdf/id_bps098.PDF
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Options in a multistage setting

• Annex I Alternatives to absolute emission
  reduction targets
• Dynamic targets and price caps
• Sectoral targets / sectoral emission standards
• Agreements on technology development
• Most of the alternatives are unlikely to be
  sufficient to reach the 2C limit
• Non-Annex I incentives for participation
• Sectoral targets
• No lose targets
• Sector crediting mechanisms
• Extended CDM
• Sustainable development policies and measures

See also Höhne and Lahme 2005 Types of future
commitments under the UNFCCC and the Kyoto
Protocol post 2012, Briefing paper for WWF
57
Worldbank investment framework for clean energy
development

• Developed out of the G8 process
• Energy sector policy reform is urgently needed
• Low-cost, high impact approaches should be
  addressed first
• IFIs can be an important source of finance,
  policy, and technical advice
• Creation of new financing instruments
• Clean Energy Financing Vehicle
• Power Rehabilitation Financing Facility
• Project Development Fund
• Venture Capital Funds for Technology Adoption

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Asia-Pacific Partnership on Development and
Climate

• Initiative by Australia, China, India, Japan,
  South Korea, USA
• Agree to cooperate on technologies including
  energy efficiency, clean coal, carbon capture and
  storage, methane capture and use, civilian
  nuclear power, advanced transportation,
  agriculture and forestry, hydropower, wind,
  solar,
• Meeting was scheduled for November 2005 but
  postponed to April 2006

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Delay of emission reductions
Reference Based on SRES A1B scenario Delayed
2020 Kyoto countries extend their targets to
2020, no action by others Delayed 2015 Kyoto
countries extend their targets to 2015, no action
by others Multistage All countries reach Kyoto
until 2010, followed by ambitious agreement for
2020 for all countries
Delay of 5 to 10 years after 2010 has significant
implications on subsequently necessary emission
reductions to meet the same goal
Source K. Blok, N. Höhne, A. Torvanger, R.
Janzic, 2005 Towards a Post-2012 Climate Change
Regime, http//europa.eu.int/comm/environment/cli
mat/pdf/id_bps098.PDF
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Conclusions

• Increasing momentum, more activities than ever
• Strong focus on alternatives to absolute binding
  emission targets of the Kyoto Protocol
• Dynamic targets, price caps,
• Sectoral targets / sectoral standards
• Technology agreements
• Incentives for developing country participation
  No lose targets, sector crediting mechanisms,
  revisiting CDM, sustainable development policies
• But time is short to still keep 2C goal within
  reach. Delay of 5-10 years has significant impact
  on later required reductions

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Backup slides
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Approaches
Contraction and Convergence
Based on one/two principles
Brazilian Proposal on hist. resp.
Common but diff. convergence
Intensity targets
Sectoral approaches
Triptych
Sophisticated approaches
Multistage
South North dialogue
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Contraction and Convergence

• Contraction Agreement on a global emission
  pathway (e.g. towards
  450ppmv)
• Convergence Per capita emission converge until,
  e.g., 2050

• For 450 ppmv CO2
• Convergence level 2-3 tCO2eq. (Global average
  today 6)

Origin of the approach Global Commons Institute
www.gci.org.uk/briefings/ICE.pdf
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Common but differentiated convergence (CDC)

• Three stages
• No commitments
• No-Lose targets
• Convergence of per capita emission level to the
  same level in e.g. 40 years
• Participation threshold
• (time dependent) globalaverage per capita
  emissions

• For 450 ppmv CO2
• Convergence level 2 tCO2eq.
• Participation at world average

Höhne, den Elzen, Weiss Common but
differentiated convergence accepted at Climate
Policy 2005
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Brazilian Proposal on historical responsibility

• Design
• Share reduction proportional to historical
  responsibility
• To allow growth targets reductions below a
  reference scenario
• Critical issues
• Calculation of historical responsibility
• For growth targets reference scenario needed
• Decisions on who participates needed
• For 450 ppmv CO2
• Fast participation of countries additional to
  Annex I, e.g. at Annex I average per capita
  emissions or GDP
• Ambitious reductions for reducing countries

See www.match-info.net for calculations of
contributions to temperature increase
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Intensity targets

• Improvement of Emissions/GDP
• Decision on participation needed
• For 450 ppmv CO2
• Annex I assumed to reduce 20 below 1990 in 2020
• Intensity targets for Non-Annex I countries, if
  their per-capita emissions above 3 to 5
  tCO2eq./cap in 2020
• Emissions/GDP improvement 1 to 2 percentage
  points per year better than under reference
  scenario

67
Sectoral approaches

• Emission targets are defined for all individual
  sectors as function of their respective output
  (e.g. t of steel, kWh produced, etc.). Emission
  trading possible
• For 450 ppmv CO2
• Annex I assumed to reduce 20 below 1990 in 2020
• Major Non-Annex I countries
• Electricity reduction in CO2/kWh by 3 per year
  energy efficiency improvements reduce growth in
  production by 0.5 per year
• Iron steel convergence in tCO2/t steel by 2025
  to 0.80 (year 2000 average 1.53)
• Cement convergence in tCO2/t cement by 2020 to
  0.60 (year 2000 average 0.77)

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Triptych

• For 450 ppmv CO2
• Convergence to efficiency 50 better than BAT in
  industry in 2050
• 60 emission free electricity in 2050.
• Domestic convergence to 0.7tCO2eq/cap

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Multistage

• Increasing participation

Absolute reductions
e.g. lowing of emission growth
e.g. sustainable development policies and measures
No commitments

• Countries graduate into the next steps based on
  thresholds (emissions/cap, GDP/cap, human
  development index)

See also EU (EGFA), scientific community (RIVM,
Wuppertal Institut), NGOs (CAN proposal)
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Multistage

• For 450 ppmv CO2

5 tCO2eq/cap
Absolute reductions
2-5 per year
4 tCO2eq/cap
e.g. slowing of emission growth
20 to 35 below BAU
3tCO2eq/cap
e.g. sustainable development policies and
measures
10 to 15 below BAU
No commitments
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South North Dialogue

• Thresholds CO2/GDP, GHG/cap, emission growth,
  cumulative emissions, GDP/cap, HDI show members
  of the groups
• Adaptation commitment
  http//www.wupperinst.org/Sites/Projects/rg2/1085.
  html

72
Stabilization pathways
50
550ppm
45
30
10
450ppm
-25
400ppm
-60
Source post SRES scenarios (stabilization
paths), CO2 only
73
Different stabilization levels
2020

• The choice of the stabilization level is important

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Different stabilization levels
2050

• The choice of the stabilization level is important

75
Change 1990 to 2020 towards 450 ppm CO2
- Kyoto target

• Annex I -10 to 30 below 1990
• No participation but also no hot air South
  Asia and Africa
• Deviate from their reference Latin America,
  Middle East, East Asia and Centrally planned Asia

Source Höhne, Phylipsen, Ullrich, Blok, 2005
Options for the second commitment period of the
Kyoto Protocol http//www.umweltdaten.de/publika
tionen/fpdf-l/2847.pdf
76
Change 1990 to 2050 towards 450 ppm CO2

• All approaches require drastic reductions
• Annex I -70 to -90 below 1990
• Substantial deviation from reference in all
  Non-Annex I regions

77
Change 1990 to 2020 towards 450 ppm CO2
Kyoto target

• Calculations started in 2010 at US Kyoto target
• More reductions than under the Kyoto Protocol
  needed

78
Change 1990 to 2020 towards 450 ppm CO2
Kyoto target

• More reductions than under the Kyoto Protocol
  needed
• Approaches that require all countries to reduce
  lead to less reductions for Annex I countries

79
Change 1990 to 2020 towards 450 ppm CO2
Kyoto target

• Calculations start at reference emissions in 2010
  (below Kyoto target)
• More reductions than under the Kyoto Protocol
  needed
• Triptych approach is more stringent due to less
  efficient industry

80
Change 1990 to 2020 towards 450 ppm CO2
Kyoto target

• More reductions than under the Kyoto Protocol
  needed
• Generally less stringent compared to rest if
  Annex I due to low per capita emissions and high
  efficiency

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Change 1990 to 2020 towards 450 ppm CO2

• Slowing of emissions growth under all approaches
  (deforestation, the major share of emissions, is
  not included in the calculations)
• Settings of sectoral approach focussed on
  electricity, which is low in Brazil

82
Change 1990 to 2020 towards 450 ppm CO2

• Slowing of emissions growth under all approaches
• Settings of sectoral approach demanding for coal
  consuming countries

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Change 1990 to 2020 towards 450 ppm CO2

• No participation or little change in emissions
  required
• Settings of sectoral approach demanding for coal
  consuming countries

84
Change 1990 to 2020 towards 450 ppm CO2

• Slowing of emissions growth under all approaches
• Settings of sectoral approach mild for Mexico

85
Change 1990 to 2020 towards 450 ppm CO2

• Slowing of emissions growth under all approaches
• Settings of sectoral approach mild for South
  Africa, since major improvements already in
  reference

86
Change 1990 to 2020 towards 450 ppm CO2

• Slowing of emissions growth under all approaches
• Sectoral approach and Triptych mild due to high
  energy efficiency

87
Conclusions

• The parameters stretched to their limits for the
  low stabilization levels 550 ppmv CO2
• participation of Non-Annex I countries at Annex I
  average per capita emissions
• 45 renewables and emission-free fossil fuels in
  the electricity sector by 2050
• 400 ppmv CO2
• almost immediate participation of many Non-Annex
  I countries
• emission reductions of more than 5 per year in
  the last stage
• 85 renewables and emission-free fossil fuels in
  the electricity sector by 2050
• Annex I the difference in reductions between
  stabilization targets (400, 450 and 550 ppmv) is
  larger than the difference between the various
  approaches aiming at the same stabilization
  target.
• Only for developing countries that participate
  under some and do not participate under other
  approaches, the differences between approaches
  are large. For those countries the criteria for
  participation are an important determinant.

88
Change 1990 to 2020 towards 550 ppm CO2
- Kyoto target

• Annex I -5 to 25 below 1990
• No participation South Asia, Africa, Centrally
  Planned Asia or excess allowances under CC or
  Triptych
• Deviate from their reference Latin America,
  Middle East and East Asia

89
Change 1990 to 2050 towards 550 ppm CO2

• Annex I -40 to -80 below 1990
• Deviate from reference Most Non-Annex I regions,
  except South Asia
• Triptych more reductions for coal intensive
  countries under these parameters

90
Change 1990 to 2020 towards 400 ppm CO2
- Kyoto target

• Annex I -25 to -50 below 1990
• No participation only a very few countries
• Deviate from their reference all Non-Annex I
  regions

91
Change 1990 to 2050 towards 400 ppm CO2

• Annex I -80 to -90 below 1990
• Substantial deviation from reference in all
  Non-Annex I regions

92
Emission reduction efforts
93
Klimastabilisierung
Source IPCC Synthesis Report, 2001
94
Linking temperature increase to global emissions
Approximate temperature levels at equilibrium
(e.g. 2200) 550ppm CO2 4C (2.5-5.5) 450ppm
CO2 3C (1.5-4.5) 400ppm CO2 2C
(1-3) (Source IPCC TAR 2001 and others)
(Source Ecofys, adapted from post SRES
stabilization paths Morita et al. 2001, CO2 only)
95
Risk of overshooting 2C
Source MEINSHAUSEN ON THE RISK OF OVERSHOOTING
2C. Paper presented at Scientific Symposium
Avoiding Dangerous Climate Change, MetOffice,
Exeter, 1-3 February 2005
96
Entwicklung des globalen Temperaturanstiegs
Source IPCC Synthesis Report, 2001
EU and D climate target of 2C above
pre-industrial level

• 1000 to 1861, N. Hemisphere, proxy data
• 1861 to 2000 Global, Instrumental
• 2000 to 2100, SRES projections

97
Vom Temperatur-anstieg zur CO2 Konzentration
CO2 Konzentration Vorindustriell 280
ppmvHeute 360 ppm
EU and D climate target of 2C
Quelle IPCC Syntheses Report, 2001