Emission projections

1
Emission projections

• Norwegian approach
• Projection Expert Panel
• Dublin, Oct 25th 2007
• Anne Kristin Fosli, Ministry of Finance
• Senior Adviser

2
Outline

• Methodologies and models
• Authorities involved
• Main characteristics
• Challenges

3
Demand for projections increases..

• Emission projections are carried out minimum
  every fourth year in conjunction with the
  preparation of the White Paper to the Parliament
  Long Term Economic Prospective
• Projections and analysis regularly published as a
  part of the White paper Long Term Prospective
• Projections are carried out and coordinated by
  Ministry of Finance in close cooperation with The
  State Pollution Control Authorities
• The need for updates and partially updates have
  increased for policy purposes, as Kyoto- and
  Gothenburg commitment years approaches
• Updates are published in National Budgets and
  Revised National Budgets
• Lately, huge focus on without measure scenarios
  to document action and effects of policies

4
Methodology

• Projections both for GHG gases and LRTAP (nmVOC,
  SO2 and NOX) are based on a macroeconomic model
  called MSG (Multi Sectoral Growth)
• An emission calculation model and electricity
  demand model are included in MSG
• Supplemented by micro-information and branch
  studies
• Projections for non- CO2 GHG- gases emissions are
  based on information from concerned sectors and
  consistent with macroeconomic projections
• NH3 projections based on projections on animal
  stock and agriculture policies

5
Authorities involved

• Ministry of Finance is responsible for the
  production and publishing of the official
  emission projections, and activity data fed into
  the MSG (including energy data)
• The Norwegian State Pollution control is
  responsible for the production of emission
  projections of non- CO2 GHG gases
• Ministry of Oil and Energy is responsible for the
  annual projections of the emissions from the
  Petroleum sector
• Ministry of Agriculture and The Norwegian State
  Pollution are responsible for projections of NH3

6
Characteristics of the MSG model

• A general equilibrium model
• All resources fully utilized
• Producer behaviour is characterized by
  monopolistic competition in the domestic market.
  Pricetakers on the world market
• Highly disaggregated
• Detailed description of the markets for energy
  and transport
• 40 private production sectors
• 7 public sectors
• 17 private consumption sectors
• Four energy carriers
• Long term projections are sensitive to
  assumptions on population growth, technological
  progress and the development of prices in
  international markets

7
Assumptions supply and use of electricity

• 99 of Norwegian mainland electricity production
  based on hydropower
• The production of renewables (water and wind
  power) is exogenously determined
• Marginal long term cost of electricity produced
  by natural gas decides long term electricity
  prices in the reference scenario
• Requirements of CO2 capture and storage on
  natural gas fired power plants in Norway make
  natural gas fired power plants not profitable in
  Norway
• Assumptions on electricity demand, particularly
  from energy intensive, are important
• Imports covers up electricity balance

8
Assumptions price of crude oil
9
Emission calculation model

• 12 pollutants
• Emissions are a function of activity and emission
  coefficients
• Emissions coefficients are exogenous
• Relationship between activity and emissions based
  on historic observation
• Coefficients are related to emitting activities
  as production and consumption activities, input
  of materials, energy inputs and landfill
• Microinformation, used to adjust or overrule
  model results

10
Emission model..cont.

• Statistics Norway develop and update the Emission
  calculation model in collaboration with The
  Norwegian State Pollution Control
• Emission calculation model are updated on the
  basis of historical emission data and takes into
  account the effects of adopted environmental
  policies, technological change etc.
• Update of model is done every fourth or fifth year

11
Net domestic energy usePetajoule
12
Energy use in Norway. 2005Petajoule
13
NOx- emissions and national projections
Effect of NOX tax/negotiaton with Government on
NOx reduction not included in projections
14
Challenges

• Conflict of interest Economic projections versus
  emission projections (level of aggregation)
• Intersection between macro and micro level in the
  medium term
• Scenario analyses definition of BAU ?
• How to deal with voluntary agreements in
  projections and scenarios when measures and
  emission reductions would be achieved anyway?
• Reporting issues-
• Compiling energy projections from emission
  projections for various formats
• Level of details

15
Summing up

• Emissions projections consistent with overall
  macroeconomic projections
• Combination of a top down and a buttom up
  approach
• Macroapproach to emissions mainly driven by
  energy use
• Microaproach
• non- CO2, GHG- emissions
• processing industry
• road traffic
• petroleum sector
• Micro level and micro information more relevant
  and available for medium term than long term