Showing papers by "Panagiotis Fragkos published in 2021"

Exploring the possibility space: taking stock of the diverse capabilities and gaps in integrated assessment models

Abstract: Integrated Assessment Models (IAMs) have emerged as key tools for building and assessing long term climate mitigation scenarios. Due to their central role in the recent IPCC assessments, and international climate policy analyses more generally, and the high uncertainties related to future projections, IAMs have been critically assessed by scholars from different fields receiving various critiques ranging from adequacy of their methods to how their results are used and communicated. Although IAMs are conceptually diverse and evolved in very different directions, they tend to be criticized under the umbrella of "IAMs". Here we first briefly summarise the IAM landscape and how models differ from each other. We then proceed to discuss six prominent critiques emerging from the recent literature, reflect and respond to them in the light of IAM diversity and ongoing work and suggest ways forward. The six critiques relate to (1) representation of heterogeneous actors in the models, (2) modelling of technology diffusion and dynamics, (3) representation of capital markets, (4) energy-economy feedbacks, (5) policy scenarios, and (6) interpretation and use of model results.

Global roll-out of comprehensive policy measures may aid in bridging emissions gap

Abstract: Closing the emissions gap between Nationally Determined Contributions (NDCs) and the global emissions levels needed to achieve the Paris Agreement’s climate goals will require a comprehensive package of policy measures. National and sectoral policies can help fill the gap, but success stories in one country cannot be automatically replicated in other countries. They need to be adapted to the local context. Here, we develop a new Bridge scenario based on nationally relevant, short-term measures informed by interactions with country experts. These good practice policies are rolled out globally between now and 2030 and combined with carbon pricing thereafter. We implement this scenario with an ensemble of global integrated assessment models. We show that the Bridge scenario closes two-thirds of the emissions gap between NDC and 2 °C scenarios by 2030 and enables a pathway in line with the 2 °C goal when combined with the necessary long-term changes, i.e. more comprehensive pricing measures after 2030. The Bridge scenario leads to a scale-up of renewable energy (reaching 52%–88% of global electricity supply by 2050), electrification of end-uses, efficiency improvements in energy demand sectors, and enhanced afforestation and reforestation. Our analysis suggests that early action via good-practice policies is less costly than a delay in global climate cooperation. Comprehensive policy measures are needed to close the emissions gap between Nationally Determined Contributions and emissions goals of the Paris Agreement. Here the authors present a Bridge scenario that may aid in closing the emissions gap by 2030.

Integrated assessment model diagnostics: key indicators and model evolution

Abstract: Integrated assessment models (IAMs) form a prime tool in informing about climate mitigation strategies. Diagnostic indicators that allow comparison across these models can help describe and explain differences in model projections. This increases transparency and comparability. Earlier, the IAM community has developed an approach to diagnose models (Kriegler (2015 Technol. Forecast. Soc. Change 90 45–61)). Here we build on this, by proposing a selected set of well-defined indicators as a community standard, to systematically and routinely assess IAM behaviour, similar to metrics used for other modeling communities such as climate models. These indicators are the relative abatement index, emission reduction type index, inertia timescale, fossil fuel reduction, transformation index and cost per abatement value. We apply the approach to 17 IAMs, assessing both older as well as their latest versions, as applied in the IPCC 6th Assessment Report. The study shows that the approach can be easily applied and used to indentify key differences between models and model versions. Moreover, we demonstrate that this comparison helps to link model behavior to model characteristics and assumptions. We show that together, the set of six indicators can provide useful indication of the main traits of the model and can roughly indicate the general model behavior. The results also show that there is often a considerable spread across the models. Interestingly, the diagnostic values often change for different model versions, but there does not seem to be a distinct trend.

The effect of differentiating costs of capital by country and technology on the European energy transition

Abstract: Cost of capital is an important driver of investment decisions, including the large investments needed to execute the low-carbon energy transition. Most models, however, abstract from country or technology differences in cost of capital and use uniform assumptions. These might lead to biased results regarding the transition of certain countries towards renewables in the power mix and potentially to a sub-optimal use of public resources. In this paper, we differentiate the cost of capital per country and technology for European Union (EU) countries to more accurately reflect real-world market conditions. Using empirical data from the EU, we find significant differences in the cost of capital across countries and energy technologies. Implementing these differentiated costs of capital in an energy model, we show large implications for the technology mix, deployment, carbon emissions and electricity system costs. Cost-reducing effects stemming from financing experience are observed in all EU countries and their impact is larger in the presence of high carbon prices. In sum, we contribute to the development of energy system models with a method to differentiate the cost of capital for incumbent fossil fuel technologies as well as novel renewable technologies. The increasingly accurate projections of such models can help policymakers engineer a more effective and efficient energy transition.

Reducing the Decarbonisation Cost Burden for EU Energy-Intensive Industries

Abstract: Carbon leakage features prominently in the climate policy debate in economies implementing climate policies, especially in the EU. The imposition of carbon pricing impacts negatively the competitiveness of energy-intensive industries, inducing their relocation to countries with weaker environmental regulation. Unilateral climate policy may complement domestic emissions pricing with border carbon adjustment to reduce leakage and protect the competitiveness of domestic manufacturing. Here, we use an enhanced version of GEM-E3-FIT model to assess the macro-economic impacts when the EU unilaterally implements the EU Green Deal goals, leading to a leakage of 25% over 2020–2050. The size and composition, in terms of GHG and energy intensities, of the countries undertaking emission reductions matter for carbon leakage, which is significantly reduced when China joins the mitigation effort, as a result of its large market size and the high carbon intensity of its production. Chemicals and metals face the stronger risks for relocation to non-abating countries. The Border Carbon Adjustment can largely reduce leakage and the negative activity impacts on energy-intensive and trade-exposed industries of regulating countries, by shifting the emission reduction to non-abating countries through implicit changes in product prices.

Challenges and Opportunities of Coal Phase-Out in Western Macedonia

Abstract: As part of the European Green Deal, the EU aims to become climate-neutral and reach net-zero greenhouse gas emissions by 2050. Ιn this context, EU member states are required to develop a national strategy to achieve the required emissions reductions under the Paris Agreement and EU climate goals. Western Macedonia is a region in North-western Greece with its economy largely dominated by lignite mining, lignite-fired power plants and district heating systems. In 2019, the Greek Government set the goal of withdrawing all lignite plants by 2028, with most units being withdrawn already by 2023. This decision has had an immense socio-economic impact on the region of Western Macedonia. This research work reflects the current situation at the socio-economic and socio-political level in Western Macedonia and discusses the policies implemented in the context of the lignite phase-out process to ensure a just transition for households and businesses of the region. Although there is not a ‘one-size-fits-all’ blueprint for successful low-carbon transitions of high-carbon intensive regional economies, the main target of our paper is understanding the impacts, challenges and opportunities of decarbonizing Western Macedonia.

Beyond the Energy System: Modeling Frameworks Depicting Distributional Impacts for Interdisciplinary Policy Analysis

Abstract: The consideration of distributional impacts in the analysis of the energy and environmental policies has risen in importance as more ambitious climate policies are implemented worldwide, often imposing taxation on energy products. Distributional impacts refer to the case when different household groups or individuals are affected by a policy to a different degree. Distributional impacts are commonly associated with inequality which may include differences in the environmental burden or distribution of income and welfare. A case that illustrates the negative consequences of not considering the distributional effects of climate policies is the Yellow vest movement that started in 2018 in France. The movement was marked by mass protests against the rising fuel taxes and prices and claimed that middle and working classes were paying a disproportionate share of the burden from the national tax reforms. These protests are a sign of how the issue of inequality has grown in relevance in recent years and how neglecting this topic may hinder climate protection action. In the European Union, for instance, increasing levels of income and carbon inequality in a large number of Member States are causing concerns for both the sustainability of economic growth and social cohesion. Globally, the gap between rich and poor is increasing and in 2015 the wealth of the richest 62 people in the world was equal to that of the bottom half. To tackle the issue of inequality, the United Nations adopted in 2015 the 2030 Agenda for Sustainable Development, in which reducing economic disparities is one of the seventeen sustainable development goals (SDGs). This agreement reinforces the need to provide a global solution for the problem of inequality and shows that policies aiming at sustainable development should consider their social and distributional impacts on different income classes and regions. To this end, this work reviews the recent literature on the model-based methods utilized for policy analyses in the areas of economics, energy systems, and environmental damages. Furthermore, we explore ways in which these models and methodologies depict distributional impacts, the main indicators obtained from their results, shortcomings of each modeling methodology, and suggest improvements for future research.

Assessing the Role of Carbon Capture and Storage in Mitigation Pathways of Developing Economies

Abstract: The Paris Agreement has set out ambitious climate goals aiming to keep global warming well-below 2 °C by 2100. This requires a large-scale transformation of the global energy system based on the uptake of several technological options to reduce drastically emissions, including expansion of renewable energy, energy efficiency improvements, and fuel switch towards low-carbon energy carriers. The current study explores the role of Carbon Capture and Storage (CCS) as a mitigation option, which provides a dispatchable source for carbon-free production of electricity and can also be used to decarbonise industrial processes. In the last decade, limited technology progress and slow deployment of CCS technologies worldwide have increased the concerns about the feasibility and potential for massive scale-up of CCS required for deep decarbonisation. The current study uses the state-of-the-art PROMETHEUS global energy demand and supply system model to examine the role and impacts of CCS deployment in a global decarbonisation context. By developing contrasted decarbonisation scenarios, the analysis illustrates that CCS deployment might bring about various economic and climate benefits for developing economies, in the form of reduced emissions, lower mitigation costs, ensuring the cost efficient integration of renewables, limiting stranded fossil fuel assets, and alleviating the negative distributional impacts of cost-optimal policies for developing economies.