Sensitivity of marginal
abatement cost curves to
variation of G4M parameters
Mykola Gusti, Nikolay Khabarov and Nicklas Forsell
4th International Workshop on Uncertainty in Atmospheric
Emissions, Kraków, 7th-9th October, 2015
Acknowledgements. The work has been carried out within the
project "Options Market and Risk-Reduction Tools for REDD+"
funded by the Norwegian Agency for Development Cooperation
under agreement number QZA-0464 QZA-13/0074.
Outline
•
•
•
•
•
Introduction
Method
Results and discussion
Conclusions and Challenges
Questions and answers
Gusti et al. Sensitivity of marginal abatement cost curves to variation of G4M
parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
2
Introduction
• MACC – a “tool” for analysis of mitigation
policies
Kesicki (2011)
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
3
Introduction
• Model derived MACC:
(BAU emissions – Mitigated emissions) against mitigation costs
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
4
Introduction
• Model uncertainty and MACC:
(BAU emissions + Err – Mitigated emissions - Err)
(BAU emissions + Err1 – Mitigated emissions – Err2)
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
5
Introduction
• Model uncertainty and MACC:
(BAU emissions + Err – Mitigated emissions - Err) ?
(BAU emissions + Err1 – Mitigated emissions – Err2) ?
What is sensitivity of the MACCs to selected model
parameters?
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
6
Introduction
• how the parameter uncertainties can impact
GHG abatement policies related to forest
sector?
Modified figure from Kesicki (2011)
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
7
Generating LUC abatement cost curves: Modeling
framework
Basic drivers
Elaboration of
basic drivers
Assumptions on GDP, population, bio-energy
by world regions
GLOBIOM
Trade
Wood prices, land rents, wood demand
Elaboration of
projections
Projections of
net forestry
emissions
Abatement
cost curve
estimation
Wood production potential, init. prices
EFISCEN EFISCEN
G4M
Forest
management
Afforestation,
reforestation,
deforestation
Cropland
Forest
management
management
Afforestation,
reforestation,
deforestation
Fuss et al. An approach to assessing benefits of advanced global carbon
observation system. ICDC 2013 - Beijing – 3-7 June 2013
Calibration
to FAO data
8
Method: G4M overview
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
9
Method G4M: LUC decisions
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
10
Method
• “Baseline”: CO2 initial prices starting in 2020 (0, 1, 3, 5,
10, 15, 20, 25, 30, 40, 50, 60, 80, 100, 120 USD/tCO2)
and rising 5% / year (CO2 price range: 4-520 USD/ton
CO2 in 2050)
• “Sensitivity”: decrease/increase cr, w, and l them by 1,
2.5, 5, 10, 50 and 90% one by one for each CO2 price
• Build MACC as a difference of total biomass CO2
emissions at non-zero CO2 price and zero CO2 price in
2030
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
11
Results and discussion
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
12
Results and discussion
Deviation of total MACC due to agriculture land price variation
1700
lm1
1200
lm10
lm2_5
MtCO2/year
700
lm5
lm50
lm90
200
lp1
0
20
40
60
-300
80
100
120
lp10
lp2_5
lp5
-800
lp50
lp90
-1300
USD/tCO2
Böttcher et al. Global forestry emission projections and abatement costs
EGU 2012 - Vienna - 22-27 April 2012
13
Results and discussion
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
14
Results and discussion
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
15
Results and discussion
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
16
Results and discussion
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
17
Impact on policy analysis
C tax
Resulting
reduction
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
18
Impact on policy analysis
Resulting
C price
C allowances
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
19
Final remarks
• Non-linear IAM - MACCs may be sensitive to variation of
the model parameters.
• G4M MACCs are much more sensitive to parameter
variation at a certain range of CO2 prices, usually low
CO2 prices.
• G4M total biomass CO2 MACCs are most sensitive to
variation of corruption coefficient and agriculture land
price.
• MACC uncertainty can influence outcome of policy
analysis.
• Inform experts applying MACCs for policy analysis on
MACC uncertainty!
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
20
Contact information
Mykola Gusti
Ecosystem Services and Management
International Institute for Applied Systems Analysis
Schlossplatz 1, A-2361 Laxenburg, Austria
Phone: (+43 2236) 807 534
Fax: (+43 2236) 71 313
Web: http://www.iiasa.ac.at
Email: [email protected]
Results and discussion
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
22
Results and discussion
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
23
Results and discussion
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
24
Results and discussion
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
25
Results and discussion
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
26
Results and discussion
Gusti et al. Sensitivity of marginal abatement cost curves to variation of
G4M parameters. 4th IWUAE, Kraków, 7th-9th October, 2015
27
Model comparison
Kindermann et al. 2008: Global emission reduction
(avoided deforestation)
USD / t CO2
CO2 emission reduction,
Mt CO2/year
Fuss et al. An approach to assessing benefits of advanced global carbon
observation system. ICDC 2013 - Beijing – 3-7 June 2013
28
Method (details*)
*Gusti et al., 2012, Simulation of REDD+ options using IIASA model cluster, iEMSs-2012
Fuss et al. An approach to assessing benefits of advanced global carbon
observation system. ICDC 2013 - Beijing – 3-7 June 2013
29
Modeling framework
Basic drivers
Elaboration of
basic drivers
Assumptions on GDP, population, bio-energy
by world regions
GLOBIOM
Trade
Wood prices, land rents, wood demand
Elaboration of
projections
Projections of
net forestry
emissions
Abatement
cost curve
estimation
Wood production potential, init. prices
EFISCEN EFISCEN
G4M
Forest
management
Afforestation,
reforestation,
deforestation
Cropland
Forest
management
management
Afforestation,
reforestation,
deforestation
Fuss et al. An approach to assessing benefits of advanced global carbon
observation system. ICDC 2013 - Beijing – 3-7 June 2013
Calibration
to FAO data
30
Modeling approach
Half degree grid cells
Potential
harvest
Simulation units
Carbon stocks
GDP and
Pop. density
G4M
Calib. to FAO
FRA 2010
and Forest
Loss Map
World regions
Initial NPV(s)
and wood
price
Forestry
GLOBIOM
Land use
Change in
NPV(s) and
Wood price
Wood demand
Crop
yields
Management
params
EPIC
Agriculture
Afforestation
Deforestation
Agriculture
land
Fuss et al. An approach to assessing benefits of advanced global carbon
observation system. ICDC 2013 - Beijing – 3-7 June 2013
31
G4M: Modeling approach
FM:
H=WD
NPV→max
0.5ox 0.5o
Fuss et al. An approach to assessing benefits of advanced global carbon
observation system. ICDC 2013 - Beijing – 3-7 June 2013
32
G4M: Modeling approach
COUNTRY OR REGION
CELL 1
Economic
Site
Climate
Altitude
NPP
Land price
Soil
Forestry NPV
Slope
LU Decisions
Afforest
Deforest
Planting costs
Harvesting costs
Increment
Yield
Stocking degree
Age / Tree Size
tC/ha
Wood price
Height
Wood demand
DBH
FM Decisions
Species
Forest
Rotation time
Age
0
1
2
3
...
Thinning
Biomass
Area
Area
Tree
Size
Sawnwood
CELL 2
Pulpwood
CELL 3
Costs
CELL ....
CELL N
Wood price market corr.
Land price market corr.
Wood demand
Land use change
GLOBIOM
Fuss et al. An approach to assessing benefits of advanced global carbon
observation system. ICDC 2013 - Beijing – 3-7 June 2013
33
G4M: FM targets and options
• FM targets:
– Harvest demanded amount of wood on country scale
– Harvest demanded amount of wood + maximize biomass
comparing to baseline (NPV->max)
• FM options:
– Tune rotation length: max MAI – max biomass
– Change harvest location (depending on CAI)
Fuss et al. An approach to assessing benefits of advanced global carbon
observation system. ICDC 2013 - Beijing – 3-7 June 2013
34
Results: Global forest area change
(baseline)
Affor and defor. baseline area rel. 2010
• Net forest area
decreases until 2015
• But increases after
2020
0,35%
0,30%
0,25%
0,20%
0,15%
0,10%
2010
2015
2020
2025
Afforestation
Fuss et al. An approach to assessing benefits of advanced global carbon
observation system. ICDC 2013 - Beijing – 3-7 June 2013
2030
2035
2040
2045
2050
Deforestation
35
Results: Global LUC removals and
emissions (baseline)
Baseline Aff. removals and Def. emissions rel. 2010
• Afforested areas
accumulate carbon
slowly
• Net LUC emissions
> 0 until 2045
120%
100%
80%
60%
40%
20%
0%
2010 2015 2020 2025 2030 2035 2040 2045 2050
Afforestation
Fuss et al. An approach to assessing benefits of advanced global carbon
observation system. ICDC 2013 - Beijing – 3-7 June 2013
Deforestation
36
Results: Global forest area change
Def. area rel. 2010 under non-zero C price
120%
100%
10
20
30
50
70
100
200
300
500
1000
80%
60%
40%
20%
0%
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Fuss et al. An approach to assessing benefits of advanced global carbon
observation system. ICDC 2013 - Beijing – 3-7 June 2013
37
Results: Global net forest area change
• FAO level is met but
trend is different
• Already in baseline
global forest area
increases after 2020
Net forest area change in M ha
10
5
0
2000
2010
2020
2030
2040
2050
-5
-10
-15
Baseline
Fuss et al. An approach to assessing benefits of advanced global carbon
observation system. ICDC 2013 - Beijing – 3-7 June 2013
FAO
38
Results: Global net forest area change
• FAO level is met but 10
trend is different
• Already in baseline 5
global forest area
increases after 2020 0
• Afforestation stays
rather constant,
-5
declining after 2020
-10
• Deforestation
decreasing
Net forest area change in M ha
2000
2010
2020
2030
2040
2050
-15
Baseline
Fuss et al. An approach to assessing benefits of advanced global carbon
observation system. ICDC 2013 - Beijing – 3-7 June 2013
FAO
AR area
D area
39
Results: Baseline development global
forestry emissions
• Deforestation emissions
expected to decline
constantly
• Afforestation (start in
2000) kicking in late
• Therefore net land use
change emissions
negative only after 2040
Forest biomass emissions in Mt CO2
8000
6000
4000
2000
0
-2000
1990 2000 2010 2020 2030 2040 2050
-4000
-6000
-8000
-10000
Fuss et al. An approach to assessing benefits of advanced global carbon
observation system. ICDC 2013 - Beijing – 3-7 June 2013
net LUC
AR
D
40
Results: Baseline development global
forestry emissions
• Deforestation emissions
8000
expected to decline
6000
constantly
4000
• Afforestation (start in
2000) kicking in late
2000
• Therefore net land use
0
change emissions
-2000
negative only after 2040
-4000
• Forest sink declining due
-6000
to ageing forest
-8000
• Overall emissions rather
-10000
stable
Fuss et al. An approach to assessing benefits of advanced global carbon
observation system. ICDC 2013 - Beijing – 3-7 June 2013
Forest biomass emissions in Mt CO2
1990 2000 2010 2020 2030 2040 2050
net LUC
AR
D
FM
total
41
Results: Global net forest area change
under different C prices
• If carbon has a price 10
net area loss declines
more rapidly and area 5
gain after 2020 is
higher
0
• A price of 30 USD
increases net gain by -5
factor four
• Strongest effects at -10
medium C prices (2050 USD)
Net forest area change in M ha
2000
2010
2020
2030
2040
2050
-15
net baseline
Fuss et al. An approach to assessing benefits of advanced global carbon
observation system. ICDC 2013 - Beijing – 3-7 June 2013
10
20
30
50
70
100
FAO
42
Results: Potential and costs for
additional storage in non-Annex I
Carbon price [USD/t C]
• CO2 storage in comparison
to baseline at different C
price levels
• Afforestation potential
negligible (high baseline,
time lag)
• Reduced deforestation puts
pressure on remaining
forest (harvest increases)
resulting in negative cost
curve
Average emission reduction until year 2030
120
100
80
60
40
20
0
-500
0
500
1000
1500
Mitigation potential [Mt CO2]
AR
Fuss et al. An approach to assessing benefits of advanced global carbon
observation system. ICDC 2013 - Beijing – 3-7 June 2013
D
FM
2000
Total
43
Sensitivities: Corruption factor effects
for non-Annex I
• Country specific corruption
factors (based on World
Bank data) lower potential
in baseline
• To be interpreted as
efficiency of USD spent on
emission reduction
• Without corruption effects
potentials can be doubled
for lower carbon prices
Carbon price [USD/t C]
Average emission reduction until year 2030
120
100
80
60
40
20
0
0
500
1000
1500
2000
Mitigation potential [Mt CO2]
Baseline
Fuss et al. An approach to assessing benefits of advanced global carbon
observation system. ICDC 2013 - Beijing – 3-7 June 2013
Without corruption effects
44
Comparison to historic estimates
Land use change
1990-1999
2000-2007
0,0
-0,5
-1,0
-1,5
-2,0
3,0
2,5
2,0
1,5
1,0
0,5
0,0
• Global emissions (Pg C)
• Similar estimates for land use
change emissions
• Underestimation of sink by G4M
• Opposing fluxes lead to big
difference in net flux
Forest sink
1,5
Global net sink
1,0
Pan et al. 2011
Science Express
0,5
1990-1999
2000-2007
G4M baseline 2011
0,0
Fuss et al. An approach to assessing benefits of advanced global carbon
observation system. ICDC 2013 - Beijing – 3-7 June 2013
1990-1999 2000-2007
45
Results: Effect of integrated MACC
curves in Annex I countries
Average emission reduction until year 2030
120
120
100
100
80
80
60
60
40
40
20
20
0
0
-100
100
300
500 -100
100
Afforestation
Forest management
Fuss et al. An approach to assessing benefits of advanced global carbon
observation system. ICDC 2013 - Beijing – 3-7 June 2013
300
500
Deforestation
SUM
46