Maria Cristina Tommasino

Pathways to Deep Decarbonization in Italy

The Deep Decarbonization Pathways Project (DDPP), an initiative of the Sustainable Development Solutions Network (SDSN) and the Institute for Sustainable Development and International Relations (IDDRI), aims to demonstrate how countries can transform their energy systems by 2050 in order to achieve a low-carbon economy and significantly reduce the global risk of catastrophic climate change. Built upon a rigorous accounting of national circumstances, the DDPP defines transparent pathways supporting the decarbonization of energy systems while respecting the specifics of national political economy and the fulfillment of domestic development priorities. The project comprises 16 Country Research Teams, composed of leading research institutions from countries representing about 70% of global GHG emissions and at very different stages of development. These 16 countries are: Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, South Africa, South Korea, the United Kingdom, and the United States. “Pathways to Deep Carbonization in Italy” contributes to the national debate on climate-change mitigation, and the importance of deep decarbonization, by examining three alternative pathways that could reduce Italian CO2 emissions by at least 40% in 2030 and 80% in 2050, compared to 1990. It analyzes the challenges the Italian energy system faces, and possible future technological developments that will need to be pursued.

The GTAP-E: Model Description and Improvements

A modified version of the GTAP-E model is developed in order to assess the effects of alternative climate change policies on economic and carbon emissions. We propose regional disaggregation which allows the role of major countries in economic as well as emission responses to be better defined. Sector disaggregation is closely related to international energy balances in order to calibrate the model on more realistic emission levels. An ad hoc emission intensity calibration is also implemented for better representation of sector-based emission levels. A specific analysis on substitution elasticities in the energy nests completes the proposed adjustments to the original GTAP-E model.

Gdyn-E: A model for the economic assessment of climate policies

dAgenzia nazionale per le nuove tecnologie, l’energia e lo sviluppo economico sostenibile (ENEA), Rome, Italy valeria.costantini@uniroma3.it In this paper we investigate the trade-offs between growth and low carbon targets for both developing and developed countries for the period to 2035. The issues examined include two policy options for being on track to meet the 450 ppm target: (a) national/regional targets without international trade in carbon permits and (b) a global market in permits. Policy options are evaluated with an original dynamic CGE (Computable General Equilibrium) model which relies on the static GTAP-E (Global Trade Analysis Project-Energy) structure. The model focuses on bilateral trade flows and links between economies and sectors that capture the realistic economy-wide nature of a globalized world. The results show higher costs of meeting the target than the average of previous models, although there are some previous studies that have costs in the same range. We then go on to investigate options for reducing these costs that are broadly consistent with a green growth strategy of supporting low carbon development. A green carbon fund financed through a levy on carbon taxation can benefit all parties. Potential larger benefits are associated with the investment of the green fund to foster energy efficiency. One of the politically most controversial climate change questions is how much will it cost to meet the targets consistent with a reasonable probability of avoiding major upheavals in the world’s climate in the medium to long term. The issues under debate regard several aspects related to climate change actions, going from the quantification of abatement costs to the distribution of such costs across countries. The large uncertainty characterizing the assessment exercises implies a huge difficulty in reaching a global consensus upon the effective actions to be taken by the bargaining parties in the international negotiations. The main purpose of this paper is to analyse a specific aspect of the difficulty regarding the assessment of alternative policy options aimed at reducing the abatement costs for developing countries in order to facilitate the achievement of a global consensus. The principle of Common But Differentiated Responsibilities (CBDR), introduced in the general framework adopted by the United Nations Convention on Climate Change (UNFCCC) and fully adopted by the Kyoto Protocol (KP), has acknowledged the different capacities and needs between developed and developing countries, proposing a differentiated approach to compute emission reduction efforts. Namely, although addressing climate change is a global challenge, national responsibilities should be differentiated, with developed countries having a heavier burden in both reducing emissions and providing resources for adaptation measures with respect to developing countries. The issue of CBDR is currently considered as a crucial issue in the Post-Kyoto negotiations since CBDR is mainly considered by developing countries as based on historical responsibility to Green House Gas (GHG) emissions whereas developed countries emphasize the role of current and future emissions. This different interpretation brings to substantial divergence in bargaining

Carbon Leakage and Trade Adjustment Policies

A modified version of the CGE GTAP-E model is used to assess economic and carbon emission effects related to alternative policy measures implemented to reduce carbon leakage. We explore a set of scenarios and compare solutions where Kyoto Annex I countries introduce carbon border taxes based on domestic carbon tax in order to solve the carbon leakage problem unilaterally and solutions where carbon border taxes are determined according to specific objectives. Results provide evidence of the scarce effectiveness of trade measures in reducing carbon leakage and enhancing economic competitiveness and the strong negative welfare effects they have not only on non-Annex countries but also on some Annex I countries.