Maryse Labriet

Reinforcing the EU Dialogue with Developing Countries on Climate Change Mitigation

The FP6 TOCSIN project has evaluated climate change mitigation options in China and India and the conditions for strategic cooperation on research, development and demonstration (RDD (II) a strong increase in Annex I support regarding RD (III) a well-designed mix of instruments and targets in an effective climate deal that addresses manifold national interests and concerns.

Modeling Uncertainty in a Large scale integrated Energy-Climate Model

The well-known method of stochastic programming in extensive form is used on the large scale, partial equilibrium, technology rich global 15-region TIMES Integrated Assessment Model (ETSAP-TIAM), to assess climate policies in a very uncertain world. The main uncertainties considered are those of the Climate Sensitivity parameter, and of the rate of economic development. In this research, we argue that the stochastic programming approach is well adapted to the treatment of major uncertainties, in spite of the limitation inherent to this technique due to increased model size when many outcomes are modeled. The main advantage of the approach is to obtain a single hedging strategy while uncertainty prevails, contrary to classical scenario analysis. Furthermore, the hedging strategy has the very desirable property of attenuating the (in)famous ’razor edge‘ effect of Linear Programming, and thus to propose a more robust mix of technologies to attain the desired climate target. Although the examples treated use the classical expected cost criterion, the paper also presents, and argues in favor of, altering this criterion to introduce risk considerations, by means of a linearized semi-variance term, or by using the Savage criterion. Risk considerations are arguably even more important in situations where the random events are of a ’one-shot‘ nature and involve large costs or payoffs, as is the case in the modeling of global climate strategies. The article presents methodological details of the modeling approach, and uses realistic instances of the ETSAP-TIAM model to illustrate the technique and to analyze the resulting hedging strategies. The instances modeled and analyzed assume several alternative global temperature targets ranging from less than 2°C to 3°C. The 2.5°C target is analyzed in some more details.

Global Energy and CO 2 Emission Scenarios: Analysis with a 15-Region World MARKAL Model

A new version of the advanced multi-region World MARKAL model has been developed and calibrated to the A1B scenario of IPCC over a 50-year time horizon. The analysis of the base and CO2constrained cases confirms and refines several conclusions observed by other models. Amongst them: a) the level of non-emitting electricity generation in the base case is a crucial assumption for defining CO2reduction opportunities; b) CO2capture and sequestration compete directly with renewable electricity generation and contribute to a major reduction in the marginal cost of CO2; c) the primary consumption of coal may increase in the long term when associated with the capture of flue gas CO2at power plants; d) in transportation, the substitution of oil by biomass is robust and much preferred to the other alternative technologies; e) the price-induced reduction of elastic demands also contributes to the emissions reduction. The resulting annualized cost of CO2policies remains under 1% of the GDP in 2050 for the stabilization of CO2concentration at 550 ppmv (A1B base case). Hydrogen production and end-uses technologies, CO2capture and sequestration, as well as non-CO2greenhouse gases would deserve more attention. Future work will focus on the modelling and comparison of the cooperative and non-cooperative international frameworks.

How Crucial is Cooperation in Mitigating World Climate? Analysis with World-MARKAL

In order to study the conditions for a World self-enforcing agreement on climate change, we model cooperative and non-cooperative World climate strategies with an integrated version of the 15-region techno-economic MARKAL model in which abatement costs and climate related damages are both included. We first explain why the use of a technology oriented model may add value to the analysis of global GHG strategies. Based on the empirical finding of linear cumulative climate damages, the computation of Nash equilibrium can be reduced to solving a series of 15 independent linear programs, one per region. Moreover, assuming interregional transfers to share the global surplus of cooperation, our work adopts the point of view of dynamic partial equilibrium computation coupled with cooperative game-theoretic principles. The results illustrate how the non-cooperative strategy is closer to the base case than to the cooperative strategy, and the amount of side-payments sufficient to guarantee the stability of the cooperative strategy are calculated with four different rules. The internal (in)stability of farsighted coalitions without transfers (non-cooperation) is also analyzed. The current project appears to be the first one of the sort using a large and detailed technology explicit model such as MARKAL.

Assessment of the Effectiveness of Global Climate Policies Using Coupled Bottom-Up and Top-Down Models

In order to assess climate mitigation agreements, we propose an iterative procedure linking TIAM-WORLD, a global technology-rich optimization model, and GEMINI-E3, a global general equilibrium model. The coupling methodology combines the precise representation of energy and technology choices with a coherent representation of the macro-economic impacts, especially in terms of trade effects of climate policies on energy-intensive products. In climate mitigation scenarios, drastic technology breakthroughs are required as soon as possible, especially in large emitting countries, and in all sectors of the economy. Energy-intensive industries tend to be delocalized in regions where low-carbon production is feasible and cheap, or in regions without emission cap. However, emission leakage remains small, mainly due to global lower oil demand, and energy exporting countries are extremely penalized given lower energy exports. Emission reduction at least in the power sector and in energy-intensive industries of developing countries must be considered to reach the 2°C target.

Energy Decisions in an Uncertain Climate and Technology Outlook: How Stochastic and Robust Methodologies Can Assist Policy-Makers

Uncertain conditions may deeply affect the relevance of deterministic solutions proposed by optimization or equilibrium models as well as leave the decision maker in a quandary at the moment of defining policy. This chapter presents two applications of stochastic programming and robust optimization to climate and energy decisions using respectively TIAM-WORLD at the global level and MIRET in the case of France. At the global level, stochastic analysis demonstrates that the hedging strategy usually presents a smoother technology transition and is not equivalent to an average of deterministic solutions. Combined with a parametric analysis of the probability of the future outlooks, the approach produces a hedging strategy where the energy system prepares early for high mitigation even in the case of a low probability for such an outcome. Moreover, some technologies appear to be particularly appealing since they penetrate more in the hedging than in deterministic strategies; the penetration of gas power without carbon capture and sequestration in China, coal power plants with carbon capture in India, renewable electricity in Central and South America are examples of these “super-hedging” choices. In the case of the French transportation sector, robust optimization illustrates the crucial role of biofuels as a robust mitigation strategy in both moderate and severe emission reduction cases.