• Energy Research

With the world talking about climate change, the United States (U.S.), China and India have announced their carbon emission reduction targets. For these three countries to achieve their targets, significant questions arise, such as what will be the annual emission reduction efforts to achieve those targets, how much it would cost and what would be the economic effects. This paper puts the carbon intensity reduction targets of China and India together with the absolute emission reduction target of the U.S. into the same non-linear model to quantitatively study the optimal emission control strategies and associated total cost for achieving those targets by the year 2020, and estimate and compare the minimized total costs of the three countries to reach their targets. Our results show that the total cost for the U.S. to achieve its emission reduction target is greater than those of China and India in terms of absolute amount. However, in terms of proportion of total cost to GDP, China and India’s ratios are significantly greater than that of the U.S., indicating that for the developing countries such as China and India, the achievement of emission reduction targets needs relatively greater effort.

The emissions trading scheme (ETS) has been long advocated to address climate change not only because it is cost effective but also because it can provide economic incentives for the adoption of new technologies. The emissions abatement of the energy-intensive sector covered by ETS is of great significance for the whole nation to attain sustainable and low-carbon development, especially for developing countries. This paper investigates the effect of market power in the emissions trading market on the diffusion of a new emissions abatement technology when firms in the energy-intensive sector interact in an imperfectly competitive output market. In the model, each firm needs to determine the optimal time to adopt the new emissions abatement technology, taking into account its benefits and costs, as well as its rival’s strategic behavior. With this framework, the results suggest that firms will delay adoption of the new emissions abatement technology in the presence of market power. Moreover, when the output demand is larger and more elastic, emissions abatement technology diffusion will occur earlier. It implies that the technology diffusion in the weak elastic sector, such as the Chinese iron and steel sector, may have more barriers than that in the strong elastic sector, such as the Chinese nonferrous metals sector.

PurposeThe ongoing urbanization and decarbonization require deployment of energy storage in the urban energy system to integrate large-scale variable renewable energy (VRE) into the power grids. The cost reductions of batteries enable private entities to invest energy storage for energy management whose operating strategy may differ from traditional storage facilities. This study aims to investigate the impacts of energy storage on the power system with different operation strategies. Two strategies are modeled through a simulation-based regional economic power dispatch model. The profit-oriented strategy denotes the storage system operated by private entities for price arbitrage, and the nonprofit-oriented strategy denotes the storage system dispatched by an independent system operator (ISO) for the whole power system optimization. A case study of Jiangsu, China is conducted. The results show that the profit-oriented strategy only has a very limited impact on the cost reductions of power system and may even increase the cost for consumers. While nonprofit-oriented energy storage performs a positive effect on the system cost reduction. CO2 emission reduction can only be achieved under a high VRE scenario for energy storage. Integrating energy storage into the power system may increase CO2 emissions in the near term. In addition, the peak-valley spread is crucial to trigger operations of profit-oriented energy storage, and the profitability of energy storage operator is observed to be decreasing with the total storage capacity. This study provides new insights for the energy management in the smart city, and the modeling framework can be applied to regions with different resource endowments.Design/methodology/approachThe authors characterize two battery storage operating strategies of profit- and nonprofit-oriented by adopting a simulation-based economic dispatch model. A simulation from 36 years of hourly weather data of wind and solar output from case study of Jiangsu, China is conducted.FindingsThe results show that the profit-oriented strategy only has a very limited impact on the cost reductions of power system and may even increase the cost for consumers. While nonprofit-oriented energy storage performs a positive effect on the system cost reduction. CO2 emission reduction can only be achieved under high VRE scenario for energy storage. Integrating energy storage into the power system may increase CO2 emissions in the near term. In addition, the peak-valley spread is crucial to trigger operations of profit-oriented energy storage, and the profitability of energy storage operator is observed to be decreasing with the total storage capacity.Originality/valueThis study provides new insights for the energy management in the smart city, and the modeling framework can be applied to regions with different resource endowments.

The petroleum refining sector is energy intensive and has been identified as one of the target industries for CO2 emissions control by China’s emissions trading scheme. A detailed accounting of the cost of emissions reduction is of great significance for the petroleum refining sector to comply with emission reduction target. In this paper, six categories of CO2 abatement technologies are identified in China’s petroleum refining sector, their CO2 emissions reduction cost as well as the potential are estimated using a bottom-up method. Most of the technologies in the sector are cost-effective, which has contributed approximately 76.4% of sectoral total emissions reduction. New equipment technology provides the greatest contribution to emissions reduction, while new materials technology offers the lowest contribution. The implementation of the emissions trading scheme will increase the potential for emissions reduction only if the CO2 price can be higher than 200 CNY/t. Given the amount of emissions reduction that technologies can provide will not exceed 40% of the total emissions; firms must find more diversified ways when facing more stringent emissions control.

Robust mitigation options will play significant role in achieving the target of limiting global change to below 1.5 °C above pre-industrial levels by 2100. To support cooperation for mitigation development, we establish a real options-based model to evaluate the rational decisions of exercising the abandon option for carbon capture and storage-enhanced oil recovery (CCS-EOR) projects under oil market and geological uncertainties. Three possible cooperative mechanisms (fixed carbon dioxide (CO2) price, oil-indexed CO2 price, and joint venture contracts) among CO2-EOR stakeholders are evaluated. The results show that the conflicts in profit maximization targets for different stakeholders in cooperative mitigation are to a great extent unable to be avoided. A joint venture business model is preferred in cooperative mitigation as it can effectively weaken such conflicts. And it is more reasonable to provide incentives to the downstream of the CO2-EOR chain than compensating the adoption cost of carbon capture technologies in the upstream. From a global perspective, the inefficient cooperation can be a main barrier that hinders the development of deep-cutting options. Global mitigation strategies should not only focus on promoting technology progress but also the design of innovative business models to balance the benefits among stakeholders. A joint venture business model is recommended in both the developed and developing countries for seizing the early mitigation opportunities.

Climate policies making are strongly impacted by the approach of damage evaluation. China is leading carbon dioxide (CO2) emissions in the world, and has agreed with Paris agreement to reduce CO2 emissions. China is also expected to be negatively impacted by climate change. One of main concerns is how to assess and monetize the climate damage from country-specific level. This paper builds a model comprising two approaches of damage evaluation and assesses China’s mitigation and adaptation responses by 2100 for both of no policy and Paris agreement policy. It has the following findings: First, the emissions pathway and nonfossil fuel consumption share of total energy consumption differs slightly between the two approaches of damage evaluation. Second, with the Burkes approach, the climate damage avoided by adaptation is increasingly higher than that by mitigation when investment in adaptation starts to be massively injected with faster increasing trend by 2045. Third, climate expenses should be invested more to address higher level of the climate damage evaluated by the Burkes approach than by the Mannes approach. Fourth, the main findings in this paper are robust in terms of uncertainties in the parameters of damage function.

ABSTRACTThus far, efforts of the Green Climate Fund (GCF) to mobilize finance have failed to meet the needs of developing countries for addressing climate change. How the GCF’s limited funds could ...

Abstract It is widely accepted that the firms included in an emissions trading scheme (ETS) come mostly from oligopolistic industries. The “exclusionary manipulation” of these heterogeneous emitters can distort both output and permit markets and lead to differences in abatement technology adoption. We studied the impacts of asymmetric firms' market power on the diffusion of abatement technologies. A model for technology adoption among heterogeneous firms has been established, which takes into account diversity in production capacity and the integration of firms' strategic behaviour in both the carbon permit and the output markets. Our model reveals that, considering the direct and strategic effects in adoption benefits, firms' production capacity can directly determine their sequence order of adoption, and their market power can accelerate the diffusion of a new abatement technology. A case study of an energy-intensive sector in China is illustrated to support the conclusions derived from the model and help policymakers better understand the diffusion of abatement technologies under imperfect market structure.

After the successful conclusion of the Paris Climate Conference (Conference of the Parties (COP) 21), countries are now attempting to identify implementation measures. An important consensus has be...