• Energy Research

Since the signing of the 2030 Agenda for Sustainable Development by the United Nations Member States and the Yellow vest movement, it is clear that emission‐reducing policies should consider their distributional impacts to ensure a sustainable and equitable growth compatible with the Paris Agreement goals. To this end, the design of environmental and energy policies should be accompanied by an interdisciplinary analysis that includes potential effects on distinct groups of society (defined by income, age, or location), regions, and sectors. This work synthesizes common modeling frameworks used to assess technical, socio‐economic, and environmental aspects in policy analysis and the recent progress to portray distributional impacts in each of them. Furthermore, the main indicators produced by each method are highlighted and a critical review pointing to gaps and limitations that could be addressed by future research is presented.

Since the signing of the 2030 Agenda for Sustainable Development by the United Nations Member States and the Yellow vest movement, it is clear that emission‐reducing policies should consider their distributional impacts to ensure a sustainable and equitable growth compatible with the Paris Agreement goals. To this end, the design of environmental and energy policies should be accompanied by an interdisciplinary analysis that includes potential effects on distinct groups of society (defined by income, age, or location), regions, and sectors. This work synthesizes common modeling frameworks used to assess technical, socio‐economic, and environmental aspects in policy analysis and the recent progress to portray distributional impacts in each of them. Furthermore, the main indicators produced by each method are highlighted and a critical review pointing to gaps and limitations that could be addressed by future research is presented.

<abstract> <p>The Paris Agreement goals require a rapid and deep reduction in global greenhouse gas emissions. Recent studies have shown the large potential of circular economy to reduce global emissions by improving resource and material efficiency practices. However, most large-scale energy system and Integrated Assessment Models used for mitigation analysis typically ignore or do not adequately represent circular economy measures. This study aims to fill in this research gap by enhancing a leading global energy system model with a representation of energy efficiency and circular economy considerations. The scenario-based analysis offers an improved understanding of the potentials, costs and impacts of circular economy in the decarbonisation context. The study shows that enhanced energy efficiency and increased material circularity can reduce energy consumption in all sectors, but most importantly in the industrial sector. They can also reduce the required carbon price to achieve Paris goals and the dependence on expensive, immature, and risky technologies, like Carbon Capture and Storage. Circular economy measures should be properly integrated with broad climate policies to provide a holistic and self-consistent framework to deeply reduce carbon emissions.</p> </abstract>

<abstract> <p>The Paris Agreement goals require a rapid and deep reduction in global greenhouse gas emissions. Recent studies have shown the large potential of circular economy to reduce global emissions by improving resource and material efficiency practices. However, most large-scale energy system and Integrated Assessment Models used for mitigation analysis typically ignore or do not adequately represent circular economy measures. This study aims to fill in this research gap by enhancing a leading global energy system model with a representation of energy efficiency and circular economy considerations. The scenario-based analysis offers an improved understanding of the potentials, costs and impacts of circular economy in the decarbonisation context. The study shows that enhanced energy efficiency and increased material circularity can reduce energy consumption in all sectors, but most importantly in the industrial sector. They can also reduce the required carbon price to achieve Paris goals and the dependence on expensive, immature, and risky technologies, like Carbon Capture and Storage. Circular economy measures should be properly integrated with broad climate policies to provide a holistic and self-consistent framework to deeply reduce carbon emissions.</p> </abstract>

This paper analyses structural change in the economy as a key but largely unexplored aspect of global socioeconomic and climate change mitigation scenarios. Structural change can actually drive energy and land use as much as economic growth and influence mitigation opportunities and barriers. Conversely, stringent climate policy is bound to induce specific structural and socioeconomic transformations that are still insufficiently understood. We introduce Multi-Sectoral Integrated Assessment Models as main tools to capture the key drivers of structural change and we conduct a multi-model study to assess main structural effectschanges of the sectoral composition and intensity of trade of global and regional economiesin a baseline and 2°C policy scenario by 2050. First, the range of baseline projections across models, for which we identify the main drivers, illustrates the uncertainty on future economic pathways-in emerging economies especially-and inform on plausible alternative futures with implications for energy use and emissions. Second, in all models, climate policy in the 2°C scenario imposes only a second-order impact on the economic structure at the macrosectoral level-agriculture, manufacturing and services-compared to changes modelled in the baseline. However, this hides more radical changes for individual industries-within the energy sector especially. The study, which adopts a top-down framing of global structural change, represents a starting point to kick-start a conversation and propose a new research agenda seeking to improve understanding of the structural change effects in socioeconomic and mitigation scenarios, and better inform policy assessments.

This paper analyses structural change in the economy as a key but largely unexplored aspect of global socioeconomic and climate change mitigation scenarios. Structural change can actually drive energy and land use as much as economic growth and influence mitigation opportunities and barriers. Conversely, stringent climate policy is bound to induce specific structural and socioeconomic transformations that are still insufficiently understood. We introduce Multi-Sectoral Integrated Assessment Models as main tools to capture the key drivers of structural change and we conduct a multi-model study to assess main structural effectschanges of the sectoral composition and intensity of trade of global and regional economiesin a baseline and 2°C policy scenario by 2050. First, the range of baseline projections across models, for which we identify the main drivers, illustrates the uncertainty on future economic pathways-in emerging economies especially-and inform on plausible alternative futures with implications for energy use and emissions. Second, in all models, climate policy in the 2°C scenario imposes only a second-order impact on the economic structure at the macrosectoral level-agriculture, manufacturing and services-compared to changes modelled in the baseline. However, this hides more radical changes for individual industries-within the energy sector especially. The study, which adopts a top-down framing of global structural change, represents a starting point to kick-start a conversation and propose a new research agenda seeking to improve understanding of the structural change effects in socioeconomic and mitigation scenarios, and better inform policy assessments.

This paper presents the challenges of increasing the energy efficiency investments in European Union (EU) residential buildings in the context of achieving climate neutrality by 2050. The paper presents the results of the PRIMES buildings model in key energy policy applications to support cost-effective and fair policy making in buildings across Europe. The model covers, in detail, the building sector for all the EU Member States (MS), segmenting the buildings into many categories. The approach proposed includes non-market barriers in conventional microeconomic modelling, which combined with idiosyncratic preferences can capture poor energy efficiency choices and still represent rational behaviours. The model includes a detailed portrayal of policies specific to the sector, comprising economic and regulatory policies as well as institutional measures. The results of the model show that the removal of non-market barriers is of great importance in reducing energy consumption and increasing both the pace and the depth of renovation investment. However, the institutional measures alone are not enough to induce energy efficiency improvement to the scale required to achieve the climate neutrality objectives. Economic (i.e., subsidies) or regulatory measures (i.e., energy performance standards) are also required to decrease emissions and energy consumption in buildings and the paper compares different configurations thereof. The optimum policy mix obviously derives from a compromise among various aims including the cost-effectiveness of the policy budget and the distributional impacts across building and consumer types.