Effects of Structural Change and Climate Policy on Long-Term Shifts in Lifecycle Energy Efficiency and Carbon Footprin

1. Sonia Yeh, Geoff Morrison, Jacob Teter (University of California at Davis) Raul Quiceno (Shell Research Limited) Kenneth Gillingham (Yale School of Forestry & Environmental Studies) Effects of Structural Change and Climate Policy on Long-Term Shifts in Lifecycle Energy Efficiency and Carbon Footprint Gouri Shankar Mishra

2. The study projects lifecycle energy efficiency for crude, natural gas, coal, and nuclear and renewables to 2100 • What is the impact of carbon policy on the evolution of lifecycle efficiency? • What are the differencesin lifecycle efficiencies of energy resources across regions? • Between developed and developing countries? • What are the relative roles of technological advancements and structural changes in evolution of lifecycle efficiency? • Carbon intensity of energy resources in terms of CO2/MJ(useful) instead of CO2/MJ(final) Lifecycle Energy Efficiency = Useful Energy / Primary Energy

3. The lifecycle thermodynamic efficiency considers energy flows from primary to useful energy Figure 1. Energy  system schematic showing the lifecycle stages (pz). The box represents the boundary for estimating lifecycle efficiency in this study.

4. Methodology General Change Assessment Model (GCAM) developed by Pacific Northwest National Laboratory (PNNL) • Partial-equilibrium model • Links representations of global energy, agriculture, land-use, and climate systems • Three end-uses: Industry, Transportation and Buildings (commercial and residential) • 14 regions Scenario Analysis • Total 15 scenarios • Carbon Policy – No carbon policy, Moderate carbon policy (RCP6.0), and Aggressive Carbon Policy (RCP 4.5) • CCS and No-CCS • Technological progress: Reference and Advanced

5. Where are the energy losses? Energy losses at various stages of fuel conversion and the useful energy consumption by energy resource for the BAU scenario

6. Time trends of Efficiency Lifecycle efficiency (%) Primary Energy (EJ) FIG 3: Potential lifecycle energy efficiencies (blue) and total primary energy (orange) across 15 scenarios (Global Level)

7. Time trends of Efficiency Lifecycle efficiency (%) Primary Energy (EJ) Average of No-Policy Scenarios

8. Time trends of Efficiency Lifecycle efficiency (%) Primary Energy (EJ) Average of No-Policy Scenarios Average of Moderate Carbon Policy Scenarios (RCP6.0)

9. There is no clear relationship between lifecycle efficiency and level of carbon price. Lifecycle efficiency (%) Primary Energy (EJ) Average of No-Policy Scenarios Average of Moderate Carbon Policy Scenarios (RCP6.0) Average of High Carbon Policy Scenarios (RCP4.5)

10. There is no clear relationship between lifecycle efficiency and level of carbon price. Complementary roles of efficiency, energy conservation, and substitution of fossil resources with decarbonized energy to achieve climate change mitigation goals. Lifecycle efficiency (%) Primary Energy (EJ) Average of No-Policy Scenarios Average of Moderate Carbon Policy Scenarios (RCP6.0) Average of High Carbon Policy Scenarios (RCP4.5)

11. Structural shifts dampen improvements in efficiency due to technological progress FIG 4: Depiction of the change in lifecycle energy efficiency over time for structural plus technological shifts (solid lines) and for only technological shifts (dashed lines). While technological advancements at each energy conversion process and end-use lead to important reductions in primary energy use, structural shifts in how energy is used dampens the gains in lifecycle efficiency.

12. Developing countries have a higher lifecycle efficiency on average than developed countries Developing countries have a higher lifecycle efficiency on average than developed countries. This is due to both structural and technological differences.

13. Carbon Intensity – CO2 emissions per unit of useful energy 350 CRUDE ALL ENERGY NG COAL 300 2100 2100 2005 2100 2005 2005 2100 2005 250 2005 200 2100 (BAU Scenario) Energy Resource CI (ton CO2/PJ) 150 100 50

14. Carbon Intensity – CO2 emissions per unit of useful energy vs. final energy 350 CRUDE ALL ENERGY NG COAL 300 2100 2100 2005 2100 2005 2005 2100 2005 CI – CO2/PJ(final energy) CI – CO2/PJ(useful energy) 250 2005 200 2100 (BAU Scenario) Energy Resource CI (ton CO2/PJ) 150 100 50 • Changes in CI(useful energy) over time are more dramatic than changes in CI(final energy) • Quantum of differences between the two CIs varies across energy resources

15. Carbon Intensity – CO2 emissions per unit of final energy vs. useful energy 350 CRUDE ALL ENERGY NG COAL 300 2100 2100 2005 2100 2005 2005 2100 2005 CI – CO2/PJ(final energy) CI – CO2/PJ(useful energy) 250 2005 200 2100 (BAU) Energy Resource CI (ton CO2/PJ) 2100 (Aggressive Policy without CCS) 150 100 50 • Carbon price has a higher impact on CI(useful) than CI(final) in case of coal

16. Implications on GHG Emissions Total CI, 2005 Global primary energy use and energy pathway lifecycle carbon intensity in 2005

17. Implications on GHG Emissions

18. Implications on GHG Emissions

19. Implications on GHG Emissions

20. Thank You Effects of Structural Change and Climate Policy on Long-Term Shifts in Lifecycle Energy Efficiency and Carbon Footprint Gouri Shankar Mishra (gsmishra@ucdavis.edu) Sonia Yeh, Gouri Shankar Mishra, Geoff Morrison, Jacob Teter (University of California at Davis) Raul Quiceno (Shell Research Limited) Kenneth Gillingham (Yale School of Forestry & Environmental Studies)