Co-benefit Approach of Mitigating Technologies toward developing Low Carbon Society in Asia

1. Co-benefit Approach of Mitigating Technologies toward developing Low Carbon Society in Asia Yohji Uchiyama and Keiichi Okajima Faculty of Systems and Information Engineering University of Tsukuba Power Lighting 2010, Almaty, Kazakhstan, 2-4 Nov. 2010

2. Background 【International trend toward the development of low carbon society】 EU：advocate 60-80 % GHG reduction under the level of 1990 up to 2050 Japan：governmental vision to reduce GHG by 25 % under the level of 1990 up to 2020, supposing participation of major powers in GHG reduction targets 【Difficulty of international agreement】 No agreement of reduction targets because of confliction among countries involved in COP,UNFCCC 【Japanese situation】 ●grappling with effective measures toward new vision ●serious consideration of Asian countries achieving remarkable economic growth ●contributing to develop low carbon societies of Asia by transfer of Japanese environmental technologies 【Situation of Newly industrializing economy and developing countries】 ●escaping from poverty ●solving local pollutions of air, water and soil ●shortage of investment funds 【Japanese role】 ●To contribute sustainable development of Asian countries ●Transfer of advanced environmental technologies to NIE and DCs by CDM projects 【Necessity of co-benefits study】 ●Cooperative Win-win relationship between developed and developing countries? ●Could mitigating technologies be economically transferred？ ●GHG reduction potential of mitigating technologies if co-benefit effect is included？

3. Clean Development Mechanism (CDM) one of the “flexibility” mechanisms defined in Article 12 of the Kyoto Protocol (IPCC, 2007,http://unfccc.int/resource/docs/convkp/kpeng.pdf#page=12) 【objectives】 • to assist parties not included in Annex I in achieving sustainable development and in contributing to the ultimate objective of the United Nations Framework Convention on Climate Change (UNFCCC) • to assist parties included in Annex I in achieving compliance with their quantified emission limitation and reduction commitments 【Outline of the project process】 ●An industrialized country ("Annex I" parties )that wishes to get credits from a CDM project must obtain the consent of the developing country(Non-Annex I parties) hosting the project that the project will contribute to sustainable development. ●The CDM is one of the Protocol's "project-based" mechanisms based on the idea of emission reduction "production“. ●These reductions are "produced" and then subtracted against a hypothetical "baseline" of emissions. ●The emissions baseline are the emissions that are predicted to occur in the absence of a particular CDM project. ●CDM projects are "credited" against this baseline, in the sense that host countries gain credit for producing these emission cuts. NOTE： "Annex I" parties are those countries that are listed in Annex I of the treaty, and are the industrialized countries. Non-Annex I parties are developing countries.

4. Procedures of the CDM DOE DOE

5. Pre-research “Developing Integrated Evaluation Method for CO2 Mitigating Technologies in Asia” Environment Research and Technology Development Fund (B-074) of the Ministry of the Environment (FY2007～2009) 【Research organization】 ●National Institute of Advanced industrial Science and Technologies ● The University of Tsukuba 【Objectives and method】 ● Potentials of CDM credits in Asian countries ● Developing Asian 3E (energy, economic and environment) Model 　★Optimal approaches (Japanese MARKAL model, Asian GOAL model) 　★Life cycle analysis (Energy-chain LCA model) 　★EIA and externality (EIA model, External cost analysis model) 【Case study】Cost-benefit analysis of CDM measures including external costs for several electricity grid networks in China and India 【MARKAL model】 ●Estimating optimal energy supply and demand up to 2030 ●Japanese requirement for CDM credits 【GOAL model】 ●Optimal analysis of energy supply & demand in Asia ●Potential of CDM credits supplied from Asian countries 【Energy-chain LCA model】 ●Life cycle inventory of CO2 mitigating technologies ●CDM credits of mitigating technologies 【EIA model Externality model】 ●Environmental impact assessment ●Economic value added of externality

6. “Co-benefit Approach of Mitigating Technologies toward developing Low Carbon Society in Asia” supported by the Environment Research and Technology Development Fund (E-1001) of the Ministry of the Environment (FY2010～2012) 【Research organization】 ●The University of Tsukuba : leading organization ●National Institute of Advanced industrial Science and Technologies(AIST)

7. Outline of the Project 【Pre-research】 “Developing Integrated Evaluation Method for CO2 Mitigating Technologies in Asia” (FY2007～2009) 【Objectives】 Estimating economical co-benefits to reduce both CO2 emission and air pollutions, and clarifying technological potential of mitigating technologies to achieve low carbon societies in Asia 【Methodologies】 Integrated Asian 3E (energy, environment and economic) Model which combines global optimal energy analysis model (Asian GOAL model) with life cycle analysis, environmental impact assessment and economic value added approach for various energy chain systems 【Results】 ●　Environmental potentials to reduce air pollutions as well as CO2 emissions in Asian countries up to 2030 ●　Economical effect of co-benefit obtained by mitigating technologies 【Policy Implication】 ●　Supporting CDM projects in Asian countries ●　Providing for research materials to support the global worming policy of IPCC since 2013

8. Promotion system of the project University of Tsukuba AIST AIST AIST

9. Sub-themes of the Project 【Sub-theme 1】 LCA of mitigating energy systems for Asian countries by using energy-chain LCA model and GIS database 【Sub-theme 2 Social survey on perception for environmental burdens of mitigating technologies 【Sub-theme 3 Analysis of external cost including co-benefit effect for mitigating technologies 【Sub-theme 4 Analysis of mitigating technology development in Asian countries including co-benefit effect

10. Structure of the Project (Period: FY2010-2012)

11. LCA for production and O&M of each process Overall Efficiency （unit factor） Raw materials extr. Conversion Transportation Utilization Energy-chain Accumulative CO2 emissions （unit factor） Conversion Transportation Utilization Total costs （unit factor） 【Sub-theme1】LCA of mitigating energy systems for Asian countries by using energy-chain LCA model and GIS database Output for sub-theme 2 and 4 Evaluation of efficiency, environmental burdens and costs of technologies Outputs of CO2 emissions for processes (example) （Investigation, Data collection) Raw materials extr. Raw materials extr. Conversion Transportation Utilization Local environmental burdens from GIS analysis(CO2,SOx,NOx, etc.) Evaluation of advanced fossil fuel power and renewable technologies with GIS database ●　China （advanced thermal power+CCS, Biomass, wind） ●India （advanced thermal power+CCS, Biomass, PV） ●Kazakhstan （wind, hydropower）

12. 【Sub-theme2】Social survey on perception for environmental burdens of mitigating technologies Structural survey on WTP for improving environmental burdens in local areas of Asian countries Sub-theme1 Preparatory study: ratio of WTP/income Air pollution emissions, etc. WTP inquiries for residents Proposal scenarios Health effect of burdens, cost requirement for reduction Investigating area income High dependence on income in Shanghai CDMhost countries China India Kazakhstan(?) Social survey in investigation areas Developing WTP functions of environmental perception by residents Mitigating technologies↓ Analysis of environmental perception ●Advanced fossil fuels power technologies ●Renewable energy technologies (biomass, wind, hydro, etc) ↓ Reducing air pollution emissions Social legislation knowledge Cost burdens Perception for burdens Sub-theme3 Data input for cost –benefits analysis including co-benefits External conditions (income, age, living condition, etc.) Emission level for acceptance Mitigating options

13. 【 Sub-theme3】Analysis of external cost including co-benefit effect for mitigating technologies Clarifying effect of environmental improvement for mitigating technologies in CDM host countries by LIME and cost-benefit analysis Cost-benefit analysis Sub-theme1 ●Technological & environmental factors of mitigating technologies ●Inventory data of CO2, SOx, NOx, etc. cost , benefit benefit cost Global warming Increase of atmospheric temperature and sea level health 0 year 30 global Introduction of technology acidification Social assets Economic evaluation on environmental improvement regional Increase of acid deposition Net benefit of environmental improvement including co-benefits biodiversity local Air pollutions Increase of pollution concentration net benefit Agri. production Including co-benefits not including co-benefits Life -cycle Impact assessment Method based on Endpoint modeling (LIME) 0 year 30 Introduction of technology Bench-mark data of WTP and benefit transfer Offset benefits Sub-theme2

14. 【Sub-theme4】Analysis of mitigating technology development in Asian countries including co-benefit effect Evaluating long-term energy supply of mitigating technologies with co-benefit effect based on outputs of sub-theme 1-3 Sub-theme1 Installed capacities only considering CDM effect Economics • Technological performance and cost data of mitigating technologies • Advanced fossil fuel fired power generation + CCS • Renewable energy technologies • Nuclear power technologies PV Energy supply and demand potential(GW) wind Emission restrictions of CO2, SOx, NOx Credit price($/tCO2) Optimal mix of power generation technologies Economic indicator of technologies = (total cost of energy system) - (CDM credit of carbon) - (co-benefits) Installed capacities considering both CDM and co-benefits Sub-theme3 Cost minimum Installed capacity of mitigating technologies Co-benefit data of mitigating technologies Including co-benefits not including co-benefits GOAL( global optimum analysis) model （estimating up to 2030） 2013 2030

15. Collaborating structure of the project Information exchange on environmental policy ●Site survey ●Data collection ●Site survey ●Data collection ●Information exchange on energy policy ●Data support on energy supply and demand

16. Input and output relation among sub-themes Investigation of energy and environmental policies in Asian countries, Construction of database with literatures and site visit investigation Sub-theme 1 Sub-theme 2 Technological/economical data and CO2/air pollution reduction of mitigating options in local area Economical data of WTP based on social survey in local area Sub-theme 3 Co-benefit data on improvement of air pollution and CO2 emission Sub-theme 4 Long term energy supply prospect , installed capacities of mitigating technologies, reduction of environmental burdens and economical effect of co-benefit Support for environmental policy on countermeasures required for international and domesticframework of climate change after 2013

17. Schedule of the project FY2010 Data collection and improvement of methodologies FY2011 Strengthening research among sub-themes FY2012 Integrated analysis and final report Drawing up final report Improving analytical models Computer analysis 【Sub-theme1】 Data survey and constructing database Case studies in different areas Developing economic evaluation model of WTP 【Sub-theme2】 Investigating inquiry approach of perception Investigating WTP functions Survey supplement Preparatory survey Site survey in different areas Improving analytical models 【Sub-theme3】 Data survey and constructing database Case studies on different technologies Improving analytical models 【Sub-theme4】 Data survey and constructing database Case studies on different scenarios

18. Acknowledgment This research is supported by the Environment Research and Technology Development Fund (E-1001) of the Ministry of the Environment, Japan.