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Energy and Environment Issues in China from Japanese Perspective. Kazuhiro Ueta, Kyoto University ueta@econ.kyoto-u.ac.jp. Positive strategy for both China and Japan. Our concern on climate change policies. Japan : Negative impact China : Not urgent issue. Basic Idea and Viewpoint.
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Energy and Environment Issues in China from Japanese Perspective Kazuhiro Ueta, Kyoto University ueta@econ.kyoto-u.ac.jp
Positive strategy for both China and Japan Our concern onclimate change policies Japan : Negative impact China : Not urgent issue
Basic Idea and Viewpoint • Environment vs. Economy • Global (CO2) vs. Local-Regional (SO2) • China vs. Japan
MAC of CO2 Emissions MAC 1985USD per ton Japan China Mill. Carbon ton Source: Ellerman, A. D., Jacoby, H. D., and A. Decaux (1998), http://web.mit.edu/globalchange/www/MITJPSPGC_Rpt41.pdf
CO2 Emissions in China and Japan Mill. ton 900 800 1971 1980 1990 2000 700 600 500 400 300 200 100 0 Japan China
Comparison: Energy Balance Table in 2001 • Energy share in China Coal 56%, Petroleum 20%, Biomass 19% Natural gas 3% • Energy share in Japan Coal 19% Petroleum 49%, Nuclear Power 16%, Natural gas 12%
Potentiality of Energy Savingin China • Coal power plant’s heat rate China 0.317 and Japan 0.425 • Efficiency of coal power plant China 3.157 (=1/0.317) Japan 2.354 (=1/0.425) • China’s energy efficiency is 25% lower than Japan’s
EBM Simulation Menu • Baseline forecast • Sim1: 25% efficiency improvement in coal power plants • Sim3: Energy switch: coal to natural gas by 2%
EBM Simulation Results • Sim1: 25% efficiency improvement⇒ CO2 reduction by 9.6% • Sim3: Coal to natural gas by 2% point ⇒ CO2 reduction by 1.3% SO2 reduction by 3.5% • Simulation results of EBM ⇒ Technology transfer in CDM =Win-Win game
Distribution of SO2 Emissions (1999) Source: China Environment Yearbook (2000)
Investment for Environment Protection (Million RMB) Source: China Environment Yearbook (2001)
Amount of SO2 Charge (Million RMB)
Waste Gas by Industries (in 2000) Source:China Environment Yearbook (2001)
K-ton Sulfur 0 50 100 150 200 250 300 350 1990 1995 Japan North East China Rest of China South Korea North Korea Others Sulfur Deposition in Japan by Sources in 1990 and 1995 North East China Japan
Domestic & Regional Optimal Solution Cost MACD MDCD Domestic Total MDCH MDCR Domestic Health Regional Aggregation Abatement QH QD QR
Marginal Abatement Cost Curves for SO2, Japan and China Source of data: IIASA, Rains-Asia CD-ROM ver.7.52
Domestic Optima for China in 1990 and 1995 WTP in China (1995) WTP in China (1990)
Domestic and Regional Optima for China in 1990 and 1995 WTP in China WTP in China + Japan
Credit Evaluation Period Period 2005 2005 2005 2008 2008 2008 Comparison 2009 2009 2009 2014 2014 2014 21 30 New Chongming years years 2015 2015 2015 Sub - Critical ( ) 2025 2025 2025 2034 2034 2034 Outline of the CDM Project #3 Project #3 CDM Case CDM Case Base line Case Base line Case Credit Evaluation Period Period Power Power Power Power 10 10 years years Comparison 21 30 New Chongming New New Chongming Chongming years years Semi - Critical IGCC) IGCC) ( ) ( (
250,000 SO2(ton) NOx(ton) 200,000 Dust(ton) 150,000 100,000 50,000 0 Project #1 Project #2 Project #3 Project #4 Project #5 Reduction of Air Pollutant of Each Project
800 SO2 700 NOx 600 500 400 300 200 100 0 Project #1 Project #2 Project #3 Project #4 Project #5 Benefit from Reduction of Air Pollutant (RMB)
Million RMB 35 Japan SO2 Japan NOx 30 Korea SO2 Korea NOx 25 20 15 10 5 0 Project #1 Project #2 Project #3 Project #4 Project #5 Benefit from Reduction of Acid Rain
Revenue and Cost for the Investor Million RMB 3,000 Cost of Project Fuel Saving 2,000 Revenue from CER 1,000 0 -1,000 -2,000 -3,000 -4,000 -5,000 -6,000 Project #1 Project #2 Project #3 Project #4 Project #5
Million LMB 1200 1000 800 10 Year Project 600 21 Year Project 400 200 0 -200 -400 -600 Developing Countries Chinese Local Power Generator Government Net Benefit of Stakeholders Investor Korea Japan Local Residents
CER=$0 CER=$5 CER=$10 CER=$20 CER=$50 USD/tonCO2e ) ( Revenue: Million RMB 5,000 4,000 3,000 2,000 1,000 0 -1,000 Discount Rate 0 5 10 15 20 25 (%) Discount Rate, CER Price and Revenue in Project #3