Meeting national targets : carbon dioxide and the future development of the Canadian energy system
Date
1993
Authors
Wells, John David
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Abstract
Canada, as part of its Green Plan, has committed to stabilizing emissions of greenhouse gases at 1990 levels by the year 2000. This thesis examines the costs and benefits of meeting a key component of this commitment: carbon dioxide (CO₂) emissions from the energy system.
The methodology is based on "bottom-up," techno-economic modeling of the Canadian energy system, from resource extraction through to the delivery of energy services, over the period 1990- 2020. Twenty-three scenarios, including a "business as usual" base case, are analyzed to investigate the effects of different forms of CO₂ emission limits and different levels of CO₂ emission taxes. Each scenario is an internally consistent set of assumptions on the future development of the energy system. These assumptions include the growth in energy service demands, the cost and performance trajectories of technologies, and socio-political constraints (e.g, on the development of nuclear energy).
Subject to these assumptions, the key conclusions of this work are:
- CO₂ emission stabilization can be achieved by 2000, and can be maintained through to 2020.
- The total cost of achieving the commitment can be as low as $26 billion (this being the sum of all discounted costs over the period 1991- 2020, in 1990 Canadian dollars). This represents about $23/tonne CO₂ abated, which is equivalent to a levy of: $1.2/GJ natural gas, $0.06/litre gasoline, or $55/tonne hard coal.
- The cost of meeting the commitment is minimized when the energy system is allowed maximum flexibility in doing so. Emission stabilization for the energy system as a whole (via a national system of tradable emission permits) costs $41 billion less than the same emission limit applied individually to each sector of the energy system.
- The commitment can also be met via a CO₂ emissions tax of about $60/tonne CO₂ emitted, i.e., a carbon tax. While the total cost now rises to $277 billion, about $253 of this is tax revenue.
- In this analysis the increase in costs due to CO₂ emission reduction is offset by a reduction in the damage costs for other emissions, particularly SO₂.
- The greatest impacts of CO₂ emission reduction are on coal use, and especially on coal-sourced electricity generation: only 1.4% of electricity is coal-sourced in 2020 under the emission stabilization target, compared to more than 17% today.
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Keywords
UN SDG 12: Responsible Consumption and Production