medec: low-carbon development for mexico · 2020. 6. 29. · mexico ghg emissions – 14th largest...

MEDEC:MEDEC:MEDEC:Low-carbon

MEDEC:Low-carbon

development for Mexico

development for Mexico

Todd M. JohnsonTodd M. Johnson

MEDEC Mé i E t di b l Di i ió d E i i d C b

World Bank – LCR Sustainable Development Department – August 24, 2009MEDEC – México: Estudio sobre la Disminución de Emisiones de Carbono

Global context

Run-up to Copenhagen

– How much will climate change mitigation cost? – How do interventions compare across sectors? – What can be done today to mitigate CO2 emissions that has financial,What can be done today to mitigate CO2 emissions that has financial,

economic, employment, and other benefits?

Mexico and other major non-Annex 1 countries

– One of five low-carbon country studies being undertaken by the WB– Middle income developing country, proactive on climate change, mitigation

potential, several studies (PECC, Instituto Mario Molina, Galindo, Quadri, M Ki CCAP )McKinsey, CCAP, …)

MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono 2

Mexico GHG emissions

– 14th largest emitting countryld id (1 5% f th t t lworldwide (1.5% of the total

global emissions), largest energy emitter in LAC

– Nearly 2/3 of the CO2 emissionsfrom energy consumption (transport, energy generation, industry, g , y,gas flaring)

– Poznan: Mexico announced target ofannounced target of reducing 2002 GHG emission levels 50% by 2050


Study methodologyModeling the low-carbon scenario

Construction of an economic and emissions model for Mexico to the year 2030– Construction of an economic and emissions model for Mexico to the year 2030– BAU consistent with national income and energy estimates and international

energy forecasts and markets– Bottom-up analysis of GHG reduction potential to 2030 from major sectors– 3 criteria for selection of reduction options– limited number of interventions

Cost methodology

– Economic cost-benefit analysis of interventions across sectors using a common methodology

– Not CDM analysis, but many interventions would qualify (carbon price=0)– Focus is on existing technologies only – thus underestimates potential– Calculate externalities where possible– Excludes “transactions” costs


Ele

ctric

ity

rgy

end-

use

MEDECMEDECsectorssectors

Ene

nspo

rt

sectorssectors

and

fore

stryTr

ans

Agr

icul

ture

a

Oil

and

gas

MEDECMéxico: Estudio sobre la Disminución de Emisiones de Carbono

ELECTRICITY


y

Baseline generationE

lect

ricity

– 2009 – 2016: Based on Mexico’s official outlook– 2017 – 2030: Based on national and international estimates for least cost

generation technologies– BAU emissions increase from 142 Mt CO2eq in 2008 to 322 in 2030 (+230%)


y

MEDEC scenario generationE

lect

ricity

– Coal and gas generating plants are replaced by low-carbon technologies– Capacities based on national potentials


yMEDEC electricity

interventionsE

lect

ricity interventions

nnua

l

ar)

bene

fit

n

Max

imum

an

emis

sion

ed

ucti

on

MtC

O2e

/yea

Net

cos

t or

bof

mit

igat

ion

US$

/tCO

2e)

M e re (M N o (U

Utility efficiency Utility efficiency 6.2 19.3 (benefit)

Electricity generation

Biogas 5.4 0.6 (cost)Windpower 23.0 2.6 (cost)

Electricity generationSmall hydropower 8.8 9.4 (cost)Geothermal power 48.0 11.7 (cost)

Electricity

Oil and gas Cogeneration in PEMEX 26.7 28.6 (benefit)Industry Cogeneration in industry 6.5 15.0 (benefit)Electricity

generation in other sectors

g y ( )

Ag and forestry

Biomass electricity 35.1 2.4 (benefit)20% fuelwood co-firing retrofitting 2.4 7.3 (cost)Bagasse (existing sugar mills) 6.0 4.9 (cost)Bagasse (new ethanol factories) 16 8 11 3 (cost)


Bagasse (new ethanol factories) 16.8 11.3 (cost)

9

Electricity emissions BAU and MEDECMEDEC

300

350

250

300

e/ye

ar]

OtherGeothermalSugarcane ethanolSmall hydroB ti

150

200

ons

[MtC

O2e Bagasse cogeneration

WindpowerBiogasBiomass electricityResidential refrigerationUtility efficiency

100Em

issi

o Utility efficiencyIndustrial motorsNon-residential lightingResidential lightingCogeneration in PEMEXMEDEC emissions

0

50

2008 2012 2016 2020 2024 2028

MEDEC emissions


2008 2012 2016 2020 2024 2028

10

OIL AND GAS


sMEDEC oil and gas

interventionsO

il an

d ga

s interventions

Maximum annual emission reduction

(MtCO / )

Net cost or benefit of mitigation (US$/tCO )(MtCO2e/year) (US$/tCO2e)

Cogeneration in PEMEX 26.7 28.6 (benefit)

Gas leakage reduction 0.8 4.4 (benefit)

Refinery efficiency 2.5 16.6 (cost)


ENERGYENERGY END-USE


e

MEDEC energy end-useer

gy e

nd-u

se

um a

nnua

l on

on

e/

year

)

st o

r of

on

C

O2e

)

Ene

Max

imu

emis

sio

redu

ctio

(MtC

O2e

Net

cos

bene

fit

miti

gati

(US$

/tC

Residential lighting 5.7 22.6 (benefit)

Electricity end-use efficiency

g g ( )Residential refrigeration 3.3 6.7 (benefit)Residential air conditioning 2.6 3.7 (benefit)Nonresidential lighting 4.7 19.8 (benefit)yNonresidential air conditioning 1.7 9.6 (benefit)Street lighting 0.9 24.2 (benefit)Industrial motors 6.0 19.5 (benefit)

Cogeneration Cogeneration in industry 6.5 15.0 (benefit)Bagasse cogeneration 6.0 4.9 (cost)

Renewable heat supply Solar water heating 18.9 13.8 (benefit)I d k t 19 4 2 0 (b fit)


Improved cookstoves 19.4 2.0 (benefit)

14

TRANSPORT


t

Baseline fleet growthTr

ansp

ort

• The transport sector is the main consumer of energy, and responsible for the largest growth and absolute quantity of GHG emissions in MexicoMexico

• Currently the sector accounts for 18% total emissionsHistorical trend in the growth of the vehicle fleet


t

Transport baseline emissionsTr

ansp

ort

• Trends in Mexico’s transport sector are assumed to be consistent with i t ti l t dinternational trends

• The national vehicle fleet would grow from 24 million vehicles in 2008 to 70 million in 2030, with emissions increasing from 167 to 347 Mt CO2eq

• 72% of emissions would be generated by trucks and private automobilesg y p

350400450

tCO

2e] Maritime

TrainsAirplanes

150200250300

mis

sion

s [M

t AirplanesHeavy duty vehiclesLight duty vehiclesTaxis

050

100150

1980 1990 2000 2010 2020 2030

Tota

l em Buses

SUVsPassenger carsMotorcycles


1980 1990 2000 2010 2020 2030 Motorcycles

17

tmj1

tmj1 There is a mistake in the BAU emissions graph for transport, both in this chart and in the document. BAU emissions are 347 compared to over 400 in graph.wb63005; 8/23/2009

tMEDEC transport

interventionsTr

ansp

ort interventions

ual

uctio

n

enef

it

xim

um a

nnis

sion

redu

tCO

2e/y

ear)

t cos

t or b

em

itiga

tion

S$/tC

O2e

)

Max

em (Mt

Net

of m

(US

Modal shift and b d l t

Bus system optimization 31.5 96.6 (benefit)Urban densification 14.3 66.4 (benefit)

urban development Bus rapid transit 4.2 50.5 (benefit)Non-motorized transport 5.8 50.2 (benefit)

TechnologiesBorder vehicle inspection 11.2 69.0 (benefit)I ti d i t i 21 iti 10 6 14 5 (b fit)Technologies Inspection and maintenance in 21 cities 10.6 14.5 (benefit)Fuel economy standards 20.1 12.3 (benefit)

Freight Freight logistics 13.8 46.3 (benefit)Railway freight 19.2 88.7 (benefit)


Railway freight 19.2 88.7 (benefit)

18

Transport emissions wedge graph

350Sugarcane ethanol

250

300

year

]

gPalm oil biodieselSorghum ethanolFuel economy standardsI&M i 21 iti

150

200

ns [M

tCO

2e/y I&M in 21 cities

Zero tillage maizeFreight logisticsNon-motorized transport

100

150

Em

issi

on Bus rapid transitUrban densificationBorder vehicle inspectionRailway freight

0

50

2008 2012 2016 2020 2024 2028

Railway freightBus system optimizationMEDEC emissions


2008 2012 2016 2020 2024 2028

19

AGRICULTURE AND FORESTRYAND FORESTRY


y

Baseline emissionsnd

bio

ener

gy

160

Land

-use

an

120

140

r]

80

100

s [M

tCO

2e/y

ear

Forestry

Agriculture and Livestock

40

60

Emis

sion

s g

Rural Uses

0

20

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030


yAgriculture and Forestry

interventionsnd

bio

ener

gy interventions

annu

al

redu

c-2e

/yr]

r e]

Land

-use

an

Max

imum

am

itiga

tion

rtio

n [M

tCO

2

Net

cos

t or

bene

fit o

f m

itiga

tion

[US$

/tCO

2e

stry

RE

DD

Productive use of biomass

For energy purposes

Biomass electricity 35.1 2 (benefit)Fuelwood co-firing 2.4 7 (cost)Charcoal production 22.6 20 (benefit)

For other purposes Forest management 7.8 13 (benefit)

Fore

s p p g ( )

No productive use of biomassWildlife management 27.0 18 (cost)Payment for environmental services 4.4 18 (cost)

Reforestation / afforestationReforestation and restoration 22.4 9 (cost)Afforestation 13 8 8 (cost)Afforestation 13.8 8 (cost)

Agriculture Zero tillage maize 2.2 15 (benefit)

Liquid biofuelsSugarcane ethanol 16.8 11 (cost)Sorghum ethanol 5.1 5 (cost)P l il bi di l 2 4 6 ( t)


Palm oil biodiesel 2.4 6 (cost)

22

Land-use emissions wedge graph

100

year

] Environmental servicesWildlife management

50

ns [M

tCO

2e/y Reforestation & restoration

AfforestationFuelwood co-firing (20%)Biomass electricity

Em

issi

on

Biomass electricityForest managementZero tillage maizeCharcoal production

02008 2012 2016 2020 2024 2028

MEDEC emissions


Ele

ctric

ity

rgy

end-

use

MEDECMEDECscenarioscenario

Ene

nspo

rt

scenarioscenario

and

fore

stryTr

ans

Agr

icul

ture

a

Oil

and

gas


Overall wedge graph

1200

800

1000

ear]

600

800

s [M

tCO

2e/y

e

LUBIOOil and gasStationary energy end-useTransport

(Ag and for)

Mexico could keep its emissions virtually

200

400

Em

issi

ons Transport

ElectricityMEDEC emissions

p yconstant through the adoption of the 40

MEDEC interventions

0

200

2008 2012 2016 2020 2024 2028


2008 2012 2016 2020 2024 2028

25

Marginal abatement costs/benefits

optim

ization

ght

cle inspectio

n

ificatio

nansit

zed transport

stics

on in PEM

EX

ng lighting

ntial lighting

oductio

n

motors

ency

maize

on in indu

stry

ities

heating

agem

ent

my standards

ntial A

Crefrigeration

e redu

ction

AC

ectricity

ookstoves

er ogen

eration

ethano

lbiod

iesel

d co‐firing (20%

)ation

tatio

n & restoratio

n

ydro

ane ethano

l

ermal

ery efficiency

life managem

ent

ronm

ental services

50

100

Bus system

Railw

ay freig

Border veh

i

Urban

den

s iBu

s rapid tra

Non

‐motori

Freight logi s

Cogene

ratio

Street lighti

Reside

ntial

Non

‐reside n

Charcoal pro

Indu

strial m

Utility

efficie

Zero tillage

Cogene

ratio

I&M in 21 ci

Solar water

Forest m

ana

Fuel econo

mNon

‐residen

Reside

ntial

Gas leakage

Reside

ntial A

Biom

ass ele

Improved

co

Biogas

Windp

owe

Bagasse co

Sorghu

m

Palm

oil b

Fuelwoo

dAfforesta

Reforest

Small hy

Sugarca

Geo

the

Refin

Wild

Envir

0

50

→Net costs

O2e]

50

Net ben

efits ←

[US$/tC

100

N

150

0 1,000 2,000 3,000 4,000 5,000


Cumulative mitigation 2009‐2030 [MtCO2e]

26

Investments required

60

]

40

osts [U

S$/tCO

2e]

20

w investmen

t co

ptim

ization

way freight

inspectio

n

nsificatio

npid transit

d transport

ht logistics

n in PEM

EX

eet lighting

ial lighting

ial lighting

prod

uctio

n

rial m

otors

y efficiency

age maize

in indu

stry

n 21

cities

er heatin

g

nagemen

t

standards

dential A

Cfrigeration

redu

ction

dential A

Celectricity

cookstoves

Biogas

Windp

ower

gene

ratio

nm ethanol

l biodiesel

ring

(20%

)orestatio

n

estoratio

n

mall hydro

ne ethanol

eothermal

y efficiency

nagemen

t

al services

0

New

Bus system

op

Railw

Border veh

icle

Urban

de

Bus ra

Non

‐motorize d

Freigh

Cogene

ratio

n

Stre

Reside

ntNon

‐residen

tCh

arcoal p

Indu

str

Utility

Zero till

Cogene

ratio

n i

I&M i

Solar wat

Forest m

a

Fuel econo

my

Non

‐resi

Reside

ntial re f

Gas leakage

Resi

Biom

ass

Improved

c WBa

gasse cog

Sorghu

Palm

oi

Fuelwoo

d co‐fi

Aff

Reforestation & r S m

Sugarcan Ge

Refin

ery

Wildlife ma

Environm

ent

0 1,000 2,000 3,000 4,000 5,000


Cumulative mitigation 2009‐2030 [MtCO2e]

27

Main messages

Mexico has significant GHG reduction potential…

– Mexico could keep emissions relatively constant by undertaking a limited number of low-carbon interventions Primary emissions reduction potential is in transport (27%) agriculture and– Primary emissions reduction potential is in transport (27%), agriculture and forestry (32%), power (17%), and energy efficiency (16%)

... at relatively low financial and economic cost…... at relatively low financial and economic cost…

– 65% of MEDEC interventions have positive financial and economic benefits. A carbon cost of $10/ton would capture another 17%


Main messages

...that will require changes in investment and financing, regulations, and institutions to achieveand institutions to achieve…

– Investment and Financing. Higher up-front costs (MEDEC scenario -- ~$64 billion to 2030). Financing required from public and private sectors and households

– Regulatory. Below-MC pricing of electricity (especially residential) and fossil fuels. Enforcement of environmental and efficiency standards and natural resource policies. Contracting issues

– Institutional. Governance reforms in CFE and PEMEX. Better coordination of Federal, State and Municipal government agencies, such as for public transport


medec: low-carbon development for mexico · 2020. 6. 29. · mexico ghg emissions – 14th largest...

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