preliminary results · 24,844 41,163 avoided tax total light bulbs distribution light bulbs avoided...
TRANSCRIPT
April 16, 2012
IN+
Tiago Domingos
Ricardo da Silva Vieira
Ana Gonçalves
Cristina Marta-Pedroso
Conferência Internacional sobre Fiscalidade Verde: Um contributo para a sustentabilidade
Fundação Calouste Gulbenkian, Lisbon April 30,2013
PRELIMINARY RESULTS
2 May 2013
Effective Carbon Prices
2
INTRODUCTION
Electricity Generation
Road Transport
Households’ Energy Use
Summary
Introduction
2 May 2013
Effective Carbon Prices
3
Assessing carbon prices in different sectors allows for: determining the efficiency in terms of climate change of the
overall policy framework
reviewing or introducing new policy instruments for dealing with climate change
Introduction
2 May 2013
Effective Carbon Prices
4
What is the cost of CO2? Abatement (ton CO2) the difference between the emissions in the situation with no policy and the lower emissions induced by the policy instrument Subsidy equivalent (M€) “(…) the outlays required to ‘buy’ certain amounts of abatement from particular sources (…) the economic costs of the policies designed to promote lower-emissions generation.” (Productivity Commission report, pp. 72-73) Implicit abatement subsidy (€/ton CO2) the ratio between the costs of reducing CO2 emissions and the actual abatement of CO2 emissions
Source: Productivity Commission Report
These definitions were used throughout this presentation, unless otherwise indicated.
Methodology
2 May 2013
Effective Carbon Prices
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Counterfactual Policy
Estimation of emissions and equivalent subsidies for 2010* by comparing to a Counterfactual scenario.
What would have happened if no policy was in place
What really happened
* 2010 was used as the Productivity Commission’s Report considered this year as reference and there were several Portuguese official data documents published using 2010 as reference year.
Where to apply it?
2 May 2013
Effective Carbon Prices
6
ELECTRICITY GENERATION ROAD TRANSPORT
PULP & PAPER AND CEMENT HOUSEHOLDS´ ENERGY USE
2 May 2013
Effective Carbon Prices
7
Introduction
ELECTRICITY GENERATION
Road Transport
Households’ Energy Use
Summary
Electricity Generation:
policies
2 May 2013
Effective Carbon Prices
8
17,838 n.a. 180
PRODUCTION INCENTIVES EMISSIONS TRADING SCHEMES
Electricity generators surrend 1 EU allowance per 1 tonCO2
Total number of allowances is capped
Coal plants are more emissions intensive than NG and renewable – they are “taxed” at higher rate
… subsidy to NG and renewable elctricity
RECS
Renewable Energy Certificate System
Certification of the source/ technology of electricity
Sold as premium energy
CAPITAL SUBSIDIES
Fixed public investments for renewable energy technologies
48,906
* Includes micro-generation
PRODUCTION IN SPECIAL REGIME (PRE)
Feed-in Tariffs
Wind, hydropower (<20 MW), solar PV, wave, bioenergy*
Waste incineration
CHP*
Priority in satisfying demand
PRE electricity is put into the grid with no need to go to the MIBEL
Indirect subsidy to PRE in terms of CMECs
Source: ERSE, EDP and REN
Electricity generated in 2010 (GWh)
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Effective Carbon Prices
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Counterfactual Policy
No feed-in tariffs AND PRE = 0 GWh
Electricity demand is satisfied through electricity from fossil fuels and large hydropower
Powerplants with CMECs (coal plant in Sines) achieve enough revenues to cover all operation and maintenance costs
Marginal electricity production is usually electricity from natural gas (due to the availability of the technology to increase electricity generated)
Production in Special Regime
Feed-in tariffs for PRE
Actual PRE production
Reduced electricity demand on non-PRE displaces first:
Scenario 1: Coal based powerplant with CMECs [high abatement]
Scenario 2: natural gas based powerplant (marginal production) [low abatement]
PRE: Definition of the
scenarios
PRE: Results
2 May 2013
Effective Carbon Prices
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Displacing CMECs (coal)
Production in Special Regime
Displacing marginal elect. (nat. gas)
5119 5199
Displacing average elect.
14,707
Emissions abatement 1000 ton CO2
PER COUNTERFACTUAL
Subsidy equivalent M€
PER COUNTERFACTUAL
Total Without CMEC cost
1067.1 10.3
CMEC cost
1077.4
Implicit Abatement Subsidy 71.6 €/tonCO2 (205.3-208.5 €/tonCO2)*
*Over-estimation (subsidies, including CMECs, are provided to more than GHG reduction), Values do not take into account that electricity is different during the day and during the night Base data sources:
Electricity generated and costs: ERSE Emission factors: APA and ERSE
PRE: Results
2 May 2013
Effective Carbon Prices
11
€/ton CO2eq
ton CO2eq
200
SOLAR PV
HYDRO-MINI
CHP-RENEW.
WIND
CHP-OTHER
BIOGAS
BIOMASS
USW
0
100
200
300
400
500
600
Imp
licit
ab
ate
me
nt
sub
sid
y (
€/t
CO
2)
PRE: Results
2 May 2013
Effective Carbon Prices
12
Production in Special Regime
Cross-country comparison
CHP Biogas Solar PV Hydro Biomass Wind
Source: Own calculations (Portugal), Productivity Commission Report (remaining countries)
2 May 2013
Effective Carbon Prices
13
Introduction
Electricity Generation
ROAD TRANSPORT
Households’ Energy Use
Summary
2 May 2013
Effective Carbon Prices
14
Introduction
Electricity Generation
Road Transport
HOUSEHOLDS’ ENERGY USE
Summary
Households’ energy use:
policies
2 May 2013
Effective Carbon Prices
15
13,739 4900 1975 25,432 15,338
RENOVE CASA*
Fridge & freezer substitution
Incentives for the acquisition of A+ and A++ fridges and freezers
ENERGY EFFICIENCY STANDARDS AND CERTIFICATION IN BUILDINGS
Mandatory certification for all new buildings
Tax reduction for more efficient buildings (A or A+)
Mandatory certification for existing houses when sold
RENOVÁVEIS NA HORA
Light bulbs substitution
Distribution of CFL lamps
Tax on incandescent light bulbs
Other programs
Washing devices substitution
Efficient windows
Efficient insulation
Installation of heatpumps
Micro –production
Incentives for the installation of micro renewable energy production
Solar thermal
Reduction of fuels consumption
Tax reduction for the installation of solar thermal
Mandatory installation in new buildings
46,495
* No distinction between the residential and service sectors
Saved energy (toe)
Source: ADENE
Light Bulbs Substitution:
Results
2 May 2013
Effective Carbon Prices
16
Renove Casa
AVOIDED TAX ON
INCANDESCENT LIGHT BULBS
CFL DISTRIBUTION
1,860,713
2,832,720
Free distribution of CFL light bulbs
Abatement emissions due to saved
energy with increase on efficiency
Subsidy equivalent to price of a CFL
light bulb
Source: ADENE
Creation of a inefficiency tax on
incandescent light bulbs
Abatement emissions due to saved
energy with increase on efficiency
Subsidy equivalent to avoided tax on
sold light bulbs (0.41€)
# of CFL Light Bulbs
Light Bulbs Substitution:
Results
2 May 2013
Effective Carbon Prices
17
Emissions abatement Ton CO2eq
Renove Casa
11,333
28,586 17,253
MINIMUM MAXIMUM
16,319
41,163 24,844
TOTAL Avoided Tax
Light bulbs distribution
TOTAL Avoided Tax Light bulbs distribution
Abatement Subsidy 13.9-24.3 €/tonCO2eq
Subsidy equivalent k€
MINIMUM MAXIMUM
436 572 136 530
695 165
TOTAL Avoided Tax TOTAL Avoided Tax
Light bulbs distribution
Light bulbs distribution
2 May 2013
Effective Carbon Prices
18
Introduction
Electricity Generation
Road Transport
Households’ Energy Use
SUMMARY
Uncertainties
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Effective Carbon Prices
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Significant uncertainties and gaps in data
Counterfactual depends on the circumstances
Discount rate of 5%
All sales of efficient devices (e.g. vehicles, fridges, CFL bulbs) are due to implemented policies
Estimates are a snapshot for 2010. Some programs are ramping up over time, but others have now stopped
Costs and abatement are attributed to some policies that have multiple objectives (or for which carbon abatement is only a side-effect) and there is uncertainty about how much might reasonably be apportioned to each.
LIMITATIONS POSSIBLE IMPACTS/SOLUTIONS
Sensitivity analysis
Sensitivity analysis
Sensitivity analysis with interval (3-7%)
Abatement is overestimated Abatement subsidy is underestimated
Values are overestimated
500
€/ton CO2eq
Electricity generation
Households energy use
Road transport
Overview
2 May 2013
Effective Carbon Prices
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ETS
MINI-HYDRO
CHP-RENEW.
WIND
CHP-OTHER
ton CO2eq RENOVE CASA
VEHICLES TAX
SOLAR PV
MODAL SHIFT
MICRO-GENERATION
SOLAR THERMAL
BIOGAS
BIOMASS
USW
Total Subsidy 1302 M€
0.62% of GDP
Conclusions
2 May 2013
Effective Carbon Prices
21
Different policies lead to very different carbon prices
The resources committed to the different emissions-reduction policies
vary between 0.001 and 0.5% of GDP
Costs and abatement are attributed to some policies that have multiple
objectives (or where carbon abatement is only a side-effect)
Different policies have different scopes for further abatement
2 May 2013
Effective Carbon Prices
22
Thank you