JapanJapan’’s marginal abatement cost s marginal abatement cost curve analysis and mitigation curve analysis and mitigation
measuresmeasures
Go HibinoMizuho Information & Research Inst.
Japan's 2nd National Workshop onEconomics of Climate Change and Low Carbon Growth
Strategies in Northeast Asia4 November 2010
Yamato Minami Room, Hilton HotelTokyo, Japan
2
1. Japan’s GHG emission target
2. Modeling analysis of long‐term (2050) emission target
3. Modeling analysis of mid‐term (2020‐2030) emission target
4. Relationship between abatement cost and reduction
5. Conclusion
ContentContent
2010.3 Cabinet approval → Submission to the Diet
2010.6 Scrapped by dissolution of the House of Representatives
2010.10 Resubmission to the Diet
44
0
200
400
600
800
1000
1200
1400
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
GH
G e
mis
sion
s (M
tCO
2eq)
CO2 emission from fuel combustion (source: USDOE)
CO2 emission from fuel combustion (source: IEA)
CO2 emission from fuel combustion (source: MOEJ)
GHG emission (source: MOEJ)
15% (vs 90's)
25% (vs 90's)
80% (vs 90's)
Japan'shigh economic growth period Bubble boom
1st oil crisis
Lehman's fall2nd oil crisis
20% (vs 90's)
55
CO2＝GDP × Energy intensity （ENERGY/GDP）×Carbon intensity （CO2/ENERGY）
66
year-on-year percentage changes '73-'90 '90-'08 '08-'20 '08-'50
GDP +3.9% +1.0% +1.6% +0.4~+1.0%Energy intensity ▴2.2% ▴0.5% ▴2.0~▴2.3% ▴1.4~▴1.7%Carbon intensity ▴0.7% ▴0.1% ▴1.4~▴2.3% ▴2.7%~▴3.0%CO2 +0.8% +0.4% ▴1.9~▴3.0% ▴3.7%
0
200
400
600
800
1000
1200
1400
1600
1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
▲15%
▲25%
▲80%GH
G e
mis
sion
(MtC
O2e
q)
▲20%
CO2(IEA)
CO2(MOEJ)
GHG(MOEJ)
Emission pathway in the case that improvement energy intensity and carbon intensity remain at approximately at the present level
Japan’s manufacturing contributes creating global LCS
JapanJapan’’s manufacturing s manufacturing contributes creating contributes creating global LCSglobal LCS
Achieving balance between comfortable daily life and energy reduction
Achieving balance between Achieving balance between comfortable daily life and comfortable daily life and energy reduction energy reduction
Energy efficient technology have considerable currency
Energy efficient technology Energy efficient technology have considerable currencyhave considerable currency
･･･insulated building, compact city, industrial structure, …
Nuclear increase based on the basic premise of safety operation
Nuclear increase based on Nuclear increase based on the basic premise of safety the basic premise of safety operation operation
77
CO2＝GDP × Energy intensity （ENERGY/GDP）×Carbon intensity （CO2/ENERGY）
･･･next generation vehicles, heat pump technology, efficient lighting, …
･･･solar, wind, geothermal, hydro, biomass…
RDD&D of innovational technology
RDD&D of innovational RDD&D of innovational technologytechnology
･･･photovoltaic, CCS, efficient coal / gas power generation, ..
Manufacturing WG
Residences and Buildings
WG
Automobiles WG
Local development
WG
Energy supplyWG
Simulation m
odelSim
ulation model
General publication
Manufacturing WG
Residences and Buildings
WG
Automobiles WG
Area development
WG
Energy supplyWG
Public comments
Stakeholdersinterview
Macro-frameWG
Communication & Marketing
WG
88
Simulation m
odelSim
ulation model
2010.3 2010.11
Simulation m
odelSim
ulation model
General publication
IndustrialIndustrial Industrial
Industrial
Residential & Commercial
Residential & Commercial
Residential & Commercial
Transportation
Transportation
Transportation
Transportation
0
50
100
150
200
250
300
350
400
2005 2050 2005 2050
Final energy consumption CO2 emission
40% reduction of end-use energy consumption40% reduction of end-use energy consumption
Source : Snapshot model of LCS2050 project (NIES)
Zero emission from residential, commercial, power generation, passenger vehicle and close-range freight vehicle
Zero emission from residential, commercial, power generation, passenger vehicle and close-range freight vehicle
Demand of high temperature heat in manufacturing
Demand of high temperature heat in manufacturing
1010
Long-range freight in transportationLong-range freight in transportation
(Million toe) (Million tC)
: The penetration rate of low carbon device and the energy efficiency will remain at the same level.
: The trend of efficiency improvement of recent years will continue.
: 15% reduction in 2020 compared to 1990’s emission by domestic countermeasure: 20% reduction in 2020 compared to 1990’s emission by domestic countermeasure: 25% reduction in 2020 compared to 1990’s emission by domestic countermeasure
：same as the 2020.
：The countermeasure for achieving the 2020’s reduction target will continue from 2021 to 2030.
1212
▲15%▲20%▲25% ▲30%▲37%▲43%
1,261 1,344 1,355 1,282 1,3791,254 1,072 1,014 944
1,3631,202 879 798 718
0
500
1,000
1,50019
90
2000
2005
2008
Tech
nolo
gyFr
ozen
Refe
renc
e
��15%
���20%
��25%
Tech
nolo
gyFr
ozen
Refe
renc
e
Coun
ter-
mea
usre
(L)
Cou
nter
-m
eaus
re (
M)
Cou
nter
-m
eaus
re (
H)
GH
G e
mis
sion
s (M
tCO
2eq) Reduction vs 1990
Non energy
Energy TransformationTransportation
Commercial
Residential
Industrial
Base year's emission
1313
Toward 80% Toward 80% reduction in 2050reduction in 2050
GH
Gre
duct
ion
(MtC
O2e
q) 306 364435 483
565645
0
200
400
600
800
▲15
%
▲20
%
▲25
%
Cou
nter
-m
eaus
re (
L)
Cou
nter
-m
eaus
re (
M)
Cou
nter
-m
eaus
re (
H)
Non energy
Energy Transformation
Transportation
Commercial
Residential
Industrial
24 24
29
0
20
40
�15% �20% �25%
CO2 reduction (MtCO2)
Agriculture
Food
PaperChemicals
Steel CeramicsNon ferrous
Machinery
Others
482 467 459 444 437 395 390 377 437 431 358 349 331
0
100
200
300
400
500
1990
2000
2005
Technology
Frozen
Reference
�15%
�20%
�25%
Technology
Frozen
Reference
Counter-
meausre (L)
Counter-
meausre (M)
Counter-
meausre (H)C
O2 emission (MtCO2)
1414
Low carbon Low carbon manufacturingmanufacturing
3948
61
0
20
40
60
80
�15% �20% �25%
CO2 reduction (MtCO2)
CoolWarm
Hot waterCookingLighting
Appliance
127158 174 185 165 120 107 89 176 156 78 59 43
050
100
150
200
1990
2000
2005
Technology
Frozen
Reference
�15%
�20%
�25%
Technology
Frozen
Reference
Counter-
meausre (L)
Counter-
meausre (M)
Counter-
meausre (H)
CO2 emission(MtCO2)
Toward zero Toward zero emission emission
house 100%house 100%
1515
CoolWarmHot waterCookingLighting
Appliance164206
236 262 218 166 146 124 248 200 111 81 57
050
100150200250300
1990
2000
2005
Technology
Frozen
Reference
�15%
�20%
�25%
Technology
Frozen
Reference
Counter-
meausre (L)
Counter-
meausre (M)
Counter-
meausre (H)
CO2 emission (MtCO2)
66
8194
0
20
40
60
80
100
�15% �20% �25%
CO2 reduction (MtCO2)
1616
Toward zero Toward zero emission emission
building 100%building 100%
Passenger vehicle
Freight vehicleRailShip
Air217265 254 233 191 177 170 163 227 167 137 126 116
050
100150200250300
1990
2000
2005
Technology
Frozen
Reference
�15%
�20%
�25%
Technology
Frozen
Reference
Counter-
meausre (L)
Counter-
meausre (M)
Counter-
meausre (H)
CO2 emission (MtCO2)
1717
5460
66
01020304050607080
�15% �20% �25%
CO2 reduction (MtCO2)
Toward next Toward next generation generation
vehicle100%vehicle100%
発電電力量（億
kWh)
1818
発電構成
0.9 1.0
1.2 1.1
1.0 1.0 1.0
1.3 1.2
1.0 1.0 1.0
0.0
0.2
0.4
0.6
0.8
1.0
1.2 1.4
2000
2005
Technology
Frozen
Reference
�15%
�20%
�25%
Technology
Frozen
Reference
Counter-
meausre (L)
Counter-
meausre (M)
Counter-
meausre (H)
Other renewablesPV
Geothermal
Pumped
Hydro
Nuclear
Oil
LNG
Coal
18% 26% 23% 20% 16% 14% 11% 17% 15%
26%24% 22% 23%
20% 19% 17%
28% 27%
34% 31% 38% 41%45% 46% 47%
40% 44%
51% 53% 56%
8% 7% 6% 7%8% 8% 8%
6% 6%
7% 8% 8%
9% 10% 11%
5% 6% 7% 10% 11% 13%
0%
20%
40%
60%
80%
100%
2000
2005
Technology
Frozen
Reference
�15%
�20%
�25%
Technology
Frozen
Reference
Counter-
meausre (L)
Counter-
meausre (M)
Counter-
meausre (H)
Other renewablesPV
Pumped
Pumped
Hydro
Nuclear
Oil
LNG
Coal
1012
kWh
20
GHG abatement cost = (Fixed cost + Reduction of annual energy cost * Payback period) / annual GHG reduction
Abatemen
t cost
GHG Reduction
Techno
logy A
Techno
logy B
Techno
logy C
Techno
logy D
Techno
logy E
Techno
logy F
Techno
logy G
Sector Life-time
Discount rate Payback period
Subjective Social Subjective Social
Industrial
energy-intensive industries
30 10% 5% 9 yrs. 15 yrs.
Others 20 33% 5% 3 yrs. 12 yrs.
Residential & Commercial
Appliance 10 33% 5% 3 yrs. 8 yrs.
Building 30~40 33% 5% 3 yrs. 15～17 yrs.
Transportation Vehicle 10 15% 5% 5 yrs. 8 yrs.
Renewables 20 10% 5% 9 yrs. 12 yrs.
2121
[COM] Efficient lighting[TRN] Fuel mileage improvement
[TRN] Next generation vehicle (freight)[IND] Alternative energy
[COM] Efficient air conditioner[ELE] Biomass / Waste power generation
[RES] Efficient lighting[COM] BEMS
[IND] Motor efficiency improvement[IND] Energy saving / recovery device
[COM] Efficient water heater[IND] Efficient boiler
[RES] HEMS[ELE] Small hydro
[IND] Efficient construction device[COM] Efficient electric device
[IND] Innovation technology
[ELE] Geothermal[ELE] Wind
[COM] Insulated building[IND] Shift to natural gas
[RES] Efficient home appliance[ELE] Shift to natural gas
[IND] Heat pump[IND] Industrial furnace
[IND] Efficient power generation[RES] Photovoltaic
[COM] Photovoltaic[RES] Efficient water heater
[RES] Efficient air conditioner[RES] Insulated house
20,000
40,000
60,000
80,000
100,000
-20,000
-40,000
0 40,000 80,000 120,000 160,000 200,000 240,000 280,000 320,000 360,000
Industrial sector
Residential sector
Commercial sector
Transportation sector
Electricity generation sector
Aba
tem
ent c
ost (
JPYT
/tCO
2)
Reduction (ktCO2)
2222
[TRN] Next generation vehicle (Passenger)
20,000
40,000
60,000
80,000
100,000
-20,000
-40,000
0 40,000 80,000 120,000 160,000 200,000 240,000 280,000 320,000 360,000
Subjective discount rate
Social discount rate
Aba
tem
ent c
ost (
JPYT
/tCO
2)
Reduction (ktCO2)
Top-runner Approach for improving energy efficiency in energy-using product
Institution for reducing of payback period and initial investment
TopTop--runner Approach for improving runner Approach for improving energy efficiency in energyenergy efficiency in energy--using using productproduct
Institution for reducing of payback Institution for reducing of payback period and initial investmentperiod and initial investment
VisualizationVisualizationVisualization
2424
Industrial sector
Residential sector
Commercial sector
Transportation sector
Electricity generation sector
20,000
40,000
60,000
80,000
100,000
- 20,000
- 40,000
0 40,000 80,000 120,000 160,000 200,000 240,000 280,000 320,000
Carbon pricingCarbon pricingCarbon pricing
Reduction (ktCO2)
Aba
tem
ent c
ost (
JPYT
/tCO
2)
1. Figure of relation between reduction cost and GHG reduction is very useful on the study of countermeasure for reduction of GHG emission.
2. Countermeasure is different among technologies whose reduction cost is relatively cheap or high.
3. The cheaper device should be introduced by regulatory measure, information measure and economic measures.
4. The higher devices should be introduced by R&D measure. They are expected to decrease the fixed cost according to the increase of cumulative production.
5. The payback period influence GHG reduction. The countermeasure for expanding the payback period is very important.
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