Sensitivity analyses for the CAFE

policy scenarios

Markus Amann, Janusz Cofala, Chris Heyes, Zbigniew Klimont, Wolfgang Schöpp, Fabian Wagner

Sensitivity analysesQuestions

1. Are ambition levels for different environmental problems balanced?

2. How would alternative health impact theories change the results?

3. How would national energy and agricultural projections change the optimization outcome?

4. How do uncertainties in agricultural projections influence the results?

5. How would exclusion of further road measures change the results?

6. How would additional measures for ships change the outcomes?

Sensitivity analysis 1

Are ambition levels for different environmental problems balanced?

Approach:• Compare outcomes of

– Optimization for health targets only– Optimization for environmental targets only– Joint optimization

Sensitivity analysis 1

Costs for health and environmental targets

0

10

20

30

40

MTFR Case "C" Case "B" Case "A" CLE

Billion Euro/year

PM optimized Joint without PM Joint optimization

Sensitivity analysis 1

Emission cuts for health and environmental targets

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SO2 NOx VOC NH3 PM2.5

% of 2000 emissions

Grey range: CLE - MTFR Case "A" Case "B" Case "C"

Sensitivity analysis 2

Uncertainty in PM health impact theories

How robust are optimized emission reductions against uncertainties in impact mechanisms?

Test with alternative hypothesis:

“Secondary inorganic aerosols do not contribute to health impacts, all PM effects are related to primary PM2.5 emissions” Natural

Sec organics

Nitrates

Sulfates

Carbon

Primarynon-carbon

StandardRAINS

approachSensitivity

case

WHO advice

Primaryanthrop.particles

Secondaryanthrop.particles

Sensitivity analysis 2

Sensitivity case

• Approach – Achieve same relative improvement in mortality estimated for

CLE based on “primary PM only” theory – or, expressed alternatively:

– Reduce primary PM2.5 concentrations by the same percentage as total PM2.5 would be reduced in reference case

• Two optimization runs:1. Targets for health (PM) only

2. For all targets simultaneously

Sensitivity analysis 2

Control costs for alternative impact theories

0

10

20

30

40

Standard approach Primary PM only Standard approach Primary PM only

Health only optimized Multi-effect optimization

Billion Euros/year

Case "A" Case "B" Case "C" MTFR

Sensitivity analysis 2A

Optimization for health targets only

0%

20%

40%

60%

80%

100%

"Prim

ary

PM

only

"

Sta

ndar

dap

proa

ch

"Prim

ary

PM

only

"

Sta

ndar

dap

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"Prim

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PM

only

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Sta

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"Prim

ary

PM

only

"

Sta

ndar

dap

proa

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"Prim

ary

PM

only

"

Sta

ndar

dap

proa

ch

SO2 NOx VOC NH3 PM2.5

% of 2000 emissions

Grey range: CLE - MTFR Case "A" Case "B" Case "C"

Sensitivity analysis 2B

Joint optimization for all targets

0%

20%

40%

60%

80%

100%

"Prim

ary

PM

only

"

Sta

ndar

dap

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"Prim

ary

PM

only

"

Sta

ndar

dap

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"Prim

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PM

only

"

Sta

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"Prim

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PM

only

"

Sta

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dap

proa

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"Prim

ary

PM

only

"

Sta

ndar

dap

proa

ch

SO2 NOx VOC NH3 PM2.5

% of 2000 emissions

Gray range: CLE - MTFR Case "A" Case "B" Case "C"

Sensitivity analysis 3

How robust are optimized emission reductions against alternative assumptions on economic/energy/agricultural development?

40%

60%

80%

100%

120%

140%

Belgium Denmark Finland France Italy Portugal Sweden UK CzechRepublic

Slovenia

With climate measures No further climate measures National projection

• National energy and agricultural projections are available for 10 countries

• However, these do not comply with Kyoto obligations

Sensitivity analysis 3

National energy and agricultural projections

• Two aspects:– How would optimization results (“emission ceilings”)

change based on the national projections?– What about the feasibility/costs of emission ceilings, if

the underlying baseline projection does not materialize?

• Approach:– Joint optimization with national projections for same

target setting rules (gap closures and relative YOLL improvement recalculated for new space between CLE and MTFR)

Sensitivity analysis 3

Costs of optimized scenarios

0

10

20

30

40

MTFR high medium low CLE

CAFE "with climate measures" National projections

Billion €/year

*) excluding costs for road sources

Sensitivity analysis 3

SO2 emissions

0%

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60%

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100%

120%

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Sp

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UK

EU

-25

% of emissions in 2000

PRIMES projections Case "A" Case "B" Case "C"

National projections Case "A" Case "B" Case "C"

Sensitivity analysis 3

PM2.5 emissions

0%

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40%

60%

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100%

Au

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Sp

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UK

EU

-25

% of emissions in 2000

PRIMES projections Case "A" Case "B" Case "C"

National projections Case "A" Case "B" Case "C"

Sensitivity analysis 4

Are there potential biases in the results for the agricultural sector?

• Uncertainties in agricultural projections• Potential implications of the CAP reform• Implications of the IPPC Directive• Implications of the Nitrate Directive• Recent information on emission control measures

Sensitivity analysis 4

Implications on compliance costs

Annual costs in 2020

Lower estimate Higher estimate

billion €/yr % billion €/yr %

Original estimate of the compliance costs to reach “Case B” targets

3.77 3.77

CAP reform -0.46 -12% -0.46 -12%

Implementation of the IPPC directive -0.60 -16% -0.85 -23%

Updated cost information on manure management

-0.60 -16% -0.60 -16%

Sub-total cost reduction -1.66 -44% -1.91 -51%

Compliance costs for Case “B” taking into account all uncertainties

2.11 1.86

Sensitivity analysis 5

How would cost-optimal emission reductions change if no further measures were taken for road emissions (i.e., no Euro-5 and Euro-6 for diesel vehicles)?

Approach:• Optimization for same environmental targets without the further measures

for road emissions

Results:• Environmental improvements of Cases B and C cannot be achieved without

further road measures

Sensitivity analysis 5

Costs for achieving the Case “A” targets

0

1000

2000

3000

4000

5000

6000

7000

With further road measures Sensitivity case without further road measures

Billion Euros/year

Power plants Industry DomesticRoad transport Inland shipping Conversion and waste treatmentAgriculture (Cases “B” and “C” cannot be achieved without road measures)

Sensitivity analysis 6

How would further NOx controls for ships change the optimal emission reductions for land-based sources?

Measures contained in baseline:• EU sulfur proposal as in Common Position (1.5% S in North

Sea, Baltic and EU seas, 0.1% in harbors, new MARPOL NOx standards, state-of-art for new ships)

Approach:• Optimization for same environmental targets with further

measures for ships • Assumed additional measure: Slide valve retrofits for low

speed engines (28 million €/year)

Sensitivity analysis 6

Control costs with NOx measures for ships

CAFE scenario

without ship measures

Sensitivity case with “medium ambition” measures for ships

Costs for land-based

sources

Costs for land-based

sources

Costs for ships

Total costs

Cost difference

Case “A” 5923 5783 28 5811 -112

Case “B” 10679 10492 28 10520 -159

Case “C” 14852 14499 28 14527 -325

Conclusions

• Multi-effect optimization increases robustness against uncertainties in health impact mechanisms

• CAFE policy scenarios are driven by health and ecosystems targets

• Optimized emission reductions are sensitive against future levels of coal use. Robustness against national energy projections needs further attention (and more robust national projections!)

• Costs for the agricultural sector are most likely overestimated

• Substituting control of road emissions with further measures from stationary sources is not cost-effective

• Control of marine ship emissions is cost-effective