REPORTS ASSESSMENT REPORTS
||Working Group III: Mitigation
|Table TS. 2: Technological options, barriers,
opportunities, and impacts on production in various sectors
Barriers and opportunities
Implications of mitigation
policies on sectors
|Buildings, households and services: Hundreds of technologies
and measures exist that can improve the energy efficiency of appliances
and equipment as well as building structures in all regions of the world.
It is estimated that CO2 emissions from residential buildings
in 2010 can be reduced by 325MtC in developed countries and the EIT region
at costs ranging from -US$ 250 to -US$ 150/ tC and by 125MtC in developing
countries at costs of -US$ 250 to US$ 50/ tC. Similarly, CO2
emissions from commercial buildings in 2010 can be reduced by 185MtC in
industrialized countries and the EIT region at costs ranging from -US$ 400
to -US$ 250/ tC and by 80MtC in developing countries at costs ranging from
-US$ 400 to US$ 0/ tC. These savings represent almost 30% of buildings,
CO2 emissions in 2010 and 2020 compared to a central scenario
such as the SRES B2 Marker scenario.
Barriers: In developed countries a market structure not conducive
to efficiency improvements, misplaced incentives, and lack of information;
and in developing countries lack of financing and skills, lack of information,
traditional customs, and administered pricing.
Opportunities: Developing better marketing approaches and skills,
information- based marketing, voluntary programmes and standards have
been shown to overcome barriers in developed countries. Affordable credit
skills, capacity building, information base and consumer awareness, standards,
incentives for capacity building, and deregulation of the energy industry
are ways to address the aforementioned barriers in the developing world.
|Service industries: Many will gain output and employment depending
on how mitigation policies are implemented, however in general the increases
are expected to be small and diffused.
Households and the informal sector: The impact of mitigation on households
comes directly through changes in the technology and price of households
use of energy and indirectly through macroeconomic effects on income and
employment. An important ancillary benefit is the improvement in indoor
and outdoor air quality, particularly in developing countries and cities
all over the world.
|Transportation: Transportation technology for light- duty vehicles
has advanced more rapidly than anticipated in the SAR, as a consequence
of international R& D efforts. Hybrid- electric vehicles have already
appeared in the market and introduction of fuel cell vehicles by 2003 has
been announced by most major manufacturers. The GHG mitigation impacts of
technological efficiency improvements will be diminished to some extent
by the rebound effect, unless counteracted by policies that effectively
increase the price of fuel or travel. In countries with high fuel prices,
such as Europe, the rebound effect may be as large as 40%; in countries
with low fuel prices, such as the USA, the rebound appears to be no larger
than 20%. Taking into account rebound effects, technological measures can
reduce GHG emissions by 5%- 15% by 2010 and 15%- 35% by 2020, in comparison
to a baseline of continued growth.
||Barriers: Risk to manufacturers of transportation equipment is
an important barrier to more rapid adoption of energy efficient technologies
in transport. Achieving significant energy efficiency improvements generally
requires a clean sheet redesign of vehicles, along with multibillion
dollar investments in new production facilities. On the other hand, the
value of greater efficiency to customers is the difference between the present
value of fuel savings and increased purchase price, which net can often
be a small quantity. Although markets for transport vehicles are dominated
by a very small number of companies in the technical sense, they are nonetheless
highly competitive in the sense that strategic errors can be very costly.
Finally, many of the benefits of increased energy efficiency accrue in the
form of social rather than private benefits. For all these reasons, the
risk to manufacturers of sweeping technological change to improve energy
efficiency is generally perceived to outweigh the direct market benefits.
Enormous public and private investments in transportation infrastructure
and a built environment adapted to motor vehicle travel pose significant
barriers to changing the modal structure of transportation in many countries.
Opportunities: Information technologies are creating new opportunities
for pricing some of the external costs of transportation, from congestion
to environmental pollution. Implementation of more efficient pricing can
provide greater incentives for energy efficiency in both equipment and modal
structure. The factors that hinder the adoption of fuel- efficient technologies
in transport vehicle markets create conditions under which energy efficiency
regulations, voluntary or mandatory, can be effective. Well- formulated
regulations eliminate much of the risk of making sweeping technological
changes, because all competitors face the same regulations. Study after
study has demonstrated the existence of technologies capable of reducing
vehicle carbon intensities by up to 50% or in the longer run 100%, approximately
cost- effectively. Finally, intensive R&D efforts for light- duty road
vehicles have achieved dramatic improvements in hybrid power- train and
fuel cell technologies. Similar efforts could be directed at road freight,
air, rail, and marine transport technologies, with potentially dramatic
|Transportation: Growth in transportation demand is projected to
remain, influenced by GHG mitigation policies only in a limited way. Only
limited opportunities for replacing fossil carbon based fuels exist in the
short to medium term. The main effect of mitigation policies will be to
improve energy efficiency in all modes of transportation.
|Industry: Energy efficiency improvement is the main emission reduction
option in industry. Especially in industrialized countries much has been
done already to improve energy efficiency, but options for further reductions
remain. 300 - 500MtC/yr and 700 -1,100MtC/yr can be reduced by 2010 and
2020, respectively, as compared to a scenario like SRES B2. The larger part
of these options has net negative costs. Non-CO2 emissions in
industry are generally relatively small and can be reduced by over 85%,
most at moderate or sometimes even negative costs.
||Barriers: lack of full- cost pricing, relatively low contribution
of energy to production costs, lack of information on part of the consumer
and producer, limited availability of capital and skilled personnel are
the key barriers to the penetration of mitigation technology in the industrial
sector in all, but most importantly in developing countries.
Opportunities: legislation to address local environmental concerns;
voluntary agreements, especially if complemented by government efforts;
and direct subsidies and tax credits are approaches that have been successful
in overcoming the above barriers. Legislation, including standards, and
better marketing are particularly suitable approaches for light industries.
|Industry: Mitigation is expected to lead to structural
change in manufacturing in Annex I countries (partly caused by changing
demands in private consumption), with those sectors supplying energy- saving
equipment and low- carbon technologies benefitting and energy- intensive
sectors having to switch fuels, adopt new technologies, or increase prices.
However, rebound effects may lead to unexpected negative results.
|Land- use change and forestry: There are three fundamental ways
in which land use or management can mitigate atmospheric CO2
increases: protection, sequestration, and substitutiona.
These options show different temporal patterns; consequently, the choice
of options and their potential effectiveness depend on the target time frame
as well as on site productivity and disturbance history. The SAR estimated
that globally these measures could reduce atmospheric C by about 83 to 131GtC
by 2050 (60 to 87GtC in forests and 23 to 44GtC in agricultural soils).
Studies published since then have not substantially revised these estimates.
The costs of terrestrial management practices are quite low compared to
alternatives, and range from 0 ('win- win' opportunities) to US$ 12/ tC.
||Barriers: to mitigation in land- use change and forestry include
lack of funding and of human and institutional capacity to monitor and verify,
social constraints such as food supply, people living off the natural forest,
incentives for land clearing, population pressure, and switch to pastures
because of demand for meat. In tropical countries, forestry activities are
often dominated by the state forest departments with a minimal role for
local communities and the private sector. In some parts of the tropical
world, particularly Africa, low crop productivity and competing demands
on forests for crop production and fuelwood are likely to reduce mitigation
Opportunities: in land use and forestry, incentives and policies
are required to realize the technical potential. There may be in the form
of government regulations, taxes, and subsidies, or through economic incentives
in the form of market payments for capturing and holding carbon as suggested
in the Kyoto Protocol, depending on its implementation following decisions
|GHG mitigation policies can have a large effect on land use,
especially through carbon sequestration and biofuel production. In tropical
countries, large- scale adoption of mitigation activities could lead to
biodiversity conservation, rural employment generation and watershed protection
contributing to sustainable development. To achieve this, institutional
changes to involve local communities and industry and necessary thereby
leading to a reduced role for governments in managing forests.
|Agriculture and waste management: Energy inputs are growing by
<1% per year globally with the highest increases in non- OECD countries
but they have reduced in the EITs. Several options already exist to decrease
GHG emissions for investments of -US$ 50 to 150/ tC. These include increasing
carbon stock by cropland management (125MtC/ yr by 2010); reducing CH4
emissions from better livestock management (> 30MtC/ yr) and rice production
(7MtC/ yr); soil carbon sequestration (50- 100MtC/ yr) and reducing N2O
emissions from animal wastes and application of N measures are feasible
in most regions given appropriate technology transfer and incentives for
farmers to change their traditional methods. Energy cropping to displace
fossil fuels has good prospects if the costs can be made more competitive
and the crops are produced sustainably. Improved waste management can decrease
GHG emissions by 200MtCeq in 2010 and 320MtCeq in
2020 as compared to 240MtCeq emissions in 1990.
|Barriers: In agriculture and waste management, these include inadequate
R& D funding, lack of intellectual property rights, lack of national
human and institutional capacity and information in the developing countries,
farm- level adoption constraints, lack of incentives and information for
growers in developed countries to adopt new husbandry techniques, (need
other benefits, not just greenhouse gas reduction).
Opportunities: Expansion of credit schemes, shifts in research priorities,
development of institutional linkages across countries, trading in soil
carbon, and integration of food, fibre, and energy products are ways by
which the barriers may be overcome. Measures should be linked with moves
towards sustainable production methods.
Energy cropping provides benefits of land use diversification where suitable
land is currently under utilized for food and fibre production and water
is readily available.
|Energy: forest and land management can provide a variety of solid,
liquid, or gaseous fuels that are renewable and that can substitute for
Materials: products from forest and other biological materials are
used for construction, packaging, papers, and many other uses and are often
less energy- intensive than are alternative materials that provide the same
Agriculture/ land use: commitment of large areas to carbon sequestration
or carbon management may compliment or conflict with other demands for land,
such as agriculture. GHG mitigation will have an impact on agriculture through
increased demand for biofuel production in many regions. Increasing competition
for arable land may increase prices of food and other agricultural products.
|Waste management: Utilization of methane from landfills and from
coal beds. The use of landfill gas for heat and electric power is also growing.
In several industrial countries and especially in Europe and Japan, waste-
to- energy facilities have become more efficient with lower air pollution
emissions, paper and fibre recycling, or by utilizing waste paper as a biofuel
in waste to energy facilities.
||Barriers: Little is being done to manage landfill gas or to reduce
waste in rapidly growing markets in much of the developing world.
Opportunities: countries like the US and Germany have specific policies
to either reduce methane producing waste, and/ or requirements to utulize
methane from landfills as an energy source. Costs of recovery are negative
for half of landfill methane.
|Energy sector: In the energy sector, options are available both
to increase conversion efficiency and to increase the use of primary energy
with less GHGs per unit of energy produced, by sequestering carbon, and
reducing GHG leakages. Win-win options such as coal bed methane recovery
and improved energy efficiency in coal and gas fired power generation as
well as co- production of heat and electricity can help to reduce emissions.
With economic development continuing, efficiency increases alone will be
insufficient to control GHG emissions from the energy sector. Options to
decrease emissions per unit energy produced include new renewable forms
of energy, which are showing strong growth but still account for less than
1% of energy produced worldwide. Technologies for CO2 capture
and disposal to achieve clean fossil energy have been proposed
and could contribute significantly at costs competitive with renewable energy
although considerable research is still needed on the feasibility and possible
environmental impacts of such methods to determine their application and
usage. Nuclear power and, in some areas, larger scale hydropower could make
a substantially increased contribution but face problems of costs and acceptability.
Emerging fuel cells are expected to open opportunities for increasing the
average energy conversion efficiency in the decades to come.
||Barriers: key barriers are human and institutional capacity, imperfect
capital markets that discourage investment in small decentralized systems,
more uncertain rates of return on investment, high trade tariffs, lack of
information, and lack of intellectual property rights for mitigation technologies.
For renewable energy, high first costs, lack of access to capital, and subsidies
for fossil fuels and key barriers.
Opportunities for developing countries include promotion of leapfrogs
in energy supply and demand technology, facilitating technology transfer
through creating an enabling environment, capacity building, and appropriate
mechanisms for transfer of clean and efficient energy technologies. Full
cost pricing and information systems provide opportunities in developed
countries. Ancillary benefits associated with improved technology, and with
reduced production and use of fossil fuels, can be substantial.
|Coal: Coal production, use, and employment are likely to fall as
a result of greenhouse gas mitigation policies, compared with projections
of energy supply without additional climate policies. However, the costs
of adjustment will be much lower if policies for new coal production also
encourage clean coal technology.
Oil: Global mitigation policies are likely to lead to reductions
in oil production and trade, with energy exporters likely to face reductions
in real incomes as compared to a situation without such policies. The effect
on the global oil price of achieving the Kyoto targets, however, may be
less severe than many of the models predict, because of the options to include
non- CO2 gases and the flexible mechanisms in achieving the target, which
are often not included in the models.
Gas: Over the next 20 years mitigation may influence the use of natural
gas may positively or negatively, depending on regional and local conditions.
In the Annex I countries any switch that takes place from coal or oil would
be towards natural gas and renewable sources for power generation. In the
case of the non-Annex 1 countries, the potential for switching to natural
gas is much higher, however energy security and the availability of domestic
resources are considerations, particularly for countries such as China and
India with large coal reserves.
Renewables: Renewable sources are very diverse and the mitigation
impact would depend on technological development. It would vary from region
to region depending on resource endowment. However, mitigation is very likely
to lead to larger markets for the renewables industry. In that situation,
R& D for cost reduction and enhanced performance and increased flow
of funds to renewables could increase their application leading to cost
Nuclear: There is substantial technical potential for nuclear power
development to reduce greenhouse gas emissions; whether this is realized
will depend on relative costs, political factors, and public acceptance.
|Halocarbons: Emissions of HFCs are growing as HFCs are being used
to replace some of the ozone- depleting substances being phased out. Compared
to SRES projections for HFCs in 2010, it is estimated that emissions could
be lower by as much as 100MtCeq at costs below US$ 200/tCeq.
About half of the estimated reduction is an artifact caused by the SRES
baseline values being higher than the study baseline for this report. The
remainder could be accomplished by reducing emissions through containment,
recovering and recycling refrigerants, and through use of alternative fluids
|Barriers: uncertainty with respect to the future of HFC policy
in relation to global warming and ozone depletion.
Opportunities: capturing new technological developments
|Geo-engineering: Regarding mitigation opportunities in marine ecosystems
and geo-engineeringb, human understanding of biophysical
systems, as well as many ethical, legal, and equity assessments are still
||Barriers: In geo- engineering, the risks for unanticipated consequences
are large and it may not even be possible to engineer the regional distribution
of temperature and precipitation.
Opportunities: Some basic inquiry appears appropriate.
|Sector not yet in existence: not applicable.