8.2.3 The Impact of Considering Multiple Gases and Carbon Sinks
The overwhelming majority of T-D mitigation studies concentrate upon CO2
abatement from fossil fuel consumption, while an increasing number of B-U studies
tend to incorporate all the GHG emissions from the energy sector, but still
not include emissions from the agricultural sector and sequestration. However,
the Kyoto Protocol also includes methane (CH4), nitrous oxide (N2O),
perfluorocarbons, hydrofluorocarbons, and sulphur hexafluoride (SF6)
as gases subject to control. The Protocol also allows credit for carbon sinks
that result from direct, human-induced afforestation and reforestation measures
taken after 1990. This may have significant impacts on abatement costs.
A recent study (Reilly et al., 1999) estimated the mitigation costs
for the USA and included consideration of all of these gases and forest sinks.
The study assumes that the Kyoto Protocol is ratified in the USA and implemented
with a cap and trade policy. The analysis considers the effects of including
the other gases in the Kyoto Protocol in terms of the effect on allowable emissions,
reference emissions, the required reduction, and the cost of control.
For the USA, the authors estimate that base year (1990) emissions were 1,654MtCeq,
converting non-CO2 gases to carbon equivalent units using 100-year
global warming potential indices (GWPs) as prescribed in the Kyoto Protocol.
This compares with 1,362MtCeq for carbon emissions alone. The result
is that allowable emissions are 1,539MtCeq in the multigas case compared
with 1,267MtCeq if other gases had not been included in the agreement.
The authors also projected emissions of other gases to grow substantially through
2010 in the absence of GHG control policies, so that total emissions in the
reference case reach 2,188MtCeq compared with 1,838MtCeq
of carbon only. The combination of these factors means that the required reduction
is 650MtCeq in the multigas case compared with 571MtCeq
if only carbon is subject to control. To analyze the impact of including the
other gases in the Kyoto Protocol the authors consider three policy cases:
- Case 1, fossil CO2 target and control. This case includes
only CO2 in determining the allowable emissions under the Kyoto
Protocol and includes only emissions reductions of CO2, unlike
the requirements in the Kyoto Protocol that require consideration of multiple
- Case 2, multigas target with control on CO2 emissions only.
This case is constructed with the multigas target (expressed as carbon
equivalents using GWPs) as described in the Kyoto Protocol, but only carbon
emissions from fossil fuels are controlled.
- Case 3, multigas target and controls. The multigas Kyoto target applies
and the Parties seek the least-cost control across all gases and carbon sinks.
Case 1 is thus comparable to many other studies that only consider CO2
and provides an approximate ability to normalize results with other studies.
For Case 1 the resultant carbon price is US$187 in 1985 price (US$269 in 1997
price). Case 2 illustrates that, if the USA does not adopt measures that take
advantage of abatement options in other gases and sinks, the cost could be significantly
higher (US$229 in 1985 price or US$330 in 1997 price). In 1997 US$, the total
cost in terms of reduced output is estimated to be US$54 billion for Case 1,
US$66 billion in Case 2, and US$40 billion in Case 3.
By comparison with Case 1, the introduction of all gases and the forest sink
results in a 20% decline in the carbon price to US$150 (1985 price, US$216 in
Cases 2 and 3 are comparable in the sense that they nominally achieve the same
reduction in GHGs (when weighted using 100-year GWPs). Thus, for a comparable
control level, the multigas control strategy is estimated to reduce US total
costs by nearly 40%.
The Reilly et al. (1999) study did not conduct sensitivity analyses
of the control costs, but noted the wide range of uncertainties in any costs
estimates. Both base year inventories and future emissions of other GHGs are
uncertain, more so than for CO2 emissions from fossil fuels. Moreover,
some thought will be required to include other GHGs and sinks within a flexible
market mechanism such as a cap and trade system. Measuring and monitoring emissions
of other GHGs and sinks could add to the cost of controlling them and so reduce
the abatement potential.