The 24th Conference of the Parties (COP24) to the United Nations Framework Convention on Climate Change (UNFCCC), presently assembling in Katowice, Poland, amid grim warnings from the IPCC Special Report on Global Warming of 1.5 °C and the National Climate Assessment regarding the speed of climate change and severity of its effects, strives to get the world on track to maintain global warming much below 2 °C.
In this regard, negotiators from the almost 200 signatory countries in the 2015 Paris Agreement are anticipated to report about their headway in fulfilling initial greenhouse gas emissions reduction targets, or Nationally Determined Contributions (NDCs), for the years 2025 to 2030, and to determine pathways to accomplishing more ambitious NDCs. In aid of this global effort, a research team at the MIT Joint Program on the Science and Policy of Global Change, the MIT Center for Energy and Environmental Policy Research (CEEPR), and the MIT Energy Initiative has created modeling tools to assess the climate progress and potential of two main global regions—Latin America and Southeast Asia.
The researchers examined the gaps existing between NDC targets and present emission levels within individual regions, emphasized major difficulties to conform to those targets, and proposed cost-effective technology and policy solutions targeted at resolving those difficulties in consultation with regional partners and General Electric. The study results have been published in two “Pathways to Paris” reports released recently—one for selected countries in Latin America (LAM), and the other for the 10-member Association of Southeast Asian Nations (ASEAN).
According to the researchers, they opted to examine the two regions since they represent widely different starting points on the road to emissions-reduction targets, and hence cover a broad range of policy and technology options for fulfilling or surpassing present NDCs.
“Whereas Southeast Asia relies heavily on fossil fuels, particularly coal, to produce energy, Latin America, which has embraced hydropower, is already on a far less carbon-intensive emissions path,” states Sergey Paltsev, a deputy director at the Joint Program and senior research scientist at the MIT Energy Initiative, and lead author of both reports. “These regions have not received as much attention as the largest emitting countries by most gap analysis studies, which tend to focus on the globe as a whole.”
At the International Congress Centre in Katowice, Paltsev presented these major findings from the two reports to COP24 participants.
Our reports help refine the overall picture of how countries in ASEAN and Latin America are doing in terms of progress toward NDC achievement, and how they get there. They also show pathways to achieve greater emissions reductions and/or reduce emissions at lower economic cost, both of which can help them understand the opportunities and implications of more ambitious NDCs.
Michael Mehling, Deputy Director, MIT Center for Energy and Environmental Policy Research
While it is important for all economic sectors in both regions to decrease emissions, the two reports mainly concentrate on the power generation sector because it provides the least-cost opportunity to attain the highest emissions reductions via available policy and technology solutions. Michael Mehling is a co-author of both the reports.
Progress and next steps for ASEAN countries
According to the ASEAN report, although the 10 member countries have jointly made excellent progress in terms of lowering their greenhouse gas emissions, they would still need to adopt more steps to attain the targets given in their individual NDCs.
As part of its Paris Agreement pledges, wherein no conditions (for example, technology transfers or climate financing) apply, the ASEAN region is roughly 400 MtCO2e (which stands for megatons of carbon dioxide-equivalent emissions) less than its 2030 emissions target, and hence should decrease emissions by at least 11% in relation to its present trajectory. Moreover, under its conditional pledges, the emissions gap is approximately 900 MtCO2e, denoting a necessity to cut down emissions by 24% by 2030.
One major difficulty faced by the ASEAN countries in realizing those objectives is to reduce emissions, and at the same time expand power production to fulfill the increasing demand for energy—almost a doubling of the overall primary energy consumption from the year 2015 to 2030—in their quickly developing economies. In order to resolve this challenge and also the above-indicated emissions gaps, the ASEAN report proposes a shift toward the generation of lower carbon electricity and implementation of carbon-pricing policies.
Lower carbon energy options consist of the solar and wind generation together with a transition from coal to natural gas. When compared to coal, natural gas generates relatively fewer carbon emissions and hence could act as a backup from erratic renewables, thus increasing their penetration in the market.
Although ASEAN countries might implement carbon pricing via emissions trading systems or carbon taxes, such policies usually involve considerable political resistance. In order to build coalitions of support for determined climate policies as well as to develop the domestic supply chains and expertise required for strong markets in clean technology, the report urges for an initial focus on technology-related policies like renewable portfolio standards and renewable energy auctions.
Progress and next steps for Latin American countries
Considering government-driven initiatives to increase natural gas and renewable electricity, the nations covered by the Latin American (LAM) report—Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Panama, Peru, Uruguay, and Venezuela—have also made an excellent advancement toward their Paris objectives.
The region, under its unconditional pledges, is just approximately 60 MtCO2e less than its overall 2030 emissions reduction target, and hence should reduce emissions by 2% in relation to its present trajectory to meet that target. The emissions gap, under its conditional pledges, is approximately 350 MtCO2e, denoting a need to reduce emissions by 10% by the year 2030.
Similar to the ASEAN region, energy demand in the LAM countries is estimated to increase considerably. According to the LAM report, approximately 25% increase in the overall primary energy consumption is projected from 2015 to 2030.
For some LAM countries, a major challenge in addressing that increased energy demand is to develop legal frameworks and stable regulatory to further motivate private investment in clean energy projects. For this region, the LAM report proposes similar policy and technology options as those described above in the ASEAN report. For nations with more technical capacities and advanced administrative, the report recommends carbon pricing since it provides the greatest benefits in terms of economic efficiency.
In addition, the two reports reveal how the MIT team’s analysis and tools can be implemented at the country level.
The ASEAN report surmises that Vietnam and Indonesia could attain their respective emissions-reduction goals at a controllable cost. In case carbon pricing is applied on an economy-wide basis, then the GDP cost in Vietnam is 0.008%, while in Indonesia it is 0.03%, in relation to GDP in a business-as-usual scenario in the year 2030.
Moreover, the LAM report also reveals that Colombia and Argentina are on track to meet their unconditional emissions reduction pledges with current plans to expand the generation of non-fossil electricity. To fulfill conditional pledges, the researchers propose an all-sectors emissions trading scheme (ETS) can be added after the non-fossil electricity targets are met. If emissions are capped at the level consistent with the conditional pledge of each country, it would result in carbon prices of $2.70 per tCO2e in Argentina and $2.90 in Colombia.
The authors of the two reports have shared all tools and input data used for generating the results with the nations in both regions, and now they intend to place these resources in the public domain in an open-source format. This method makes it viable for other countries to examine their pathways to fulfilling or surpassing their electrification, energy, and emissions-reduction goals.
We need more and more studies at the country level. We hope our analysis will help countries in other regions to improve their capability to assess their progress in meeting NDC targets and develop more effective technology and policy strategies to reduce their emissions.
Sergey Paltsev, Senior Research Scientist, MIT.
The study was supported by GE and enhanced through collaboration with representatives of the ASEAN Centre for Energy and selected Latin American countries.