Comparing energy system optimization models and integrated assessment models: Relevance for energy policy advice.

Background: The transition to a climate neutral society such as that envisaged in the European Union Green Deal requires careful and comprehensive planning. Integrated assessment models (IAMs) and energy system optimisation models (ESOMs) are both commonly used for policy advice and in the process of policy design. In Europe, a vast landscape of these models has emerged and both kinds of models have been part of numerous model comparison and model linking exercises. However, IAMs and ESOMs have rarely been compared or linked with one another. Methods: This study conducts an explorative comparison and identifies possible flows of information between 11 of the integrated assessment and energy system models in the European Climate and Energy Modelling Forum. The study identifies and compares regional aggregations and commonly reported variables. We define harmonised regions and a subset of shared result variables that enable the comparison of scenario results across the models. Results: The results highlight how power generation and demand development are related and driven by regional and sectoral drivers. They also show that demand developments like for hydrogen can be linked with power generation potentials such as onshore wind power. Lastly, the results show that the role of nuclear power is related to the availability of wind resources. Conclusions: This comparison and analysis of modelling results across model type boundaries provides modellers and policymakers with a better understanding of how to interpret both IAM and ESOM results. It also highlights the need for community standards for region definitions and information about reported variables to facilitate future comparisons of this kind. The comparison shows that regional aggregations might conceal differences within regions that are potentially of interest for national policy makers thereby indicating a need for national-level analysis.

Increased energy use for adaptation significantly impacts mitigation pathways.

Climate adaptation actions can be energy-intensive, but how adaptation feeds back into the energy system and the environment is absent in nearly all up-to-date energy scenarios. Here we quantify the impacts of adaptation actions entailing direct changes in final energy use on energy investments and costs, greenhouse gas emissions, and air pollution. We find that energy needs for adaptation increase considerably over time and with warming. The resulting addition in capacity for power generation leads to higher greenhouse gas emissions, local air pollutants, and energy system costs. In the short to medium term, much of the added capacity for power generation is fossil-fuel based. We show that mitigation pathways accounting for the adaptation-energy feedback would require a higher global carbon price, between 5% and 30% higher. Because of the benefits in terms of reduced adaptation needs, energy system costs in ambitious mitigation scenarios would be lower than previous estimates, and they would turn negative in well-below-2-degree scenarios, pointing at net gains in terms of power system costs.

Persistent inequality in economically optimal climate policies.

Benefit-cost analyses of climate policies by integrated assessment models have generated conflicting assessments. Two critical issues affecting social welfare are regional heterogeneity and inequality. These have only partly been accounted for in existing frameworks. Here, we present a benefit-cost model with more than 50 regions, calibrated upon emissions and mitigation cost data from detailed-process IAMs, and featuring country-level economic damages. We compare countries' self-interested and cooperative behaviour under a range of assumptions about socioeconomic development, climate impacts, and preferences over time and inequality. Results indicate that without international cooperation, global temperature rises, though less than in commonly-used reference scenarios. Cooperation stabilizes temperature within the Paris goals (1.80∘C [1.53∘C-2.31∘C] in 2100). Nevertheless, economic inequality persists: the ratio between top and bottom income deciles is 117% higher than without climate change impacts, even for economically optimal pathways.

Taking stock of national climate policies to evaluate implementation of the Paris Agreement.

Many countries have implemented national climate policies to accomplish pledged Nationally Determined Contributions and to contribute to the temperature objectives of the Paris Agreement on climate change. In 2023, the global stocktake will assess the combined effort of countries. Here, based on a public policy database and a multi-model scenario analysis, we show that implementation of current policies leaves a median emission gap of 22.4 to 28.2 GtCO2eq by 2030 with the optimal pathways to implement the well below 2 °C and 1.5 °C Paris goals. If Nationally Determined Contributions would be fully implemented, this gap would be reduced by a third. Interestingly, the countries evaluated were found to not achieve their pledged contributions with implemented policies (implementation gap), or to have an ambition gap with optimal pathways towards well below 2 °C. This shows that all countries would need to accelerate the implementation of policies for renewable technologies, while efficiency improvements are especially important in emerging countries and fossil-fuel-dependent countries.

Limited emission reductions from fuel subsidy removal except in energy-exporting regions.

Hopes are high that removing fossil fuel subsidies could help to mitigate climate change by discouraging inefficient energy consumption and levelling the playing field for renewable energy. In September 2016, the G20 countries re-affirmed their 2009 commitment (at the G20 Leaders' Summit) to phase out fossil fuel subsidies and many national governments are using today's low oil prices as an opportunity to do so. In practical terms, this means abandoning policies that decrease the price of fossil fuels and electricity generated from fossil fuels to below normal market prices. However, whether the removal of subsidies, even if implemented worldwide, would have a large impact on climate change mitigation has not been systematically explored. Here we show that removing fossil fuel subsidies would have an unexpectedly small impact on global energy demand and carbon dioxide emissions and would not increase renewable energy use by 2030. Subsidy removal would reduce the carbon price necessary to stabilize greenhouse gas concentration at 550 parts per million by only 2-12 per cent under low oil prices. Removing subsidies in most regions would deliver smaller emission reductions than the Paris Agreement (2015) climate pledges and in some regions global subsidy removal may actually lead to an increase in emissions, owing to either coal replacing subsidized oil and natural gas or natural-gas use shifting from subsidizing, energy-exporting regions to non-subsidizing, importing regions. Our results show that subsidy removal would result in the largest CO2 emission reductions in high-income oil- and gas-exporting regions, where the reductions would exceed the climate pledges of these regions and where subsidy removal would affect fewer people living below the poverty line than in lower-income regions.