The climate challenge for the energy system
If dangerous and irreversible climatic events are to be avoided, global average temperature should not increase by more than 2°C above pre-industrial levels (European Parliament and the Council 2009). Meinshausen et al. (2009) show that in order to achieve such a global target, a mitigation pathway has to limit global emissions to about 70% below 1990 levels by 2050. There is thus a clear need for immediate binding commitments on greenhouse gas emission reductions in the post-Kyoto period. While the Copenhagen accord (affirmed by COP 16 in Cancun) recognized the need for deep cuts in emissions, within the UNFCCC framework (UNFCCC 2009, 2010), it has so proved impossible to obtain agreement on binding commitments with respect to quantification of reduction levels.
The “EU climate and energy package” agreed upon in December 2008 by the Council and the EU parliament stipulates the implementation of comprehensive energy and climate goals for 2020. At the overall EU level, greenhouse gas emissions are to be reduced by 20% below the 1990 level, the share of renewables in final energy demand is to be raised to 20%, and energy efficiency is to increase by 20% (this latter point may be viewed as redundant once the other two goals are reached). The specific goals for Austria stipulate an increase in the share of renewable energy in final energy demand to 34% by 2020 (with respect to the reference year of 2005, the Austrian share of renewables was already well above the EU average) and a reduction of GHG emissions in sectors not covered by the EU emissions trading system (EU ETS) of 16% compared to 2005 emission levels. The overall EU goal for installations covered by the EU ETS is an emission reduction of 21%, compared to 2005 levels.
Discussions on long term energy and climate goals up to 2050 started within the EU. In order to limit global temperature rise to 2°C, compared to the pre-industrial level, the EU acknowledges that EU greenhouse gas emissions need to be reduced by 80–95% below 1990 levels by 2050 (European Council, 2009). In March 2011 the European Commission published “A Roadmap for moving to a competitive low-carbon economy in 2050” (European Commission 2011). This maps out how such long term low carbon strategies are to be achieved. The achievement of consensus on the EU energy and climate package, and long-term strategy was not only motivated by climate change issues but also by the prevailing relatively high EU dependency on energy imports from regions characterised by political instability. The only way out of this dependency is an increase in energy productivity linked with a stronger focus on renewable energy.
In order to meet the subsequent, post-2012 EU objective, i.e. the EU 2020 targets, the Austrian Climate Act was passed in November 2011. This provides the basis for emission reductions for those sectors not covered by the EU Emission Trading Scheme.
A radically new perspective concerning the energy system is required
Linkages need to be described between energy services, the role of new materials and technologies, and their impact on “technology wedges”
The need for a comprehensive policy approach in meeting 2020 targets
The need to consider economic impact in both the investment and in the operating phase
The central role played by the building sector
The need to consider the policy framework
The need to consider the long term and the impact of technological lock-in
The articles of this special issue cover aspects from the different domains that the climate challenge raises for the energy system. Grossmann et al. analyze the one renewable energy technology, photovoltaics, that is given by far highest potential, both in technological terms, and economic terms. The authors analyze the possibility of a practically full shift of the global energy system to photovoltaic supply by 2050, and the economic implications thereof. They find that it is possible in economic terms, even though current supply from PV is still below 0.1%. Bednar-Friedl analyses in a stylized two–country intertemporal general equilibrium model welfare maximizing emission caps in emerging and industrialized countries, taking account of country differences in technology, environmental preferences and saving rates. Simultaneous target setting is compared to a sequential one in which the industrialized country commits itself to binding targets first. One key finding is that an industrialized country like the EU might be willing to choose a more stringent emission target as a first mover. This is contrary to first thought that a unilateral policy is always ‘symbolic’. Rather, this sequential approach is welfare superior for both industrialized and emerging countries. Brauneis et al. analyze the question whether a price cap in emission permit systems—discussed to ease introduction and limit industry opposition to such systems—does change the incentive structure for firms in technological choice. They find that the lower the cap, the more investment is driven away from clean technologies, but that a range of technological factors determine the specific implications. Bednar-Friedl et al. explore in a general equilibrium model setting policy measures suitable to alleviate potential losses in international competitiveness for Austria due to carbon leakage that might result from stringent EU climate policy. By comparing different concessions to energy-intensive trade exposed sectors, they find that grandfathering of emissions allowances is less cost effective to reduce leakage than export rebates and output subsidies. Finally, Steininger et al. analyze one specific measure in the transport sector, an expansion of the heavy duty vehicle charge from the primary road network to also the secondary road network, as currently discussed in many European countries. They find that such an instrument is environmentally effective, but needs to be accompanied by complementary measures to avoid detrimental implications for peripheral regions, which are in general more dependent on the secondary road network, in terms of distributional fairness.
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- Wolkinger B, Steininger KW, Damm A, Schleicher S, Grossmann W, Türk A, Tatzber F, Steiner D (2012) Implementing Europe’s climate targets at the regional level. Clim Policy. doi: 10.1080/14693062.2012.669096