TY - JOUR
T1 - The deployment of low carbon technologies in energy intensive industries
T2 - A macroeconomic analysis for Europe, China and India
AU - Nabernegg, Stefan
AU - Bednar-Friedl, Birgit
AU - Wagner, Fabian
AU - Schinko, Thomas
AU - Cofala, Janusz
AU - Clement, Yadira Mori
N1 - Publisher Copyright:
© 2017 by the authors.
PY - 2017
Y1 - 2017
N2 - Industrial processes currently contribute 40% to global CO2 emissions and therefore substantial increases in industrial energy efficiency are required for reaching the 2°C target. We assess the macroeconomic effects of deploying low carbon technologies in six energy intensive industrial sectors (Petroleum, Iron and Steel, Non-metallic Minerals, Paper and Pulp, Chemicals, and Electricity) in Europe, China and India in 2030. By combining the GAINS technology model with a macroeconomic computable general equilibrium model, we find that output in energy intensive industries declines in Europe by 6% in total, while output increases in China by 11% and in India by 13%. The opposite output effects emerge because low carbon technologies lead to cost savings in China and India but not in Europe. Consequently, the competitiveness of energy intensive industries is improved in China and India relative to Europe, leading to higher exports to Europe. In all regions, the decarbonization of electricity plays the dominant role for mitigation. We find a rebound effect in China and India, in the size of 42% and 34% CO2 reduction, respectively, but not in Europe. Our results indicate that the range of considered low-carbon technology options is not competitive in the European industrial sectors. To foster breakthrough low carbon technologies and maintain industrial competitiveness, targeted technology policy is therefore needed to supplement carbon pricing.
AB - Industrial processes currently contribute 40% to global CO2 emissions and therefore substantial increases in industrial energy efficiency are required for reaching the 2°C target. We assess the macroeconomic effects of deploying low carbon technologies in six energy intensive industrial sectors (Petroleum, Iron and Steel, Non-metallic Minerals, Paper and Pulp, Chemicals, and Electricity) in Europe, China and India in 2030. By combining the GAINS technology model with a macroeconomic computable general equilibrium model, we find that output in energy intensive industries declines in Europe by 6% in total, while output increases in China by 11% and in India by 13%. The opposite output effects emerge because low carbon technologies lead to cost savings in China and India but not in Europe. Consequently, the competitiveness of energy intensive industries is improved in China and India relative to Europe, leading to higher exports to Europe. In all regions, the decarbonization of electricity plays the dominant role for mitigation. We find a rebound effect in China and India, in the size of 42% and 34% CO2 reduction, respectively, but not in Europe. Our results indicate that the range of considered low-carbon technology options is not competitive in the European industrial sectors. To foster breakthrough low carbon technologies and maintain industrial competitiveness, targeted technology policy is therefore needed to supplement carbon pricing.
KW - Computable general equilibrium analysis
KW - Decarbonization
KW - Energy intensive industry
KW - International trade
KW - Rebound effect
UR - http://www.scopus.com/inward/record.url?scp=85035049327&partnerID=8YFLogxK
U2 - 10.3390/en10030360
DO - 10.3390/en10030360
M3 - Article
AN - SCOPUS:85035049327
SN - 1996-1073
VL - 10
JO - Energies
JF - Energies
IS - 3
M1 - 360
ER -
