Protecting prosperity
Protecting prosperity Lessons from leading low carbon economies
AUSTRALIA UK JAPAN
Executive summary
CHINA GERMANY USA
Research commissioned by
Carbon Productivity Non-energy emissions and related output ‒ ‒ ‒ ‒
Energy productivity (GDP/Energy)
(inverse)
Emissions intensity of energy (Emissions/Energy)
LULUCF Direct industrial Waste Agriculture
All of level 3 is affected by investment choices Energy Efficiency ‒ Technology ‒ Production techniques
Energy Prices
Sectoral composition
‒ Regulation ‒ Resource endowment
‒ Transport needs ‒ Emissions intensive Industry ‒ Resource extraction ‒ Services/ Manufacturing ‒ Heating and cooling needs
Conversion efficiency ‒ Power stations ‒ Vehicles ‒ Industrial facilities
Source: Vivid Economics
Electricity Market
Transport Fuels
‒ Shares of ‒ Share of heavy fuel type vs light ‒ Cost of fuel products ‒ Type of ‒ biofuels plant ‒ Dispatch ‒ Transmission losses
JPN FRA
Carbon productivity (US$ GDP per tonne of CO2)
4000
GBR
3000 ITA GER BRA
ARG
2000
USA
MEX
CAN
KOR
TUR
AUS
1000 IDN IND
SAU
ZAF CHN RUS
10000
20000
30000
40000
GDP per capita ($US 2000)
Source: Vivid Economics, data is from 1980-2007 and the line gets thicker over time, Note that we use the international standard ISO codes to refer to countries: ARG Argentina, AUS Australia, BRA Brazil, CAN Canada, CHN China, FRA France, GBR United Kingdom, GER Germany, IDN Indonesia, IND India, ITA Italy, JPN Japan, KOR South Korea, MEX Mexico, RUS Russia, SAU Saudi Arabia, TUR Turkey, USA United States, ZAF South Africa.
CHN
Carbon productivity, 1980 baseline = 1
3.0
2.5
GER GBR
2.0 USA
1.5 JPN AUS
1.0 1980
1985
1990
1995
2000
2005
Year
Source: Vivid Economics analysis of IEA and World Bank data
1.50 1.00 0.50
IDN
BRA
TUR
KOR
IND
SAU
AUS
JPN
MEX
ITA
ARG
CHN
ZAF
RUS
CAN
USA
GBR
-0.50
FRA
0.00 GER
Clean growth index (1980-2007)
2.00
-1.00
The Clean Growth index is calculated as the percentage increase in carbon productivity for every percentage increase in GDP per capita Source: Vivid Economics
Energy productivity (US$ GDP per unit of energy in kg oil equivalent)
JPN
10
8
GBR
JPN
GER
6
USA GBR
AUS
4 GER AUS USA
2 CHN
CHN
1980
1985
1990
1995
Year
Source: Vivid Economics
2000
2005
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Electricity prices for industrial users, $US per kWh
0.2
0.18
0.16
0.14
0.12
0.1
0.08
0.06
0.04
0.02
0
Australia Germany Japan United Kingdom United States
Source: IEA and Garnaut Climate Change Review China
Energy per unit of emissions (kg oil equivalent per tonne CO2)
440
CHN
420 JPN GER USA GBR
400 JPN USA
380
360 GBR
340
GER AUS
CHN
320 AUS
1980
1985
1990
1995
2000
2005
Year
Source: Vivid Economics analysis of IEA and World Bank data
Australia
China
Germany
Japan
UK
USA
Renewables
6%
17%
13%
9%
6%
10%
Nuclear
0%
2%
22%
27%
18%
20%
Coal
76%
79%
42%
25%
28%
45%
Gas
16%
1%
14%
32%
44%
23%
Oil
1%
1%
2%
6%
1%
1%
Other, waste, biomass
1%
0%
7%
2%
3%
2%
Note: Data is for 2009, except for China which is 2008 Source: Vivid Economics calculations from IEA data
Emissions intensity of all generation (gCO2 per kWh of electricity)
900 AUS
800 CHN
Country 700
AUS CHN GBR GER
600
JPN USA USA
500
GBR GER JPN
400
1980
1985
1990
1995
Year
Source: IEA
2000
2005
Emissions intensity of coal generation (g CO2 per kWh of electricity)
1150
1100
1050
Country AUS AUS
1000
CHN GBR GER JPN
950 GBR USA JPN
900
CHN
850
GER
1980
1985
1990
1995
Year
Source: IEA
2000
2005
USA
Emissions intensity of gas generation (g CO2 per kWh of electricity)
600 AUS
Country 500
AUS CHN GBR JPN CHN
GER JPN
400
USA GBR
300 GER
1980
1985
1990
1995
Year
Source: IEA
2000
2005
USA
The appropriate level of emissions abatement is a controversial issue, and our approach to this, outlined later in the report, is based on IEA scenarios.
1.0
Index of cost-effectiveness
0.9 0.8 CHN
0.7 0.6
0.5
CA
0.4
GBR
AUS
0.3
GER JPN
0.2 0.1 0.0 0.0
0.2
0.4
0.6
0.8
1.0
Index of abatement effort
Note: abatement financed by the CDM is included for China; the codes are defined as AUS Australia, CA California, CHN China, GER Germany, JPN Japan, GBR United Kingdom Source: Vivid Economics
Policy MACC
IIASA Technology MACC
IEA 450 q*
Marginal cost of abatement, USD/tCO2e
600
500
400
300
200
100
0 0
20
40
60
80
100
120
-100
-200
MtCO2e abated
Source: IIASA and Vivid Economics
140
160
€
7.00%
6.00%
Required change in carbon productivity (% p.a.)
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
RUS KOR ITA FRA BRA USA GBR IND CAN ZAF JPN ARG GER IDN MEX SAU TUR AUS CHN -1.00%
-2.00%
-3.00%
-4.00%
Source: Vivid Economics
US$ 2010 billions saved
20 16
12 8
4 0
+0.5%
+1.0%
+1.5%
+2.0%
Increased p.a. rate of carbon productivity improvement (over baseline)
Source: Vivid Economics and IIASA
AUSTRALIA UK JAPAN
Executive summary
CHINA GERMANY USA
Research commissioned by
Carbon Productivity Non-energy emissions and related output ‒ ‒ ‒ ‒
Energy productivity (GDP/Energy)
(inverse)
Emissions intensity of energy (Emissions/Energy)
LULUCF Direct industrial Waste Agriculture
All of level 3 is affected by investment choices Energy Efficiency ‒ Technology ‒ Production techniques
Energy Prices
Sectoral composition
‒ Regulation ‒ Resource endowment
‒ Transport needs ‒ Emissions intensive Industry ‒ Resource extraction ‒ Services/ Manufacturing ‒ Heating and cooling needs
Conversion efficiency ‒ Power stations ‒ Vehicles ‒ Industrial facilities
Source: Vivid Economics
Electricity Market
Transport Fuels
‒ Shares of ‒ Share of heavy fuel type vs light ‒ Cost of fuel products ‒ Type of ‒ biofuels plant ‒ Dispatch ‒ Transmission losses
JPN FRA
Carbon productivity (US$ GDP per tonne of CO2)
4000
GBR
3000 ITA GER BRA
ARG
2000
USA
MEX
CAN
KOR
TUR
AUS
1000 IDN IND
SAU
ZAF CHN RUS
10000
20000
30000
40000
GDP per capita ($US 2000)
Source: Vivid Economics, data is from 1980-2007 and the line gets thicker over time, Note that we use the international standard ISO codes to refer to countries: ARG Argentina, AUS Australia, BRA Brazil, CAN Canada, CHN China, FRA France, GBR United Kingdom, GER Germany, IDN Indonesia, IND India, ITA Italy, JPN Japan, KOR South Korea, MEX Mexico, RUS Russia, SAU Saudi Arabia, TUR Turkey, USA United States, ZAF South Africa.
CHN
Carbon productivity, 1980 baseline = 1
3.0
2.5
GER GBR
2.0 USA
1.5 JPN AUS
1.0 1980
1985
1990
1995
2000
2005
Year
Source: Vivid Economics analysis of IEA and World Bank data
1.50 1.00 0.50
IDN
BRA
TUR
KOR
IND
SAU
AUS
JPN
MEX
ITA
ARG
CHN
ZAF
RUS
CAN
USA
GBR
-0.50
FRA
0.00 GER
Clean growth index (1980-2007)
2.00
-1.00
The Clean Growth index is calculated as the percentage increase in carbon productivity for every percentage increase in GDP per capita Source: Vivid Economics
Energy productivity (US$ GDP per unit of energy in kg oil equivalent)
JPN
10
8
GBR
JPN
GER
6
USA GBR
AUS
4 GER AUS USA
2 CHN
CHN
1980
1985
1990
1995
Year
Source: Vivid Economics
2000
2005
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Electricity prices for industrial users, $US per kWh
0.2
0.18
0.16
0.14
0.12
0.1
0.08
0.06
0.04
0.02
0
Australia Germany Japan United Kingdom United States
Source: IEA and Garnaut Climate Change Review China
Energy per unit of emissions (kg oil equivalent per tonne CO2)
440
CHN
420 JPN GER USA GBR
400 JPN USA
380
360 GBR
340
GER AUS
CHN
320 AUS
1980
1985
1990
1995
2000
2005
Year
Source: Vivid Economics analysis of IEA and World Bank data
Australia
China
Germany
Japan
UK
USA
Renewables
6%
17%
13%
9%
6%
10%
Nuclear
0%
2%
22%
27%
18%
20%
Coal
76%
79%
42%
25%
28%
45%
Gas
16%
1%
14%
32%
44%
23%
Oil
1%
1%
2%
6%
1%
1%
Other, waste, biomass
1%
0%
7%
2%
3%
2%
Note: Data is for 2009, except for China which is 2008 Source: Vivid Economics calculations from IEA data
Emissions intensity of all generation (gCO2 per kWh of electricity)
900 AUS
800 CHN
Country 700
AUS CHN GBR GER
600
JPN USA USA
500
GBR GER JPN
400
1980
1985
1990
1995
Year
Source: IEA
2000
2005
Emissions intensity of coal generation (g CO2 per kWh of electricity)
1150
1100
1050
Country AUS AUS
1000
CHN GBR GER JPN
950 GBR USA JPN
900
CHN
850
GER
1980
1985
1990
1995
Year
Source: IEA
2000
2005
USA
Emissions intensity of gas generation (g CO2 per kWh of electricity)
600 AUS
Country 500
AUS CHN GBR JPN CHN
GER JPN
400
USA GBR
300 GER
1980
1985
1990
1995
Year
Source: IEA
2000
2005
USA
The appropriate level of emissions abatement is a controversial issue, and our approach to this, outlined later in the report, is based on IEA scenarios.
1.0
Index of cost-effectiveness
0.9 0.8 CHN
0.7 0.6
0.5
CA
0.4
GBR
AUS
0.3
GER JPN
0.2 0.1 0.0 0.0
0.2
0.4
0.6
0.8
1.0
Index of abatement effort
Note: abatement financed by the CDM is included for China; the codes are defined as AUS Australia, CA California, CHN China, GER Germany, JPN Japan, GBR United Kingdom Source: Vivid Economics
Policy MACC
IIASA Technology MACC
IEA 450 q*
Marginal cost of abatement, USD/tCO2e
600
500
400
300
200
100
0 0
20
40
60
80
100
120
-100
-200
MtCO2e abated
Source: IIASA and Vivid Economics
140
160
€
7.00%
6.00%
Required change in carbon productivity (% p.a.)
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
RUS KOR ITA FRA BRA USA GBR IND CAN ZAF JPN ARG GER IDN MEX SAU TUR AUS CHN -1.00%
-2.00%
-3.00%
-4.00%
Source: Vivid Economics
US$ 2010 billions saved
20 16
12 8
4 0
+0.5%
+1.0%
+1.5%
+2.0%
Increased p.a. rate of carbon productivity improvement (over baseline)
Source: Vivid Economics and IIASA
