PNNL

Abstract

The European Union has established an aggressive portfolio with explicit near-term targets for 2020—to reduce greenhouse gas emissions by 20%, rising to 30% if the conditions are right, to increase the share of renewable energy to 20% and to make a 20% improvement in energy efficiency—intended to be the first step in a long-term strategy to limit climate forcing. In this paper we consider the effectiveness and cost of extending these measures in time and ambition and propagating them to the rest of the world. We report numerical results and analyze the contribution of the portfolio’s various elements through a set of sensitivity experiments. We find that the hypothetical program leads to very substantial reductions in greenhouse gas emissions, dramatic increases in use of electricity, and substantial changes in land-use including reduced deforestation, but at the expense of higher food prices. The greenhouse gas emissions reductions are driven primarily by the direct limits. We find that while the carbon price is lower under the hypothetical protocol than it would be under the emissions cap alone, the economic cost of the portfolio is higher between 13 and 22 percent.