A LOW CARBON VISION FOR GREECE IN 2050

Transcription

1 A LOW CARBON VISION FOR GREECE IN 2050 Wina Graus Eliane Blomen September 2008 Project number: PECSNL Ecofys Netherlands BV, Utrecht Commissioned by: WWF Greece 1

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3 Executive summary This study defines a low carbon vision for Greece in This vision involves a 60 80% reduction in greenhouse gas emissions in Greece below 1990 levels. Below is a summary of the study with the main conclusions. Climate Change is already visible and perceptible also in Greece. There is a clear warming in the country from the early 1990s (NOA, 2001), which is gradually strengthened and record-breaking hot summers are an increasingly regular occurrence. Furthermore, the trend of precipitation in Greece is negative both on annual as well as on seasonal basis (NOA, 2005). Higher average temperatures and structural changes in the frequency and intensity of rainfall will have consequences for agriculture, fisheries and nature conservation. In industrialised countries, an emission reduction of at least 60-80% compared to 1990 levels is necessary to stay below a global 2 C temperature increase. The average global temperature has already risen by 0.8 C since the beginning of the Industrial Revolution (NOAA, 2005). According to recent research (IPCC, 2007, Graßl et al. 2003, Hare 2003), an average global warming of 2 C or above compared to the pre-industrial Revolution level would result in dangerous, irreversible impacts; only with a stabilisation at 400 ppm carbon dioxide equivalent (CO 2eq ) is the probability of exceeding 2 C unlikely. In order to stay below this 2 C warming, vast emission reductions are a necessity. To achieve a 60-80% reduction, the Greek carbon budget is limited to a yearly emission of between 22 to 44 Mtonne CO 2eq in the year In 2005, total greenhouse gas emissions in Greece were 139 Mtonne CO 2eq. CO 2 emissions represent the largest share of greenhouse gases (81%, excluding land use change and forestry or LUCF), followed by nitrous oxide (N 2 O) and methane (CH 4 ) emissions, which together account for 15%. Emissions from HFCs, SF 6 and PFCs are relatively small, at a total of 4%. The negative contribution of LUCF (net removal of CO 2 ) is equal to 4% of emissions (139 Mtonne CO 2eq ) in The largest share of greenhouse gas emissions in Greece results from public power and heat generation (41%), followed by industry (17%) and road transport (14%, see Figure 1). Agriculture and the residential sector were responsible for 10% and 8% of total emissions in 2005, respectively. Smaller contributors are petroleum refining (3%), waste (2%) and the service sector (1%). 3

4 Waste 2% Petroleum refining 3% Residential 8% Agriculture 10% Services 1% Other 4% Public power and heat generation 41% Road transport 14% Industry 17% Figure 1 Greenhouse gas emissions per sector in 2005 (UNFCCC, 2007) In order to reduce greenhouse gas emissions by 60-80% in 2050, emissions need to reduce from the 1990 level of 109 Mtonne CO 2eq to Mtonne CO 2eq /yr in In terms of greenhouse gas emissions per capita, a reduction is needed from 11 tonne CO 2eq per capita in 1990 to 2-4 tonne CO 2eq per capita in For the purpose of forecasting greenhouse gas emissions in the period and estimating possible greenhouse gas emission reductions, two scenarios are determined: a reference scenario that forecasts business-as-usual greenhouse gas emissions in Greece and a frozen efficiency level: a fictive emission level that represents a world where current emission intensities (or efficiencies) are kept constant until In this way we project the current situation onto 2050 assuming that only GDP growth would occur and efficiency would not improve. These are both explained in the box below and in more detail on page 22.. Reference scenario A reference scenario is defined for the development of greenhouse gas emissions in Greece in the period This reference scenario is based on the 4th National Communication to the United Nations Framework Convention on Climate Change (MEPPPW, 2006) and includes policies currently implemented for reducing greenhouse gas emissions. Frozen efficiency level For the purpose of calculating the total emission reduction potential, a frozen efficiency level is determined. This represents the emission level when the energy-efficiency of technologies remains the same as in 2005 and no measures for reducing greenhouse gas emissions are implemented. It is calculated by assuming that emissions grow linear with forecasted GDP until This frozen efficiency level is only a tool that we need due to insufficient detail in the reference scenario and should not be seen as a separate scenario, merely a hypothetical situation (see page 22). 4

5 In the reference scenario, emissions increase from 109 Mtonne CO 2eq in 1990 to 228 Mtonne CO 2eq in The projected economic growth for Greece used in this study is approximately 3% per year until 2020 and 1.5% per year from 2020 to With constant greenhouse gas intensity, emissions will increase to 328 Mtonne CO 2eq in 2050 in Greece. Within the reference scenario emissions grow to 228 Mtonne CO 2eq. The reference scenario takes into account implemented policies for reducing greenhouse gas emissions and an autonomous greenhouse gas intensity decrease. With currently available, low-cost technologies ( low hanging fruit ) emissions in Greece can be reduced to 175 Mtonne CO 2eq in 2050 compared to the reference scenario level of 228 Mtonne CO 2eq. In order to achieve this reduction, the greenhouse gas intensity should decrease by 2.3% per year compared to the frozen efficiency level in which current greenhouse gas intensities stay constant. Possible measures are included in five emissions reduction wedges : Industrial efficiency, Hybrid transport, Efficient buildings, Efficient farming, and Efficient energy supply. With more innovative technologies ( emerging technologies ), emissions can be further reduced to 36 Mtonne CO 2eq in 2050 (reduction of 67% compared to 1990 emissions). Implementing these measures along with the low hanging fruit measures makes sure that a greenhouse gas intensity reduction of 5.6% per year is achieved compared to the frozen efficiency level (FEL) in which current GHG intensities remain constant. Measures are included in five wedges: Emerging industry, Shifting transport, Zero emission buildings, Low greenhouse gas farming, and Emerging clean power. The relative contribution of the wedges to total emission reduction in the low carbon vision for 2020 and 2050 is shown in Figure 2. Absolute emission reductions are compared with the 2020 and 2050 frozen efficiency level. The wedges in the figure refer to: Wedge 1: Industrial efficiency Wedge 2: Emerging Industry Wedge 3: Hybrid Transport Wedge 4: Shifting Transport Wedge 5: Efficient Buildings Wedge 6: Zero emission buildings Wedge 7: Efficient farming Wedge 8: Low GHG farming Wedge 9: Efficient energy supply Wedge 10: Emerging clean power 5

6 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Wedge 10 Wedge 9 Wedge 8 Wedge 7 (incl waste) Wedge 6 Wedge 5 Wedge 4 Wedge 3 Wedge 2 Wedge 1 0% 2020 % of FEL 2050 % of FEL Figure 2 Contribution of emission reduction per wedge in comparison to total emissions in frozen efficiency level (FEL) For the needed emission reduction (60-80% in comparison to 1990) all possible options for mitigating greenhouse gas emissions should be implemented from energy-efficiency improvement to renewable energy sources and carbon capture and storage. Figure 3 shows the development of greenhouse gas emissions in the low carbon vision, the frozen efficiency level, and in the reference scenario. By implementing all measures the needed emission reduction can be achieved, while still maintaining the economic growth of 3% per year until 2020 and 1.5 % per year from GHG emissions (Mtonne CO2eq) Frozen efficiency level Reference scenario Low hanging fruit 60% reduction 80% reduction Low carbon scenario Figure 3 Graph showing different scenario s until

7 Table 1 shows the emissions per sector in the low carbon vision in 2050 in comparison to emissions in The total emission reduction in the low carbon vision is 67% below the 1990 level of 109 Mtonne CO 2eq. This emission reduction that can be achieved by the different measures is based on available literature sources with estimates for emission reduction potentials (see Appendix). Table 1 Emission reduction in low carbon vision (the measures are not presented in any kind of order) Sector Industry Emissions (Mt CO 2eq ) Emissions in 2050 compared to % Examples of measures Improving energy efficiency and combined heat and power generation (2% per year energy-efficiency improvement) Material efficiency and increased recycling (1% per year energy-efficiency improvement) Energy efficient emerging technologies (0.5% per year energy-efficiency improvement) Reducing N 2 O emissions from nitric acid production by catalytic reduction by 90% The use of biomass and solar energy reduce emissions in 2050 by 20%. Transport % Energy-efficient cars and trucks (2.5% per year energy-efficiency improvement) Restrain growth of car traffic per capita from 14,000 km/capita in 2005 to 22,000 km/capita in 2050 Reduce road transport by modal shift (10% for passenger cars and 18% freight) Implementation of natural gas buses (10% of fleet in 2050) and RES-produced hydrogen buses (30% of fleet in 2050) Biofuels for 10% of 2050 fuel use (27 PJ) Households and services % Efficient appliances and lighting (2% energyefficiency improvement per year) Improved thermal insulation and building design (2% per year energy-efficiency improvement) Zero-energy buildings (1.5% per year energyefficiency improvement) Use biomass for 15% of heat demand in buildings and 7.5% in

8 Sector Emissions (Mt CO 2eq ) Emissions in 2050 compared to 1990 Agriculture % Energy supply % Waste % Total % Examples of measures Energy efficiency improvement (efficient equipment, tractors, CHP) (2% per year energy-efficiency improvement) Anaerobic digestion of manure; implementation of 70% and 80% in 2020 and 2050 respectively Reduce CH 4 from enteric fermentation by improved diets (reduce by 5% in 2020, 19% in 2050) Reduce N 2 O from soils by spreader maintenance, fertilizer free zones, and sub optimal levels of fertilizer (reduction potential 17% in 2020 and 36% in 2050) Decrease growth of power generation by energyefficiency measures in end-use sectors (buildings and industries such as solar and geothermal cooling) (energy-efficiency improvement 1.7%/year) Increased use of renewable energy (24 TWh in 2020, 42 TWh in 2050) CO 2 capture and storage (CCS) (only in a viable and secured social and environmental way) Reduced unmanaged landfill sites Decrease organic waste land fields Increase recycling Figure 4 shows the relative contributions of the different wedges to the total emission reduction in the low carbon vision. 8

9 350 GHG emissions (Mtonne CO2eq) Wedge 1 Wedge 2 Wedge 3 Wedge 4 Wedge 5 Wedge 6 Wedge 7 Wedge 8 Wedge 9 Wedge 10 Frozen Technology 50 Low carbon vision Figure 4 Graph depicting the relative contributions of the wedges to the total emission reduction Immediate actions are required to ensure the achievement of these reductions in In order to realise the low carbon vision it is important to start immediately with the formulation of policies to implement the measures. When looking at greenhouse gas emission reductions of 60-80% over a period of 50 years, innovation in the field of energy-efficient technologies will play an important role. Policies aimed at encouraging innovation in this field should be implemented. It is best if policies are implemented in an international context, to avoid market distortions and the leakage of emissions to other countries. However, it is important to take the lead in order to strategically position the economy to benefit from the increasing global demand for mitigation and sustainable (energy) technology. Total annual costs to achieve 60-80% reduction are estimated to be around 0.7% of gross domestic product 67% greenhouse gas emission reduction in 2050 at an average cost of 20 /tonne CO 2eq is equal to annual costs of ~4 bln. This is equivalent to 0.7% of the gross domestic product (GDP) in Greece in 2050 (560 bln ) in the reference scenario. This cost estimate does not take peripheral benefits of reduced fossil fuel consumption into account (such as reduced pollution, decreased fossil fuel dependence, health improvement). Moreover, the costs resulting from the effects of climate change are not taken into account. 9

10 The Stern Review (Stern et al., 2006) contains valuable and crucial points on the costs of climate change. The basic message is that the costs of stabilising the climate are significant but manageable; delay would be dangerous and much more costly. The benefits of strong and early action far outweigh the economic costs of not acting. There is still time to avoid the worst impacts of climate change, if we take strong action now. 10

11 Table of contents Executive summary 3 1 Introduction Background to this study Background to climate change The global perspective The Greek perspective Content of the report 20 2 Methodology 21 3 Historic greenhouse gas emissions Total greenhouse gas emissions Trend in greenhouse gas emissions Emissions per sector 27 4 Reference scenario General characteristics of the scenario Climate policies Energy Price development Developments per sector in reference scenario Energy Supply Transport Industry Agriculture Waste Residential-Tertiary Sector Land Use Change and Forestry Development of greenhouse gas emissions 36 11

12 5 Low carbon vision Required greenhouse gas emission reduction Wedges for emission reduction Low carbon vision Total emission reduction Costs Road maps for policy making 63 6 Conclusions and recommendations 67 References 69 Appendix 1: Description of wedges 75 Wedge 1: Industrial efficiency 75 Wedge 2: Emerging Industry 78 Wedge 3: Hybrid Transport 81 Wedge 4: Shifting Transport 85 Wedge 5: Efficient Buildings 89 Wedge 6: Zero emission buildings 95 Wedge 7: Efficient farming 98 Wedge 8: Low GHG farming 101 Wedge 9: Efficient energy supply and Wedge 10: Emerging clean power

13 List of abbreviations Abbreviation CC CCS CH 4 CFL CHP CO 2 CO 2eq CSF EPBD ETS EU FEL GDP g.e. GHG GWP HFCs kt/ktonne ktoe LUCF MEPPPW N 2 O PFCs ppm ppmv SF 6 toe Explanation Climate Change Carbon Capture and Storage Methane Compact Fluorescent Light bulbs Combined Heat and Power generation Carbon Dioxide Carbon Dioxide equivalent, based on Global Warming Potential from IPCC s Third Assessment Report, 2001 Community Support Framework Energy Performance Building Directive Emissions Trading Scheme European Union Frozen efficiency level Gross Domestic Product Gasoline equivalent Greenhouse gases Global Warming Potential Hydrofluorocarbons kilo - tonne kilo tonnes of oil equivalent Land Use Change and Forestry Ministry for the Environment, Physical Planning and Public Works, Greece Nitrous oxide Perflourocarbons Parts per million Parts per million by volume Sulphurhexafluoride Tonne of oil equivalent 13

14 1 Introduction 1.1 Background to this study This study defines a low carbon vision for Greece in The starting points for the vision are a maximum global temperature increase of at most two degrees in 2050 and an atmospheric CO 2 concentration of at most parts per million. For industrialised countries, this leads to a need to reduce greenhouse gas emission by 25-40% in 2020 and at least 60%-80% in 2050 in comparison to 1990 levels. The goal of this study is to determine the technological measures needed to establish this challenging emission reduction in Greece. This is done by defining packages of measures for greenhouse gas emission reduction by sector. 1.2 Background to climate change The threat of climate change is not only well recognized, but is an important item on the political agenda of all countries due to the speed and intensity with which the impacts are already occurring. But how fast does the world need to move? And how do we avoid resorting to climate-saving technologies which themselves cause other damage to the environment? This low carbon vision for Greece explores the positive potential for achieving the goal of: An equitable contribution from Greece to averting dangerous and irreversible climate change, and Avoiding other serious damage to the world s life sustaining environment The global perspective It is beyond doubt that climate change is happening right here, right now. Increasingly, the world is experiencing extreme weather conditions, such as lengthy droughts, heat waves, changing rainfall patterns, changing seasonal patterns, and severe hurricanes. The average temperature on earth has increased by 0.8 degrees Celsius since pre-industrial times. That this is related to high concentrations of CO 2 in the atmosphere, caused by burning fossil fuels, coals, oil and gas, is undisputed. Other significant causes on a global scale are deforestation and agricultural practices. Climate Change is induced by humans and is primarily caused by the combustion of fossil fuels; coal, oil and gas, but other greenhouse gases (GHGs) also contribute to the problem. 14

15 The 2 degrees imperative The average global temperature has already risen by 0.8 C since the beginning of the Industrial Revolution (NOAA, 2005). According to recent research (IPCC, 2007, Graßl et al. 2003, Hare 2003), an average global warming of 2 C or above compared to the pre-industrial Revolution level would result in dangerous, irreversible impacts. The latest research (IPCC, 2007) on probability assessments indicate that at 550 ppm CO 2 -equivalent (CO 2eq ), there is a very great likelihood that 2 C will be exceeded (63-99% with a mean of 82%). A stabilisation at 475 ppm is associated with a 38 to 90% (mean 64%) probability. Only with a stabilisation at 400 ppm CO 2e is the probability of exceeding 2 C unlikely, with a range of 8 to 57% (mean 28%). Concentration level The CO 2 concentration in the atmosphere in 2006 was 382 ppm, or approximately 400 ppm CO 2eq. This figure has been rising in recent years at a rate of 2 ppmv per year (IPCC, 2007). The critical need is to ensure that GHG emissions peak and start to decline within the next 10 years, as GHGs linger in the atmosphere for decades. This means that radical action is urgent and imperative. WWF translated the long-term stabilisation goal of 400 ppm into a global carbon budget of cumulative fossil CO 2 emissions. Stabilisation at 400 ppm CO 2eq in 2050 would require the world to keep within a carbon budget of approximately 370 Gtonne Carbon (1360 Gtonne CO 2eq ) for energy and 30 Gtonne Carbon for deforestation, assuming that deforestation emissions have been reduced significantly in the period until Any failure to secure deforestation emissions would have to be balanced by commensurate energy budget cuts. Stabilisation target and probability. Our adopted target of 400 ppm carbon dioxide equivalent for greenhouse gases is based on Meinhausen s analysis of the impact of greenhouse emissions on the climate system, which suggests that such a stabilisation would provide a 72% probability of avoiding a 2 degree warming. Carbon budget. There is consensus about the level of emission reductions required to avoid dangerous climate change typically 60% below current levels globally by However, it is the total cumulative emissions that are important for avoiding dangerous climate change and so the principle of a carbon budget came to life, which totals the amount of carbon that can be released from human-induced sources (allowing for natural levels of emission and sequestration) before a particular concentration level is reached. 15

16 The Global Carbon budget The graph below shows that worldwide emissions may rise up to 10 billion tonnes of Carbon (37 Gtonne CO 2eq ) in 2010 and have to decrease sharply thereafter Total Emissions Projected in A1B scenario (GtC/yr) Carbon Budget ( GtC) Carbon Emissions (GtC/yr) Emissions from residual fossil fuels, gas and CCS (Gtc) Figure 5: Comparison of emissions from the global WWF scenario (run in red) with the reference scenario (green background), and the carbon budget range (brown) (Graus et al., 2006) Carbon budget range. Meinhausen s fossil carbon budget [of] about 500 GtC [gigatonnes of carbon] for stabilisation at 400 ppm CO 2eq has been adopted as an upper limit. However, this assumes a significant cut in land use emissions. Meinhausen points out that the carbon budget could be lower (400 GtC), depending on net land-use emissions. 400 GtC (1470 tonne CO 2eq ) has therefore been adopted here as the lower bound. Carbon band. Clearly, such a budget will be spent (emitted) over the course of many years. The model assumes that the shape of this spend is a band, as shown in Figure 6, consistent with the upper and lower limits of the total carbon budget, and the inertia in the current energy system, which will resist sudden change. 16

17 Giga-tonne Carbon 10 Carbon Budget (GtC) GtC total emissions GtC total emissions Figure 6: Annual carbon emissions range in GtC available for energy, based on a total budget of between 400GtC and 500GtC, projected to The Greek perspective Global emissions in 2005 were approximately 29 billion tonnes CO 2 equivalents. The share of Greece, with 139 Million tonnes (Mtonne) CO 2eq in 2005, amount to approximately 0.5% of global emissions. In order to comply with the radical emission reduction tracks needed to remain within the budget of ultimately 500 GtC (1830 tonne CO 2eq ) worldwide, industrialised countries need to reduce by at least 60-80% in 2050 compared to 1990 levels. Greece does not have very high overall emissions compared to large emitters like the United States or China. Nevertheless, it still remains a member state of the European Union, which has international obligations. Greece s per capita emissions are higher than the European average. Taking into account that the latest research (IPCC, 2007) says that the emission reductions of the industrialised countries should be closer to the upper limit of this 60-80% range, Greece as part of the industrialised group of countries but with a small share in the overall global emissions should at least achieve a 60% reduction in order to contribute to the global effort of cutting emissions so drastically. For Greece an emission reduction of 60-80% in 2050 would result in a maximum emission level of MtCO 2eq (emission in 1990 are 109 Mtonne CO 2eq /yr). Per capita the emission amount to 12.5 tonnes CO 2eq in 2005, while the emissions required in 2050 would have to be between 2 and 4 tonnes per capita. 17

18 In 2005 Greece produced a total calculated emission of 139 Million tonnes of CO 2 -equivalents (excluding land use change and forestry). CO 2 -equivalents include all greenhouse gases, such as methane (CH 4 ), nitrous oxide (N 2 O) and carbon dioxide (CO 2 ), converted into CO 2 - equivalents based on the Global Warming Potential (GWP) of each greenhouse gas. The greatest share of emissions in Greece is caused by power plants (41%), followed by industry (17%) and road transport (14%). Emissions from international air transport and marine bunkers (total 11.6 Mtonne CO 2eq in 2005) are not included in this analysis. Impacts of Climate Change (CC) on Greece and the Mediterranean Climate Change is already visible and perceptible, also in Greece. There are clear indications of warming in the country from the early 1990s (NOA, 2001), which is gradually strengthened and record-breaking hot summers are an increasingly regular occurrence. Furthermore, in total the trend of precipitation in Greece is negative both on annual as well as on seasonal basis (NOA, 2005). This kind of changes could be associated with many adverse consequences in the future, especially regarding water management. The IPCC (IPCC, 2007) predicts that water stress will increase over southern Europe, where summer flows in some rivers may be reduced by up to 80%. The hydropower potential of Europe is expected to decline by 20 to 50% around the Mediterranean by the 2070s. In economic terms, climate change could result in large adaptation and social costs, specifically in Mediterranean countries, including Greece, where an increase of the number of extremely hot days in the summer, will make the region less attractive for tourists. 18

19 What a 2 C warmer world means for the Mediterranean From the WWF report Climate change impacts in the Mediterranean resulting from a 2 o C global temperature rise, (WWF, 2005), which focuses on the thirty-year period assuming that global temperature reaches 2 o C above pre-industrial levels: If global average temperature would rise 2 C above pre-industrial levels, the climate of the Mediterranean region would become hotter, drier and more variable. Annual mean temperature around the region would increase by 1-2 C compared to present conditions. Heat waves and extremely hot days are expected to become more plentiful, particularly in inland locations. Even the breezy northern Aegean islands in Greece would experience a two-week increase in heat wave days. Annual precipitation would likely decrease by up to one fifth over the southern Mediterranean, while reduction in summer rainfall over the northern Mediterranean could exceed 30%. Drought periods would be expected to shift in time and extend in duration. Even as the number of dry days would increase, more rainfall would be expected to be concentrated in heavier episodes over Italy, western Greece, southern France and the northwestern part of the Iberian Peninsula. With 2 C global warming, the whole southern part of the Mediterranean would be at risk from forest fires all year round. In other parts of the region, the period of fire risk would be expected to be extended by up to six weeks. Extreme fire risk may lengthen by over a month in the Iberian Peninsula, northern Italy and the Balkans. The hotter and drier climate is likely to lead to lower agricultural yields, particularly in summer crops that are not irrigated. Beans, soy beans and lentils are among the most affected crops in the region, with a reduction of up to 40% in yields depending on location. Throughout the region, some agricultural strategies could still make crops more resilient to the hotter and drier climate. However, such strategies could require up to 40% more water for irrigation, which may or may not be available under a global 2 C warming. More frequent heat waves and forest fires would discourage summer holidays in the Mediterranean region. The spring and autumn seasons may become attractive to certain visitors but families might take their summer holidays elsewhere. Many visitors from northern Europe may choose to stay away. A drier climate, accompanied by reduced precipitation and surface runoff, and increasing demand from the agricultural sector, would exacerbate the already high level of water stress in the region. Furthermore, latest studies show that global warming of more than 2 C could lead to a loss of over 50% of plant species in the northern Mediterranean region, with losses exceeding 80% in north-central Spain and in the mountains, especially in France. An increase in forest fires would encourage the spread of invasive grass species, which in turn would fuel even more frequent and more intense fires. 19

20 1.3 Content of the report This report is structured as follows: Chapter 2 discusses the methodology used. Chapter 3 surveys historic greenhouse gas emissions by sector and greenhouse gas in Greece in the period Chapter 4 gives the projected greenhouse gas emissions in the reference scenario in Greece in the period Chapter 5 presents the low-carbon vision for Greece, which aims to give an overview of how 60-80% of greenhouse gas emissions can be reduced in 2050 in comparison to 1990 levels. Chapter 6 gives the conclusions and recommendations of the analysis. The Appendix shows detailed assumptions regarding the calculation of emission reduction options in Greece. 20

21 2 Methodology This chapter surveys the methodology used for determining a low carbon vision for Greece in The analysis is divided into three steps: 1. Assessment of historic greenhouse gas emissions in the period by sector and greenhouse gas. The purpose of this assessment is to get a feeling for the development of greenhouse gas emissions by sector and greenhouse gas in Greece. The result of this step is an overview of sectors that emit large amounts of greenhouse gases. Based on the emissions in 1990 we determine to what level greenhouse gas emissions must be reduced in 2050 in order to realise the target discussed in Chapter 1: 60-80% emission reduction in 2050 compared to 1990 levels. 2. Development of reference scenario. A reference scenario is defined for the development of GHG emissions in Greece in the period This reference scenario is based on the 4 th National Communication to the United Nations Framework Convention on Climate Change (MEPPPW, 2006). The reason for choosing this with measures scenario is that it covers all greenhouse gas emissions and all sectors. This scenario projects emissions until Emissions are extrapolated for the period For the extrapolation we use the yearly growth rates per subsector from and assume this growth rate will remain the same until 2050 (agriculture 0.6% per year, waste -3% per year, industry 0.9% per year, transport 1.4% per year, energy supply 1.0% per year, and residential/tertiary 1.5% per year). The result of this step is an overview of the projected greenhouse gas emissions in Development of low-carbon vision. This step consists of two parts: a. Definition of wedges for emission reduction. The term wedge is taken from Pacala & Socolow (2004), who define technology-based stabilisation wedges for emission reduction. A stabilisation wedge represents an activity that reduces emissions to the atmosphere, implying an effort beyond what would occur under the reference scenario (due to so-called virtual wedges). In our study a wedge refers to a combination of measures for greenhouse gas reduction in a certain sector. A distinction is made between low-hanging fruit and innovation wedges. The low-hanging fruit wedges include measures for emission reduction that are readily, cost-effectively available. The innovation wedges include further emission reductions, focused on emerging technologies and future developments. In a long-term scenario, technology development plays an important role. New technologies, which may be expensive at the moment, will be available in a longer time period at lower cost, due to for example learning by doing and mass production. Increasing energy prices will enhance this process. By continuous efforts in the field of innovation strong improvements in energyefficiency can be achieved over long time periods. Together, wedges should lead to the emission reduction needed in The wedges determine the low-carbon vision 21

22 for Greece in The vision gives the measures needed to reduce greenhouse gas emissions in the long term and reveals that short-term policy making is needed to realise the vision. b. Calculation of emission reduction per wedge. The potential for greenhouse gas emission reductions in a certain wedge is determined from available literature sources. The potential is preferably based on studies of greenhouse gas emission reductions in Greece and, if these are not available, in the European Union. Detailed assumptions about the emission reduction per wedge can be found in the Appendix. The emission reduction per wedge is calculated such that there is no overlap between options and wedges. This implies that the emission reductions per wedge can be added to get to the total emission reduction. Due to the relatively ambiguous reporting of exact policies and measures taken into account in the reference scenario, we decided to base the emission reductions on the frozen efficiency level instead of the with measures reference scenario. An explanation of the frozen efficiency level and how it is used in this study is given in the box on the next page. 22

23 Frozen efficiency level Ideally, the reference scenario is described in such detail that assumptions for useful indicators in all sectors are known (e.g. passenger car fuel intensity in 2050). However, this is not the case in the reference scenario used in this study. We thus do not know which measures are already taken in the reference scenario (for example: improve passenger car efficiency from 7 L/100-km to 5 L/100-km in 50% of cars). This means we do not know which measures will be exploited in 2050 and which measures will still be available. In order to solve this problem we need to construct a fictive emission level which we call the frozen efficiency level. This fictive emission level represents a world where current emission intensities (efficiencies) are kept constant until In this way we project the current situation onto 2050 assuming that only GDP growth would occur and efficiency would not improve (so 7 L/100-km passenger cars, number of cars increases with GDP). In this way we can reduce emissions with all possible measures (all cars will attain 3 L/100-km in 2050). We reduce emissions with respect to the frozen efficiency level, but we want to compare these reductions to the realistic reference level. We accordingly have to compare the low carbon emission level with the reference scenario. See drawing below. GDP growth rates used can be found in Table 3. GDP growth frozen efficiency level reference scenario all reductions low carbon scenario reductions compared to reference scenario 23

24 3 Historic greenhouse gas emissions This chapter surveys historic and current greenhouse gas emissions in Greece per sector and per greenhouse gas. All emission data in the figures exclude international bunker fuels. 3.1 Total greenhous e gas emissions Total greenhouse gas emissions in Greece amounted to 134 Mtonne CO 2eq in 2005, including land use change and forestry (LUCF) and 139 Mtonne CO 2eq excluding LUCF. Figure 7 gives a breakdown of greenhouse gas emissions in Greece per gas for the year N2O 9% CH4 6% HFCs 4% PFCs 0% SF6 0% CO2 (excl LUCF) 81% Figure 7 Share of greenhouse gas emissions per greenhouse gas in 2005 (Inventory 2005 Greece; UNFCCC, 2007). CO 2 emissions represent the largest share of greenhouse gases in Greece (81% in 2005, excluding LUCF), followed by CH 4 and N 2 O, which together account for 15%. Emissions from HFCs, SF 6 and PFCs are relatively small, altogether accounting for 4%. LUCF emissions in Greece are negative (-5.4 Mtonne CO 2eq in 2005), signifying net removals of CO 2 from the atmosphere. These LUCF emissions constitute 4% of total greenhouse gas emissions (excluding LUCF). Table 2 surveys greenhouse gas emissions and their main origins. Their Global Warming Potential (GWP) is also given. GWPs are used to compare the abilities of different greenhouse gases to trap heat in the atmosphere. They are based on the heat absorbing capacity of each gas relative to that of carbon dioxide (CO 2 ), as well as the decay rate of each gas (the amount removed from the atmosphere over a given number of years) relative to that of CO 2. The GWP of gases allows one to calculate the radiative impacts of various greenhouse gases in terms of a 24

25 uniform measure: tonne carbon dioxide equivalent (tonne CO 2eq ). All percentages given in the table are based on total greenhouse gas emissions omitting the negative contribution of LUCF. Table 2 Greenhouse gases and their origin GHG Greenhouse gas GWP 1 Main origins 2 CO 2 Carbon Dioxide 1 CH 4 Methane 23 N 2 O Nitrous Oxide % of CO 2 emissions in Greece originate from fossil fuel combustion and 7% from industry (especially mineral products) 42% of methane emissions in Greece originate from agriculture (82% from enteric fermentation; mainly from cows, and 15% from manure management), nearly 35% from waste, and nearly 20% from fugitive emission from fuels 61% of nitrous oxide emissions in Greece originate from agriculture (mainly from agricultural soils: 96%), 31% from fossil fuel combustion, and 5% from the chemical industry HFCs PFCs Hydrofluorocarbons All emissions of HFCs come from industry: 57% ,000 3 from refrigeration and air conditioning equipment and 43% from production of HCFC-22 Perflourocarbons 5, % of PFC emissions in Greece originate from 11,900 4 aluminium production SF 6 Sulphur Hexafluoride 22,200 All SF 6 in Greece is emitted by electrical equipment. 1 IPCC estimates for global warming potential over a period of 100 years from Third Assessment Report (2001). 2 UNFCCC (2007) Inventory 2005 Greece 3 Ranging from 120 for HFC-152a to 12,000 for HFC ,700 for perfluoromethane (CF 4) and 11,900 for perfluoroethane (C 2F 6). 25

26 3.2 Trend in greenhouse gas emissions Figure 8 shows the development of greenhouse gas emissions in Greece in the period , classified per source. The first graph shows the development of all greenhouse gases. The second graph shows the development of non-co 2 greenhouse gases and CO 2 emissions from land use change and forestry. 160, ,000 ktonne CO2 eq ktonne CO2 eq 120, ,000 80,000 60,000 40,000 20, ,000 20,000 15,000 10,000 5, ,000-10, Total (incl LUCF) CO2 (excl LUCF) CH4 N2O HFCs CO2 - contribution LUCF PFCs SF6 CH4 N2O HFCs CO2 - contribution LUCF Figure 8 Development of greenhouse gas emissions in Greece (UNFCCC, 2007) Figure 8 shows the following trends for the period : Total greenhouse gas emissions have increased by 27%. Emissions from CO 2 (main source: fossil fuel combustion) have increased by 31%. Emissions from CH 4 and N 2 O (main sources: agriculture, waste and fossil fuel combustion) have both decreased by 7%. PFCs SF6 26

27 Emissions from HFCs and PFCs (main sources: refrigeration, air conditioners and industrial processes) have respectively increased by 532% and decreased by 72%, respectively. Emissions from SF 6 have increased by 46%. Remarkable is the strong growth of HFC emissions, which is mainly a result of an increase of cooling equipment (air conditioning and refrigeration) and replacement of HCFCs with HFC's. HFCs are applied as a substitute for fluorinated and chlorinated hydrocarbons (HCFC), which are internationally banned under the Montreal protocol because of their role in the destruction of stratospheric ozone. Mobile air conditioning is a significant source of HFC. This has increased in recent years and is expected to increase in the future. HFC emissions are discussed in more detail in the next section. CO 2 emissions also show a strong increase, mainly caused by the increase in fossil fuel combustion in the power sector. 3.3 Emissions per sector Figure 9 shows a breakdown of greenhouse gas emissions per sector in The largest share of greenhouse gas emissions in Greece results from public power and heat generation (41%), followed by industry (17%), and road transport (14%). Agriculture and the residential sector are responsible for 10% and 8% of total emissions in 2005, respectively. Smaller contributors are petroleum refining (3%), waste (2%) and the service sector (1%). Waste 2% Petroleum refining 3% Services 1% Other 4% Residential 8% Agriculture 10% Public power and heat generation 41% Road transport 14% Industry 17% Figure 9 Greenhouse gas emissions per sector in 2005 (UNFCCC, 2007) All emission figures in this study exclude greenhouse gas emissions from international bunker fuels (aviation and marine). These emissions, however, are worth mentioning since they amount to 11.6 Mtonne CO 2eq in Including these emissions would increase the total amount of greenhouse gas emission in 2005 from 139 Mtonne (excluding LUCF) to

28 Mtonne, an increase of 8%. These emissions are not expected to increase at alarming rates; aviation CO 2 emissions decreased by 2% with respect to the base year and marine CO 2 emissions increased by 13% (UNFCCC, 2007). Even though a growth of 13% might sound serious (RIVM, 1999), there are more serious emission growths to worry about in Greece, such as (all growth percentages use 1990 as a base year): - 113% increase in CO 2eq emissions from households and services between 1990 and 2005 (total emissions in 2005: 12 Mtonne CO 2eq ) - 48% increase in CO 2eq emissions from the transport sector (total emissions in 2005: 23 Mtonne CO 2eq ) - 34% increase in CO 2eq emissions from the power sector (total emissions in 2005: 58 Mtonne CO 2eq ) - 532% increase in HFCs emissions (total emissions in 2005: 6 Mtonne CO 2 equivalent) Let us focus on the latter two taking into account the enormous growth or the relatively large contribution to total emissions. HFCs are chemical substances, the production of which aims mainly at substituting ozone depleting substances (following the Montreal Protocol in 1987). HFCs are not harmful to the ozone layer but are powerful greenhouse gases. Apart from being characterized by a high Global Warming Potential (GWP), these gases have extremely long atmospheric lifetimes, resulting in their essentially irreversible accumulation in the atmosphere. Table 2 shows that in 2005 all emissions of HFCs (5.9 Mtonne CO 2 eq) came from industry: 57% from refrigeration and air conditioning equipment (manufacturing process, leakage over the operational life of the equipment, and disposal at the end of the lifetime) and 43% from production of HCFC-22. In comparison, HFCs in 1993 were emitted in the same industry branches (total 1.6 Mtonne CO 2 eq), but with a negligible share for refrigeration and air conditioning equipment. This illustrates the considerable growth in the use of refrigeration and air conditioning equipment from 1993 to Growth in GDP per capita over the last decade has been among the most rapid in the OECD (OECD, 2007). Accordingly, the use of air conditioning equipment in the residential sector and new passenger cars in Greece has increased tremendously throughout the past 10 years (MEPPPW, 2006). Economic growth and energy consumption follow the same pattern. Electricity generation increased continuously with an average annual rate of approximately 4% for the period (MEPPPW, 2006). Gross electricity production in 2003 totalled 58.2 TWh, of which 60% and 15% came from the combustion of coal and petroleum products, respectively, 9% from hydropower, 15% from natural gas and 1% from other (except large hydro) renewable energy sources (mainly from wind energy). Due to the close connection between energy consumption and GDP growth, these emissions are expected to increase considerably in the future. 28

29 4 Reference scenario This chapter surveys the reference scenario used as basis for the analysis. 4.1 General characteristics of the scenario The reference scenario used is from the 4 th National Communication to the United Nations Framework Convention on Climate Change (MEPPPW, 2006). The report presents amongst others a reference projection that covers the future development of Greek energy use and greenhouse gas emissions. Within this projection, two scenarios have been developed: with measures and with additional measures. We use the former as reference scenario, which takes into consideration the implemented policies and measures for reducing GHG emissions and assuming that no additional emission reduction actions are adopted. This scenario projects emissions until 2020 and should therefore be extrapolated for the period For the extrapolation we continue the emission trends using 2020 data and the yearly growth rates for the period We slightly adapt the high growth percentage of HFC emissions in the industrial sector from 4% from 2020 onwards to 1.5% from 2020 onwards (in line with a lower GDP growth). The with additional measures scenario is projected until 2015 and is based on the assumption that the current policy and measures ensemble is expanded. Both scenarios assume the same GDP and population growth (Table 3). We do not use the GDP and population growth rates to forecast emissions in the reference scenario, but we do use them for passenger- and transport-kilometre forecasts in the reference scenario beyond Table 3 GDP and population in reference scenario (MEPPPW, 2006) Historic data Projections Average annual rate of increase Population (x1000) % 0.32% 0.19% 0.02% 0.02% GDP (bil. 2000) % 3.67% 3.46% 2.81% 1.5% In the reference scenario, average yearly emission growth rates from 2020 onwards used to extrapolate emissions are: Energy Supply 1.0% per year, Transport 1.4% per year, Industry 0.9% per year, Agriculture 0.6% per year, Waste -3% per year, Residential/Tertiary 1.5% per year. More details on sector definitions in 4.2. These growth rates illustrate convergence to western European levels (households and services, transport grow faster than industry and agriculture) Climate policies It is difficult to resolve concrete or detailed climate policies for Greece. Policies presented in this section are therefore mostly an indication of what ought to be implemented or adopted in 29

30 Greece in the with measures reference scenario. Supporting policies for the restriction of GHG emissions in Greece consist of the following (MEPPPW, 2006): The 2 nd National Climate Change Programme ( ) aims at restricting emissions up to 2010 and defines the additional policies and measures necessary for Greece to meet its Kyoto target (restricting the increase of GHG emissions to 25% over , compared to 1990 emissions) by amongst others: o Promotion of natural gas in energy and transport sectors o Improvements in conventional power generation system o Promotion of renewable energy sources and co-generation o Council Directive on waste management o Promotion of energy saving measures and energy efficient appliances in industry and in the residential-tertiary sectors (e.g. Council Directive on the energy performance of buildings, EPBD) o Structural changes in agriculture and in chemical industry o Emissions reduction actions in transport (e.g. voluntary agreement between EC and motor manufacturers, Council Directive on promotion of use of biofuels or other renewable fuels, Council Directive relating to the quality of petrol and diesel fuels) European emissions trading scheme (EU-ETS) ( ) Operational Programme Competitiveness which falls under the 3 rd Community Support Framework (CSF) for , and promotes interventions that may lead to GHG emissions reduction (9 priority sectors with 41 measures). Operational Programme Environment, which also falls under the 3 rd CSF and promotes among other things special actions for the reduction of atmospheric pollution, particularly for regions of Athens and Thessalonica. o Council Directive on limitation of emissions of certain pollutants into the air from large combustion plants These climate policies in the reference scenario ( with measures ) result in a GHG emissions reduction potential (compared to frozen efficiency level) of 11 Mtonne CO 2eq for 2010 and 29 Mtonne CO 2eq for However, the scenario foresees that emissions will be 37% and 53% above base year levels 5 by 2010 and 2020 respectively (MEPPPW, 2006); illustrating the need for additional policies and measures as well as for implementing promised measures: on the 17 th of January 2008, Greece was condemned by the European court of justice for failing to transpose the EU s 2002 energy performance of buildings directive (European Court of Justice, 2008). The Greek government presented the legal framework for this directive to the Greek parliament two years after the deadline set by the European Commission for transposing it into national law was expired. Given that the sector LUCF was a net sink of GHG emissions in 1990, the removals are not considered in estimating base year emissions for Greece and are furthermore not included in the emissions projections for CO 2, CH 4, N 2O emissions, and 1995 for HFCs, PFCs and SF 6 emissions 30

31 4.1.2 Energy Price development Energy price developments in the reference scenario are given in Table 4. These numbers are not used for forecasts but serve as illustration of assumptions used in the reference scenario. Table 4 Development of fuel prices in reference scenario (MEPPPW, 2006) Historic prices Projected prices International fuel prices Coal ($ 2000 /t) Oil ($ 2000 /bbl) Natural Gas ($ 2000 /toe) Note that the oil price in the reference scenario in 2020 is 26.8 US$/barrel, which is very low compared to recent prices of US$/barrel (Oct 2007-April 2008). A higher oil price would further encourage energy efficiency improvement and the production and consumption of renewable energy sources. 4.2 Developments per sector in reference scenario Table 5 shows the sector terminology used in this study. Table 5 Greenhouse gas emissions by sector Sector Energy supply Transport Industry Agriculture Waste Residential - Tertiary Definition Direct GHG emissions from public electricity and heat generation and fugitive emissions from fossil-fuel production and distribution Direct GHG emissions from public, private and freight transport (e.g. cars, buses, motors, diesel trains, trucks). Excluding emissions from international marine bunker fuels and international aviation. Direct GHG emissions from industries, resulting from fossil fuel combustion and process emissions (including emissions from solvents and other products use, and petroleum refining). Direct GHG emissions from agriculture. Mainly CH 4 and N 2 O emissions from animals and soil, and CO 2 emissions from fossil fuel combustion. Direct GHG emissions from waste management and storage (e.g. landfills and waste water handling). Direct GHG emissions from households and services. Mainly combustion of fossil fuels for heating purposes. 31