18 Technologies, Policies and Measures for Mitigating Climate Change buildings sector. This discussion focuses on four general policy areas: (i) market-based programmes in which customers or manufacturers are provided technical support and/or incentives; (ii) mandatory energy-efficiency standards, applied at the point of manufacture or at the time of construction; (iii) voluntary energyefficiency standards; and (iv) increased emphasis of private or public research, development and demonstration programmes for the development of more efficient products. Information and training programmes are a necessary prerequisite for most of these measures, but it is difficult to directly estimate savings attributable to such programmes (SAR II, 22.5.1.6). Direct government subsidies and loans will not be covered as a separate policy category but rather treated in the context of other measures as a means to reduce private investment costs. The measures discussed herein often work best in combination. Mutually reinforcing regulatory, information, incentive and other programmes offer the best means for achieving significant portions of the cost-effective energy-efficiency potential (SAR II, 22.5.1.8). Demand-side projects can be "bundled" in order to provide a larger energy "resource" and attract capital, especially in non-Annex I countries (SAR II, 22.5.1.7). Measures need to be carefully tailored to address specific issues and barriers associated with various building characteristics, including commercial versus residential buildings, new construction versus existing retrofits, and owner- versus renter-occupied buildings (SAR II, 22.5.1). • Government or utility programmes that obtain voluntary agreements from customers (typically industries or owners/ operators of large commercial buildings) that they will implement cost-effective energy-efficiency measures in exchange for technical support and/or marketing assistance (e.g., U.S. Department of Energy and Environmental Protection Agency programmes such as Green Lights, Motor Challenge and Energy Star Computers) (SAR II, 22.5.1.6). Procurement programmes in which very large purchasers (typically governments) commission large numbers of high-efficiency units (SAR II, 22.5.1.1). Examples include the Swedish NUTEK technology procurement programme and the International Energy Agency's Cooperative Procurement of Innovative Technologies. • Manufacturer incentive programmes in which a competition is held and a substantial reward provided for the development/commercialization of a high-efficiency product [e.g., the U.S. Super Efficient Refrigerator Program (SERP)) (SAR II, 22.5.1.1). • Utility demand-side management (DSM) programmes in which incentives are provided to customers for the purchase of energy-efficient products (SAR II, 22.5.1.4). • Creation of energy service companies, often encouraged by government and utility programmes, that pay the full cost of energy-efficient products in exchange for a portion of future energy cost savings (SAR II, 22.5.1.4). Market-based programmes can be used in place of, or in addition to, standards. In combination with standards, marketbased programmes can be designed to induce the acceptance of new and innovative technologies in the marketplace in advance of when they would otherwise be adopted. When combined with active, ongoing RD&D programmes, such efforts are likely to have significant long-term impacts on the availability and performance of advanced, more efficient technologies. For appliances, lighting and office equipment, such programmes can influence a very large number of purchasers, many of whom have little knowledge of or interest in the energy efficiency of the product. Combining market-based programmes and mandatory standards can help overcome some of the difficulties of imposing standards, and could have an impact greater than standards alone. Importantly, market-based programmes can be directed toward building systems (as opposed to individual pieces of equipment) to reduce energy consumption resulting from inadequate design, installation, maintenance and operation of heating and cooling systems. There are numerous examples of systems problems, such as mismatches between air-handling systems and chillers, absence or inadequate performance of building control systems, simultaneous heating and cooling of different parts of the same building, and so on. Based on expert judgment, the authors estimate that marketbased programmes will result in global carbon emission reductions of about 5% of projected (IS92 scenarios) buildings-related emissions by 2010, about 5-10% by 2020 and about 10-20% by 2050 (see section of Table 2 entitled "Potential Reductions from Energy-efficient Technologies Captured through Measures"), after allowing for an estimate of the portion of savings that is "taken back” in increased services (usage). Surveys of the costs and benefits of these programmes as they have been applied in the United States generally indicate that they are cost-effective (SAR II, 22.5.1.4). However, it is not possible to generalize, since there have been limited analyses and the costs and savings depend both on the specific technologies that are promoted and the method of implementation of the programme. • Also see Section 9, Economic Instruments. Technologies, Policies and Measures for Mitigating Climate Change The major administrative, institutional and political issues in implementing market-based programmes for residential and commercial building equipment follow: • Difficulties in improving integrated systems 19 Project-level costs associated with mandatory standards include programme costs for analysis, testing and rating of the products. Testing laboratories and equipment to certify the performance of the appliances will be needed for a country or group of countries without such facilities but with a growing demand for • The need for, and shortage of, skilled persons capable of appliances. Other major costs are the investment costs for initial diagnosing and rectifying systems problems Mandatory energy-efficiency standards-through which the govemment enacts specific requirements that all products (or an average of all products) manufactured and buildings constructed meet defined energy use criteria-are an important regulatory option for residential and commercial buildings; such standards have the potential to yield the largest savings in this sector (SAR II, 22.5.1.2, 22.5.1.3). Appliances typically have lifetimes of 10-20 years (SAR II, 22.4.1.5), while heating and cooling equipment is replaced over a slightly longer time period. These rapid turnover rates mean that inefficient stock can be relatively rapidly replaced with more efficient stock that meets established standards. Residential and commercial buildings, however, more typically last between 50 and 100 years. Depending on the stringency of the standard levels, the authors estimate (based on expert judgment) that mandatory standards applied to appliances, other energy-using equipment in the building, and the building envelope could result in global carbon emission reductions of about 5-10% of projected (IS92 scenarios) buildings-related emissions by 2010, about 10-15% by 2020 and about 10-30% by 2050 (see section of Table 2 entitled "Potential Reductions from Energy-efficient Technologies Captured through Measures"), after allowing for an estimate of the portion of savings that is "taken back" in increased services (usage). production of the more efficient products, the need for trained personnel and the need for new institutional structures. There also are administrative, institutional and political benefits associated with mandatory energy-efficiency standards, including responding to consumer and environmental concerns, reducing future generating capacity requirements, and providing credibility to manufacturers that take the lead in introducing energy-efficient products through uniform test procedures. Harmonization of test procedures and standards could reduce manufacturing costs associated with meeting various requirements. Mandatory energy-efficiency standards are typically set at Voluntary Standards Voluntary energy-efficiency standards, where manufacturers and builders agree (without government-mandated legislation) to generate products or construct buildings that meet defined energy use criteria, can serve as a precursor or alternative to mandatory standards (SAR II, 22.5.1.2). For products covered by these standards, there must be agreement on test procedures, adequate testing equipment and laboratories to certify equipment and product labeling-thus satisfying the prerequisites of mandatory standards. Voluntary standards have been more 20 Technologies, Policies and Measures for Mitigating Climate Change successful in the commercial sector than in the residential sector, presumably because commercial customers are more knowledgeable about energy use and efficiency of equipment than residential consumers. Energy use and carbon emissions reductions for voluntary standards vary greatly, depending upon the way in which they are carried out and the participation by manufacturers. Based on expert judgment, the authors estimate that global carbon emissions reductions from these standards could range from 10-50% (or even more if combined with strong incentives) of the reductions from mandatory standards. RD&D programmes foster the creation of new technologies that enable measures to have impacts over the longer term. In general, only large industries and governments have the resources and interest to conduct RD&D. The building industry, in contrast, is highly fragmented, which makes it difficult for the industry to pool its resources to conduct RD&D. Governmentsupported RD&D has played a key role in developing and commercializing a number of energy-efficient technologies, such as low-emissivity windows, electronic ballasts and highefficiency refrigerator compressors. While Annex I RD&D results can often be transferred to non-Annex I countries, there are conditions specific to these countries that require special attention, such as building design and construction for hot, bumid climates. For this reason, it is essential to develop a collaborative RD&D infrastructure between researchers based in non-Annex I countries and both Annex I and non-Annex I country RD&D specialists (SAR II, 22.5.1.5). A specific carbon emissions reduction estimate is not assigned to RD&D in Table 2; rather, it is noted that vigorous RD&D on measures to use energy more efficiently in buildings encompassing improvements in equipment, insulation, windows, exterior surfaces and especially building systems is essential if substantial energy savings are to be achieved in the period after 2010. It is essential to note that the emissions reductions potentials for the residential, commercial and institutional buildings sector will not be realized without significant RD&D activities. A range of total achievable emissions reductions for global residential, commercial and institutional buildings is provided in Tables 1 and 2. These reductions are estimated to be about 10-15% of projected emissions in 2010, 15-20% in 2020 and 20-50% in 2050, based on IS92 scenarios. Thus, total achievable carbon emissions reductions for the buildings sector are estimated to range (based on IS92 scenarios) from about 0.175-0.45 Gt C/yr by 2010, 0.25-0.70 Gt C/yr by 2020 and 0.35-2.5 Gt C/yr by 2050. The measures described can be differentiated based on their potential for carbon emissions reductions, cost-effectiveness and difficulty of implementation. All of the measures will have favorable impacts on an overall economy, to the extent that the energy savings are cost-effective. Environmental benefits are approximately proportional to the reductions in energy demand, thus to carbon savings. The administrative and transaction costs of the different measures can vary markedly. While building codes and standards can be difficult to administer, many countries now require some minimum level of energy efficiency in new construction. Many of the market programmes introduce some complexity, but they often can be designed to obtain savings that are otherwise very difficult to capture. The appliance standards programmes are, in principle, the least difficult to administer, but political consensus on these programmes can be difficult to achieve. 3.1 Introduction 3. TRANSPORT SECTOR9 In 1990, CO2 emissions from transport sector energy use amounted to about 1.25 Gt C-one-fifth of CO2 emissions from fossil fuel use (SAR II, 21.2.1). Other important GHG emissions from the sector include N2O from tailpipe emissions from cars with catalytic converters; CFCs and HFCs, which are leaked and vented from air-conditioning systems; and NO, emitted by aircraft near the tropopause (at this height, the ozone generated by NO, is a very potent GHG). World transport energy use grew faster than that in any other sector, at an average of 2.4% per year, between 1973 and 1990 (SAR II, 21.2.1). GHG mitigation in the transport sector presents a particular challenge because of the unique role that travel and goods movement play in enabling people to meet personal, social, economic and developmental needs (SAR II, 21.2.3). The sector may also offer a particular opportunity because of the commonality of vehicle design and fuel characteristics. Transport has many stakeholders, including private and commercial transport users, manufacturers of vehicles, suppliers of fuels, builders of roads, planners and transport service providers. Measures to reduce transport GHG emissions often challenge the interests of one or another of these stakeholders. Mitigation strategies in this sector run the risk of failure unless they take account of stakeholder concerns and offer better means of meeting the needs that transport addresses. The choice of strategy will depend on the economic and technical capabilities of the country or region under consideration (SAR II, 21.4.7). Table 4 shows energy use by different transport modes in 1990, and two possible scenarios of CO, emissions to 2050 (SAR II, 21.2). These two scenarios are used in this section as the basis for evaluating the effects of measures on GHG emissions. Energy intensity fell by 0.5-1% per year in road transport between 1970 and 1990, and by 3-3.5% per year in air transport between 1976 and 1990. Ranges of future traffic growth and energy-intensity reduction shown in the table are expected to be slower than in the past (SAR II, 21.2.5). Most scenarios in the literature foresee a continuing reduction in growth rates for energy use whereas these two scenarios are based on constant growth rates; thus, the HIGH estimates in this table are much higher than IS92e for 2050. The LOW scenario in 2050 is about 10% below IS92c, and would be unlikely to occur without some change in market conditions (such as a sharp rise in oil prices) or new policies, for example to reduce air pollution and traffic congestion in cities. The largest transport sector sources of GHG through to 2050 are likely to be cars and other light-duty vehicles (LDVs). heavy-duty vehicles (HDVs) and aircraft. Current annual percentage growth in all of these is particularly high in southeast Asia, while some central and eastern European countries are seeing a very rapid increase in car ownership. Two-wheelers, This section is based on SAR II, Chapter 21, Mitigation Options in the Transportation Sector (Lead Authors: L. Michaelis, D. Bleviss, J.-P. Orfeuil. R. Pischinger, J. Crayston, O. Davidson, T. Kram, N. Nakicenovic and L. Schipper). <CO2 emissions in this table are calculated from energy consumption using a constant emission factor for all modes of 18.5 Mt C/EJ. Based on SAR II, 21.24. •Energy use per vehicle kilometre in the case of cars; energy use per ton kilometre for goods vehicles and rail, marine and air freight, and energy per passen Transport systems and technology are evolving rapidly. Although in the past this evolution has included reductions in energy intensity for most vehicle types, relatively little reduction occurred during the decade prior to 1996. Instead, recent technical advances mainly have been used to enhance performance, safety and accessories (SAR II, 21.2.5). There is little or no evidence for any saturation of transport energy demand as marginal income continues to be used for a more transportintensive lifestyle, while increasing value-added in production involves more movement of intermediate goods and faster, more flexible freight transport systems. A number of technological and infrastructural mitigation options are discussed in the SAR (II, 21.3). Several are already cost-effective in some circumstances (i.e., their use reduces private transport costs, taking into account energy savings, improvements in performance, etc.). These options include energy-efficiency improvements; alternative energy sources; and infrastructure changes, modal shifts and fleet management. The cost-effectiveness of these technical options varies widely among individual users and among countries, depending on availability of resources, know-how, institutional capacity and technology, as well as on local market conditions. in 2020 might amount to 10-25% of projected energy use, with vehicle price increases in the range $500-1 500. Larger savings in energy are possible at higher cost, but these would not be cost-effective (NRC, 1992; ETSU, 1994; DeCicco and Ross, 1993; Greene and Duleep, 1993). The potential for cost-effective energy savings in commercial vehicles has been studied less than that in cars, and is estimated to be smaller-perhaps 10% for buses, trains, medium and heavy trucks and aircraft-because commercial operators already have stronger incentives to use cost-effective technology (SAR II, 21.3.1.5). Energy-intensity reductions are possible beyond the level that is cost-effective for users; however, vehicle design changes that offer large reductions in energy intensity also are likely to affect various aspects of vehicle performance (SAR II, 21.3.1.5). Achieving these changes would thus depend either on a shift in the priorities of vehicle manufacturers and purchasers, or on breakthroughs in technology performance and cost. Where energy-intensity reductions result from improved vehicle body design, GHG mitigation may be accompanied by a reduction in emissions of other air pollutants, where these are not controlled by standards that effectively require the use of catalytic converters. On the other hand, some energy-efficient engine designs (e.g., direct fuel injection and lean-burn engines) have relatively high emissions of NO, or particulate matter (SAR II, 21.3.1.1). Changes in vehicle technology can require very large investments in new designs, techniques and production lines. These short-term costs can be minimized if energy-efficiency improvements are integrated into the normal product cycle of vehicle manufacturers. For cars and trucks, this means that there might be a ten-year delay between a shift in priorities or incentives in the vehicle market, and the full results of that shift being seen in all the vehicles being produced. For aircraft, the delay is longer because of the long service life of aircraft, and because new technology is only approved for general use after its safe performance has been demonstrated through years of testing. Some energy-intensity reductions are cost-effective for vehicle Alternative Energy Sources On a full-fuel-cycle basis, alternative fuels from renewable energy sources have the potential to reduce GHG emissions from vehicle operation (i.e., excluding those from vehicle manufacture) by 80% or more (SAR II, 21.3.3.1). At present, these fuels are more expensive than petroleum products under most circumstances, although vehicles operating on liquid biofuels can perform as well as conventional vehicles and manufacturing costs need be no higher in mass production. Widespread use of these fuels depends on overcoming various barriers, including the costs of transition to new vehicle types, fuel production and distribution technology, concerns about |