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Title: A multi-model study of energy supply investments in Latin America under climate control policy

In this article we investigate energy supply investment requirements in Latin America until 2050 through a multi-model approach as jointly applied in the CLIMACAP-LAMP research project. We compare a business-as-usual scenario needed to satisfy anticipated future energy demand with a set of scenarios that aim to significantly reduce CO 2 emissions in the region. We find that more than a doubling of annual investments, in absolute terms, occurs in the business-as-usual scenario between 2010 and 2050, while investments may treble over the same time horizon when climate policies are introduced. However, investment costs as a share of GDP decline over time in the business-as-usual scenario, as well as the climate policy scenarios, due to the fast economic growth in that region. Business-as-usual cumulative investments of 1.4 trillion US$ are anticipated between 2010 and 2050 in energy supply, and increase when additional climate policies are introduced: under a carbon tax of 50 $/tCO 2e in 2020 increasing with a rate of 4% per year, an additional 0.6 trillion US$ (+45%) investment is needed. Climate control measures lead to increased investment in low-carbon electricity technologies, primarily wind, solar, and CCS applied to fossil fuels and biomass. Our analysis suggests that compared tomore » the business-as-usual case an average additional 21 billion US$ per year of electricity supply investments is required in Latin America until 2050 under a climate policy aiming at 2°C climate stabilization. Conversely, there is a disinvestment in fossil fuels. For oil production, a growth from 58 billion US$ to 130 billion US$ annual investment by 2050 is anticipated in a business-as-usual scenario: ambitious climate policy reduces this to 28 billion US$. Finally, mobilizing necessary additional investment capital, in particular for low-carbon technologies, will be a challenge, and suitable frameworks and enabling environments for a scale-up in public and private investment will be critical to help reach required levels. The economic case for such a transition still remains to be articulated.« less
Authors:
 [1] ;  [1] ;  [2] ;  [3] ;  [4] ;  [5] ;  [6]
  1. Energy Research Centre of the Netherlands, Amsterdam (The Netherlands). Policy Studies
  2. Energy Research Centre of the Netherlands, Amsterdam (The Netherlands). Policy Studies; Johns Hopkins Univ., Bologna (Italy). School of Advanced International Studies; Univ. of Amsterdam (Netherlands). Faculty of Science
  3. Pacific Northwest National Lab. (PNNL), Richland, WA (United States)
  4. KanORS-EMR, Delhi (India)
  5. European Commission, Sevilla (Spain). Joint Research Centre
  6. Eneris Environment Energy Consultants, Madrid (Spain)
Publication Date:
Report Number(s):
PNNL-SA-109344
Journal ID: ISSN 0140-9883; 453040310
Grant/Contract Number:
AC05-76RL01830
Type:
Accepted Manuscript
Journal Name:
Energy Economics
Additional Journal Information:
Journal Volume: 56; Journal Issue: C; Journal ID: ISSN 0140-9883
Publisher:
Elsevier
Research Org:
Pacific Northwest National Lab. (PNNL), Richland, WA (United States)
Sponsoring Org:
USDOE; USEPA; European Union (EU)
Country of Publication:
United States
Language:
English
Subject:
54 ENVIRONMENTAL SCIENCES; climate policy; low-carbon energy technology; technology investment costs
OSTI Identifier:
1406813

Kober, Tom, Falzon, James, van der Zwaan, Bob, Calvin, Katherine, Kanudia, Amit, Kitous, Alban, and Labriet, Maryse. A multi-model study of energy supply investments in Latin America under climate control policy. United States: N. p., Web. doi:10.1016/j.eneco.2016.01.005.
Kober, Tom, Falzon, James, van der Zwaan, Bob, Calvin, Katherine, Kanudia, Amit, Kitous, Alban, & Labriet, Maryse. A multi-model study of energy supply investments in Latin America under climate control policy. United States. doi:10.1016/j.eneco.2016.01.005.
Kober, Tom, Falzon, James, van der Zwaan, Bob, Calvin, Katherine, Kanudia, Amit, Kitous, Alban, and Labriet, Maryse. 2016. "A multi-model study of energy supply investments in Latin America under climate control policy". United States. doi:10.1016/j.eneco.2016.01.005. https://www.osti.gov/servlets/purl/1406813.
@article{osti_1406813,
title = {A multi-model study of energy supply investments in Latin America under climate control policy},
author = {Kober, Tom and Falzon, James and van der Zwaan, Bob and Calvin, Katherine and Kanudia, Amit and Kitous, Alban and Labriet, Maryse},
abstractNote = {In this article we investigate energy supply investment requirements in Latin America until 2050 through a multi-model approach as jointly applied in the CLIMACAP-LAMP research project. We compare a business-as-usual scenario needed to satisfy anticipated future energy demand with a set of scenarios that aim to significantly reduce CO2 emissions in the region. We find that more than a doubling of annual investments, in absolute terms, occurs in the business-as-usual scenario between 2010 and 2050, while investments may treble over the same time horizon when climate policies are introduced. However, investment costs as a share of GDP decline over time in the business-as-usual scenario, as well as the climate policy scenarios, due to the fast economic growth in that region. Business-as-usual cumulative investments of 1.4 trillion US$ are anticipated between 2010 and 2050 in energy supply, and increase when additional climate policies are introduced: under a carbon tax of 50 $/tCO2e in 2020 increasing with a rate of 4% per year, an additional 0.6 trillion US$ (+45%) investment is needed. Climate control measures lead to increased investment in low-carbon electricity technologies, primarily wind, solar, and CCS applied to fossil fuels and biomass. Our analysis suggests that compared to the business-as-usual case an average additional 21 billion US$ per year of electricity supply investments is required in Latin America until 2050 under a climate policy aiming at 2°C climate stabilization. Conversely, there is a disinvestment in fossil fuels. For oil production, a growth from 58 billion US$ to 130 billion US$ annual investment by 2050 is anticipated in a business-as-usual scenario: ambitious climate policy reduces this to 28 billion US$. Finally, mobilizing necessary additional investment capital, in particular for low-carbon technologies, will be a challenge, and suitable frameworks and enabling environments for a scale-up in public and private investment will be critical to help reach required levels. The economic case for such a transition still remains to be articulated.},
doi = {10.1016/j.eneco.2016.01.005},
journal = {Energy Economics},
number = C,
volume = 56,
place = {United States},
year = {2016},
month = {5}
}