2nd Regional Consultation Meeting on Economics of Climate

Change and Low Carbon Growth Strategies in Northeast Asia

Ulaanbaatar, Mongolia
11-12 October 2010

Assessment of Regional Marginal

Abatement Cost Curves in 2020
- comparison of Japan, China and Korea -
Tatsuya Hanaoka
Center for Global Environmental Research (CGER),
National Institute for Environmental Studies(NIES),
Japan
 AIM family for mitigation analysis
model Output Global
AIM/Impact[Policy]
scale

National Global emission paths

scale to climate stabilization
Top--down approach
Top

AIM/Material AIM/CGE[Country] AIM/CGE[Global]

Hybrid approach Macro-economic Macro-economic

driving forces driving forces
AIM/Backcast
Mitigation potentials Mitigation potentials
and costs curves and costs curves

AIM/Extended
Snapshot
AIM/Enduse[Country] AIM/Enduse[Global]
AIM/Energy
Snapshot

Bottom--up approach
Bottom Industrial production, Industrial production,
transportation volume, etc transportation volume, etc

Element / transition Element / transition

(service demand) (service demand)
 Costs: definitions and determinants
See in detail: IPCC Second Assessment Report, WGIII, Chapter 8, pp269-270
1) The direct engineering and financial costs of specific technical measures
Cost of switching from coal to gas in electric production, of improving energy efficiency
of appliances, of planting trees in reforestation program. Technical costs can show
negative net costs because a given technology may yield enough energy cost saving to
more than offset the costs of adopting and using the technology. These costs depend on
both technical-economic data and a given interest rate.
Bottom-up models
2) Economic costs for a given sector
Cost by “partial equilibrium” analysis in sectroral models that do not capture the
feedback effects between the behaviour of a sector and that of the overall economy.

3) Macroeconomic costs CGE models

The impact of a given strategy on the level of the GDP and its components (household
consumption, investment,etc). This aggregated index measures the monetary value
added of goods and services and provides an index of the scale of human activities
including the feedback effects between the behaviour and economy.

4) Welfare costs
 MAC Curve by bottom-
bottom-up models
- Implication, caution & limitation -
Abatement cost
($/tCO2 eq)

MAC by energy-engineering
models with bottom-up data
0
Cumulative GHG reductions (tCO2 eq)

Implication:
1) Technological mitigation potentials and technological implementation costs
2) MAC curves can compare mitigation efforts across countries, because MAC considers
various factors such as the current level of energy efficiencies, difference of socio-
economic characteristics by country, scope of renewable energies, etc.

Caution: MAC is a complicated index

1) MAC curves differ widely depending on assumptions of technology data such as
technology costs, energy prices, payback periods, diffusion ratio of technology, etc.
2) MAC curves differ widely depending on socio-economic assumptions and baseline
emissions.

Limitation:
1) Difficult to discuss economic impacts (e.g. GDP loss) by using a bottom-up model.
 Key factors for MAC curves

It is not enough just comparing shape of MAC curves by different models.

It is important to conduct decomposition analysis to clarify reasons of
differences of mitigation potentials and costs.

Coverage Definition
1) Geographical coverage 1) Definition of “potential”
2) Sectoral coverage 2) Definition of “cost”
3) GHG coverage 3) Definition of “drivers”
4) Mitigation options coverage 4) Definition of any specific terms…

Data assumptions Detail information (which

1) Population reflects key uncertainties)
2) GDP and service demands 1) The rate of technology
3) Energy price development and diffusion
4) Discount rate 2) The cost of future technology
5) Payback period 3) Climate and non-climate policy
drivers
6) Composition of power sources
…. and so on
7) Baseline scenario
 Overview of AIM/Enduse
AIM/Enduse[Global]
[Global]
Macroeconomic model
Socio-economic macro frame model
Population

GDP
Sector-wise value added

Service demand model

Waste
Steel production Cement Transportation energy service Agricultural Fluorocarbon
generation
and trade model production model demand model demand model trade model emission model
model

Value added Energy service Energy service

Crude steel Cement Transportation Agricultural Waste Emission of
of secondary demand demand
production production volume production generation fluorocarbon
industry (residential) (commercial)

Technology bottom-up model

Waste
Iron and steel Other industries Transportation Residential Commercial Agriculture Fluorocarbon
Cement sector management
sector sector sector sector sector sector emission sector
sector

Electricity demand Technology database

Initial cost Efficiency
Technology Maximum
Energy database Primary energy lifetime
bottom-up model diffusion rate
production
Energy price （power generation sector）

Emission factor
Technology
bottom-up model
（energy mining sector）
Exogenous Endogenous
variable variable

Model Database GHG emission

Technology bottom-up model
 Target gas and sectors
considering mitigation options
GHG Sector Services
Power generation Coal power plant, Oil power plant, Gas power plant, Renewable
(Wind, Biomass, PV)

Industry Iron and steel，Cement

CO2
Other industries （Boiler, motor etc）
CH4
N2 O Transportation Passenger vehicle, Truck，Bus，Ship, Aircraft，Passenger train，
Freight train (except for pipeline transport and international
transport)
Residential and Cooling, Heating, Hot-water，Cooking，Lighting，Refrigerator, TV
& Commercial

CH4 Agriculture Livestock rumination, Manure management, Paddy field, Cropland

N2 O MSW Municipal solid waste
CH4 Fugitive Fugitive emission from fuel

HFCs, Fgas emissions By-product of HCFC-22, Refrigerant，Aerosol, Foams，Solvent,

PFCs,SF6 Etching，Aluminum production, Insulation gas, others.

Note)
 Nuclear power, hydro power, and geothermal power generation are considered in the analysis
but included in the baseline because they are not considered as mitigation options in this study.
 There are some mitigation options which are not able to be considered in this study due to the
lack of data availability, for example, CO2 mitigation options in petrochemical, N2O mitigation
options in waste water, CO2 mitigation options in agriculture etc.
 Example of technology options
This study is based on realistic and currently existing technologies, and future
innovative technologies which are under development are not taken into account.
Sector Category Technology options
Efficient coal power plant(Super critical, Ultra super critical), IGCC (Integrated
Coal power
Gasification Combined Cycle), IGFC (Integrated Gasification Fuel-cell Combined
plant
Cycle), PFBC (Pressurized Fluidized Bed Combustion),
Energy
supply Gas power Efficient gas power plant(Combined Cycle, Advanced Combined Cycle), LNGFC
plant (LNG Fuel-cell Combined Cycle)
Renewables Wind power, Photovoltaics, Biomass power plant
Coke oven (Coke gas recovery, Automatic combustion, Coal wet adjustment , Coke
dry type quenching, COG latent heat recovery, Next generation coke oven), Sinter
furnace (Automatic igniter, Cooler waste heat recovery, Mainly waste heat recovery,
Efficient igniter), Blast furnace (Large size blast furnace, Blast furnace gas
recovery, Wet top pressure recovery turbine, Dry top pressure recovery turbine,
Steel
Heat recovery of hot blast stove, Coal injection, Dry top pressure gas recovery),
Basic oxygen furnace (LDG recovery, LDG latent heat recovery), Casting & rolling
(Continuous caster, Hot charge rolling, Hot direct rolling, Efficient heating furnace,
Industry
Heat furnace with regenerative burner, Continuous annealing lines), Electric
furnace (DC electric furnace, Scrap pre-heat)
Mill (Tube mill, Vertical mill), Kiln (Wet kiln, Semi-wet kiln, Dry long kiln, Dry
Cement
shaft kiln, SP/NSP)
Boiler (Efficient boiler [coal, oil, gas], Boiler with combustion control [coal, oil, gas],
Other
Cogeneration [coal, oil, gas], Regenerative gas boiler), Process heat (Efficient
industries
industrial furnace [oil, gas]), Motors (Motor with Inverter control, Efficient motor)
 Abatement Cost Curves
- magnitude of technology implementation -
200

Abatement cost curves show

magnitude of technology
Abatement costs (US$/tCO2eq)

150
implementation
under a certain carbon price
(i.e. marginal cost)
100

50
Marginal
cost

0
0 50 100 150 200 250 300 350 400

Mitigation potentials
-50 compared to baseline
Reduction quantity (tCO2eq)

JPN(HDR0) JPN(HDR50) JPN(HDR100) JPN(HDR150) JPN(HDR200)

 Marginal Abatement Cost Curve
and Abatement Cost Curves
200

Marginal abatement cost curves

show the lines connecting the
Abatement costs (US$/tCO2eq)

150
plot of a certain carbon price
(i.e. marginal cost)
100

50
Marginal
cost

0
0 50 100 150 200 250 300 350 400

Mitigation potentials
-50 compared to baseline
Reduction quantity (tCO2eq)

JPN(HDR0) JPN(HDR50) JPN(HDR100) JPN(HDR150) JPN(HDR200) JPN-MAC

 Logic of technology selection
• Total cost = investment cost + O&M cost + energy cost + carbon tax + subsidies
Initial cost Annual cost
→ annualized costs are compared under technology selection framework
(1) Recruitment of technology to satisfy new demand and demand of replacement
Annualized
initial cost O&M and energy cost
Service demand
Conventional
Technology A

High-efficient
Technology B
New demands Recruitment Technology A < Technology B
Replacement in year X+1
Annualized
initial cost O&M and energy cost Carbon tax
Existing Conventional
Technology A

High-efficient
Technology B
X X+1 Year
Technology A > Technology B
Thus ,it is important to pay attention to the following setting:
How to annualize the initial cost ? how to set discount rate for investment (hurdle rate) ?
how to set payback period ?
 How to annualize initial cost

Technology lifetime T
Initial cost
C

Annualized initial cost

Payback period is set as
a technology lifetime
Ca Ca Ca ・・・ Ca

C
C = Ca + Ca + Ca + ・・・ + Ca Ca 
T
Ca Ca Ca T
C =
Ca
+ + + ・・・ +  1   
1    1   2 1   3 1   
T
Ca  C  T
α: Discount rate for investment 1     1
Capital recovery
Inverse value becomes
factor
payback period
 Scenarios :Discount rate for investment
(hurdle rate, or internal rate of return)
Discount rate Example of assumed payback period
Scenario Sector
(hurdle rate) （Numbers in bracket show technology lifetime）
Residential equipments：7-10 year (10-15 year）
Car, Truck, Bus：6-9 year (8-12 year）
LDR All sectors 5％ Large plant：14-15 year (30 year）
Train, Ship, Aircraft：12-13 year (20 year）
Insulation housing：15-16 year（30 year）
Residential equipments：6-8 year (10-15 year）
Car, Truck, Bus：5-7 year (8-12 year）
Energy related sectors 10％
MDR Boiler：9-10 year （30 year）
※ other things are same as the setting in HDR
Non-energy sectors 5％ ※ same as the setting in HDR
Residential and commercial Residential equipments：3 year (10-15 year）
Transport（automobile） 33％ Car, Truck, Bus：3 year (8-12 year）
Industry （cross-cuttings） Boiler：3 year （30 year）

Power plant
Large plant：9-10 year (30 year）
Industry plant（steel, cement）
HDR 10％ Train, Ship, Aircraft：8-9 year (20 year）
Transport（train, ship, aircraft） Insulation housing： 9-10 year （30 year）
Insulation housing
Non-energy sectors Agriculture： 1-11 year (1-15 year）
（agriculture, MSW, 5％ MSW：10-16 year (15-30 year）
fluorocarbons, energy-mining） Fluorocarbons ： 1-13 year (1-20 year）
 Abatement Cost Curves: Japan
- under different discount rate for investment -
Abatement cost curves at a carbon price of 100 US$/tCO2-eq
100
Settings of discount rate
have a large impact on
75 mitigation potentials
Abatement costs (US$/tCO2eq)

because of high energy

prices in Japan
50

25

0
0 50 100 150 200 250 300 350 400 450

-25
Large impact on
the demand side.
-50
Reduction quantity (tCO2eq)

JPN(HDR) JPN(MDR) JPN(LDR)

 Abatement Cost Curves: China
- under different discount rate for investment -
Abatement cost curves at a carbon price of 100 US$/tCO2-eq
100

75
Abatement costs (US$/tCO2eq)

50 Settings of discount rate

have a relatively less impact
on mitigation potentials
25
because of low energy
prices in China
0
0 1,000 2,000 3,000 4,000 5,000 6,000

-25

-50
Reduction quantity (tCO2eq)

CHN(HDR) CHN(MDR) CHN(LDR)

 Abatement Cost Curves: Korea
- under different discount rate for investment -
Abatement cost curves at a carbon price of 100 US$/tCO2-eq
100

Settings of discount rate

75
have a certain impact on
Abatement costs (US$/tCO2eq)

mitigation potentials
50 because of energy prices in
between Japan and China

25

0
0 20 40 60 80 100 120 140 160 180 200

-25

-50
Reduction quantity (tCO2eq)

KOR(HDR) KOR(MDR) KOR(LDR)

 Logic of technology selection
• Total cost = investment cost + O&M cost + energy cost + carbon tax + subsidies
Initial cost Annual cost
→ annualized costs are compared under technology selection framework
(2) Substitution of existing technology
Annualized O&M and
Existing initial cost energy cost
Service demand
Conventional
Technology A

High-efficient
Technology B

Technology A < Technology B

Annualized O&M and
Carbon tax
initial cost energy cost
Existing
Conventional
Existing Substitution
Technology A
in year X+1
High-efficient
Technology B
X X+1 Year
Technology A > Technology B
it is important to pay attention to a case if substitution of existing technology is allowed.
e.g. ) if a new gas power plant is more cost effective than a existing coal or oil power plant,
the coal or oil power plant is immediately stopped and replaced with a gas power plant.
 Scenarios: energy price & energy shift
Under the logic of technology selection, energy efficient technology options are
selected if energy saving cost benefits exceeds additional investment costs.
Additional investment cost
≦ energy savings ×（energy price ＋ emission factor × carbon price ）× payback period

Based on HDR scenarios, following two additional scenarios are assessed.

1. HDR scenario: high discount rate scenario at international energy prices based on IEA
forecast, under cost optimization without considering energy security
restrictions (i.e. substitution of existing coal and oil power plants are allowed.)

2．HDR-EP2 scenario： supposing a double energy prices in each country due to rising the
international energy prices more rapidly than the IEA’s forecast.

3．HDR-ws scenario：considering composition of power sources with energy security, and

social barriers restrict to a certain extent of any drastic energy shift from
coal and oil power plants to efficient gas powers or renewables.
(i.e. substitution of existing coal and oil power plants are not allowed.)
 Abatement Cost Curves: Japan
- under different scenarios -
Stop an existing coal power plant and build a new efficient gas power plant
200
Large impact on the supply side
at high carbon price
if composition of power
Abatement costs (US$/tCO2eq)

150
sources are restricted with
considering energy security.
100
Large impact on the
demand side at low
50
carbon price
if energy prices are double.
This is because of high
energy prices in Japan.
0
0 50 100 150 200 250 300 350 400 450

-50
Reduction quantity (tCO2eq)

JPN(HDR) JPN(HDR-ws) JPN(HDR-EP2)

 Abatement Cost Curves: China
- under different scenarios -
Stop an existing coal power plant and build a new efficient gas power plant

200
Large impact on the supply
side at high carbon price
if composition of power
Abatement costs (US$/tCO2eq)

150
sources are restricted with
considering energy security.
100

Relatively less impact on the

50 demand side even though energy
prices are double. This is because
of low energy prices in China.
0
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

-50
Reduction quantity (tCO2eq)

CHN(HDR) CHN(HDR-ws) CHN(HDR-EP2)

 Abatement Cost Curves: Korea
- under different scenarios -
Stop an existing coal power plant and build a new efficient gas power plant
200

A certain impact on
the demand side at
Abatement costs (US$/tCO2eq)

150
low carbon price
if energy prices are
double. Large impact on the supply
100
side at high carbon price
if composition of power
sources are restricted with
50
considering energy security.

0
0 50 100 150 200 250

-50
Reduction quantity (tCO2eq)

KOR(HDR) KOR(HDR-ws) KOR(HDR-EP2)

 Marginal Abatement Cost curves
compared to 1990 emissions level
200

180

Marginal abatement cost (US$ / tCO2 eq)

160

140

120

100

80

60

40

20

0
240% 220% 200% 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% -20%
Reduction ratio (compared to 1990 level)
JPN_HDR CHN_HDR KOR_HDR

Baseline emissions based on baseline scenarios such as GDP growth rate, increase of
service demands will affect a lot on the results when comparing to 1990 emissions level
 GHG emissions in 2020
compared to 1990 emissions level
16,000 1,600
JPN_HDR
14,000 1,400
CHN_HDR

GHG emissions (MtCO2 eq)

GHG emissions (MtCO2 eq)

12,000 1,200
KOR_HDR
JPN_HDR
10,000 1,000
KOR_HDR
8,000 800

6,000 600

4,000 400

2,000 200

0 0
Fixed 0$ 200$ Fixed 0$ 200$

1990 1995 2000 2005 2020 1990 1995 2000 2005 2020

300%
JPN_HDR
250%
CHN_HDR
Reduction ratio (compared to 1990 level)

200% KOR_HDR

150%

100%

50%

0%

-50%
Fixed 0$ 200$

1990 1995 2000 2005 2020

 Key factors for MAC curves

It is not enough just comparing shape of MAC curves by different models.

It is important to conduct decomposition analysis to clarify reasons of
differences of mitigation potentials and costs.

Coverage Definition
1) Geographical coverage analysis,1)mitigation
For a bottom-up Definition of “potential”and
potentials
2) Sectoral coverage 2) Definition of “cost”
their costs vary depending on the baseline settings
3) GHG coverage 3) Definition of “drivers”
as well as key data
4) Mitigation options coverage
settings, such as technology data
4) Definition of any specific terms…
and future energy prices.
Data assumptions Detail information (which
1) Population reflects key uncertainties)
2) GDP andForservice demands
finalizing 1) The
results, these keyrate of technology
factors should be
3) Energy price development and diffusion
carefully2)assessed.
The cost of future technology
4) Discount rate
5) Payback period 3) Climate and non-climate policy
drivers
6) Composition of power sources
…. and so on
7) Baseline scenario
25
Appendix
 Regional classification

World
32 regions

Annex I OECD
JPN (Japan) USA (United States) CAN (Canada) KOR (Korea)
AUS (Australia) XE15 (Western EU-15) TUR (Turkey) MEX (Mexico)
NZL (New Zealand) XE10 (Eastern EU-10) XEWI (Other Western EU in Annex I) BRA (Brazil)
RUS (Russia) XE2 (Other EU-2) XEEI (Other Eastern EU in Annex I) ARG (Argentine)
CHN (China) XSA (Other South Asia) XENI (Other EU) XLM (Other Latin America)
IND (India) XEA (Other East Asia) XCS (Central Asia) ZAF (South Africa)
IDN (Indonesia) XSE (Other South-East Asia) XOC (Other Oceania) XAF (Other Africa)
THA (Thailand) MYS (Malaysia) VNM (Viet Nam) XME (Middle East)
ASEAN
 Service demand models
Endogenous Exogenous Estimation Definitional
variable variable equation equation
GDP per capita Exogenous
TIME trend Domestic price Intl. price GDP per capita GDPPi,t variable
TIMEt PDi,t PWt GDPPi,t

Endogenous
Producer Price Export price Import price Consumption variable
PSi,t PEi,t PMi,t per capita Production per
CNSPi,t Estimation
capita
PRDPi,t equation
Relative Relative Population
export price domestic price POPi,t Population Definitional
PEWi,t PDMi,t POPi,t equation
Production Export ratio Import ratio Consumption
PRDi,t REXCi,t RMCi,t CNSi,t
Production i: region
PRDi,t t: year

Export Import
EXCi,t MCi,t

Steel production and


trade model
Domestic market equilibriumi： CNSi,t＝PRDi,t－EXCi,t＋MCi,t


International market equilibrium： EXCi,t ＝ MCi,t
i: region
t: year
Cement production model
i i

700 1,400

Cement Production (million ton)

2005 2020
Steel Production (million ton)

2005 2020
600 1,200
500 1,000
Steel Cement
400 800
300 600
200 400
100 200
0 0

Developed
EU25

ロシア
日本

米国

中国

インド
EUEU25

Annex I
Russia
ロシア

Developed

25
日本

米国

中国

Japan
インド

China
Annex I

India
USA
Russia

25
Japan

China

India
USA

EU
 Socio--economic settings (POP and GDP)
Socio

・Population (POP)： the prospects at medium variant by UN World Population Prospects

・GDP：GDP by region are estimated by the Socio-economic Macro Frame model．

1.6 16 60
2005 2020 2005 2020 2005 2020

GDP (Trillion US$, 2000 price)

(Thousand US$, 2000 price)

1.4 14
50
1.2 12
Population (billion)

40

GDP per capita

1.0 10
0.8 8 30
0.6 6
20
0.4 4
0.2 2 10
0.0 0 0
EUEU25

ロシア

EUEU25
日本

米国

中国

ロシア
インド

EUEU25
日本

米国

中国

ロシア
インド

日本

米国

中国

インド
Russia

Russia

Russia
25 25 25
Japan

Japan

Japan
China

China

China
India

India

India
USA

USA

USA
 Annual growth rate from 2005 to 2020 (%/year)
Japan USA EU25 Russia China India Developed Developing Global
POP -0.2% 0.9% 0.1% -0.6% 0.5% 1.3% 0.3% 1.2% 1.1%
GDP 1.3% 1.9% 1.9% 5.0% 8.1% 7.3% 1.9% 5.5% 3.0%
GDP/POP 1.5% 1.0% 1.7% 5.5% 7.6% 6.0% 1.6% 4.2% 1.9%
 Service demand settings
700
2005 2020 1,400

Cement Production (million ton)

Steel Production (million ton) 600 2005 2020
1,200
500 1,000
400
Steel Cement
800
300 600
200 400
100 200
0 0
EU EU25

ロシア
日本

米国

中国

インド
Developed

Developed
Annex I

EUEU25

ロシア
日本

米国

中国

インド
Annex I
Russia

Russia
25 25
Japan

Japan
China

China
India

India
USA

USA
20 12
Passenger transportation volume

Freight transportation volume

18 2005 2020 2005 2020
16 10
Passenger Freight
(Trillion person-km)

14

(Triillion ton-km)
8
12
10 6
8
6 4
4
2
2
0 0
Developed
EUEU25

ロシア

EU EU25
日本

米国

中国

ロシア
インド
Annex I

日本

米国

中国

インド
Annex I
Developed
Russia

25
Japan

China

India
USA

Russia
25

Japan

China

India
USA
 Annual growth rage from 2005 to 2020(%//year)
Japan USA EU25 Russia Developed China India World
Steel 0.4% 1.5% 0.1% 0.3% 0.5% 3.3% 10.7% 2.4%
Cement -0.2% 0.8% 0.3% 1.3% 0.5% 1.0% 7.4% 2.2%
Passenger -0.4% 0.9% 0.9% 2.5% 0.9% 2.6% 1.7% 1.6%
Freight -0.2% 0.9% 1.1% 1.6% 1.1% 2.5% 1.6% 1.7%
 Service Demand Settings
 Service demands are estimated by Steel production and trade model, Cement production model,
Socio-economic macro frame model, Passenger transportation demand model, Freight
transportation demand model, Agricultural trade model and so on. Data settings of GDP and
population are the same across all sectors.
 service demands in each service and sector are estimated by these models based on various
kinds of international and national statistics
＜Example of service demands in 2020 by major region＞
Japan USA EU25 Russia
2005 2020 2005 2020 2005 2020 2005 2020
POP Million 127.9 124.5 299.8 342.5 461.0 471.5 144.0 132.4

GDP 2000 US $ 4.96 5.99 10.87 14.50 9.10 11.99 0.33 0.68

Industry Steel Million ton 112.5 119.7 94.2 119.3 187.3 190.7 66.1 69.0
Cement Million ton 68.7 66.7 100.0 113.1 242.5 252.3 48.7 59.2
Others 2005 year=100 100 111 100 121 100 115 100 203
Transport Passenger Bil. p-km 1322.7 1243.7 8090.8 9233.7 5147.5 5884.3 833.3 1203.8
Freight Bil. ton-km 277.6 269.6 4583.9 5215.5 2161.8 2557.2 1473.1 1882.8

China India Developing Developed World

2005 2020 2005 2020 2005 2020 2005 2020 2005 2020
POP Million 1320.5 1429.8 1134.4 1379.2 5448.1 6555.3 1089.4 1135.5 6537.5 7690.8

GDP 2000 US $ 2.02 6.54 0.61 1.77 9.19 20.62 26.59 35.11 35.78 55.74

Industry Steel Million ton 355.8 580.4 38.1 174.2 651.9 1097.2 484.8 526.1 1136.8 1623.3
Cement Million ton 1012.4 1175.0 142.7 417.9 1821.3 2673.8 483.5 518.5 2304.8 3192.2
Others 2005 year=100 100 317 100 305 100 230 100 119 100 156
Transport Passenger Bil. p-km 1872.2 2763.8 1095.0 1408.4 9058.9 13661.2 16356.9 18724.4 25415.8 32385.6
Freight Bil. Ton-km 2338.7 3375.9 693.0 874.2 7573.8 10749.4 9382.1 10986.1 16955.8 21735.5
 Example of composition of power sources
Japan USA EU25
1,600 5,000 4,000
PV PV PV
1,400 4,500 3,500
Elec tr ic ity o u tp u t (TW h )

Elec tr ic ity o u tp u t (TW h )

Elec tr ic ity o u tp u t (TW h )

WIN 4,000 WIN WIN
1,200 3,000
BMS 3,500 BMS BMS
1,000 3,000 2,500
GEO/HYD GEO/HYD GEO/HYD
800 2,500
Case NUC
2,000
NUC
2,000
NUC
600 1,500
A 400
GAS 1,500 GAS GAS
OIL OIL 1,000
1,000 OIL
200 500 500
COL COL COL
0 0 0
2005

≤0
≤ 20
≤ 50
≤ 100
≤ 200

2005

≤0
≤ 20
≤ 50
≤ 100
≤ 200

2005

≤0
≤ 20
≤ 50
≤ 100
≤ 200
B aselin e

B aselin e

B a selin e
A drastic energy shift from coal and oil to gas is allowed if it is cost effective.

1,600 5,000 4,000

PV PV PV
1,400 4,500 3,500
Ele c tr ic ity o u tp u t (T W h )

E lec tr ic ity o u tp u t (T W h )

E lec tr ic ity o u tp u t (T W h )
WIN 4,000 WIN WIN
1,200 3,000
BMS 3,500 BMS BMS
1,000 3,000 2,500
GEO/HYD GEO/HYD GEO/HYD
800 2,500 2,000
NUC NUC NUC
600 2,000 1,500
Case GAS
1,500 GAS GAS
400 1,000
B 200
OIL 1,000 OIL OIL
COL 500 COL
500
COL
0 0 0
2005

≤ 0
≤ 20
≤ 50
≤ 100
≤ 200

2005

≤ 0
≤ 20
≤ 50
≤ 100
≤ 200

2005

≤ 0
≤ 20
≤ 50
≤ 100
≤ 200
B ase lin e

B ase lin e

B as elin e
Social barriers restrict any drastic energy shift considering realistic state.
 Caveats
The following points must be kept in mind while interpreting the
results of this study:
1) Possibility of more mitigation potentials
This study is based on realistic and currently existing technologies, and
future innovative technologies expected in 2020 are not taken into
account. Therefore, it may be possible to reduce more if innovative
technologies become available in the future.

2) Possibility of over estimation

The baseline emissions in 2020 are estimated under the technology-
frozen case which does not take into account changes in the industrial
structure. Moreover, future service demands are exogenous parameters,
thus changes in the industrial structure and service demands due to the
effects of mitigation measures are not taken into account. Thus baseline
emissions and reduction potentials may be overestimated.