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Models & policy makingExperiences from the CCC

Mike ThompsonHead of Carbon Budgets

www.theccc.org.uk

8th December 2014

@theCCCuk@Mike_Thommo

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1. The Committee on Climate Change

2. Use of models in the CCC

3. Some case studiesa) Climate science and the climate objectiveb) 2050 modellingc) The Renewable Energy Review

4. Reflections

Contents

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Climate Change Act changed the terms of the debate in the UK

Climate change Carbon budgets

• Long-term• Global• Uncertain

• Near-term• Local• Definite

Whether to cut emissions?

How to cut emissions?

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The Climate Change Act and the CCC

The Climate Change Act

A statutory 2050 target for emissions reduction (at least -80% v 1990)

Legally-binding 5-year ‘carbon budgets’

Requirement to develop policies and proposals to meet budgets

Establishes the CCC as independent advisor

The Committee on Climate Change

How fast? Level of 2050 target and carbon budgets

How? Sectoral contributions, technologies and policy options

Monitoring. Are we on track to meet budgets? Lord Deben, Chairman

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Lord Deben

Professor Jim Skea

Professor Sir Brian Hoskins

Professor Dame Julia King

Professor Samuel Fankhauser

Lord Robert May

Lord John Krebs

Paul Johnson

Plus ~25 full-time secretariat, mostly analysts

Contract out specialist research

CCC appointed to recommend targets and monitor progress – an expert group, not an interest group

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Driving Change and the Climate Change Act

Requirement that Government brings forward policies

Committee on Climate Change to monitor progress and suggest

changes

Carbon budgets

2050 Emissions Target

A toolkit

A monitoringframework

A pathway

A goal1

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3

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The Climate Change Act 2008Analysis

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1. The Committee on Climate Change

2. Use of models in the CCC

3. Some case studiesa) Climate science and the climate objectiveb) 2050 modellingc) The Renewable Energy Review

4. Reflections

Contents

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The question CCC faces:What is the right level for the carbon budgets as stepping stones to the 2050 target?

20002003

20062009

20122015

20182021

20242027

20302033

20362039

20422045

20482051

0

100

200

300

400

500

600

700Legislated budgets

2050 target (inc. IAS)

UK Kyoto GHG emissions

MtC

O2e

/yr

Carbon budgets: The cost-effective path to the 2050

target

UK 2050 target:80% below 1990 levels

(75% below 2010)

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Strong evidence-based underpinning…

Climate science

International/EU

2050 Target Carbon budgetsPo

wer

Build

ings

Indu

stry

Tran

spor

t

Agric

ultu

re

Was

te &

F-

gase

s

Secu

rity

of

supp

ly

Fuel

pov

erty

Com

petiti

vene

ss

Fisc

al im

pact

s

Econ

omic

im

pact

s

Sectors: scenarios, costs, required policy

Air q

ualit

y &

he

alth

Budget impacts

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…that is transparent to all interested stakeholders…

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…has led to widespread business support

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What does CCC use energy system models for?

Use energy system models in a ‘what if’ framework, primarily for insights

plus...

Quantitative evidence also required to support insights

however...

Important for insights to drive selection of evidence to support recommendations rather than vice-versa

i.e. evidence-based policy not policy-based evidence

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The use of energy system models is not easy, and is open to misinterpretation / abuse

It is crucial to understand a particular model’s strengths and weaknesses

– reliability of insights depends on knowing whether the choices facing the model robustly reflect those in reality

Judgements around uncertainty and decision making always need human input, rather than simply relying directly on a model’s results

– there are various types of uncertainty – some can be incorporated into a modelling framework, some cannot

– decisions in reality, whether by companies or individuals, are rarely made according purely to least-cost optimisation principles

Using a model to provide evidence requires good judgement and integrity. How a model is set up can have a large effect on the results it produces.

– it is acceptable to set up a run to represent quantitatively an off-model insight

– it is unacceptable to set up a run so that it just tells you what you told it (and then use that as evidence!)

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A single graph can provide multiple insights, if you understand the system it represents (example from UCL global modelling in 2012)

Coal-to-gas switch is cheaper in a low gas price world

Switching from unabated gas to low-carbon more expensive in a

low gas price world

Low gas price makes gas CCS more cost-effective and lowers the cost of

electrifying heat/transport

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1. The Committee on Climate Change

2. Use of models in the CCC

3. Some case studiesa) Climate science and the climate objectiveb) 2050 modellingc) The Renewable Energy Review

4. Reflections

Contents

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Modelling climate from global emissions

Global emissions

Climate modelling with Met Office• MAGICC• ~700 runs per

emissions trajectory

Global temperatures

Climate parameter pdfs• Climate sensitivity• Ocean mixing rate• Carbon cycle feedback

strength

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Projections of climate change risks

Source: IPCC WG2 AR4

• No obvious, definitive maximum ΔT to avoid

• Now: some impacts already apparent (climate extremes, glacier loss, human mortality)

• Beyond ~2°C: key damages become globally prevalent (species loss, crop productivity, ice melt)

• Beyond ~4°C: likely to exceed adaptive capacity of many systems; few analogues in recent geological history

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CCC decision rule

Decision rule• Median projected

temperature increase by 2100 must be close to 2°C above pre-industrial levels

• Keep probability of a 4°C increase very low (e.g. 1%)

Risk of impacts• 2°C above pre-industrial by 2100

will exacerbate current impacts and trigger regional problems

• Beyond 4°C many systems will not be able to adapt

Committed change• Emissions trends and uncertainty

in climate projections make it very difficult to rule out a 2°C increase with 100% confidence

Science guides the discussion, but decision is ultimately a (difficult) value judgment

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Considerations in the 2050 target

Climate Objective• Keep median (i.e. 50%) estimate of

ΔT by 2100 close to 2°C over pre-industrial

• Keep risk of 4°C to very low levels (e.g. 1%)

UK 2050 legislated target• UK ~10tCO2e per capita in 1990• => at least 80% reduction below

1990 levels• All Kyoto GHG sources, inc.

international aviation & shipping

Projections of climate change risks

Possible future global emissions pathways

Global paths to meet the climate objective• Peak by ~2020, halve (~20GtCO2e) by 2050

Share of effort among nations• Various methods, but hard to envisage a

deal where UK has above average emissions per person

• ~2tCO2e per capita in 2050

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1. The Committee on Climate Change

2. Use of models in the CCC

3. Some case studiesa) Climate science and the climate objectiveb) 2050 modellingc) The Renewable Energy Review

4. Reflections

Contents

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2010 emissions

International aviation & shipping

UK non-CO2 GHGs

Other CO2

Industry (heat & industrial processes)

Residential & commercial heating

Domestic transport

Electricity generation

2050 objective

160 MtCO2e

628 MtCO2e

75% cut (= 80% vs.

1990)

The UK 2050 challenge – some initial insights are possible before any modelling begins

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Modelling of global carbon market suggests should not rely on imported carbon credits in the long-term

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Modelling of bioenergy resource suggests it can only be a small part of the solution to reducing emissions

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Energy system models help develop potential pathways to 2050

Least-cost optimisation model that runs over the period to 2050 (in 5-year time steps), which falls somewhere between ‘top-down’ and ‘bottom-up’ modelling

– technology-rich, but not as detailed /sophisticated as sector-specific models

– allows imposition of overall CO2 emissions constraints, either as a trajectory or cumulative budget

– consistent and flexible ‘what-if’ framework, emphasis on sensitivity and uncertainty analysis

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Electricity

Buildings

Transport

Industry

Non-CO2

Aviation & shipping

Further expansion and decarbonise mid-merit/peak

Low-carbon electrified heatCommercial Residential Hard-to-treat

Roll out low-carbon vehicles to fleet

More on-farm measures, F-gases, reduce waste and diet impact?

Efficiency

Decarbonise baseload

EV penetration up;Early H2 adoptionEfficiency

CCS, electrification and other fuel switching? Product substitution?Efficiency

Efficiency on farms, divert waste from landfill

Operational measures, new plane/ship efficiency, whilst demand grows (though possibly constrained)

Potential pathways to 2050 – all require extensive deployment of measures and development of options

2010s 2020s 2030s 2040s

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Summary on meeting the 2050 target

• Various ways in which target could be met based on currently identified measures at cost of 1-2% of 2050 GDP

• Uncertainties also exist over preferred technologies – need to provide support for emerging technologies throughout RDD&D chain to develop portfolio of options, and avoid lock-in to long-lived high-carbon assets

• All scenarios involve widespread energy efficiency improvement; decarbonisation of power generation; extensive electrification of heat and transport; prioritised bioenergy use; some progress in industry, aviation and agriculture

• Appropriate strategy now: aim for full deployment, refocus effort as uncertainties over costs and barriers are resolved

• 2050 target is stretching and requires action across the economy

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1. The Committee on Climate Change

2. Use of models in the CCC

3. Some case studiesa) Climate science and the climate objectiveb) 2050 modellingc) The Renewable Energy Review

4. Reflections

Contents

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Offshore wind, 406

Solar PV, 140

Tidal stream, 116

Onshore wind, 83

Tidal range, 39

Wave, 40 Geothermal, 35 Hydro, 8

There is abundant UK renewable resource

Estimated practical resource for UK renewables = ~850 TWh per year> Electricity demand = c. 350 TWh today, 500-600 TWh in 2050

• Fuel shortage unlikely before 2050

• Availability of sites?Nuclear

• Fuel supplies abundant• CO2 storage capacity?CCS

IntermittencyCan be managed at a cost likely to be

low relative to the cost of generation

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-40

-20

0

20

40

60

80 Fixed demand net intermittent generation Flexible Demand Exports & pumped storage

How does the system cope with high renewables? Snapshot from Feb (2006) with 50% renewables

Source: Poyry Zephyr model

0

10

20

30

40

50

60

70

800

1-Fe

b

03-F

eb

05-F

eb

07-F

eb

09-F

eb

11-F

eb

13-F

eb

15-F

eb

17-F

eb

19-F

eb

Offshore wind Onshore wind Solar Wave + tidal stream Fixed demand

0

10

20

30

40

50

60

70

80 Nuclear Non-intermittent res CCSCoalIGCC CCSGas CCGTPeaker Imports VehiclesToGrid (GW)Pumped Storage Demandshedding

Fix

ed

dem

and

and

in

term

itte

nt

gen

erat

ion

(GW

)

Co

ntr

oll

able

de

man

d (G

W)

Co

ntr

oll

able

su

pply

(G

W)

Shape of fixed demand quite regular

Low wind

Flexible demand moves to high wind periods

Increased exports

Wind close to capacity (59GW)

Increased imports

Flexible demand shifts to overnight, no exports

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7.0 8.511.0 10.5

15.5

5.0 5.5 7.05.0

8.5

13.5

25.023.0

31.5

10.0

14.5 15.0 14.0

0

5

10

15

20

25

30

35

40

45

50

Onshore wind

Offshore wind

Solar PV Tidal stream

Wave Nuclear Gas CCS Coal CCS Unabated gas

Leve

lised

co

st (p

/kW

h)

2030 Estimated cost of low-carbon technologies (2030)

Source: CCC calculations, based on Mott MacDonald (2011) for the Renewable Energy Review . Costs of low-carbon generation technologies.Note: 2010 prices, using a 10% discount rate. Project starting construction in 2030. Unabated gas and CCS include a carbon price (high-low range). Excludes additional system costs associated with intermittency.

Which low-carbon capacity?Future costs of low-carbon are highly uncertain

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18% 31% 45% 58% 72% 86%Proportion of renewables in electricity supply

(excluding Bio CCS)

Uncertainty over costs means that it is not appropriate to be too prescriptive over mix of low-carbon generation

Mean: 52%Median: 55%

CCC ESME run for 2050

ESME run for CCC Renewable Energy Review, May 2011, using ranges for costs of power technologies from Mott MacDonald, and for fossil fuel prices based on DECC scenarios.

All technologies assumed to be available.31

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Given various risks and uncertainties a portfolio approach is appropriate for power sector decarbonisation

EconomicsCurrent Future

Resource Limitations / Risks

Likely to play major role

Nuclear Sites, waste storage, public attitudes

Onshore wind

Probably limited

Acceptability (planning) constraints

Offshore wind

?

Could play major role, UK deployment important to developing option

CCS Best at low LF ?

Access to storageSubject to demo success

Tidal stream and wave

? Subject to demo success

May play role, UK deployment less important to drive down costs

Solar PV Globally driven

?

Tidal barrage

Limited scope for costs to fall

Useful option if others constrained/expensive

= favourable outlook = uncertain, potentially favourable

A portfolio approach: Firm minimum commitments on less mature technologies are required, alongside competitive investment in mature technologies.

Appears lowest cost

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1. The Committee on Climate Change

2. Use of models in the CCC

3. Some case studiesa) Climate science and the climate objectiveb) 2050 modellingc) The Renewable Energy Review

4. Reflections

Contents

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• Simple is good (but not always sufficient)

• Insights begin before models are used

• It helps to have a story

• Judgements are inevitable, and should be explicit

• Effective advice needs to cover all aspects

• Models are invaluable, but dangerous

Some reflections from our experiences

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Some important principles in using models to inform policy

Targeted

Transparent

Trustworthy

• Questions should fit into a broader ‘story’• Understand the question before using the model• Ask the right question to the right model

• Understand why the model gives a certain answer• Know the underlying relations and inputs• Be clear on uncertainties and limitations

• Based on reliable data• A lot of effort in QA• Check against intuitive understanding

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Questions?

Mike ThompsonHead of Carbon Budgets

www.theccc.org.uk

@theCCCuk@Mike_Thommo