Energy Economics 34 (2012) S316–S324

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Energy Economics

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Framing and modeling of a low carbon society: An overview

Mikiko Kainuma a,⁎, Priyadarshi R. Shukla b, Kejun Jiang c

a National Institute for Environmental Studies, 16‐2 Onogawa, Tsukuba 305‐8506, Japanb Indian Institute of Management Ahmedabad, Vastrapur, Ahmedabad, Gujarat 380015, Indiac Energy Research Institute, National Development and Reform Commission, B1518, Guohong Building, Jia. No. 11, Muxidibeili, Xicheng Dist., Beijing 100038, China

Abbreviations and acronyms: AIM, Asia-Pacific InModeling Exercise; CCS, carbon capture and storage; CDanism; ELC, enhanced low carbon (scenario); EMT, electended Snapshot Tool; GCAM, Global Change AssessmGas Inventory & Research Center of Korea; GIS, geographformation and communications technology; IIM, Indian IIntegrated Policy Model for China; LCS, low carbon societate mitigation action; NIER, National Institute for Enviro⁎ Corresponding author. Tel.: +81 29 850 2422; fax:

E-mail addresses: mikiko@nies.go.jp (M. Kainuma),(P.R. Shukla), kjiang@eri.org.cn (K. Jiang).

1 Data are from AME studies.

0140-9883/$ – see front matter © 2012 Elsevier B.V. Allhttp://dx.doi.org/10.1016/j.eneco.2012.07.015

a b s t r a c t

a r t i c l e i n f o

Article history:Received 2 August 2011Received in revised form 11 July 2012Accepted 13 July 2012Available online 29 July 2012

JEL classification codes:Q470Q480O530O210

Keywords:Low carbon societyClimate changeSustainable developmentEmission mitigationScenario modeling

Asian Modeling Exercise (AME) studies show feasible GHG emissions pathways consistent with the 2 degreescentigrade global stabilization target. The aim of the low carbon society subgroup is to propose frameworks,modeling methodologies, and workable roadmaps that will transform in-situ socioeconomic development toa sustainable low carbon society. This paper overviews LCS modeling studies and presents the LCS modelingframeworks and approaches used by the country modeling teams from Japan, China, India, Korea, and Nepal.The LCS modeling is soft-linked to global targets through regional emission constraints derived from theglobal stabilization targets. The disaggregated, yet soft-linked, assessments provide opportunities to articu-late scenarios that include context-specific inputs, and thereby explicitly consider benefits and delivermore realistic and implementable roadmaps. We find that LCS modeling exercises are still at a relativelyearly stage in terms of modeling space, and need methodological enhancements. However, this approach of-fers considerable promise in a world where major emerging economies are undergoing rapid transformation,national and regional interests everywhere still precede global interests, and implementation of the carbonmarket remains fragmentary. Significant opportunities therefore exist for co-benefits to be gained, opportu-nities that could be the key drivers of short-term actions vital to the realization of the low carbon transition.

© 2012 Elsevier B.V. All rights reserved.

1. Introduction

Asia is growing very rapidly. It has the fastest growing greenhousegas (GHG) emissions in the world and under a business-as-usual sce-nario it will contribute 40–54% of global CO2 emissions in 2050.1 Thesuccess of mitigation efforts in this region is important to combat cli-mate change.

Countries in Asia have a range of diversities including their politicalregimes, developmental preferences, equity concerns, and industrialcompetitiveness. At the same time, this region is highly vulnerable tothe impacts of climate change in terms of the number of people affectedand economic assets threatened (IPCC, 2007). Realizing low carbon so-cieties in this region is a key to the reduction of climate change impacts.

tegrated Model; AME, AsianM, Clean Development Mech-trified mass transit; ExSS, Ex-ent Model; GIR, Greenhouseic information system; ICT, in-nstitute of Management; IPAC,y; NAMA, nationally appropri-nmental Research.+81 29 850 2572.shukla@iimahd.ernet.in

rights reserved.

What is a low carbon society? Skea andNishioka (2008) define a lowcarbon society as one that takes actions that are compatible with theprinciples of sustainable development, ensuring that the developmentneeds of all groupswithin the society aremet and that an equitable con-tribution is made toward the global effort to stabilize the atmosphericconcentration of CO2 and other GHGs at a level that will avoid danger-ous climate change, through deep cuts in global emissions.

AME studies (Calvin et al., 2012–this issue) show the existence offeasible GHGemissions pathways that are consistentwith the 2 degreescentigrade global target.Many technologies are suggested byAME stud-ies, but appropriate actions should be taken to deploy them. Althoughcurrent per-capita carbon emissions in most developing countries arelow, emissions are increasing in tandem with economic development.The aimof LCSmodeling studies is tofind alternative pathways tomain-tain emissions at low levels while raising standards of living.

International collaboration is required to support financing for thedeployment of low carbon technologies in less-developed countries.Governments and other institutions need to be reoriented so as tomove forward toward becoming low carbon societies. Countries needto consider how to overcome the barriers that prevent market accessfor such technologies. Low carbon technologies tend to be more costlythan those with high emissions (IPCC, 2011). Although large invest-ments are needed to deploy low carbon technologies such as energy-efficient appliances, next-generation automobiles, and renewable ener-gy technologies, additional investment costs could be balanced by fuel

S317M. Kainuma et al. / Energy Economics 34 (2012) S316–S324

cost reductions. A diverse set of policy actions should be undertakento encourage research and development of technologies, create fi-nancing mechanisms, and support the transformation of the indus-trial structure.

Developing countries such as India face major development chal-lenges, with access to basic amenities such as drinkingwater, electricity,sanitation, and clean cooking energy still remaining a luxury for bothurban and rural dwellers alike (CoI, 2001; Halsnaes et al., 2008).Hence, it is vital to link climate change policies with sustainable devel-opment goals in the majority of Asian countries to gain multiple co-benefits. The LCS modeling studies in the AME focus on developing aroadmap of national and global policies and actions that aligns nationalsustainable development objectives and goals with global climate poli-cies. The transition to low carbon targets in order, for example, to limitglobal warming to below the 2 degrees centigrade target, will requiredeep cuts in GHG emissions in Asian developing countries. Climate pol-icies implemented without considering co-benefits would result in sig-nificant welfare losses. The aim of LCS modeling is to minimize welfarelosses by crafting policies and actions that can deliver co-benefits suchas lower energy security risks, air quality improvements, enhanced en-ergy access, greening of spaces, and recovery of forests.

A key advantage in Asian developing countries is that their long-term development pathways will be shaped in the coming decadesas they undergo rapid urbanization and industrialization. This pro-vides opportunities to alter investments, especially in infrastructures,in ways that will lower the long-term carbon emissions pathway. Cit-ies still in the process of formation provide an excellent opportunity forurban planning solutions to modify underlying energy consumptionpatterns and associated emissions. The LCSmodeling frameworks there-fore attempt to alignmyriad local and bottom-up actionswith top-downand global policies (Halsnaes and Shukla, 2007). The frameworks conse-quently differ according to regional or national targets.

This paper provides an overview of LCS modeling studies and pre-sents the LCS modeling frameworks and approaches used by the coun-trymodeling teams of Japan, China, India, Korea, and Nepal. Discussionsand conclusions from these studies are also reported. We find that LCSmodeling exercises are still at a relatively early stage in terms of model-ing space and need methodological improvements. However, this ap-proach offers considerable promise in a world where major emergingeconomies are undergoing rapid transformation, national and regionalinterests everywhere still take precedence over global interests, and lit-tle discussion of the implementation of the carbon market has beenconducted, but where significant opportunities exist for co-benefits tobe gained, opportunities that could be the key drivers of short-term ac-tions vital to the realization of the low carbon transition.

2005-2020AIM-Enduse DNE21 GCAM IMAGE MESS

-90%

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

Asia China India Japan World

Fig. 1. Changes in energy intensity of GDP across regions and mo

2. LCS scenarios in AME studies

The aim of LCSmodeling is to find pathways to limit global warmingto below the 2 degrees centigrade target and analyze effective policymeasures to follow these pathways. The AME studies examine globalGHG emissions pathways with the 2.6 W/m2 OS target. Most of thesemodeling exercises estimate that CO2 emissions will increase andpeak around 2020 and then decline.

The AME studies also show disaggregated country and regionalpathways, focusing on Asia. Some models estimate emissions through2050, while others estimate them through 2100.

Up to 2020, energy intensity improves much more rapidly thancarbon intensity. Fig. 1 shows changes in the energy intensity ofGDP across regions and models from 2005 to 2020 and from 2005to 2050 in the 2.6 W/m2 OS scenario. It is noted that the region Asiaincludes most Asian countries with the exception of the MiddleEast, Japan and Former Soviet Union states. The energy intensity ofGDP will improve from 44% to 58% in China and from 38% to 57% inIndia during the period 2005–2020, and from 74% to 84% in Chinaand from 67% to 82% in India during the period 2005–2050. Fig. 2shows changes in the CO2 intensity of energy across regions andmodels from 2005 to 2020 and from 2005 to 2050 in the 2.6 W/m2

OS scenario. The CO2 intensity of energy will improve from −10% to17% in China and from −11% to 12% in India during the period2005–2020, and from 40% to 82% in China and from 32% to 95% inIndia during the period 2005–2050 in the 2.6 W/m2 OS scenario. Insome Asian countries, CO2 intensity from 2005 to 2020 will increaseeven in stabilization scenarios. This is mainly because noncommercialbiomass will be replaced by electricity in rural areas. The decliningCO2 intensity in developing countries does not necessarily meanthat they will use new energy. In developed countries, however, neg-ative CO2 intensity changes represent changes in the energy mix fromCO2-intensive energy to less CO2-intensive energy such as renewableenergy and gas. The 2.6 W/m2 OS target requires a large reduction ofCO2. The improvement of CO2 intensity comes from the deploymentof carbon capture and storage (CCS) and new energy sources suchas commercial biomass, solar power, and wind power generation.

The energy intensity of GDP shows a much greater improvementthan the CO2 intensity of energy prior to 2020, while the CO2 intensityimproves at a much higher rate beyond 2020. This means that energyintensity improvement will play an important role for the next 15–20 years, whereas CO2 intensity improvement is expected to play amajor role beyond 2020.

The carbon prices required to achieve the 2.6 W/m2 OS scenariorange from 104 to 632 US$/tCO2 in 2050 and from 145 to 1648 US$/

2005-2050

AGE REMIND TIAM-WORLD TIMES-VTT

-90%

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

Asia China India Japan World

dels from 2005 to 2020 (left) and from 2005 to 2050 (right).

2005-2020 2005-2050

-100%

-80%

-60%

-40%

-20%

0%

20%

China India Japan WorldAsia China India Japan WorldAsia-100%

-80%

-60%

-40%

-20%

0%

20%

AIM-Enduse DNE21 GCAM IMAGE MESSAGE REMIND TIAM-WORLD TIMES-VTT

Fig. 2. Changes in CO2 intensity of energy across regions and models from 2005 to 2020 (left) and from 2005 to 2050 (right).

GtCO2

0

2

4

6

8

10

12

Reference

2.6W/m2 OS

IIM-LCS

Fig. 4. CO2 emissions projections for India in 2050.

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tCO2 in 2100 globally. The AME studies also analyze the mitigation sce-nario of CO2 Price $50 (5% p.a.), whose carbon tax is 216 US$/tCO2 in2050 and 2238 US$/tCO2. In some of the models, the GHG emissionsin the CO2 Price $50 (5% p.a.) scenario are lower than those in the2.6 W/m2 OS scenario.

Fig. 3 shows CO2 emissions for China in 2050 under the reference,2.6 W/m2 OS, IPAC-LCS, and IPAC-enhanced low carbon (ELC) scenar-ios. The CO2 emissions in 2050 range from 11 to 21 GtCO2 in the ref-erence scenario and from 2.0 to 7.6 GtCO2 in the 2.6 W/m2 OSscenario. The emission reduction rates in 2050 in the 2.6 W/m2 OSscenario range from 56% to 88% compared with the reference scenarioand from −52% to 66% compared with the 2005 emissions.

The IPAC-LCS and IPAC-ELC scenarioswere developed to analyze keytechnologies and policy action plans in order to achieve a low carbonsociety in China. The IPAC-LCS scenario reflects China's concerns relatedto the issues of energy security, environmental problems, and the lowcarbon transition. It is achievable through domestic policies such as in-tensive technology improvements, changes in economic developmentpatterns, and changes in consumption patterns. In addition, energy effi-ciency is significantly improved,with renewable energy and nuclear en-ergy developed on a large scale and CCS technology employed to amoderate extent. Various policies related to national energy and climatechange targets are also included. The IPAC-ELC scenario considers glob-ally compatible GHG reductions. Carbon reduction technologies are fur-ther developed, and their cost falls more rapidly. China invests more inthe low carbon economy, and clean coal and CCS technology are widelyused. This scenario tries to explore possible policy options to achievefurther mitigation of CO2 emissions, with emissions reaching a peakby 2030 and then starting to decrease. The IPAC-LCS and IPAC-ELC

0

5

10

15

20

25

Reference

2.6 W/m2 OS

IPAC-LCS

IPAC-ELCS

GtCO2

Fig. 3. CO2 emissions projections for China in 2050.

scenarios are derived from the IPAC bottom-up technology model,which incorporates detailed technological data for China. The ELC sce-nario is the lowest emission scenario that the IPAC model can provide,with promising technologies and countermeasures.

Fig. 4 shows the CO2 emissions for India in 2050 under the refer-ence, 2.6 W/m2 OS, and ANSWER-MARKAL-IIM (IIM-LCS) scenarios.The CO2 emissions in 2050 range from 4.6 to 10.6 GtCO2 in the refer-ence scenario and from 0.21 to 3.2 GtCO2 in the 2.6 W/m2 OS scenar-io. The emission reduction rates in 2050 in the 2.6 W/m2 OS scenario

Reference

2.6W/m2 OS

AIM-LCS

GtCO2

0

0.5

1.0

1.5

2.0

Fig. 5. CO2 emissions projections for Japan in 2050.

Table 1Targets and characteristics of LCS models.

Model/modelingteam

Country/region Reduction target Target year Target areas Interest/output Co-benefits

AIM-LCS Japan (country) 60–80% from 1990 level 2050 Energy supply, industry,residential, commercial,transportation

Qualitative analysis of mitigation actions,roadmaps

Energy securityAIM-ExSS Kyoto (city), Japan 40% from 1990 level 2030 Increased convenience in public transportation

AIM-CGE Global 450 ppme 2100 Energy supply, industry,residential, commercial,transportation

Sustainable development, clean energy Energy security

IPAC-LCSIPAC-ELC

China (country) Compatible with 550 ppm target 2050 Energy supply, industry,transportation, residential,commercial

Detailed analysis of advanced technologiesand policies

Improvement of air quality, water resources,energy security

PECE China (country) 66% from BaU level 2050 High-energy-consumingproduction, transportation,building, energy supply

Technological choices that offer themaximum potential for emission reductionsafter 2030

Improvement of air quality

GCAM-IIM India (country) 75% from BaU level 2100 Targets for low or no carbontechnologies, electricity, nuclearrisk

Subsidies and penetration levels for low orno carbon technologies, GDP loss for India

Energy security, nuclear risk mitigation

ANSWER-MARKAL(IIM)

India (country) 78% from BaU level in 2050 2050 Energy supply, residential,commercial, industry,transportation

Improvements in energy efficiency,sustainable transportation, clean energy,governance, financing

Energy security, lower local pollutant loads,energy access, water use efficiency

ExSS model (IIM) Ahmeda-bad (city),India

Per-capita emissions in 2050 at 2010 level;results in 75% from BaU level

2050 Power sector, buildings, industry,transportation, solid waste

Mitigation roadmap, infrastructures andtechnology policies, financing, localgovernance

Improvement of air quality, waterconservation, energyrecovery from solid waste and wastewater,lower heat island effect

GRAPE(Kurosawa,this issue)

World (China, India,and Japan as singleregion)

GHG/GDP intensity (10% in 2020,40% in 2050)

2020andbeyond

Economy-wide Detailed analysis of transportation andpower generation portfolio

SOx reduction, energy security

GIR Korea (localgovernments)

30% reduction from BaU level (country),according to local governments' situations

2020 Evaluation of local governments'plans, implementation andinspection

Local government implementation plans Improvement of air quality

Nepal MARKAL Nepal (country) 20%–40% reduction in cumulative emissionsfrom 2005 to 2100 in the transportationsector in Nepal

2100 Energy supply, industry,residential, commercial,transportation, agriculture

Introduction of electric vehicles, electricmass transportation, carbon tax

Energy security, local environmentalimprovement, energy efficiency improvement,local employment generation

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ExSS-Kyoto ExSS-Ahmedabad

v

TIMEShort term Long term

Glo

bal

Loca

l

SP

AC

E

China India Japan Korea Nepal Global

GIR

AIM-LCSIPAC-LCS

PECE

ANSWER-MARKAL-IIMAIM-CGE

GCAM-IIM

GRAPE

MARKAL

Fig. 6. Space and time dimensions of LCS models.

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range from 68% to 97% compared with the reference scenario andfrom −125% to 84% compared with the 2005 emissions. As theper-capita CO2 emission in 2005 in India was low and the Indian pop-ulation is growing, India is one of the few countries for which theallowable emissions under the 2 degrees centigrade target would in-crease. The projected emissions display a great deal of variance.GCAM projects the active deployment of CCS and predicts a hugeemission reduction in 2050.

Fig. 5 shows the CO2 emissions for Japan under the reference,2.6 W/m2 OS, and AIM-LCS scenarios. The CO2 emissions in 2050range from 0.92 to 1. 82 GtCO2 in the reference scenario and from0.13 to 0.86 GtCO2 in the 2.6 W/m2 OS scenario. The emission reduc-tion rates in 2050 in the 2.6 W/m2 OS scenario range from 49% to88% compared with the reference scenario and from 54% to 89% com-pared with the 2005 emissions. The projections show that Japan is re-quired to make a radical cut in CO2 emissions by 2050.

Table 2Key actions and related policies and measures considered in the AIM-LCS scenario.

Name of action Concept

Comfortable and greenbuilding environment

Keep warm/cool air in the building by active solar systemand by changing the building structure.

Anytime, anywhereappropriate appliances

Rental services relieve the burden of initial cost ofhigh-efficiency equipment, and promote servicesupply independent from manufacturers.

Promoting seasonal localfoods

Consumers select low carbon seasonal foods and canobtain information about farm producers.

Sustainable buildingmaterials

Active use of wood feedstock and wooden construction.

Environmentallyenlightenedbusiness industry

Change of office space design and full use of low carbon styl

Local renewable resourcesfor local demand

Active selection of regional renewable energy such as solarand wind energies.

Labeling to encouragesmart and rationalchoices

Display of CO2 emissions helps consumers to select lowcarbon products.

Pedestrian-friendly citydesign

Effective urban planning to realize short trips and pedestrian(and bicycle-) friendly transportation, augmented by efficienpublic transport.

The AME studies show the technological feasibility of limiting globalwarming to below the 2 degrees centigrade target under the assump-tion of complete and immediate participation. However, these path-ways need to be linked to national and international policies in orderto be realized. Key policies and measures to achieve a low carbon soci-ety have been discussed in the LCS sessions in AME with considerationgiven to co-benefits.

3. Overview of LCS modeling approach

Table 1 shows modeling activities being carried out in the LCSmodeling field and Fig. 6 shows the space and time dimensions ofeach model. Most of the models focus on national policies to achieve alow carbon society. GRAPE (Kurosawa, this issue), ANSWER-MARKAL(Shukla et al., 2008), and AIM-CGE (Okagawa et al., this issue) are globalmodels. Some of them explicitly deal with the 2 degrees centigrade sta-bilization challenge. Indian, Korean, and Japanese teams are also dealingwith implementation plans for achieving low carbon societies at thelevel of local governments. The studies show the key technologies toachieve low carbon societies and action plans to deploy them. Theyalso emphasize the importance of considering the co-benefits of climatepolicies. The LCS modeling activities in Japan, China, India, Korea, andNepal are summarized here as they provide typical case studies.

3.1. Japanese LCS exercise

Japanese LCS studies have investigated the feasibility of achieving a60–80% GHG reduction domestically in Japan compared with the 1990level using AIM-LCS (2050 Japan Low-Carbon Society Scenario Team,2008; Kainuma, 2009). These studies show the feasibility of achievingthe targets in Japan and illustrate the roadmaps of the necessary actions.The backcasting method is used to identify reduction potentials withpolicy options (2050 Japan Low-Carbon Society Scenario Team, 2009).The targeted reduction of CO2 emissions by 70% in 2050 under AIM-

Policies and measures

– Standardization of energy-efficient buildings– Support to develop low carbon architectural designs– Establishment of simplified method for evaluation of environmentalefficiency of residences and buildings– Regulation of a top-runner system– Support measures for a shift from the retail style to the leasing business style– Enhanced development of ICT to support efficient use of technologies– Introduction of low carbon agriculture certification– Leasing and subsidies for reduction of carbon in production systems– Subsidies to promote low carbon agriculture– Promotion of wood products and recycling– Subsidies for forestry machinery– Certification system for eco-conscious forest management

e. – Establishment of CO2 emission information disclosure system– Development of authorized CO2 accounting system– Tax reduction for investments in low carbon business– Strengthening of technology development for renewable energy– Enhancement of renewable energy purchasing system– Support for construction of local electricity networks– Promotion of use of smart meters– Planning and development of LCS navigation system– Obligation of IC device installation in home appliances and office equipment

-t

– Creation and implementation of a master plan for low carbon cityplanning by municipalities and citizens– R&D support and investment for development of high-efficiency secondarybatteries and lighter vehicle bodies– Introduction and expansion of priority lanes and parking lots for vehicles withlow environmental load

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LCS lies in the range of the AME results for emissions in the 2.6 W/m2OSscenario (Fig. 5).

The process of developing roadmaps can be classified into two stages:envisioning of the target point, and calculating backward from that point(in otherwords, searching for a pathway to arrive at that target point). Inthe first stage, envisioning of the target point, the socioeconomic scenar-ios toward the target have been developed. The socioeconomic scenariosinclude factors such as the energy mix, lifestyle patterns, and industrialstructure. The envisioned socioeconomic factors that are considered tohave particularly large impacts on GHG emissions are the economicgrowth rate of the nation as a whole, the exports of each industry, thepopulation distribution, and the employment rate. In this first stage, var-ious effective measures for mitigation are collected and the combinationof measures to achieve the target is identified. Table 2 shows key actionsand related policies and measures considered in the AIM-LCS scenario.

In the second stage, a roadmap leading to the society depicted in thescenario is investigated. The basic approach is to determinewhat types ofmeasures should be implemented and when they should be imple-mented, in order to arrive at the dissemination rate for the measures atthe target year estimated in the first stage.

The model is used interactively to build consensus among stake-holders. The parameters of measures have been improved through di-alogues with stakeholders concerning various elements such as actionplans, barriers to such plans, strategies to remove these barriers, andpolicies to implement innovative technologies.

Some of the measures suggested by the LCS study have beenimplemented in Japan. The Japanese government has introduced sev-eral measures such as a top-runner system, subsidies for renewableenergies, and promotion of wood products and recycling. The City ofKyoto has proposed the following six actions: Walkable City, Kyoto;Kyoto-Style Buildings and Forest Development; Low Carbon Lifestyle;Decarbonation of Industry; Comprehensive Use of Renewable Energy;and Establishment of a Funding Mechanism. The effectiveness ofthese actions has been estimated using AIM-LCS tools (Gomi, 2008;Gomi et al., 2011).

3.2. Chinese LCS exercise

The IPAC model used for LCS studies is an energy technology model(IPAC-AIM/technology) linked with a global emission model (IPAC-Emission) and an energy economic model (IPAC-CGE). IPAC-Emissionprovides Chinese GHG emission targets and IPAC-CGE provides futureenergy service demands.

Taking into account different levels of concentration targets, threescenarios were studied to explore China's 2050 low carbon develop-ment paths. These are the baseline scenario (BaU), the low-carbonscenario (LCS), and the enhanced low-carbon scenario (ELC) (Jiang

Table 3Key policies and measures to achieve a low carbon society in China.

Policy/measure Description

Reasonable lifestyle andconsumption patterns

Advocating reasonable ways of living, controlling the gto choose low-energy-consumption and low-emissionsumption pattern.

Structural optimization Optimizing economic structure, industrial structure, pThe proportion of tertiary industry in GDP will increas

End-use energy technologyprogress

In view of China's industrialization and urbanization, iindustrial sector before 2035. The share of advanced tecommercial and civil sectors through technical progreenergy saving in end-use sectors.

Technological progress of energysupply

The proportion of coal end-use consumption in energy20% in the low carbon scenario. In the enhanced low ctaken into account after 2020.

Policy mechanism Policies include energy taxes, carbon taxes, environmetax breaks/privileges, government grants/funding, gre

International cooperation This includes vigorously strengthening international ccarbon emission mitigation.

et al., 2008; Hu et al., 2011; Jiang, this issue). The CO2 emission levelin IPAC-LCS is higher than the levels in the range of the 2.6 W/m2

OS scenario, whereas that of IPAC-ELC lies in the range of 2.6 W/m2

OS emissions (see Fig. 3). Key policies and measures considered inLCS scenarios in China are listed in Table 3.

The results of the scenario analysis show that China's industrializa-tion, urbanization, and modernization processes will remain far frombeing completed in 2050 in the case of BaU. In order to achieve a“three-step development strategy,” China is at the stage of rapid eco-nomic development supported by the consumption of large amountsof energy. This will result in an increase in GHG emissions. The Chinesegovernment has announced the target of a 40–45% reduction in the car-bon intensity of GDP in 2020 compared with 2005. However, theIPAC-LCS and IPAC-ELC scenarios respectively show 66% and 67% reduc-tion requirement of carbon emissions intensity of GDP in 2020 and 94%and 97% reduction requirement in 2050. Although it will encountermany challenges, taking the path of low carbon development will bethe inevitable choice for China to ensure sustainable developmentwith energy security and food security and to avoid climate impacts.

Rather than BaU, China should take the relevant measures to followthe LCS and ELC paths. These measures include reasonable choices oftechnologies by end-users, use of recycled materials, development oflow carbon infrastructures, technological progress of end-uses, andtechnological progress of energy supplies. It will also be necessary toprovide protective and supporting policies to overcome obstacles en-countered in achieving thesemeasures, such as relevant laws and regu-lations, economic and tax policies, industrial policies for low carbondevelopment, strict energy-efficiency standards, low carbon productstandards, various types of innovativemechanisms, policies for promot-ing technological innovation, promotion of international cooperationand technology transfers, and others.

3.3. Indian LCS exercise

India is undergoing rapid transitions in income (low to medium),demographic (growth and age profile), rural to urban and agrarian toindustrial. Conventionally, such transitions witness rapid rise in ener-gy demand and emissions of local air pollutants and greenhousegases. Overwhelming fraction of India's energy mix consists of do-mestic coal and oil—nearly a three fourth of which is imported. Themodel results show that the volume and the share of oil importsshall significantly grow under the conventional business-as-usual fu-ture. The climate changemitigation in India is therefore intricately as-sociated with the local air quality and energy security risks.

The actions to mitigate these risks happen at different geographi-cal (e.g. national, state, city) and sector levels.

rowth rate of per capita living space, developing public transport, guiding peopletransportation modes, policies to encourage the choice of a reasonable con

roduct structure, energy structure, and others to achieve low carbon development.e from 40% in 2005 to 60% in 2050.t is particularly important for China to make technological advances in thechnology progress may reach more than 90% in 2030–2035. The contribution of thess and optimal design of buildings will continue to be maintained at 35–40% for

-saving scenarios drops from 47.1% in 2005 to 21.6% in 2050, and further drops toarbon scenario, the application of carbon capture and storage technology is fully

ntal taxes, voluntary agreements, the reduction of fossil fuel subsidies,en power feed-in tariff, standards and labels, propagation/education, etc.ooperation and utilizing the mechanisms of international cooperation to realize

S322 M. Kainuma et al. / Energy Economics 34 (2012) S316–S324

The LCS modeling exercises for India include scenarios and modelingassessment by soft-linking diversemodels and inputs fromdisaggregatedgeographic and sector specific modeling exercises (Shukla et al.,2008). The typical LCS assessment focuses on aligning the develop-ment and climate policies and actions so as to gain multipleco-benefits. The LCS modeling in India for the AME used asoft-linked modeling framework (Shukla and Dhar, 2011). The top-down global assessment model GCAM-IIM (Shukla and Chaturvedi,2011a, 2011b) delivers to the national level exercise the future carbonprice, e.g. for the 2 degrees centigrade stabilization target. The nationallevel assessment used the energy system partial equilibrium modelANSWER-MARKAL (Shukla et al., 2008) and delivers sector and technol-ogy level details. Themicro level planningmodel ExSS (Gomi, 2008), anaccounting model with Geographical Information Systems (GIS) inter-face, is used for the city level assessment.

A national baseline scenario is developed for the 2010–2050 period.The scenario drivers include the future economic and demographic pro-files and also already announced development targets and programs re-lated to energy efficiency, renewable energy technology capacity aswell as variousmissions announced in India's “National Climate ChangeAction Plan” (GoI, 2008). The low carbon scenarios for India are bifur-cated through two underlying paradigms: i) Conventional LCS scenario,and ii) Sustainable LCS scenario. The two scenarios have identical cumu-lative CO2 emissions from the year 2010 to 2050, but they follow differ-ent development paths. The Conventional LCS scenario uses carbonprice as the sole instrument for transition to a low carbon pathway.The Sustainable LCS scenario is targeted to achieve the same cumulativeemissions from 2010 to 2050 as in the Conventional LCS scenario. Thebaseline of Sustainable LCS scenario assumesmultifarious developmentprograms and policies and specified technology targets (Shukla andChaurvedi, 2012–this issue). The construction of the second scenario in-cludes the policies and actions such as at local (e.g. city) and sector (e.g.transport) levels.

The assessment approach and the results for the two LCS scenariospresent interesting contrast. The Conventional “LCS Scenario” assess-ment assumes carbon price as the sole instrument to transform theemissions pathway and the minimization of discounted long-term en-ergy system costs as the single objective. GCAM provides the globalcarbon price and ANSWER-MARKAL provides the detailed sector andtechnology level road-map that minimizes the discounted energy sys-tem cost. For Sustainable LCS scenario, since the cumulative carbonemissions constraint equal to that for the Conventional LCS scenario isimposed, the ANSWER-MARKAL model delivers the “shadow” carbonprice trajectory (Gomi et al., 2011, 2008). The “shadow price” trajectoryis generally lower than the global carbon price trajectory, the differencebeing the contribution from the expected co-benefits (and co-costs) ofthe national sustainable development policies and actions.

The CO2 emissions for both scenarios,modeled by IIM-LCS (ANSWER-MARKAL-IIM), lie within the range of 2.6 W/m2 OS emissions (Fig. 4).However, in terms of energy and technology mix, the scenario resultsvary sharply. The assessment of Conventional LCS scenario recommendsincreasing the share of energy supply-side technologies, e.g. nuclear andCCS, as themain options for the low carbon transition. In case of Sustain-able LCS scenario, the assessment suggests enhancing investments ininfrastructures (which deliver long-term development and carbonmit-igation benefits) and end-use efficiency improvementmeasures (whichdeliver near-term significant co-benefits with little direct costs), be-sides focusing on building competitive national industry for advance re-newable options like solar PV.

Following the global negotiations at COP17 at Durban in December2011 and the 12th Five-Year plan for India (GoI, 2011), the next stageof LCS modeling exercises in India is aiming: i) to align, in the short-term, the national development policieswith the existing low carbon fi-nancial mechanisms like NAMAs (Nationally Appropriate MitigationActions) at the sector level and CDM (Clean Development Mechanism)at the project level, ii) to coordinate, in the medium term, national

technology policies with technology mechanism envisaged in theUNFCCC negotiation, and iii) to carry out, in the long-term, the nationallow carbon modeling assessment to develop the technology and finan-cial roadmaps for India's optimal participation in the global climatechange regime while gaining the co-benefits vis-à-vis the key nationalobjectives like energy security and clan air.

3.4. Korean LCS exercise

Yoon (2010) presented Korean strategies toward a low carbon so-ciety at the AME workshop in Seoul and stressed the importance ofjoint city and local government efforts under the strong leadershipof the national government. As a modeling activity, the Korean LCSexercise is still in a nascent state. One important observation is thatit is necessary to develop actual plans to mitigate emissions withlocal governments.

Several local governments have already prepared their implementa-tion plan for setting a reduction target and achieving a low carbon soci-ety. As of 2009, 16 local municipalities and 10 local governments (pilotprojects) were in the process of calculating GHG emissions by sectoraccording to the IPCC guidelines and establishing an implementationplan to respond to climate change. However, it is difficult to synthesizeand compare the analysis results of local governments because there isno consensus on standardization for the definition of sectors, base year,and target year, nor the methodology for setting baselines and reduc-tion targets.

In order to successfully achieve the national GHG reduction target,local governments must, as the implementing agencies, have thestrong will to meet the target goal, as well as specific and qualitativemitigation plans.

Therefore, the National Institute of Environmental Research (NIER)has proposed a standardized guideline to establish the methodologyfor GHGmitigation under a comprehensive plan for dealingwith climatechange. The contents of the guideline include (2050 Japan Low-CarbonSociety Scenario Team, 2008) methods for setting GHG reduction goals,(2050 Japan Low-Carbon Society Scenario Team, 2009) GHG emissioncalculationmethods, (Calvin et al., 2012–this issue) an estimationmeth-odology for BaU and the effect of introducing policies on future GHGemissions, and (GoI, 2008) methods for creating a roadmap for the im-plementation of reduction policies.

With the cooperation of the Presidential Committee on GreenGrowth and other relevant authorities, the Ministry of Environmentis taking concrete measures to move toward a low carbon society soas to realize green growth without delay.

There are differences of opinion between the national and local gov-ernments on implementation plans, such as in the case of policies andfinance to meet short- and mid-term reduction targets.

Currently, the Greenhouse Gas Inventory and Research Center ofKorea (GIR) runs a range of models to analyze the mitigation potentialof various sectors at the national level. Since the establishment of themid-term GHG mitigation plan for the Republic of Korea in 2009,sectoral- and source-specific GHGmitigation goals have been under de-velopment, with GIR as the central organization.

Mitigation targets for sectors and companies will be determinedthrough the drafting of a consensus process. Also, as a follow-up mea-sure, GIR will prepare a master plan proposing reduction policies in de-tail, as well as the direction for technological development to achievethe reduction goal. This will help accelerate the Republic of Korea's con-tribution to achieving a low carbon society.

3.5. Nepalese LCS exercise

Shrestha and Shakya (2012–this issue) have examined the feasi-bility of a low carbon transportation system in Nepal. Strategiesadopted for developing a low carbon society may not be the samefor the developed and developing countries, and they may also vary

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even among the developing countries due to variations in energy re-sources, geographical conditions, state of economic development, andother factors. The Nepalese study analyzes the effect of a cumulativeemission reduction target during the period 2005–2100 from the cumu-lative emission level in the reference scenario. The Nepal-MARKALmodel has been used to analyze the emission reduction target (ERT) sce-narios, inwhich the target ranges from a 20% cutback to a 40% cutback ofCO2 emissions in the reference scenario during the study period. In ad-dition, it has examined a third case, which considers a 40% cutback ofCO2 emissions plus an increase in the level of modal shift of road trans-portation service demand to electrified mass transit (EMT) under thereference scenario.

Recently, the Government of Nepal introduced its Climate ChangePolicy 2010, which emphasizes the promotion of clean and renewableenergy resources in the country and the adoption of climate-friendlysocioeconomic development (MOEV, 2010). It also envisages the for-mulation of a national low carbon development plan by 2013.

The Nepal-MARKAL model exercise aims to establish a referencecase emission trajectory under the BaU condition during the period2005–2100, in order to examine emission reduction target scenariosand determine the corresponding least-cost CO2 mitigation options indifferent sectors. It also aims to examine co-benefits in terms of energysecurity, local pollutant emissions, and employment benefits associatedwith the implementation of CO2 emission reduction targets, and tostudy the role of EMT in meeting the CO2 mitigation targets.

In the context of implementing climate change policy in the country,there is a need for studies that will help to formulate concrete short-,medium-, and long-termplans tomitigate expected future CO2 emissionsin the most cost-effective and realistic manner, while taking into consid-eration the broader objective of the sustainable development of thecountry.

The study shows that introduction of ERT policies would promotethe use of renewable energy resources and improve energy security interms of import dependency as compared with the reference scenario.ERT policies would also help to promote indigenous energy resources(hydropower, biomass, and other renewables) and significantly reducethe amounts of short-lived local pollutant emissions (SO2, NOX, CO,PM10, non-methane volatile organic compounds). The introduction ofERT policies would favor the penetration of cleaner and more efficienttechnologies and create some employment opportunities in the country.

The study also shows that increasing the modal shift from roadtransportation to EMT would enrich the value of the feasible CO2

emission reduction target and its associated benefits.

4. Discussion

The AME studies show that there are feasible pathways consistentwith the 2 degrees centigrade target. The models show differentamounts of emission reductions by country. Although many technol-ogies are suggested by the AME studies to achieve the climate stabili-zation targets, policies to introduce such technologies have not beendiscussed directly. LCS modeling takes into account policies and ac-tions to deploy technologies for each country.

Strategies adopted for developing a low carbon society may not bethe same for the developed and developing countries due to differ-ences in energy resources, geographical conditions, state of economicdevelopment, and other factors.

Unlike the case of developed countries, setting an emission reductiontarget below the 1990 level may not be possible in many developingcountries because a significant percentage of the population in the latterdoes not have access to nontraditional forms of energy in order to meettheir basic energy requirements (Shrestha and Shakya, 2012–this issue).The concept of LCS modeling in such a situation might not be accepted.However, developing countries have large potential for economic devel-opment and their GHGemissions could increase at a rapid pace. Avoidingthe lock-in of a high carbon infrastructure with a long lifespan is crucial

in developing countries. The Nepal-MARKAL team has investigated thereduction potential in the transportation sector and shown the possibil-ity of achieving lower CO2 emissions while satisfying transportation de-mand. It is very important to design a low carbon transportation systemat an early stage. An effective way to investigate strategies for loweringemissions in developing countries is to start bymodeling a specific sectorsuch as transportation.

Developing countries facemajor development challenges. Hence, it isvital to link climate change policies with sustainable development goalsin most Asian countries to gain multiple co-benefits. When developingroadmaps to an LCS, the assessment of co-benefits that include improve-ments in multiple sustainability indicators at the macro/national levels(e.g., energy security, water security) andmicro/local levels (e.g., energyaccess, air quality, water stress) is vital to enhance acceptability and de-livery of low carbon measures. Some of the LCS models estimate im-provement of environmental quality associated with GHG emissionreductions and analyze the employment opportunities along with newenergy sources.

It is not an easy task to link the modeling outputs to governmentalpolicies. Not only the national government, but also local govern-ments play a key role in the management of GHG emission reduc-tions. As regulatory bodies, local governments assume a pivotal rolein reducing GHG emissions by providing information to the final en-ergy consumers in public and private institutions as well as by pro-viding motivation to incorporate changes in consumption patterns.In a practical sense, it is crucial to establish policies and measures vi-able for GHG mitigation in the medium and long term. Specific andquantitative mitigation plans are needed to successfully achieve a na-tional GHG reduction target. NIER (Korea) has proposed a standard-ized guideline to establish a methodology for GHG mitigation undera comprehensive plan regarding climate change. Such guideline prep-aration is only a part of LCS analysis, but it is an essential startingpoint to convey the LCS target to local policymakers.

Although large investments will be needed in the initial stages totake early actions, energy savings could recover these costs in thelong run. The modeling can support investments by showing whatinitial costs would be required and the extent to which energy costscould be reduced.

Early investment in land use planning and infrastructure is essentialfor a sustainable LCS. Infrastructure investments (public and private in-vestments in transportation, ICT, etc.) can deliver sustained multipleco-benefits and help to prevent long-term lock-ins into unsustainableresource (e.g., energy) exploitation and high emissions pathways.

The soft-linking of models at different levels of geographical and sec-tor hierarchies through data transfers permits the creation and explora-tion of scenarios with greater realism. However, the consistency of theexercise requires that the different models be aligned to the samestoryline and comparable dataset. The precision of suchmodel alignmentis desirable, but not strictly practicable. Thus, there is a trade-off betweenthe practicality and purposiveness of themodel outputs versus the preci-sion. The modeling teams act as key integrators who deliver consistencyto the soft-linking of models. The modeling process, on the other hand,includes diverse stakeholders who act as the validators of the scientificprocess, revealers of the stakeholder preferences, and recipients andusers of the LCS outputs of the modeling assessment. LCS modeling istherefore an integrated process wherein the models are used as interac-tive tools to deliver purposive results in a realistic and hierarchical pro-cess of policy-making and decision-making. LCS modeling assessmentsfill the gap between the typical laboratory-style integrated modeling as-sessments and the downscaled but unaligned practical assessmentsperformed at disaggregated geographical and sector-specific scales.

5. Conclusions

Achieving a low carbon society in Asia is a challenge, as the region en-compasses diverse and rapidly growing economies that are undergoing

S324 M. Kainuma et al. / Energy Economics 34 (2012) S316–S324

multiple transitions in, for example, income, demographics, infra-structures, and institutions. It makes strategic sense to leapfrog theconventional development path and transit to a new socioeconomicfoundation that leads to an LCS based on sustainable and low carboninfrastructures, technologies, and behavior. Although large invest-ments will be needed in the initial stages to take early actions, thereare many co-benefits that justify rapid and targeted early actions.

A comprehensive roadmap that aligns national development andclimate policies and incentivizes technology R&D players, entrepre-neurs, and consumers has the potential to give a tremendous boostto national clean energy industries in emerging economies. This isvital in order to make clean energy an important part of the nationalsustainable development process. It is also vital in terms of the na-tional commitment to the ultimate objective of the UNFCCC, whichis to stabilize GHG concentrations so as to avoid the dangerous conse-quences of future climate change while remaining aligned to the na-tional sustainable development pathway.

The integration of climate and development policies, which LCS as-sessments pursue, has potential to offer keener insights and information(Heller andShukla, 2003; Luken, 2006; Shukla, 2006). Global climate ne-gotiators, policymakers (at all geographic levels) and diverse decision-makers and agents in all economic activities could use these insightsand information to enhance responses that may contribute positivelyto the ultimate objective of the Climate Convention.

Acknowledgments

Part of this study was supported by the Environment Research andTechnology Development Fund (S-6 and A0808) of the Ministry of theEnvironment, Japan. We also acknowledge the support of the POEMand CPOprojects supported by the EuropeanUnion (FP7) and the BasqueCentre for Climate Change (BC3). We are grateful to Dr. So-Won Yoon(GIR, Korea), Prof. Ram Shrestha (Nepal), and Mr. Shree Raj Shakya(AIT, Thailand) for their contributions of the regional analyses for Koreaand Nepal. We also wish to thank Dr. Jongchul Bang (Korea), Dr. JunichiFujino (NIES), Dr. Amit Kanudia, Dr. Atsushi Kurosawa, and Mr. Fu Shafor providing important insights into low carbon society scenarios duringvarious interactions.

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