technological convergence between developed and developing ...€¦ · technological convergence...

Technological Convergence Between Developed and pDeveloping Countries

Francisco de la ChesnayeProgram Manager Global Climate ProgramGlobal Climate Program

2011 International Energy WorkshopSt f d U i J l 6 2011Stanford Univ, July 6, 2011

Research question:

• Is there a pattern of technological diffusion and p gconvergence between middle & low income countries and high income countries similar to the pattern observed within high income countries, particularly inobserved within high income countries, particularly in energy-related technologies?

2© 2011 Electric Power Research Institute, Inc. All rights reserved.

Relationship between cost and climate change stabilizationclimate change stabilization

3© 2011 Electric Power Research Institute, Inc. All rights reserved.Source: Source: IPCC 2007b, Figure TS.9.

Delayed Participation: Regions Enter the Gl b l C liti TiGlobal Coalition over Time

Annex 1 (minus Russia)

BRICS (Brazil, Russia, India, China)

Remaining Countries

2012 2030 2050 2070


Source: Weyant & de la Chesnaye presentation to the National Academies of Science, International Context for America’s Climate Choices

Annex 1 2020 Carbon Prices

$250

$300

ETSAP-TIAM

650 CO2-e 550 CO2-e 450 CO2-e

$150

$200

2005

U.S

.$) FUND

GTEM

IMAGE

IMAGE-BECS

MERGE Optimistic

$

$100$/tC

O2 (

MERGE Optimistic

MERGE Pessimistic

MESSAGE

MESSAGE-NOBECS

MiniCAM - Base

$0

$50 MiniCAM - Lo Tech

POLES

SGM

WITCHFullN.T.E.

DelayN.T.E.

FullN.T.E.

DelayN.T.E.

FullO.S.

DelayO.S.

FullN.T.E.

DelayN.T.E.

FullO.S.

DelayO.S.N.T.E. N.T.E. N.T.E. N.T.E.O.S. O.S. N.T.E. N.T.E.O.S. O.S.

Scenarios that could not be modeled under


be modeled under criteria of study.

Source: Weyant & de la Chesnaye presentation to the National Academies of Science, International Context for America’s Climate Choices

Key Characteristics of Selected Climate Economic ModelsClimate Economic Models

Model Model Type Solution Concept Technology Diffusion

AIM A i P ifi I t t d M d l M lti S t G l R i D i E t li it ti i t d ti fAIM: Asian-Pacific Integrated Model(Kainuma, et al, 2007)

Multi-Sector General Equilibrium

Recursive Dynamic Expert elicitation on introduction of new technologies

GEMINI-E3: General Eq. Model of Int. Interaction for Economy-Energy-Env

(Bernard et al, 2006)


Recursive DynamicInstantaneous

EPPA: Emissions Projection and Policy Analysis Model

(Paltsev, et al, 2005)


Recursive Dynamic Endogenously determined depending on technology costs, including fuels, for

each region

MERGE: Model for Evaluating Regional and Global Effects of GHG Reductions

Aggregate General Equilibrium

Intertemporal Optimization Lagged by one or two decades depending on region income leveland Global Effects of GHG Reductions

Policies(Blanford et al, 2009)

Equilibrium on region income level

IMAGE: Integrated Model to Assess the Global Env

(van Vliet et al, 2009)

Market Equilibrium Recursive DynamicInstantaneous

MESSAGE: Model for Energy Supply Strategy Alternatives and Their General

Env. Impact(Krey and Riahi, 2009)

Market Equilibrium Recursive DynamicInstantaneous

MiniCAM: Mini-Climate Assessment Model

Market Equilibrium Recursive Dynamic Instantaneous


Model(Calvin et al, 2009)

Different Rates of Technological Convergence and Technology DiffusionCo e ge ce a d ec o ogy us o

Fossil and Advanced Fossil Plants

5 000

4,000

4,500

5,000

non-OECD Ref

2,500

3,000

3,500 OECD Ref

3 deg non-OECD Con F

3 deg OECD Con F

non-OECD Adv Fossil

1 000

1,500

2,000OECD Ref Adv Fossil

-

500

1,000

1971 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100


Approximation of the number of fossil fuel power plants based on historical and projected electricity generation data. Sources: Historical data, IEA, 2009; Projections, Blanford et al, 2009.

Research question:

• Is there a pattern of technological diffusion and p gconvergence between middle & low income countries and high income countries similar to the pattern observed within high income countries, particularly inobserved within high income countries, particularly in energy-related technologies?


Historical Technological Convergence Between Developed and Developing Countriesp p g

9© 2011 Electric Power Research Institute, Inc. All rights reserved.Source: Comin and Hobijn (2004)

Research task: add technology measures for energy related sectors and developing countriesgy p g

Electricity

KWhr of electricity produced per unit of real GDP per year

KWhr of electricity produced by coal units

KWhr of electricity produced by gas unitsKWhr of electricity produced by gas units

KWhr of electricity produced by biomass‐waste renewable units

KWhr of electricity produced by wind & solar renewable units

Petroleum refining / fuels

Kiloton of Oil Equivalent (KTOE) per unit of real GDP per year

KTOE of petroleum for Transportation

KTOE of petroleum for Oil Refining (excluding transportation uses)

KTOE of petroleum for Chemical and Petrochemical production


KTOE of petroleum for Chemical and Petrochemical production

Obtain data for additional Low- & Middle–Income Countries, focusing on the following large CO2 emitting countriescountries

1. China2. Brazil

1. Nigeria2. Venezuela

3. Indonesia4. Russian Federation5 India

3. Turkey4. South Africa 5 Saudi Arabia5. India

6. Mexico7. South Korea 8 I

5. Saudi Arabia 6. Poland 7. Thailand 8 A ti8. Iran

9. Ukraine 8. Argentina


Electricity Generation Convergence Between Developed and Developing Countriesp p g

8 0

Electric Power Generation Convergence Rates

7.0

8.0All Elec (KWh/GDP)

Coal Elec (KWh/GDP)

Gas Elec (KWh/GDP)

Bio‐Waste Elec (KWh/GDP)

5.0

6.0 Wind‐Solar Elec (KWh/GDP)

3.0

4.0

1.0

2.0

12© 2011 Electric Power Research Institute, Inc. All rights reserved.12

0.0

1971 1975 1979 1983 1987 1991 1995 1999 2003 2007

Electricity Generation Convergence Between Developed and Developing Countriesp p g

3 0

Electric Power Generation Convergence Rates

2.5

3.0All Elec (KWh/GDP)

Coal Elec (KWh/GDP)

Gas Elec (KWh/GDP)

2.0

Bio‐Waste Elec (KWh/GDP)

1.0

1.5

0.5


0.0

1971 1975 1979 1983 1987 1991 1995 1999 2003 2007

Petroleum-related Technological Convergence Between Developed and Developing Countriesp p g

3 0

Petroleum Related Convergence Rates

2.5

3.0Transport Oil (KTOE/GDP)

Oil Refining (KTOE/GDP)

Chem/PetroChen (KTOE/GDP)

2.0

1.0

1.5

0.5


0.0

1971 1975 1979 1983 1987 1991 1995 1999 2003 2007

Results on Speed of Convergence

Estimates of βs and the speed of convergence, in percent, for selected technologies All Electricity Coal Electricity Gas Electricity Bio‐Waste

ElectricityWind‐Solar Electric

0.71(0 05)

0.43(0 22)

0.85(0 07)

0.83(0 11)

0.56(0 16)(0.05)

34%R‐2 = 0.66

(0.22)86%

R‐2 = 0.67

(0.07)16%

R‐2 = 0.67

(0.11)19%

R‐2 = 0.50

(0.16)57%

R‐2 = 0.18

Transportation Oil

RefineriesOil

Chemical Petrochemical

0.58(0 07)

0.92(0 03)

0.77(0 06)(0.07)

54%R‐2 = 0.37

(0.03)8.4%

R‐2 = 0.90

(0.06)27%

R‐2 = 0.70Standard errors are in parenthesis. Speed of convergence is calculated as ‐ln(β).


Conclusions

• There is an observed pattern of technological convergence between developed and developing countries in the observedbetween developed and developing countries in the observed data, i.e., more detailed assessment of electric generation and petroleum-related technologies.

• For electric generation technologies, convergence is faster g g , gbetween developed and developing countries than that observed between OECD countries.

• This is the same for oil refining, however, transportation and chemical production show very distinct patterns.

• Key insight # 1: Patterns and speed of convergence with a technology group (all electricity) can be very different (gas vs

l)coal). • Key insight # 2: Newer technologies (wind and solar) exhibit

much faster convergence rates than stable technologies.


• Take away: Details within technology groups matter; more detail the better for specifying convergence rates.

technological convergence between developed and developing ...€¦ · technological convergence...

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