1 Co-benefits of CDM projects in China CDM and Climate Policy: Multidisciplinary Perspectives MILEN Workshop 18 November 2009 Holmenkollen Park Hotell, Oslo Kristin Aunan Center for International Climate and Environmental Research – Oslo (CICERO)

2 Outline Emissions of CO 2 and air pollutants in China Air pollution co-benefits of CO 2 mitigation Co-benefits of China’s current CDM portfolio

3 Outline Emissions of CO 2 and air pollutants in China Air pollution co-benefits of CO 2 mitigation Co-benefits of China’s current CDM portfolio

4 China1990: 11% of global emissions China 2008: 22% Global emissions growth : China’s share was 70% China dominates global emissions and emissions growth Myhre et al., 2009 CO 2 from fossil fuels (GtC/yr)

5 Half of the growth in CO 2 towards 2030 may come from China ~80% of the growth in emissions from developing countries ~60% from developing Asia ~40% from China alone (NB: These are BAU scenarios..)

6 Power plants and industry largest sources of emissions of CO 2, SO 2, and NOx Peters et al. (2009) based on China Statistical Yearbook

7 Outline Emissions of CO 2 and air pollutants in China Air pollution co-benefits of CO 2 mitigation Co-benefits of China’s current CDM portfolio

8 ’Co-benefits’: Climate-change and air- pollution links Source link: CO 2 and the main air pollutants have the same sources Air pollutants, especially tropospheric ozone and particles, play an important role in the climate system Chemistry: Some air pollutants affect the lifetimes of GHGs

9 ’Co-benefits’: Climate-change and air- pollution links Source link: CO 2 and the main air pollutants have the same sources Air pollutants, especially tropospheric ozone and particles, play an important role in the climate system Chemistry: Some air pollutants affect the lifetimes of GHGs

10 Co-benefits include: Avoided mortality and morbidity due to exposures to air pollution Avoided corrosion to materials and heritage due to acid rain Avoided damage to crops and ecosystems due to surface ozone and acid rain Avoided costs in air pollution abatement Avoided climate disturbance from air pollutants (PM, O 3 …) Beijing, november 2007

11 Air pollution co-benefits of CO 2 mitigation in developing countries are well documented US-EPA IES program: –Co-control options accounting for health co-benefits (Argentina, Brazil, Chile, China, India, Mexico, Phillippines, South Korea.. ) IGES (Institute for Global Env. Strategies): –Research on co-benefits of climate actions in the Asia-Pacific region Clean Air Initiative: Asia IIASA (Gains model) Academic scholars/publications: –Health and environmental co-benefits of GHG mitigation often exceed the costs –Air pollutants as a climate forcing (trade-offs!)

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13 IPCC AR4 concludes: “..in all analyzed world regions near-term health co-benefits from reduced air pollution as a result of actions to reduce GHG emissions can be substantial and may offset a substantial fraction of mitigation costs (high agreement, much evidence)”

14 Outline Emissions of CO 2 and air pollutants in China Air pollution co-benefits of CO 2 mitigation Co-benefits of China’s current CDM portfolio

15 China by far the largest CDM country Figure: Volumes of proposed CDM project emissions reductions, through Source:Point Carbon 2009

16 Draws upon studies on health and environmental co-benefits of CO 2 reductions in China (energy- related, potential CDM) Exploiting China’s CDM potential (energy): 3, ,000 premature deaths avoided each year, and 1-45 billion RMB saved due to avoided morbidity and hospitalization, crop loss, material damage…

17 A simplified methodology for estimating co- benefits of current Chinese CDM portfolio (Rive and Aunan, 2009, work in progress) Statistical sampling from the 1754 active CDM projects in China as of July 1st 2009 (UNEP CDM Pipeline database) – categorized according to project type and geographical location

18 CERs from China’s CDM portfolio (2010)

19 Sample from the 1754 active CDM projects in China as of July 1st 2009 (UNEP CDM Pipeline database) – categorized into project type and geographical location From information in the Project Design Document and emission factors in GAINS-Asia database: co- abatement rate for SO 2, PM 2.5, and Nox re estimated A simplified methodology for estimating co- benefits of current Chinese CDM portfolio (Rive and Aunan, 2009, work in progress)

20 Co-control rate for project types (Based on Rive and Aunan, 2009, work in progress)

21 Total offsets of air pollutants (2010)

22 Total offsets: Annual CO 2 reductions and co- abated air pollution CER in 2008: ~2% of China’s CO 2 emissions from fossil fuels SO 2 reduction from CDM in 2010: ~20% of China’s targeted SO 2 reduction in 11th five year plan PM 2.5 and NOx: Small share of total emissions, but large co-benefits

23 A simplified methodology cont., health (premature mortality) Assume an average 0.10 avoided deaths per tPM 2.5 for energy related ‘CDM type projects’ in China (from Vennemo et al. 2006). This is 2.6 times the figure estimated for general PM 2.5 reductions in Europe in the CAFE Programme Adjust according to project type (ie. height and dispersion of emission – ’intake fraction’ (from Ho and Nielsen, 2007) and region (i.e. population density (from Tan et al. 2008)

24 Avoided deaths rate for project types and regions Aggregate results for five types of offsets: Grid offsets; Point sources (biomass+non-biomass); Transport; Biomass open burning (Based on Rive and Aunan, 2009, work in progress)

25 A simplified methodology cont., agricultural crop loss A reduced form model for the NOx → surface ozone → crop loss link for China based on Aunan et al. (2000) was applied to estimate avoided crop loss from a nationwide CO 2 tax in China in Vennemo et al. (2009):  Average avoided crop loss per ktNOx associated with a CO 2 -tax: mill Yuan (2005)/tNOx

26 Co-benefit rate of China’s CDM portfolio 2010 (€/tCO 2 eq) (Based on Rive and Aunan, 2009, work in progress) CER cost ~10-15 Euro/tCO 2 eq

27 Sensitivity: Use of iF weighting reduces the health damage estimates; use of geographical weighting enhances them) Figure: No weighting Euro/tCO 2 eq

28 Total benefit (avoided deaths and crop loss) of CDM in China (2010): 14 billion RMB (~1.4 bill €)

29 Value of co-benefits vs value of CERs

30 Conclusions Energy related CDM projects in China bring substantial health and environmental co-benefits, on average worth maybe ~1/3 of the CERs’ value Energy efficiency in industry and power production has the largest co-benefit rate per ton CO 2 Zero-emissions renewables (wind, new solar and hydro..) currently bring the largest co- benefits PDD currently not required to provide AP impacts – perhaps they should?