1. International Energy Workshop 2009- Venise Policy Scenarios and Stochastic Analysis with the Gemini-E3 Model F. Babonneau¹ – A. Haurie¹ – M. Vielle² (¹Ordecsys – ²EPFL) Switzerlandwww.ordecsys.com

2. International Energy Workshop 2009- Venise Aim of the work Perform stochastic analysis in the framework of the Planets Project Analyzing the robustness of the scenario results in particular concerning energy mix and technological choice Preliminary runs

3. International Energy Workshop 2009- Venise Main Characterictics of GEMINI-E3 World General Equilibrium Model Total Price Flexibility Detailed Representation of Indirect Taxation Measure of Welfare Cost of Policies and Components

4. International Energy Workshop 2009- Venise GEMINI-E3 Production Function

5. International Energy Workshop 2009- Venise Electricity Generation CCS

6. International Energy Workshop 2009- Venise Cost of CCS Information coming from Chalmers University of Technology - (Euro/ton CO2) CaptureTransportStorage 201510025-1510 20203020-75 20252510-55 2030205-33 K. Andersson, F. Johnsson « Process evaluation of an 865 MWe lignite fired O2/CO2 power plant » Energy Conversion and Management, 2006

7. International Energy Workshop 2009- Venise The climate constraint The objective is to limit the radiative forcing to 3.5 W/m 2, the emission profile is given by TIAM

8. International Energy Workshop 2009- Venise Methodology 1/2 We retain the BAU scenario and the FP-3.5 scenario defined by the planets project We use an aggregated version of Gemini-E3 model Run Monte Carlo simulations on six parameters We run 500 scenarios with Latin Hyper Cube sampling

9. International Energy Workshop 2009- Venise Regions EUR : European Union (25) OEC : Other industrialized countries ASI : Asia EEC : Energy exporting countries (FSU-MID) ROW : Rest of the World

10. International Energy Workshop 2009- Venise Methodology 2/2 Uncertain parameters : Productivity factor (technical progress on labor) : ASI ROW Correlation Autonomous Energy Efficiency Improvements (AEEI) Elasticities Energy nest Aggregated inputs Oil prices Price of carbon capture and sequestration (only for coal)

11. International Energy Workshop 2009- Venise Infeasible runs 19% of runs are infeasible (i.e. Gemini-E3 does not converge) We estimate a probit model: 0 if convergence 1 otherwise Endogenous variables : uncertain parameters

12. International Energy Workshop 2009- Venise Carbon tax in 2050 in US $ per ton

13. International Energy Workshop 2009- Venise Energy consumption (G toe) in 2050 Coal Gas Oil Elec In red: Standard deviation divided by mean 0.11 0.02 0.03 0.06

14. International Energy Workshop 2009- Venise Macroeconomic Cost (GDP change wrt Baseline - 2050) 1/2 OECEUR ROW ASI

15. International Energy Workshop 2009- Venise Macroeconomic Cost (GDP change wrt Baseline) – 2050 2/2 EEC

16. International Energy Workshop 2009- Venise We propose to combine Monte Carlo and Optimal hedging strategy to «model» the dynamic process of the uncertainty. 1. We use the stochastic version of TIAM to generate emission profiles for different values of CS and assuming that the uncertainty is revealed in 2030. 2. Gemini-E3 : Monte-Carlo sampling on CS Generation of the emission profile by interpolation on the profiles given by TIAM. Next Step : Uncertainty on climate sensitivity (1/2)

17. International Energy Workshop 2009- Venise 3. Try to link results and stochastic parameters (econometric) Next Step : Uncertainty on climate sensitivity (2/2)