1. Sensitivity analyses for the CAFE policy scenarios Markus Amann, Janusz Cofala, Chris Heyes, Zbigniew Klimont, Wolfgang Schöpp, Fabian Wagner

2. Sensitivity analyses Questions 1.Are ambition levels for different environmental problems balanced? 2.How would alternative health impact theories change the results? 3.How would national energy and agricultural projections change the optimization outcome? 4.How do uncertainties in agricultural projections influence the results? 5.How would exclusion of further road measures change the results? 6.How would additional measures for ships change the outcomes?

3. Sensitivity analysis 1 Are ambition levels for different environmental problems balanced? Approach: Compare outcomes of –Optimization for health targets only –Optimization for environmental targets only –Joint optimization

4. Sensitivity analysis 1 Costs for health and environmental targets

5. Sensitivity analysis 1 Emission cuts for health and environmental targets

6. Sensitivity analysis 2 Uncertainty in PM health impact theories How robust are optimized emission reductions against uncertainties in impact mechanisms? Test with alternative hypothesis: “Secondary inorganic aerosols do not contribute to health impacts, all PM effects are related to primary PM2.5 emissions” Natural Sec organics Nitrates Sulfates Carbon Primary non-carbon Standard RAINS approach Sensitivity case WHO advice Primary anthrop. particles Secondary anthrop. particles

7. Sensitivity analysis 2 Sensitivity case Approach –Achieve same relative improvement in mortality estimated for CLE based on “primary PM only” theory – or, expressed alternatively: –Reduce primary PM2.5 concentrations by the same percentage as total PM2.5 would be reduced in reference case Two optimization runs: 1.Targets for health (PM) only 2.For all targets simultaneously

8. Sensitivity analysis 2 Control costs for alternative impact theories

9. Sensitivity analysis 2A Optimization for health targets only

10. Sensitivity analysis 2B Joint optimization for all targets

11. Sensitivity analysis 3 How robust are optimized emission reductions against alternative assumptions on economic/energy/agricultural development? National energy and agricultural projections are available for 10 countries However, these do not comply with Kyoto obligations

12. Sensitivity analysis 3 National energy and agricultural projections Two aspects: –How would optimization results (“emission ceilings”) change based on the national projections? –What about the feasibility/costs of emission ceilings, if the underlying baseline projection does not materialize? Approach: –Joint optimization with national projections for same target setting rules (gap closures and relative YOLL improvement recalculated for new space between CLE and MTFR)

13. Sensitivity analysis 3 Costs of optimized scenarios Billion €/year *) excluding costs for road sources

14. Sensitivity analysis 3 SO 2 emissions

15. Sensitivity analysis 3 PM2.5 emissions

16. Sensitivity analysis 4 Are there potential biases in the results for the agricultural sector? Uncertainties in agricultural projections Potential implications of the CAP reform Implications of the IPPC Directive Implications of the Nitrate Directive Recent information on emission control measures

17. Sensitivity analysis 4 Implications on compliance costs Annual costs in 2020 Lower estimateHigher estimate billion €/yr% % Original estimate of the compliance costs to reach “Case B” targets 3.77  CAP reform -0.46-12%-0.46-12%  Implementation of the IPPC directive -0.60-16%-0.85-23%  Updated cost information on manure management -0.60-16%-0.60-16% Sub-total cost reduction-1.66-44%-1.91-51% Compliance costs for Case “B” taking into account all uncertainties 2.111.86

18. Sensitivity analysis 5 How would cost-optimal emission reductions change if no further measures were taken for road emissions (i.e., no Euro-5 and Euro-6 for diesel vehicles)? Approach: Optimization for same environmental targets without the further measures for road emissions Results: Environmental improvements of Cases B and C cannot be achieved without further road measures

19. Sensitivity analysis 5 Costs for achieving the Case “A” targets (Cases “B” and “C” cannot be achieved without road measures)

20. Sensitivity analysis 6 How would further NO x controls for ships change the optimal emission reductions for land-based sources? Measures contained in baseline: EU sulfur proposal as in Common Position (1.5% S in North Sea, Baltic and EU seas, 0.1% in harbors, new MARPOL NO x standards, state-of-art for new ships) Approach: Optimization for same environmental targets with further measures for ships Assumed additional measure: Slide valve retrofits for low speed engines (28 million €/year)

21. Sensitivity analysis 6 Control costs with NO x measures for ships CAFE scenario without ship measures Sensitivity case with “medium ambition” measures for ships Costs for land-based sources Costs for ships Total costs Cost difference Case “A”59235783285811-112 Case “B”10679104922810520-159 Case “C”14852144992814527-325

22. Conclusions Multi-effect optimization increases robustness against uncertainties in health impact mechanisms CAFE policy scenarios are driven by health and ecosystems targets Optimized emission reductions are sensitive against future levels of coal use. Robustness against national energy projections needs further attention (and more robust national projections!) Costs for the agricultural sector are most likely overestimated Substituting control of road emissions with further measures from stationary sources is not cost-effective Control of marine ship emissions is cost-effective