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Reducing global CO2 emissions with the technologies we have

Hauke Ward, Alexander Radebach, Ingmar Vierhaus, Armin Fügenschuh and Jan Christoph Steckel

Resource and Energy Economics, 2017, vol. 49, issue C, 201-217

Abstract: The energy intensities of the various industrial sectors differ considerably across countries. This suggests a potential for emissions reductions through improved accessibility to efficient technologies. This paper estimates an upper-bound CO2 emission mitigation potential that could theoretically be achieved by improved access to efficient technologies in industrial sectors. We develop a linear optimization framework that facilitates the exchange of sectoral production technologies based on the World Input-Output Database (WIOD), assuming perfect substitutability of technologies and homogeneity within economic sectors, while ignoring barriers to technological adoption and price driven adjustments. We consider the full global supply chain network and multiple upstream production inputs in addition to energy demand. In contrast to existing literature our framework allows to consider supply chain effects of technology replacements. We use our model to calculate emission reduction potentials for varying levels of access to technology. If best practice technologies were made available globally, CO2 emissions could theoretically be reduced by more than 10 gigatons (Gt). In fact, even second-tier production technologies would create significant global reduction potentials. We decompose sectoral emission reductions to identify contributions by changes in energy intensity, supply chain effects and changes in carbon intensities. Excluding the latter, we find that considering supply chain effects increases total mitigation potentials by 14%. The largest CO2 emission reduction potentials are found for a small set of developing countries.

Keywords: GHG mitigation potential; Sectoral energy intensities; Technology transfer; Multi-regional input output data; Optimization; Multiple production inputs; Supply chain effects (search for similar items in EconPapers)
JEL-codes: C61 C39 Q54 O14 Q5 (search for similar items in EconPapers)
Date: 2017
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