Improving the Energy-Water-Material
Nexus toward sustainable future in
East Asia
E3ME modelling: Part 2 - Chapter 11 and Chapter 12

Unnada Chewpreecha

uc@camecon.com

5 August 2016

Outline of the presentation• Methodology Part 2 Chapter 11• Methodology Part 2 Chapter 12

Part 2: Chapter 11

Reducing the environmental impactof buildings

Energy Efficiency Policies- Building• Building accounts for more than 40% of totalenergy used globally and 1/3 of GHG emissions(UNEP, 2009)• Building is identified as a source of substantial
energy savings that can be made in a costeffective manner

Energy Efficiency Policies- Building
Examples of building energy efficiency policies inthe EU:– introduction of energy performance certificates– the requirement that all new buildings must be near zeroenergy by 2020 (public buildings by the end of 2018)– energy performance requirements for new buildings and majorrenovation of buildings– inspection schemes for heating and air conditioning systems– smart meter

Energy Efficiency Policies- Building
The multiple benefits of energy efficiency:– energy efficiency offers many of the most cost-effective options formeeting global emission targets.
– ‘negative cost’, meaning that it would be economicallyadvantageous to implement them.

‘Capturing the multiple benefits of energy efficiency’(IEA, 2014)– economy and jobs
– health and well-being– environmental impact– social aspects– public budgets– industrial competitiveness– the value of buildings

Example Scenarios• Baseline (IEA, 2015)• Energy efficiency in building scenario– selected East Asian regions– either targets or announced policies

Scenario Coverage• Regions to cover• Types of buildings: residential, public,commercial, industry• Energy savings: electricity, gas, heat, solid fuel• EE investment and who pay• Time coverage

E3ME and EE Modelling
The E3ME model is highly suited to this analysis
compared to other macroeconomic models
because– as a non-equilibrium model it allows for the possibility that zero or negative-cost
efficiency options exist– it has an annual time profile that allows for an evaluation of the impacts as they
happen, rather than the net benefit over a time period– it has a full representation of economies, through the national accounts, andenergy system and full integration between the two allowing for analysis ofenergy policy and rebound effects– it has a modular structure suitable for bringing in energy savings input toprovide effects on the economy (including rebound effects)– it has an extensive track record of being used for previous analysis of energy
efficiency

E3ME Inputs – Exogenous Savings• E3ME energy demand modelling are too
aggregated and top-down– not suitable for estimating energy savings from EE building
technologies• Required bottom-up analysis of EE savings asinput– from engineering energy model – energy savings from newtechnologies e.g. how much energy savings if switching toLED light bulb
– from literature reviews• Aggregated EE savings are enteredexogenously to E3ME to provide
macroeconomic impacts

Overview - Exogenous Savings

E3ME-FTT Households (EndogenousSavings)• E3ME and FTT received funding to extend
E3ME-FTT to cover household’s heating andcooling (DG Energy, European Commission)• Based on the same principle as the FTT-Power,Transport and Industry• Long term project and once completed will beavailable to use for this chapter (2017 onward)

E3ME Expected Feedbacks

Source: Reproduced from IEA (2014).

Examples of E3ME EE Analysis

http://ec.europa.eu/energy/sites/ener/files/
documents/CE_EE_Jobs_main%2018Nov
2015.pdf

http://www.energybillrevolution.org/wpcontent/uploads/2014/10/Building-theFuture-The-Economic-and-Fiscalimpacts-of-making-homes-energyefficient.pdf

Part 2: Chapter 12

Economic and environmental impact
by carbon taxes to meet the 2030
INDCs targets and 2050 targets(or 2℃ target)Current Global Emission Trends

Current Global Emission Trends

Source(s): Climate Action Tracker http://climateactiontracker.org/

South Korea

Source(s): Climate Action Tracker http://climateactiontracker.org/

JapanSource(s): Climate Action Tracker http://climateactiontracker.org/

ChinaSource(s): Climate Action Tracker http://climateactiontracker.org/

E3ME Possible Scenarios• Baseline (IEA, WEO2015)• East Asia 2030 INDC targets (national)– announced policies + remaining reductions via carbon tax; or– carbon tax only; or– carbon tax + revenues recycling

E3ME Possible Scenarios (cont)• East Asia 2050 2°C target (national carbontaxes)– pathway after 2030
– combination of other chapters (power, transport, industry,building) + carbon tax for remaining reductions– optional revenue recycling• Global 2050 2°C target (one single carbon tax)
– pathway after 2030
– combination of other chapters (power, transport, industry,building - East Asia only) + single carbon tax for remaining
reductions– optional revenue recycling

E3ME Inputs• INDC targets in 2030
• Equivalent national targets in 2050 for the 2°Ctarget• Announced national policies (detailedinformation required)– expected impacts on emissions– investment/ costs of policies– who affected and when
* possibly combining works/ policies from other chapters• Assumptions on revenue recycling

E3ME Main Impacts: Carbon Tax

E3ME Main Impacts: Revenue Recycling

Possible Issues• Very high and unrealistic carbon tax rates
required to achieve the 2°c path
– in reality there will be a mix of policies e.g. renewables,
energy efficiency investment• E3ME endogenous energy price will fall
– reduction in fossil fuel demand will reduce fossil fuel price– this will make emission reduction via pricing mechanism suchas carbon tax even more difficult