Cost-effective fuel and technology choices in the transportation sector in a future carbon constrained world: Results from the Global Energy Transition (GET) model

Doktorsavhandling, 2009

This thesis analyzes future fuel and technology choices focusing on transport in a carbon constrained world. The analysis tool used in all five appended papers is the cost-minimizing Global Energy Transition (GET) model. Paper I analyzes cost-effective fuel and technology choices for passenger vehicles under a variety of vehicle cost-assumptions and how these choices depend on technology paths in the electricity sector. We find that cost estimates as well as the availability of carbon capture and storage technology and concentrating solar power have a substantial impact, ranging from a dominance of hydrogen to a dominance of electricity. Paper II analyzes the cost-effectiveness of biofuels for transportation, assuming that industrialized regions start reducing their CO2 emissions some decades ahead of developing regions. We find that biofuels may play a more important role for transportation in industrialized regions if these regions assume their responsibilities and reduce emissions before developing regions start reducing theirs, compared to the case in which all countries take action under a global cap and trade emissions reduction regime. Paper III analyzes how policy instruments aimed at increasing the use of biofuels for transportation in industrialized regions affect CO2 emissions in industrialized and developing regions. We find that such policy instruments may lead to avoided emissions in industrialized regions, especially during the first 50 years, and in a few specific cases in the developing regions, too. However, in the majority of cases, such a biofuels policy leads to increased emissions in the developing regions, i.e., to “carbon leakage.” Paper IV analyzes why two global energy systems models reach different results on the cost-effectiveness of biofuels, although the models have strong similarities. We find biomass most cost-effectively used for heat production at low CO2 taxes in both models. Biomass allocation at higher CO2 taxes may depend on whether CO2-neutral hydrogen and/or electricity are assumed available for the transportation sector at sufficiently low cost. Paper V investigates prices and costs in the GET model, and how these change over time, to get a deeper understanding of why biofuels generally are not a cost-effective transportation fuel choice in the model. We compare the total cost per km for each fuel choice, based on the primary energy prices and carbon tax generated by the model. We find that the required carbon tax level for biofuels to become cost-effective, compared to fossil-based fuels, is a “moving target.” The required tax level increases with an increase in carbon taxes, since the latter increases the price of biomass energy in the model.