21P-2004
  INTEGRATED ANALYSIS
              of
 COUNTRY CASE STUDIES
REPORT OF THE U.S./JAPAN EXPERT GROUP

               to

 THE ENERGY AND INDUSTRY SUBGROUP
          September, 1990
          HEADQUARTERS LIBRARY
          ENVIRONMENTAL PROTECTION AGENCY
          WASHINGTON, D.C. 20460

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                                      CONTENTS
BACKGROUND AND APPROACH  	,	   1

CONSTRUCTING THE COUNTRY STUDY BASE CASE	   2
    Sources	   3
       Countries Submitting Reports	   3
       Independent Expert Studies  	   3
       International Energy Agency	   3
    Regional Coverage of Country Studies	'	   5
    Common Assumptions Specified by EIS 	   6
    Results Requested by EIS	   6
    Filling in the Gaps and Extending the Estimates	   7
       Economic Growth	   9
       Primary Energy Demand	   10
       Final Energy Demand by Sector	   15
       Final Energy Demand by Type 	   16
       Energy Conversion	'  16
       Carbon Dioxide Emissions 	   17

RESULTS OFTHE COUNTRY STUDY BASE CASE  	   18
    Primary Energy Demand and CO2 Emissions	   18
    Primary Energy Demand by Energy Type	   20
       Coal	   25
       Oil	   25
       Natural Gas	   26
       Hydro and Nuclear	   26
       Other	   26
    Final Energy Demand	   27
       Electricity and Fuel Use	   27
       Residential Energy Use	   28
       Industrial Energy Use	   29
       Transportation Energy Use	   29
    Methane Emissions	   29

INDIVIDUAL COUNTRY RESULTS 	   34
    OECD Countries	   34
       Australia 	   34
       Canada	   35
       Federal Republic of Germany	   36
       France	   36
       Japan	   37
       The Netherlands	   37
       Norway	   38
       Switzerland	   38
       United Kingdom	   38
       United States	   39
    USSR And Eastern Europe	   40
       USSR	   41
       Poland	   42
       Hungary	   43

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   Developing Countries	:	'.	  44
       Population and GDP Assumptions	-	  45
       Residential Energy Use	  46
       Transportation	  50
       Industry	  54
   Summary	  54

COMPARATIVE ANALYSIS USING THE ASF	  56
   Final Energy Demand	  58
   Electricity Generation	  60
   Synthetic Fuels	  61
   Primary Energy Demand	  62
   Primary Energy Supply	  62
       Natural Gas	  64
       Coal	  65
       Ofl	  65
       Other	  66
   CO2 Emissions	  66

COMPARISON TO US./NETHERLANDS SCENARIO	  67
   Economic Growth	  67
   Energy Use	  68
   CO2 Emissions	  69

COMPARISON TO OTHER LONG-RUN GLOBAL ENERGY FORECASTS	  69

REGIONAL AND COUNTRY STUDY RESPONSE OPTIONS ANALYSIS	  74

SELECTED WESTERN EUROPEAN COUNTRIES	  75
   Federal Republic of Germany	  75
   France	  77
   The Netherlands	  78
       Stabilization Strategies for 1995 - 2000	  78
       Fuel Mix Strategies	  79
       Other Technological Options 	  79
   Norway	  80
   Switzerland	  81
   United Kingdom	  81
       Near Term Options  	  82
       Long Term Options 	  82

OTHER SELECTED OECD COUNTRIES 	  83
   Australia	  84
   Canada	  85
   Japan	  86
   Analysis by the IEA Secretariat	  87

USSR AND EASTERN EUROPE 	  87
   USSR	  89
       Reference Scenario	  90
       Policy of Perestroika and Structural Change	  90
       Additional Policies	  91

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    Poland	;	  91
       Reference Scenario	  92
       Structural Change	  93
       Additional Policies	  93
    Hungary	  93

SELECTED DEVELOPING COUNTRIES	  95
    Changes in Structure	  95
    Reducing Energy Consumption	  97
    Decrease Conversion Losses 	  99
    Shift to Less-Carbon»Intensive Fuels	  99
'    Brazil	   100
    China	   101
    India	   101
    Indonesia  	X	   102
    Republic of Korea	   102
    Mexico	   103
    Venezuela	   103



ATTACHMENT A

ATTACHMENT B

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       This report presents the results of an effort by the U-STJapan Expert Group, which was assigned the


tasks of integrating individual country studies into a base case of worldwide energy use and consequent


emissions of greenhouse gases, and summarizing the policy cases discussed in the individual country studies.


The reference scenario, referred to as the Country Study Base Case, combines information presented in the


individual studies in a systematic and consistent way. Some of the studies presented, in various levels of detail,


an assessment of potential policy options.  These are summarized in the last section of this report
 •



BACKGROUND AND APPROACH




       The decision to develop an integrated base case scenario of energy use and consequent emissions of


greenhouse gases was made by the Energy and Industry Subgroup (EIS) of the Intergovernmental Panel on


Climate Change (IPCC)  at a meeting held in Paris in April of 1989.   At this meeting,  a number of


participating countries each agreed to prepare a study of future energy use and greenhouse gas emissions in


their own countries, as well as an examination of potential policy options to  reduce emissions. At the EIS


expert meeting in Tokyo in July 1989, an expert group composed of representatives from the United States


and Japan was established to collect the different studies prepared by the EIS participants, to combine the


results with other  projections,  and thereby form an  integrated scenario of future global energy use and


emissions.




       The U.S. and Japanese experts decided to use two somewhat different approaches to integrating


country-specific data. The U.S.  approach involved extracting the country-specific forecasts of energy use and


emissions from the  individual studies,  converting the data  into common  units, extrapolating and/or


interpolating where necessary to make the time horizon consistent, filling in data for countries not supplying


information, and then aggregating the results into regional and national totals. The resulting integrated Base


Case scenario provided a view of the future global energy markets with detail by energy sector, by energy type


(or form), and by  region.  The Japanese  approach  involved collapsing the information supplied in  the

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individual country studies into three component indices:  growth in total economic product, primary energy

use per unit gross product (energy intensity), and changes in carbon emitted per unit of primary energy

consumed (carbon intensity).  Trends in these indices were identified from the country study data, and were
                                    •
extrapolated where necessary to produce estimates of CO2 emissions.  Aggregate results from the two

approaches were compared and differences were resolved.




        We describe first some specifics of the data extraction and extrapolation effort and then describe the

results of the integrated Country Study Base Case developed by the expert group.  Next, we describe  how

county study data were used to construct a comparable scenario in the Atmospheric Stabilization Framework

(ASF).   The Country Study Base Case is  also compared to the  ASF-generated U.S./Netherlands High

Emissions scenario and other forecasts of future global energy use (U.S./Netherland$ Expert Group, 1990).

Finally, the policy options provided in the individual country studies are discussed in reference to the Country

Study Base  Case. Attachment A contains energy data derived from the reference cases of individual country

studies, and Attachment B contains corresponding data for the policy scenario, where available from each of

the country studies.  The data in the attachments are reported in consistent units (exajoules, million tons of

carbon) and CO2 emission estimates were put on  a common basis (e.g. emissions from biofuel combustion

were excluded).




CONSTRUCTING THE COUNTRY STUDY BASE CASE




        In this section we describe the data sources used to develop  the Base Case, the parameters specified

by the EIS, and the information provided for each input category.

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Sources
        Three sources of data were used to construct the Country Study base case:  studies prepared and



submitted by participating countries, country and regional studies prepared by independent experts supported



by the US. EPA, and regional projections supplied by the International Energy Agency (IEA). Table 1 lists



the individual studies in each category.
•






Countries Submitting Reports







        Twelve countries participating in the EIS submitted studies (some still in draft form) to the EIS:



Australia, Canada, China, Finland, France, Federal Republic of Germany, Japan, the Netherlands, Norway,



Switzerland, the United Kingdom, and the United States.  The time horizon on these studies extended to at



least 2010, except for the studies from Norway, which extended to the year 2000, and the Australian study



which extended to the year 2005.







Independent Expert Studies








        Nine country studies provided to the EIS were prepared for the U.S. EPA by analysts in the USSR,



Poland, Hungary, India, the Republic of Korea, Indonesia, Mexico, Brazil, and Venezuela. These draft studies



provided detailed estimates of energy use and CO2 emissions through 2025 by sector and by energy type.  For



the developing countries, the energy estimates included use of traditional biofuels.







International Energy Agency








        Energy estimates from the IEA were used to estimate energy use and emissions for those countries



where no country study was provided. The IEA provided regional estimates of primary energy use by energy

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                                         Table!
                                   Country Study Sources
Prepared by Participating Country
Australia
Canada
China
Finland
France
Germany (FRG)
Japan
The Netherlands
Norway
Switzerland
United Kingdom
USA
Commonwealth Department of Primary Industries and Energy, Australia
Energy Mines and Resources, Canada (preliminary)
Lu Ying Zhong, Qin Daxiong, Wu Zong Xing Tsinghua University, China
Ministry of Trade and Industry, Finland (preliminary)
Ministry of Industry and Territorial Affairs
Federal Ministry of Economics, Federal Republic of Germany
Institute of Energy Economics, Japan
Energy Study Centre, The Netherlands
Ministry of Environment, Norway
Federal Office of Energy, Switzerland
Department of Energy, United Kingdom
US. Department of Energy (preliminary results)
Independent Studies Prepared for EPA
Brazil
Hungary
India
Indonesia

Korea, Rep. of
Mexico
Poland
USSR

Venezuela
Rest of World
Gilena Graca; University of Sao Paulo, Brazil
Tamas Jaszay, Budapest Technical University
R. K. Pachauri, Sujata Gupta; Tata Energy Research Institute, India
Saswinadi Sasmojo, Bandung Institute of Technology, Indonesia; Yogo
Protomo, Directorate General for Power, Indonesia
Ji-Chul Ryu, Seung-Jin Kang, Korea Energy Economics Institute
Yolanda Mendoza; Ministry of Energy Mexico
S. Sitnidd, et. aL; Ministry of Environment, Poland
A. A. Makarov, L A. Bashmakov, Institute of Energy Research, USSR
Academy of Science, Moscow USSR
Nora Pereira, Ministry of Energy and Mines, Venezuela
Energy Policies and Programmes of IEA Countries, 1988 Review

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type through 2005 (IEA, 1989)  The regions included were fairly broad: OECD countries, the centrally
planned economies, Asia, the Middle East, Africa, and Latin America.

Regional Coverage of Country Studies
•
       Although only 20 individual country-specific studies were available to the expert group, these countries
represented nearly 79% of global primary energy use in 1986. Regionally, the studies represent over 86% of
primary energy consumption in the OECD, 83% of centrally-planned economies, and 45% of the rest of the
world (see Figure 1). No country studies were available for the Middle East and for Africa.
                                      FIGURE 1
                  COVERAGE OF COUNTRY STUDY DATA
                         COUNTRY STUDY TOTAL PRIMARY ENERGY
             REGION        OATA(EJ)      CONSUMPTION (EJ)      COVERAGE
             NORTH AMERICA    83.1   V///////////////A 83.1   100%
             WESTERN EUROPE  36.1   Y//////A      155.7           63%
             EASTERN OECD      18.1   Y//A 18.7                      97%
             CP EUROPE        61.3   V//////////A    175.8     81%
             CP ASIA           22.5   Y///A
24.7                   91%
             MIDDLE EAST      0      [J6.2                           0%
             AFRICA           0      QJ7.9                           0%
             LATIN AMERICA    10.5   \//\ J16.3                      65%
             SOUTH & EAST ASIA 10.3   V/\ 116.2                      64%

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Common Assumptions Specified by EIS



       To ensure consistency, the EIS requested that individual country studies used the same oil price

assumptions.  The IEA provided a forecast of world oil prices that extended through 2025 (see Table 2).

Although the EIS agreed that individual countries should provide their own estimates of economic growth for

their countries, the EIS suggested that country-specific estimates be consistent with a moderate rate of growth

for the global economy.                                 •^^••^•••••^•^••^••^••i

                                                                       Table 2
                                                             World Oil Price Assumptions
                                             .    ,               (1987 U.S. dollars)
       These  assumptions   were   not  consistently

incorporated in the different country studies.  There were            ^yj           yj g
                                                                1995           270
several reasons for these inconsistencies, but the main reason            2000           3L1
                                                                2010           33.4
was that several countries decided to submit existing studies            2Q30           44 J

or studies currently in progress.  For example, the study  •••••^•••^•••^^••^^•••^•i

provided by the United Kingdom contained six scenarios that incorporated two future oil price paths and three

scenarios of economic growth.1 In the study provided by Canada, oil prices increased to 25 dollars per barrel

by 2000 then remained constant



Results Requested by EIS



       The expert group requested that estimates of energy use be provided through 2025, for 5- or 10-year

periods.  Specifying the type of data to be submitted would allow the expert subgroup to compare country

studies for consistency and identify critical trends in energy use by fuel type, by sector, and by region. The

information requested included emissions of CO^ primary energy demand by energy type, final energy demand

by sector and by energy type  within sectors, energy use for electricity generation, and other energy uses. The
    1 The expert group combined the two scenarios with moderate economic growth but with low and high
oil prices to come up with an average scenario, which was integrated into the Base Case scenario.

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most important inputs from the different studies were the estimates of CO2 emissions and primary energy use
by energy type, which determine the CO2 emissions estimates in the Country Study Base Case. All of the
other data were used to explain and compare the energy and emission forecasts.

       However, some of the forecasts did not extend through 2025 and/or did not provide the detailed
information requested by the group such as final energy demand by energy type or final energy demand by
sector. Some forecasts provided estimates in 5-year increments, while others provided estimates for as few as
two years (1985 and 2025). In addition, some of the emission estimates included CO2 from the combustion
of biofuels while others did not  Table 3 yimnmrfaea the information available from the different country
reports, including the years for which data were provided in the reports.
Filling hi the Gaps and Extending the Estimates

       As described above, the input data from the country and regional studies were provided to the expert
group in different forms, using different units, and with varying degrees of disaggregation.  The first step to
integrating country studies was to extract the information from the different reports and convert the data to
common units.  Because not all the country studies incorporated all of the requested data, it was then
necessary to fill in for missing types of information and for missing years. This was accomplished primarily
through interpolation and extrapolation, which yielded country level scenarios of energy use and CO2
emissions to the year 2025.

       • Expanding the country study estimates to regional and global estimates consisted of several steps.
Hist, missing detail in the EEA forecast, such as energy demand by sector and energy type, was imputed using
other sources as explained below.  The EA forecast was then extrapolated to 2025  using trends from  the
available country studies.  Next, the regional  share of primary energy (by fuel type) represented  by  the
countries for which no study was submitted was estimated using 1986 United Nations data (U.N. 1988).

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                                         Table 3
                            Data Available from Country Studies
Countrv/ReeJon
Australia
     Horizon
China
Finland
France
Germany (FRG)
Japan
The Netherlands
Norway
Switzerland
United Kingdom
USA
Brazil
India
Indonesia
Korea, Rep. of
Mexico
Poland
USSR
Venezuela
Rest of World
1985, 1988, 1995 to 2005 by 5
1985, 1995, 2005, 2020
1985,2025
1988, 2000, 2010, 2025
1986, 1988, 2010
1987, 1990 to 2010 by 5
1986, 1988, 2000, 2010, 2030
1985, 1990, 2000, 2010, 2030
1986, 1987, 2000
1988,2010
1985, 1990, 2005, 2020
1987, 1990 to 2030 by 5
1985,2025
1985,2025
1985,2025
1985, 2010, 2025
1985,2025
1985 to 2030 by 5

1985, 1990, 2000, 2010, 2025
1985, 2010, 2025
1987, 1995, 2005
       Data Available
Final not by energy type
Final not by energy type
All
Only primary energy demand
CO2 emissions by sector, nuclear energy
All
Final not by sector
All
Total CO2 emissions, primary energy
All
All, average of six scenarios
All
All
All
All
All
All
Final demand by sector in primary
equivalents and not by energy type
All
All
Only primary energy demand given
(Regions: OECD, Centrally Planned
Economies, Asia, Middle East, Africa, and
Latin America)
                                            8

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Future energy use for each region was then estimated by applying these regional shares to the regional energy

forecast from EEA. Regional totals were then aggregated into global totals.


Economic Growth


        Hie input assumptions concerning economic growth were provided in three forms: in U.S. currency

or in the submitting countries currency, as an index from a specified year, or as an energy intensity measure.

These assumptions were converted to a common unit of measurement primarily for inter-regional comparison

using the following process:
                                                                                  •

        1.   .   Supplied information was converted to annual growth rates.

        2.      Estimates of 1985 GDP by country and region made by the World Bank (World Bank, 1987)

               were compared to supplied data where possible.  The estimates from the Polish country case

               study were used directly.  For the USSR, data from the Country case study was  used to

               estimate 1985 GDP.

        3.      Future GDP by country and region were placed on a common basis using the supplied growth

               rates and the 1985 GDP estimates in US. dollars.


The lEA-supplied information did not include explicit GDP growth estimates, only regional energy intensity

(primary energy use per unit GDP) and primary energy use. As a consequence, gross regional product was

computed by dividing energy use by energy intensity.  One of the EA regions encompassed all developing

countries. Where individual developing country  data were not available, the expert group used the EEA

estimate of energy intensity in order to calculate changes in energy intensity for the developing regions. For

country studies that did not extend to 2025, annual economic growth rates from the last time period where

data were provided were assumed to remain constant through 2025 (see Figure 2).

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Primary Energy Demand







        Primary energy demand was provided in a variety of formats, using different units, and with different



levels of disaggregation and different time horizons. Most of the studies provided primary energy use for the



following categories: coal, ofl, gas, hydro, nuclear, and "other" which includes predominately biofoels and solar



energy.  Some of the studies provided more detail (e.&, biofuels and solar energy separate), while one study



(Canada) combined hydro and nuclear energy.  In the case of Canada, all hydro and nuclear energy was



included in the hydro category so that special care needs to be taken in  comparing the  supply from this



category to other studies. Most of the studies provided the data in tabular form, but for some studies selected



results had to be estimated from figures in the reports.







        As explained earlier and shown in Table 3, the time horizon of the different studies varied as well as



did the  years in which data were reported. The expert group used the  data provided to  estimate primary



energy use for the missing years in the following manner.







        1.      For those studies  that did  not extend to 2025,  total  primary energy consumption was



               extrapolated to 2025 using trends from country studies (from the same region) that did extend



               to 2025.



        2.      Annual  trends in primary energy consumption by category were extrapolated in a similar



               manner and then normalized so that the sum of primary  energy consumption by energy type



               equalled total primary energy as estimated in the fast step.



        3.      Where data was not provided for years between 1985  and 2025, total primary energy



               consumption was interpolated using annual trends based on the data provided.



        4.      Similarly, primary energy consumption by energy type was estimated for years not provided



               by using annual trends from provided data and then normalizing the results, so that the sum
                                               10

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               of primary energy consumed by energy type equaled total primary energy consumption

               calculated in Step 3.



In most cases, exponential growth was ass^nv*1. Exceptions included new energy sources, which started at zero

or very low levels and grew quickly. In these cases, linear interpolation was used, at least in the early years.


 *
       For those regions that required extrapolation to complete the time horizon, the annual trends from

the studies were compared to the other studies that did extend that far into the future.  None of these trends

diverged significantly as shown in Figure 2 (economic growth), Figure 3 (primary energy consumption), and

Figure 4 (energy intensities).



       The units used in the different studies varied considerably.  The EIS expert group requested that

estimates be provided in units of millions of tons of oil equivalent and a number of studies used these units.

Data were also provided in petajoules, exajoules, and quadrillion Btus.2  In addition, the  U.S. data were

converted from gross calorific content to net calorific content  based on conversion factors from OECD

(OECD, 1988).



       The data provided by the IEA did not include traditional uses of biofuels, but did provide estimates

of CO2 emissions from these sources. To supplement the IEA data, traditional use of biofuels were estimated

based on figures in Meyers and  Leach (1989). Future biomass energy use was estimated using the current

estimates and CO2 growth rates  from IEA,
    2 Petajoules = 1015 joules; Exajoules = 1018 joules; and quadrillion Btu (quad) = 101S British
thermal units.  1 quad = 1.055 Exajoules (EJ).

                                               11

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  400
   Figure 2


GDP INDICES

   (1985-2025)


      1,000
                                           800
                                           400
                                           200
                                                        Centrally Planned
                                                                                «A
         IMO  IMC 2000 aoet MIO  tot*  mo  ton
                                                  IMO  1MC  2000  200C 2010 10 U 202O  202C
1,000
  800
o
o


A 600
03
a.
o
a
  400
  200
              Developing Countries
       1,000
        800
        600
        200
                  IEA Developing Regions
     IMC  1««0 11M 2000 200t  2010  20t(  2020  202S     IMC  1MO  IMC 2000 200C 2010  201C  2020  202*

                      YEAR                                    YEAR

                      * Note: OECD scale Is different from other regions.
                                          12

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                                    Figure 3

                     PRIMARY ENERGY CONSUMPTION
                                    (1985-2025)
  250
to
CO
» 200
a.



1  150
O
u

O
ae
iu

Ul
>  100

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  100
o
o

10

   80

Z  60


O
oe
IU

IU



   40
                   OECO*
                                    Figure 4

                        ENERGY INTENSITY INDICES
                                    (1985-2025)

                                         160
                                         140
120
                                         100
                                      OCCO/KA
 60
                                          40
             Centrally Planned

                                                                             «A C*
                                                                             Hungary

                                                                             UMH
     I«M  it«e  im  2000  MO*  aoio  2011 aoao
                                            1«M  1MO  1*M  2OOO  Mot  2010  20K  2020  202<
  160
  140
o
o
^
10
CO
0»
>100
IU
o
cr
IU

IU
   60
   60
   40
             Developing Countries
160
140
120
100
 80
 60
 40
          IEA Developing Regions
                                    MlddU f Ml



                                    Atrto*
             1tM  2000  20M  2010  2011  2020  2OW     1«OS 1«M 1«M 2000  2001  2010  20K  2020  202*

                     YEAR                                   YEAR

                     * Note: OECD scale Is different from other regions.
                                         14

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Final Energy Demand bv Sector







       Like primary energy demand, final energy demand was reported in a number of forms, with different



units, for different years, and for various time horizons.  For years where data were not provided, estimates



were derived through extrapolation or interpolation. The approach for extrapolating the time horizon and



filling in for missing, periods was similar to that used for primary energy.  Total final energy demand was



estimated through extrapolation and/or interpolation. Final energy demand by sector was estimated through



extrapolation and/or interpolation and then normalized so that the sum of final energy demand by sector



equalled total final energy demand.







       In addition, the sectoral disaggregation varied considerably between the studies. The .IEA results



provided no estimates of final demand, and the results for Japan were not disaggregated by sector. Residential



and commercial energy use was combined in some studies and not in others.  Other energy-using sectors such



as agriculture and services were also disaggregated in some and not in others. For those studies which did not



provide sectoral information, other sources were used to allocate the aggregate data into appropriate sectors.



For the IEA data, estimates of final energy demand by sector were based on information from various sources.



Similarly, additional information was used to estimate the disaggregation of final energy demand by sector for



Japan.







       The expert group converted the estimates of final energy demand into common units and organized



the data into four common sectors: Residential, Transportation, Industry, and Other. The "Other* category



included such uses as commercial, services, fuel production, and agriculture, except where the country study



data had these uses combined with the first three sectors.
                                               15

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Final Energy Demand by Type








        Two country studies, Australia and Canada, and the EEA study did not provide estimates of final



energy demand by energy type.  For these countries and regions, the estimates of primary energy demand by



energy type were allocated to the different uses using simple rules. For the IEA data, all of the traditional



uses of biofuels were assumed to be for final uses.







        Extrapolation and interpolation of the data were performed in a manner similar to that used for final



demand by sector. First, final demands by energy type for yean not reported in the study were estimated by



extrapolation and/or interpolation and then normalized so that final energy demand equaled the sum of final



energy use by fuel Where appropriate, care was taken so that final energy use of traditional biofuels equaled



primary uses.







Energy Conversion








        Energy used  to supply and/or convert primary energy for final use was divided into four categories:



energy used for electricity generation, energy used for production of synthetic fuels, energy consumed in energy



production, and energy used to produce district heat. As with the other data, reporting of this information



varied  by country and region. The China study was the only study that explicitly projected the use of fossil



energy for synthetic fuel production. The studies for the Federal Republic of Germany, Poland, Switzerland,



and the USSR were the only studies that explicitly reported energy consumed in the form of district heat, while



district heat was accounted for in the Korea study but not reported separately.








        The energy  consumed in energy production, where reported, was combined with the final energy



demand for  reporting purposes.  Energy  used in  the production of synthetic fuels was separated. Primary
                                               16


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energy not used for final uses and for synthetic fuel production were assumed to be used for electricity


generation and for district heating.
Carbon Dioxid*
        Where estimates of COj emissions from fossil fuel combustion were available in individual country


studies, they were incorporated directly into the Country Study Base Case global CO2 emission estimate. CO2


emission estimates were interpolated or extrapolated using estimates of primary energy demand by fuel type


and emission coefficients for coal, oil, and gas (see Table 4).  The emission coefficients were from Marland


and Rotty (1984) and included factors for carbon left in soot and fuel used for non-combustion purposes where


the carbon remains in the product for a long


time (e.^ asphalt).  Using emission coefficients   ••^^•^^^••^^•^^^^••••••••••^^•^•i"""

                                                                  Table 4
in the extrapolation of country study estimates                CQ^ Eadsslm coefficients

                                                    Used for Interpolation or Extrapolation
is intended to account for projected changes in

                                                         Carbon in    Fraction    Emission
fuel  shares, a  factor which would  not  be                 p^       Oxidized    Coefficient

       ,  .f ^                                           nee/on     _     rke/on
captured  if CO2  emission  estimates were

                                                 Coal      25.5         0.98          24.9
interpolated or extrapolated directly.

                                                 Oil       203         0.92          18.6


                                                 Gas       13.7         0.98          13.4
        However,   where  country    studies
estimated CO2 emissions from biofuels, these


emissions were excluded because of the difficulty in assessing how much of the biofuel use is not on a


sustainable  basis.  Net emissions of CO2 from biofuels are zero when biofuels are used in a sustainable


manner. This occurs when the CO2 emitted by the combustion of biofuels are at least offset through the


annual growth of the biofuels. CO2 from the combustion of waste products from agriculture or forestry (e.g.,



crop residues, dung, bagasse, and wood) can be considered zero since the carbon would eventually reach the


atmosphere in the form of CH4 or CO2 through decomposition. Also, use of fuelwood in regions where that





                                              17

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use does not result in deforestation (e.g^ normal regrowth replaces the lost carbon) then the net emissions

from the use would be close to zero. Meyers and Leach (1989) estimated that net annual emissions of CO2

from biofuels in developing countries is somewhere between 0.1 and 03 billion tons of carbon.



RESULTS OF THE COUNTRY STUDY BASE CASE



       The Country Study Base Case portrays a future where  energy use, use of fossil fuels, and CO2

emissions grow rapidly. Economic growth rates are moderate — with an average annual rate of 3.0% for the

period 1985 to 2025 - white improvements in energy intensity are also moderate  -  with an average annual

rate of 0.8% for the same period. As a result, primary energy consumption more  than doubles, and, despite

regional shifts and changes in patterns of energy use, CO2 emissions increase in the exact same proportion

as primary energy use.



Primary Energy Demand and CO2 Emissions
                                                              Table 5
                                                      Country Study Base Case
                                                           Global Results

                                        Primary Energy (ED    1985    2000    2010    2025
       In the Country Study Base Case, primary energy use increases from 328 exajoules (EJ) in 1985 to 777

EJ in 2025, while  emissions of CO2

from energy consumption grow from

5.2 billion tons of  carbon in 1985 to

12.4  billion  tons of carbon in 2025.

Both  primary  energy  use and CXXj

emissions grow at  an average annual

rate of 23.%.   Table 5 shows  global

primary energy shares  by energy type

and CO2  emissions for the Country

Study Base Case, and Table 6 supplies
Coal
Oil
Gas
Hydro and Nuclear
Other
Total
CO2 Emission (Bt C)
86.4
121.5
58.5
34.9
26.8
328.2
5.2
126.0
156.7
95.5
54.1
29.7
462.1
7.3
163.1
181.5
123.9
70.9
317
572.1
9.1
238.4
223.1
172.7
103.0
39.6
776.9
12.4
                                              18

-------
GLOBAL TOTALS
                 Table 6
Primary Energy Consumption and CO2 Emissions
      (ezajooles and billion tons carbon)

             Primary Energy                  Carbon Dioxide

      1985    2000   2025  AAGR    1985  2000   2025   AAGR

      32&2  462.1  TJ63   22%     5.15  730   12A2     23%

      234.7  308.0  4344   L6%     3£3  445   644     L5%
riOfili ^Tt^^crtctt
United States
faqarfa
Western Europe
Fed Rep Gennany
Fiance
Finland
Netherlands
Switzerland
United Kingdom
Others
OECDEast
Australia
Japan
New Zealand
Centrally Planned Europe
Hungary
Poland
USSR
Others
DEVELOPING
Africa
Centrally Planned Asia
China
Others
Latin America
Brazil
Mexico
Venezuela
Others
Middle East
South & East Asia
India
Indonesia
Korea
Others
85.4
75.2
10L2
54.7
113
83
L2
2.6
L2
9.0
2L1
19.2
3.4
15.2
0.6
75.5
13
53
54.4
14.5
93A
13.5
3L2
29.0
22
19.1
6.0
4.5
L7
7.0
8.0
21.6
8.1
1.8
2.4
93
1084
93.7
K5
64.8
1L4
10.0
1.4
32
L2
11.8
25.8
29.6
4.8
24.0
0.8
105.4
L5
6.9
75.2
21.8
154U)
21.0
47.0
43.6
33
27.5
8.4
6J
2.7
9.9
\92
393
143
3.4
4.6
17.1
142.1
118.0
24.1
813
103
14.0
L6
3.9
LI
16.4
33.9
422
6.6
34.6
1.0
169.0
L9
11.4
1172
38.6
3423
Si3
9L9
86.0
5.9
55.0
152
12.0
7.1
20.9
43.2
99.2
36.6
93
102
43.2
13%
1.1%
22%
L0%
-02%
13%
0.8%
1.0%
•02%
1.5%
L2%
2.0%
L7%
11%
12%
2.0%
0.9%
1.9%
1.9%
23%
33%
33%
2.7%
2.8%
23%
2.7%
2.4%
23%
3.6%
2.8%
43%
3.9%
3.8%
42%
3.7%
3.9%
134
123
an
0.85
020
0.09
0.01
0.04
0.01
0.16
033
031
0.07
0.23
0.01
133
0.02
0.12
0.90
0.29
133
0.17
034
(X50
0.04
0.22
0.04
0.07
0.02
0.09
0.13
0.27
0.10
0.02
0.04
0.10
L71
L55
0.16
0.98
0.19
0.11
0.02
0.05
0.01
0.19
0.40
0.48
0.10
037
0.01
L78
0.02
0.15
1.19
0.42
235
0.28
0.88
0.83
0.05
031
0.06
0.10
0.03
0.12
031
0.56
021
0.04
0.08
0.23
237
2.12
024
1.19
0.16
0.14
0.02
0.07
0.01
0.26
0.52
0.62
0.14
0.48
0.01
2.77
0.03
0.26
1.75
0.73
5.48
0.80
L80
1.72
0.09
0.65
0.13
0.20
0.07
0.25
0.67
. 135
0.62
0.14
0.17
0.62
IA%
1.4%
1.9%
0.8%
-0.5%
1.0%
12%
1.4%
-0.4%
12%
12%
1.8%
1.8%
1.8%
1.0%
1.9%
0.9%
1.9%
1.7%
2.4%
3,6%
4.0%
3.1%
3.1%
2.0%
2.7%
19%
2.7%
2.7%
2.7%
4.1%
4.5%
4.7%
4.8%
3.4%
4.6%
                                        19

-------
regional and countiy detail on energy use and emissions.  The growth rates shown on Table 7 - for GDP,



energy intensity (energy consumed per unit GDP), and carbon intensity of energy use (carbon emitted per unit



of energy consumed) — reflect the approach developed by the Japanese members of the expert group.







       Regional patterns of economic activity, energy use and CO2 emissions vary considerably.  The



economic growth rate for North America is lowest at 22%, the rate for Eastern Europe and the USSR



averages 32%, and the rate for developing countries averages 4.4%. The share of primary energy consumed



in the OECD decreases from 49% in 1985 to 34% in 2025, the share consumed by the USSR and Eastern



Europe deceases from 23% in 1985 to 22% in 2025, while the share of primary energy consumed in developing



countries increases from 28% to 44% over the period.  Increases in energy consumption in developing



countries account for 55% of the increase in global energy consumption. The share of emissions from the



OECD declines from 49% in  1985 to 34% in 2025, and the share from the USSR and Eastern Europe declines



from 26% to 22% in the same period. Emissions from the developing countries, which account for only 26%



of carbon emissions in 1985, represent 57% of the increase in  emissions through 2025, by which time they



account for 44% of global emissions.  Figure 5 displays the increase in global CO2 emissions by region, Figure



6 shows primary energy demand by region and by energy type, and Figure 7 illustrates the regional changes



in share of energy provided by each type.







Primary Energy Demand by Energy Type







       While global primary energy demand more than doubles during over the period between 1985 and



2025, the share of primary energy provided by fossil fuels remains constant at 81% over the time period.



However, the shares provided by coal and natural gas increase while the share provided by oil decreases. The



share provided by traditional biofuels declines and the share provided by hydroelectric and nuclear sources



increases.
                                              20

-------
                               Table 7
Gross Domestic Product, Primary Energy Intensity, and CO2 Emission Intensity
                     (average annual growth rates)
                     GDP
Primary Enerev/GDP
CO JPrimarv Energy


GLOBAL TOTALS
DEVELOPED
North America
United States
P^parfn
Western Eurooe
FJL Germany
France
Finland
Netherlands
Switzerland
United Kingdom
Others
OECD Pacific
Australia
Japan
New Zealand
USSR & E. Europe
Hungary
Poland
USSR
Others
DEVELOPING
Africa
Cent-Planned Asia
China
Others
LA tin Afcrfcfl
Brazil
Mexico
Venezuela
Others
Middle East
South & East Asia
India
Indonesia
R. of Korea
Others
1985-
2000
32%
34%
2Mb
16%
16%
2j&%
14%
14%
19%
3.0%
L9%
15%
18%
34%
32%
4.0%
18%
33%
10%
15%
3.4%
17%
42%
23%
52%
5.6%
17%
2J8%
32%
3.5%
33%
1.7%
5.4%
4.5%
4.9%
3.0%
7.0%
3.4%
2000-
2025
24%
2A%
2Mb
1.9%
14%
2.1%
10%
12%
L5%
10%
L9%
12%
12%
2.7%
13%
17%
12%
3.1%
10%
19%
3.0%
3.4%
4.6%
4.7%
5.4%
5.6%
3.4%
3.5%
32%
3.5%
5.0%
3.4%
4.6%
4.6%
4.9%
3.0%
53%
4.4%
1985-
2025
3.0%
2.6%
22%
12%
14%
23%
12%
23%
10%
23%
L9%
14%
14%
3.1%
16%
3.2%
14%
32%
10%
18%
32%
3.1%
4.4%
4.0%
53%
5.6%
3.1%
33%
32%
3.5%
43%
17%
44%
4.6%
4.9%
3.0%
5.9%
4.1%
1985-
2000
44%
•Ll%
-L0%
-1.1%
-O2%
-1.4%
-13%
-1.1%
-L6%
-L5%
-12%
-0.7%
-1.4%
44%
-0.7%
-0.9%
-L4%
-1.0%
-1.1%
-0.7%
•12%
0.1%
4.8%
02%
-23%
-17%
0.1%
4.4%
-O8%
-1.0%
-O2%
0.7%
0.7%
4.4%
-L0%
1.1%
-23%
0.7%
2000-
2025
4.8%
-L0%
44%
-1.0%
-03%
-12%
-14%
-0.8%
-1.0%
-1.1%
-12%
-0.9%
-1.1%
-12%
-1.0%
•12%
-1.1%
-1.1%
-1.1%
-0.8%
-L2%
-1.0%
•13%
4.9%
-2JS%
-17%
-1.0%
4.7%
-0.8%
-1.0%
-1.0%
-03%
-12%
4.8%
-1.0%
1.1%
-10%
-0.6%
1985-
2025
4.8%
-L0%
44%
-1.1%
-03%
•13%
-23%
-0.9%
•12%
-13%
-12%
-0.8%
•12%
-1.1%
-0.9%
-1.1%
-1.2%
•1.1%
-1.1%
-0.8%
-12%
-0.6%
•1.1%
4.5%
•2£%
-17%
-0.6%
4.6%
-0.8%
-1.0%
-0.7%
0.0%
4.5%
4.7%
-1.0%
1.1%
-11%
-0.1%
1985-
2000
0.0%
-0.1%
0.0%
0.1%
-0.1%
42%
-03%
-03%
03%
0.8%
-0.2%
-0.5%
-0.1%
0.0%
Q2%
-0.0%
-03%
42%
0.1%
-0.0%
-03%
-02%
0.5%
0.5%
0.5%
0.6%
-0.6%
4.0%
0.4%
03%
-0.6%
-0.4%
43%
L0%
13%
0.7%
-0.2%
13%
2000-
2025
0.0%
4.0%
02%
03%
-0.4%
4.1%
-03%
-0.4%
0.4%
0.1%
-0.1%
-0.2%
0.0%
43%
0.1%
-0.4%
-0.2%
4.1%
0.1%
-0.0%
•02%
-0.0%
02%
0.6%
02%
0.2%
-0.4%
0.1%
0.6%
0.2%
-1.0%
0.1%
4.1%
03%
0.6%
0.6%
-0.4%
0.3%
1985-
2025
0.0%
4.1%
0.1%
0.2%
-03%
42%
-03%
-0.4%
0.4%
0.4%
-0.1%
-03%
-0.0%
42%
0.1%
-03%
-0.2%
42%
0.1%
-0.0%
-0.2%
-0.1%
03%
0.5%
03%
0.4%
-0.5%
0.1%
0.5%
0.2%
-0.9%
-0.1%
42%
0.6%
0.9%
0.6%
-03%
0.7%
                                 21

-------
                    FIGURE 5
            C02 EMISSIONS BY REGION
                 (PETAGRAMS C)
1985   1990   1995   2000   2005   2010   2015   2020   2025
                                                  Latin
                                                  America
                                                  Africa
                                                  Asia
                                                  CP Asia
                                                  CP Europe
                                                  OECD
                         22

-------
800
700 -
600 -
600 -
400 -
300
200 r
100
                       FIGURE 6
            TOTAL PRIMARY ENERGY DEMAND
                     (EXAJOULES)

         BY REGION               BY ENERGY TYPE
aoo
                               1MO 1«M MOO 2001 2010  MU 20M 2021
  1*M 1MO
            YEAR
                          23

-------
                           FIGURE 7

       TOTAL PRIMARY ENERGY CONSUMPTION BY TYPE
                        1985 AND 2025
  150
   100 -
(A
Ul
X
Ul
   50 -
       N. AMERICA
                             S & E ASIA
             W. EUROPE
CP EUROPE
              PRIMARY SOLIDS


              PRIMARY NUCLEAR
    MIDDLE EAST




PRIMARY LIQUIDS


PRIMARY HYDRO
                    222
 LATIN
AMERICA
PRIMARY GAS
                        PRIMARY OTHER
                               24

-------
Coal
       Globally, coal use increases at an average annual rate of 2.6% between 1985 and 2025, during which



time the share of primary energy provided by coal increases from 26% to 31%.  Regional patterns differ



Considerably, however. In North America, the share of primary energy provided by coal increases from 21%



to 33%, while the coal share remains roughly constant in Western Europe. In Centrally Planned Asia, 58%



of primary energy needs are met with coal in 1985, and that share increases to 68% by 2025 in the Country



Study Base Case. In other regions, coal use grows proportionally to primary energy use, and the coal share



stays relatively constant







       The increase in  primary  coal consumption is  due in large part to increasing use for electricity



generation: by 2025, most coal is used to generate electricity, and coal's leading share in electric generation



energy use is increased.  Between 1985 and 2025, the share of primary coal consumption used for electricity



generation increases from 46% to 54%, while coal's share of electricity generation fuel  demand grows from



35% to 40%. Coal use for synthetic fuels occurs primarily in China and increases from less than 1EJ in 1985



to over 6.2 EJ by 2025.
       Between 1985 and 2025, oil use increases 84% in the Country Study Base case, although the share of



global primary energy provided by oil decreases from 37% to 29%.  Most regions experience a decrease in the



share of energy provided by oil ranging between 4% to  13%, except for the Middle East, which experiences



a large decline in the share of primary energy supplied by oil, and Africa and Asia, which register a slight



increase.  Although oil consumption increases in the Middle East, much stronger gains in primary gas use



reduces the oil share from roughly two-thirds to one-third between 1985 and 2025.  The global share of



primary oil consumption used for electricity generation  increases from 13% to 20% during the period.






                                              25

-------
Natural Gas



       The share of global primary energy provided by natural gas increases from 18% to 22% in the time

period 1985 to 2025, with considerable variation in regional patterns. Natural gas consumption in the U.S.

and Canada, which accounted for 30% of global primary gas consumption in 1985, increases from 17.5 EJ in

1985 to 252 EJ in 2005, then declines to 213 EJ by 2025.  This represents an overall decrease in the share

of energy provided by gas in North America from 20% in 1985 to 15% in 2025.  Conversely, the share of

primary energy consumption provided by natural gas in the Middle East increases from 28% to 61%, increases

from 9% to 31% in Africa, and increases from 14% to 25% in Latin America. The share of global primary

gas used for electricity generation declines slightly from 28% to 26% between 1985 and 2025.



Hydro and  Nuclear


                                        /•
       The share of primary energy provided by hydroelectricity and nuclear energy increases from 11% in

1985 to 13% in 2025.  These increases occur primarily in the industrialized countries, including Centrally

Planned Europe, and in China. The share of primary energy provided by nuclear power grows in Western

Europe and the Pacific OECD  countries, as well as in the USSR and Eastern Europe and Centrally Planned

Asia.  The share of primary energy provided by hydroelectric power grows in the industrialized countries and

China, while remaining roughly constant in other regions.
Other
       While primary energy provided by other sources increases modestly, its share of total primary energy

declines from 8% in 1985 to 5% in 2025.  Currently, other energy sources consist primarily of traditional

biofuels in developing countries. Even with high population growth rates, use of traditional biofuels grows

modestly over time because many users switch to cleaner and more convenient commercial energy sources.
           •

                                              26

-------
The share of other fuels in primary energy consumption in 1985 is 21% in Centrally Planned Asia, 30% in the


rest of Asia, and 35% in Africa.  These shares fall to 4% in Centrally Planned Asia, 8% in other Asian


countries, and 13% in Africa in 2025.  Commercial renewables and solar energy are not projected to make


substantial inroads by 2025.                       •^^^^^•••^^^••••^^•••••••••••i

                                                                   Table 8


                                                        Final Energy Demand by Region
Final Energy Demand                                              (exajonles)


                                                                            1985    2025


        Several important trends can be derived        North ^en^          54.7     943
 . _                           .      ...         Western Europe         39.5      573
 from the final energy demand estimates from the        Eastern OECD          12.9      24.5

        «..«    „        ~ ^,   <,„„,«        USSR * E. Europe      61.7     132.4
 Country Study Base Case (see Tables 8, 9, and 10        Centrally Planned Asia    262      64.5

   „ _     ^  „   . .      w                        Middle East              6.1      3L2
 and Figure 8).  Electnaty use becomes a greater        Africa                  11 1      41 7

      ._  ,                       _   ,_              Latin America           15.0      40.8
 pan of final energy use in all regions. The shares of        ^nth and East ^      1&0      7g j
final energy use among sectors remains relatively       Total                  255 2     564 6


stable  over  the  period  in the  industrialized  ••••••^^^^^^^^^^^••••••••••
countries, while in the developing regions, the residential share of final energy is decreased by an amount


roughly equal to the increase in the share of final energy devoted to transportation.





Electricity and Fuel Use





       Electricity use globally increases from 13% of final energy in 1985 to 18% in 2025.  Significant


increases in electricity shares are expected in the industrialized countries of the OECD, the USSR, and Eastern


Europe, ranging from share increases of 13% in the Eastern OECD to 4% share increase in Western Europe.


Increases in developing countries are highest in Centrally Planned Asia, where electricity share of final energy


rises from 8% to 17%, while increases of 4% are expected in the developing market economies of Africa, Latin


America, and rest of Asia.
                                              27

-------
        On average, the share of final energy consumption provided by fossil fuels stays constant at about

75%, but the shares vary by region and by fuel In the OECD, the share of final energy provided by fossil fuels

declines from 80% in 1985 to 70% in 2025. The share of solids stays constant at 10%, while the share of oil

declines from 51% to 43% and the use of natural gas decreases from 20% to 17%. Most of this decline in

fossil fuel use is offset by increased electricity use. On the other hand, the share of final energy consumption

provided by fossil fuels increases in Centrally-Planned Asia from 67% in 1985 to 78% in 2025. Most of the

increase is in liquid fuels, whose shares increase from 13% to 20%.  The use of electricity also increases from

8% to 17% of final energy use, while the use of traditional biofuels decreases from 25% to 5%.
                                             Table 9
                               Final Energy Demand by Energy Type
                                            (exajoules)

                                         1985           2010           2025
Electricity
Liquid Fuels
Gaseous Fuels
Solid Fuels
District Heat
Other
Total
32.8
101.1
42.4
46.8
6.1
26.1
255.2
68J
149.8
89.5
80.5
9.8
29.9
428.1
100.7
185.9
1273
103.4
133
33.9
564.6
Residential Energy Use



        Between 1985 and 2025 in the Country Study Base Case, the share of final energy used in the

residential sector increases slightly in centrally planned Europe, from 21% to 22%. In all other regions,

the share of final energy use in the  residential sector declines, with the largest declines the developing

countries of Asia and Africa. The residential share declines from 41% to 24% in centrally planned Asia

between 1985 and 2025, while falling from 36% to 15% in the rest of Asia and declining from 13% to 4% in
                                               28

-------
Africa. Smaller declines occur in the industrialized countries and Latin America. Globally, the share of final

energy used in the residential sector declines from 24% in 1985 to 18% in 2025.



 V
Industrial Energy Use




       The share of global final energy consumed in the industrial sector grows slightly, from 44% in 1985

to 48% in  2025, with shares remaining relatively stable in most regions. Industrial shares of energy use

increase slightly in North America, Western Europe, Asia, and Latin America, while slight declines in the

industrial share of final energy use occurs in other regions.
Transportation Energy Use



        The share of final energy consumed in the

transportation sector remains nearly constant in the

OECD countries between 1985 and 2025 at between

29% and 36%, depending on the region. The share

of final energy used  in transportation in Latin

America declines from 31% to 28% between 1985

and 2025, but increases significantly in Centrally

Planned Asia, the rest of Asia, and  Africa.
      Table 10
Final Energy by Sector
     (exajooles)
        1985
2025
Residential
Transportation
Industrial
Other
Total
62.2
61.9
113.4
17.7
255.2
101.0
148.9
272.4
42.4
564.6
Methane Emissions
       Methane emissions from the production and consumption of energy represent 10 to 25 per cent of

total methane emissions. The major energy-related sources of methane include releases during the mining of

coal, venting during crude oil and natural gas production, leaks during natural gas transmission and


                                              29

-------
600
500 -
400 -
300 -
200
100
                        FIGURE 8
              TOTAL FINAL ENERGY DEMAND
                      (EXAJOULES)
          BY REGION
          BY SECTOR
600
                                                      OTMft
        IMC WOO 30M  3010  Mil  MM

             YEAR
                          MM  IMC 1MO 1MB aOOO 2401 M10 2O1t 2O30 203*
                                                      RCMDCNTIM.
                            30

-------
distribution, and incomplete combustion of fuels, primarily biofnels. Due to incomplete understanding of the



sources and sinks of CH^ some uncertainty exists concerning total emissions of CH4 as well as the relative



contribution of the different sources.
                of annual global emissions of methane from all natural and anthropogenic sources range
from 400 to 640 Teragrams (Tg) CH4 (Cicerone and Oremland, 1988).  Cicerone and Oremland also estimate
•


that annual emissions from fossil fuel production and use are from 50 to 95 Tg CH4 and that annual emissions



of CH4 from all biomass burning range from 50 to 100 Tg CH4. Emissions of CH4 from biomass burning



related to energy use are estimated at around 8 Tg CH4. Other important anthropogenic sources of methane



include rice cultivation, landfill emissions, and enteric fermentation in domestic livestock.







       Future emission estimates of CH4 from coal mining are based on regional 1987 emission estimates



developed for the EPCC (Japan Environmental Agency and U.S. EPA, 1990).  In the Country Study Base Case,



these regional emissions estimates for 1987 are grown in proportion to regional growth in primary coal



consumption.  In  1985, the emissions were estimated at 42  Tg CH4 and grow to 126 Tg CH4 by 2025.



Centrally Planned  Asia, and in particular China, account for 45% of the growth in global emissions with



emissions growing from 15 Tg CH4 in 1985 to 53 Tg CH4 in 2025. Table 11 and Figure 9 summarize these



results.







       Future emission estimates of CH4 from natural gas production  and use, including venting and leakage



from natural gas transmission and distribution, are based on an estimate of emissions of 22 Tg CH4 in 1987



(Japan Environmental Agency and U.S. EPA, 1990).  These emissions are allocated by region based on



regional primary natural gas consumption, and are grown over time consistent with growth in regional primary



gas consumption.  Global emissions in 1985 are estimated at 20 Tg CH4 and grow to 59 Tg CH4 by 2025.



Table 12 summarise* these results.
                                              31

-------
                                Table 11
                          CH4 From Coal Mining
                         Country Study Base Case
Region
GLOBAL TOTALS
DEVKT-OPED
North America
Western Europe
OECD Pacific
Centrally Planned Europe
DEVELOPING
Africa
Centrally Planned Asia
Latin America
Middle East
South and East Asia
1985
423
223
6.7
3.9
1.1
10.7
20.0
22
152
0.4
0.1
22
2000
63.8
30.0
93
4.5
L8
14.4
33*
33
252
0.6
O2
4.5
2010
84.4
37.1
113
4.9
11
18.8
474
5.0
343
0.8
03
7.0
2025
125.9
5L6
17.2
5.7
2.4
263
743
82
52.7
13
0.4
11.7

                                 Table 12
                     CH4 From Gas Production and Use
                         Country Study Base Case
Region                       1985          2000          2010          2025

GLOBAL TOTALS             20.1          32.7           42*5            59.2

DEVELOPED                 174          252           292            31.8

 North America                6.0           8.1            8.4             73
 Western Europe               32           4.0            4.6             5.6
 OECD Pacific                 0.8           LI            13             L8
 Centrally Planned Europe       7.4          12.0           14.9            17.1

DEVELOPING                 2.7           7.6           13.2            273

 Africa                        0.4           1.1            2.4             5.6
 Centrally Planned Asia         0.2           0.4            0.7             1.4
 Latin America                 0.9           1.6            23             4.6
 Middle East                  0.8           3.1            5.0             9.1
 South and East Asia           0.4           1.4            2.8             6.6
                                   32

-------
                              Figure 9

                 BASELINE METHANE EMISSIONS
  60
  50
I 4°
*•
5 30
  20
   10
       Natural Gas Production
  Latin America
  Africa


  Asia


  CP Asia

  CP Europe



  OECO
   1985   1990   1995  2000   2005   2010   2015
                                           2020
  120
  100
c

£
•

M
£
- Coal Production
2025
  Latin America
  Africa
  Asia
«
•
   1985   1990   1995  2000   2005   2010   2015   2020   2025
                                                         Latin America
       Landfills
   1985   1990   1995   2000   2005   2010   2015   2020   2025
                                33

-------
       The scenario adopted for methane emissions from landfills (U.S7Japan Methane Working Group,



1990) shows methane emissions doubling from 1985 to 2025 (from 30 to 60 Tg CH^. Most of the growth is



in developing countries as rising incomes increase the use and required disposal of products as well as the use



of landfill* to dispose of these wastes.  Figure 9 summarizes these results.








INDIVIDUAL COUNTRY RESULTS








       This section discusses the results of the Country Study Base Case for individual countries.  The first



section discusses countries within the OECD, the second section discusses the USSR and Eastern Europe, and



the last section discusses results for individual developing countries.







OECD Countries








       In the developed free market economies, future energy use and greenhouse gas emissions are expected



to vary considerably from one country to another. Some of the countries expect rapid growth in energy use,



with emissions growth tied closely to expectations of economic growth. Others project small increases, or in



some cases, declines in primary energy use and CO2 emissions  due to expected structural changes in the



economy or active policies to encourage energy conservation.  Table 13 sumntariaeg expected future changes



in energy demand and CO2 emissions for the different countries  under the reference scenarios.
Australia
       Primary energy and CO2 emissions grow at an average annual rate of 23-2.4% through 2005 in the



reference scenario.  This growth is closely tied to relatively high near-term economic growth, which averages



3.0% during the same time period. The share of primary energy provided by different energy sources remains



relatively constant.






                                              34

-------
                                             Table 13

                              Summary Results from Country Studies
\JCA~MJ ana oiner rrcsicru duropcan ^uunaics
(average annual growth rate)
GPP Growth Primary Energy CO, Emissions
(index) (exajoules)
Country 1985 2025 1985 2025
WesternJSurope
Finland
France
FRO
Netherlands
Switzerland
UJC
Other OECD
Australia
f^n^ri?
Japan
U.S.A.
• AAGR » Average

100
100
100
100
100
100

100
100
100
100
Annual

223
245
236
253
216
254

282
263
351
240
Growth

12
83
113
2.6
12
9.0

3.4
102
152
752
Rates

1.6
14.0
103
3.9
1.1
16.4

6.6
24.1
34.6
118.0

(million tons Q
1985 2025 AAGR*

18
92
202
40
14
158

67
127
234
1229


23
136
165
69
12
256

137
244
477
2121


12%
1.0%
-0.5%
1.4%
-0.4%
1.2%

1.8%
1.9%
1.8%
1.4%

Canada
        Emissions of CO2 from fossil fuel energy use in Canada in 1985 are estimated at 127 mt C  The use


of refined petroleum products, mainly for transportation, accounted for the largest share of CO2 emissions.


Petroleum products contributed 46% of total Canadian fossil fuel CO2 emissions, although they comprised
                                                            \

less than one-third of energy consumed.  Natural gas and coal use each account for roughly one-quarter of


CO2 emissions from fossil fuels.
        In the Canadian reference scenario, the consumption of all fuels increases over the next three decades,


and by 2020, energy demand exceeds 1985 levels by 118%.  However, there is a projected decrease in the


proportion of fuels emitting high levels of carbon dioxide. As a result, emissions of CO2 are expected to




                                               35

-------
increase by only 95 percent over the period, reaching 223 mt C in 2020.  Overall, CO2 per unit of primary



energy use in Canada decreases 13% between 1985 and 2020.







Federal Republic of Germany







       Current policies encourage energy conservation and efficiency, and primary energy use in the reference



scenario is estimated to grow by only 1% by 2000, and then decline to 3% below 1987 levels by 2010.



Economic growth rates wOl average 23% from 1988 to 2010, while the population falls from 613 million to



5&5 million.  Energy prices reach the high levels of 1980-1982 by 2010, in part through higher  taxation



(producer and consumer taxes on energy are assumed to be 20% in 2010, with electricity and district heating



taxes a little lower). Primary energy use grows by 1% in 2000, but then declines to 3% less than 1987 levels



in 2010. Primary consumption of coal, lignite, and petroleum products decline, while consumption of natural



gas increases.  Nuclear energy increases through 1995, but then decreases to 1987 levels by 2010.  In the



reference scenario, CO2 emissions decline steadily from 197 million tons of carbon (mt Q in 1987 to 184 mt



C in 2010.
   nee
       French policy currently supports reductions in CO2 emissions through energy conservation policy and



an electronuclear program both started in 1973. Since 1973, CO2 emissions have been reduced 26% with GNP



growing 40%. Currently, 90% of electricity production in France is from non-CO2 emitting energy forms, with



70% from nuclear energy and 20% from hydropower.








       In the reference scenario, annual GNP growth averages 2.4% from 1988 to 2010. Structural change



in the economy (development of the service industry and a decrease in heavy industry) combined with current



efforts aimed at saving energy will produce a annual improvement in energy efficiency of 1%.






                                               36

-------
       CO2 emissions grow at a slower rate (1%) that primary energy (1.4%), reaching 117 mt C in 2010



compared to 94 mt C in 1988.
Japan
       Primary energy consumption increases significantly in  the reference scenario, along with CO2



emissions. Growth in primary energy use is explained in large part by expected rapid growth in the economy.



la the reference scenario, Japan achieves real average annual GNP growth rates of 4.0% between 1988 and



2000, which declines to 3.0% through 2010. Primary energy grows from 18.6 EJ in 1988 to 28.1 EJ by 2010



and readies 37.1 EJ by 2030, representing an average annual growth rate of 13% through 2010 and 1.4% after



2010. While use of all forms of energy increases, the shares of primary energy provided by nuclear and natural



gas increase throughout the time period, while the shares provided by coal and oil decrease.  CO2 emissions



increase at a slightly lower rate due primarily to increases in nuclear power and new more efficient energy



sources: from 294 mt C in 1988 to 422 mt C in 2010 and 493 mt C in 2030.







The Netherlands








       The reference scenario assumes a  47% growth in primary energy consumption, resulting in a 64%



growth in CO2 emissions from 1990 to 2030. These results reflect an assumed average annual growth in GDP



of 2£% during the period (136% cumulative), coinciding with the development of a less energy-intensive



economy.  Efficiency improvements continue in the reference scenario, reducing per unit energy consumption



27% by 2030. Coal plays a much more dominant role in the future, accounting for most of the increase in



primary energy use.
                                              37

-------
Norway
       The Norwegian government has set targets to stabilize Norwegian CO2 emissions at 1989 levels by



the year 2000.  Policies aimed at achieving this goal include price increases, additional energy conservation,



and development of alternative energy sources.








       The reference scenario assumes that no efforts are made to stabilize CO2 emissions. Real oil prices



increase slightly to 20 US. dollars per barrel in the year 2000 and energy use in Norway increases roughly 1%



annually through 2000, from L2 EJ in 1987 to 1.4 EJ in 2000.  CO2 emissions grow from 10 mt C to 12 mt



C, an increase of 20%.







Switzerland







       Switzerland has elaborated detailed energy scenarios to assess the possibilities, preconditions and



implications of various energy policy options.  The base case (reference scenario) assumes a continuation of



past trends, including efforts to use energy more efficiently and increasing reliance on nuclear power to meet



growing electricity demand. This scenario is very unlikely because of major political difficulties for expanding



nuclear power capacities.  It would imply a slight increase of CO2  emissions (9% between 1985 and 2025).



Currently, electricity  generation  is  based on  hydropower  (approximately 60%)  and  nuclear energy



(approximately 40%).







United Kingdom








       Given the wide range of assumptions used in the reference scenarios, primary energy increases at



annual rates ranging from 0.9% to 2.1% through 2020, with CO2 emissions growing at average annual rates



ranging from 0.5% to 10%.  Primary energy consumption increases from 201 million tons oil equivalent






                                               38

-------
(mtoe) in 1985 to 271-414 mtoe in 2020. The range of energy growth estimates is mostly due to uncertainty

regarding the annual rate of economic growth, which ranges from 1.25% to 3.25%.  Differences in future

energy prices have a small impact on total primary energy use but a large impact on relative fuel shares.

Primary consumption of natural gas grows from 48 mtoe in 1985 to between 72 and 97 mtoe in 2020 (assuming

higher growth in energy prices), and to between 121 and 169 mtoe in 2020 (assuming lower growth in energy

prices). Consumption of solid fuels more than doubles assuming high growth in energy prices, but declines

if oil and gas prices are assumed to remain low. Emissions of CO2 grow from 158 mt C in 1985 to  levels

ranging from 188 mt C to 316 mt C in 2020, with  the highest emissions associated with higher oil and gas

prices and high economic growth. CO2 emissions in 2020 range from 233 to 250 mt C when average economic

growth rates are assumed.



United States



       In the U.S. reference scenario, primary energy demand grows from 84 EJ in 1987 to 131 EJ in 2030,

an average annual growth rate of 1.0%.   Driving this increase are modest assumptions of economic growth,

starting at 19% annually but declining to  1.6% by 2030; moderate rates of population growth, starting at 1.0%

annually but declining to 0.6% by 2030; and pronounced changes in the industrial production index, which rises

at 2.7% annually from 1987 through 1995 but slows to 0.7% annually by 2030.  Energy prices for oil, natural
                                                       i
gas,  and  coal increase throughout the whole period, with the highest increases for  natural  gas, which is

resource  constrained by 2030, and lowest increases for coal due to enormous indigenous reserves.  CO2

emissions during this period increase from 1349 mt C in 1987 to 2255 mt C in 2030.



       End-use energy consumption grows at a slower rate than primary energy, 0.8% annually, with half of

the growth  in electricity demand.  Energy end use in 1987 is 63 EJ, with demand for electricity at  9  EJ,

demand for liquid fuels at 33 EJ, demand for natural gas at 15 EJ, and demand for solids and renewables at

3 EJ each. Demand for electricity in the combined residential and commercial sector more than doubles, while
                                              39

-------
roughly 1 El of final liquid energy demand from this sector shifts to renewable*.  In the industrial sector,

electricity demand more than doubles and demand for liquids increases initially, then declines by 2030 to a

level 20% greater than that in 1987. Most of the growth in the transportation sector is in diesel and jet fuel

use, while gasoline usage increases by 16% above 1987 levels in 2010, then declines to 10% over 1987 levels

by 2030. Both the number of operating vehicles and vehicle miles travelled nearly double, but the effect on

transportation fuel demand is mostly offset by efficiency improvements, from an average 15 J miles per gallon

(mpg) in 1987 to 23.8 mpg in 2030.



        Increases in the use of coal, predominantly for electricity generation, account for over 70% of the

increase in primary energy consumption from 1987 to 2030.  Abundant domestic reserves lead to smaller

increases in coal prices compared to other fuels and allow coal to capture most of the new  electricity

generation market  Use of oil increases through 2015, but then declines to a level 15% greater than 1987 oil

use by 2030. Use of natural gas increases from  18 EJ in 1987 to 23 EJ in 2005, but then declines to 18 EJ

due primarily to higher rates of increase  of natural gas prices relative to other energy sources; these price

increases are due to declining domestic production and resource constraints. Use of nuclear energy grows to

a maximum of 8% greater than 1987 levels, while consumption of renewable energy more than doubles in the

time period, from 6 EJ to 14 EJ.


                                       \
USSR And Eastern Europe



        Energy use and CO2 emissions grow considerably in the USSR and Eastern Europe over the next 35

years. These countries accounted for one quarter of global energy-related CO2 emissions in 1985, about 1360

mt C, with the Soviet Union accounting  for 70% of this total (about 950 mt C).  The Soviet and Eastern

European nations rank among the most energy-intensive in the world, around 80% more  intensive than

Western European countries. In Poland, energy consumption per capita is 85% greater than that of  the

Federal Republic of Germany, but income per capita is only one third as large.


                                               40

-------
       Economic growth in this region is assumed to drive demand for amenities towards Western European
levels as incomes approach those of Western Europe. Improvements in energy intensity will be realized as
demand for consumer goods increases with income, while demand for basic materials declines per unit of
economic output  Table 14 illustrates the results of the country studies for these regions.
1
Table 14
Summary Results from Country Studies
USSR and Eastern Europe
GDP Growth Primary Energy CO, Emissions
Country
USSR
Poland
Hungary
(index) (exajoules)
1985 2025 1985 2025
100 351 54.4 117.2
100 296 53 11.4
100 221 13 1.9
(million tons C)
1985 2025 AAGR
899 1752 1.7%
119 255 1.9%
21 30 0.9%
USSR
       The Soviet Union accounts for 5% of global population and 20% of global CO2 emissions. Their
energy supply mix is relatively low in carbon due primarily to extensive use of natural gas, which supplies 40%
of primary energy demand. Future energy use depends heavily on economic growth and the success of efforts
to restructure the Soviet economy.

       Current energy use in the Soviet Union is very different from energy use in North America and
Western Europe. Industry is very material-intensive; the Soviet Union produces twice as much steel as does
the US. (where incomes are two to four times greater).  Living space averages 15 square meters per capita
compared to 25 to 55 square meters in Canada, France, and the US.  Ownership of automobiles is low,
averaging 1 car per 29 persons.

                                               41

-------
       Hie reference scenario assumes that the Soviet economy continues to evolve in a manner consistent
with historical trends, and that progress in implementing fundamental structural change is very slow, which
leads to a future economic growth rate of 32% per year from 1985 to 2025. This economic growth assumed
in the reference scenario results in an average annual growth of 13% in primary energy demand (56.4 EJ in
1985 to 1172 EJ in 2025) and annual growth of 1.7% in CO2 emissions (899 mt C in 1985 to 1752 mt C in
2025).  The share of energy provided by coal and natural gas remains relatively constant, with the share
provided by oil declining 17% by 2025 and nuclear and renewable energy combined increasing 12%.
Poland
        Poland is undergoing profound economic and environmental change.  It is shifting from central
planning to markets to allocate economic resources, and attempting at the same time to conserve and protect
environmental resources. The high energy intensity of the Polish economy, combined with heavy reliance on
coal, has caused much of Poland's serious air and water pollution problems. The high energy intensity is
primarily due to pervasive energy subsidies that discount the price of energy 25% to 80% below supply costs.

        Almost 80% of Poland's primary energy is obtained from coal and lignite. However, coal resources
are being depleted; the average heating value of coal used domestically has fallen from 24.1 gigajoules (GJ)
per ton in 1978 to 22J GJ recently. Costs of producing coal have been increasing, presenting the nation with
prospects of rising energy costs and energy shortages.

        Like the Soviet Union, future energy use and opportunities to reduce energy use reflect current energy
use patterns.  In Poland, 80% of industrial sector energy use is consumed by four sectors: iron and steel (31%),
chemicals (22%), food processing (16%), and building materials and ceramics (12%).  Living space and
automobile ownership is comparable to that in the Soviet Union.
                                               42

-------
       As a result of economic growth that averages 15% to 3.0% annually in the reference scenario, primary
energy use increases from 53 El in 1985 to 11.4 EJ in 2025, with growth in the building and transportation
sectors slightly faster than in the industrial sector. Primary use of oil grows faster than coal or gas, increasing
its share of primary energy use from 17% in 1985 to 24% in 2025. COj emissions grow from 119 mt C in
1985 to 255 mtC in 2025.
Hungary
        Unlike Poland and the Soviet Union, Hungary imports half of its energy supply and energy prices are
close to market levels. But like Poland and the Soviet Union, energy intensity is high, creating a number of
environmental problems.  Like Poland, the Hungarian government has recently announced its intention to
move toward greater market allocation of resources, but the economic reforms needed to implement this policy
goal are not yet in place.

        Progress toward structural change is assumed to be slow in the reference scenario, resulting in growth
in primary energy demand by 2025 of 50%, with CO2 emissions growing from 21 mt C to 30 mt C Production
of steel and non-ferrous metals remain constant, while slight increases are seen in the chemical, stone, clay,
and glass sector and the pulp and paper sector.  Car and light truck  fuel  economies improve by 25%.  Oil,
coal, and electricity prices increase at annual rates of 2%, 1.5%, and L2%, respectively. Imports of electricity
from the Soviet Union increase.
                                               43

-------
Developing Countries3








       Developing countries account for a large share of the increase in use of energy and emissions of CO2



in the Country Study Base Case, mostly due to population and economic growth in these countries.  The



current use of energy and resulting emissions vary considerably among the countries, as do expectations



regarding the future. Table IS sammamt* results for Brazil, China, India, Indonesia, the Republic of Korea,



Mexico and Venezuela. Factors affecting future energy use and emissions include resources within the country,



availability of capital, and cultural differences.
                                             TablelS
snmnuvy Kesuns mini t-
uevetoping (jooi
GDP Growth Primary
(index)
Country 1985 2025
Brazil
China
India
Indonesia
Rep. of Korea
Mexico
Venezuela
• AAGR » Average
100
100
100
100
100
100
100
Annual
358 .
877
669
332
997
396
547
Growth
fnUnfJ a
atries
(exajoules)
1985 2025
6.0
29.0
8.1
1.8
2.4
4.5
1.7
Rate
152
86.0
36.6
93
102
12.0
7.1

nuues
CO* Emissions
(million tons C)
1985 2025 AAGR*
41
503
98
22
44
68
23

129
1719
620
141
166
199
67

2.9%
3.1%
4.7%
4.8%
3.4%
2.7%
2.7%

        The sections  that  follow summarize the country scenarios for  the residential, industrial, and



transportation sectors. The agriculture and services sections were also analyzed but not described here. These
     1 This section is based on Sathaye et al (1989).
                                                44

-------
two sectors can be important Energy use in agriculture sector is very important in India.  Electricity use
dominates energy use in the services sector.

Population and GDP Assumptions

        Population growth rates vary from (X5% per year in the Republic of Korea to about 2.0% in
Venezuela (see Table 16).  The population growth rate is expected to be low in China where the birth rate
is mandated to one child per family.  However, the
lack of population control in rural areas will mean
that the average  family  will  have  two  children.
Population in India will grow faster *h?n in
India's  population will approach that of China by
2025.  Urban population growth rates are  generally
lower  than rural  growth rates;   thus, continued
urbanization in Brazil leads to the lower population
growth assumptions.
will mean
children.
irhlllfl ?IMJ
China by

\ generally

continued
population


Table 16
Population
(millions)
Country
China
India
Korea
Indonesia
Brazil
Venezuela
Mexico
1985
1045
751
41
165
132
17
83
2025
1420
1315
50
267
214
38
155
AAGR*
0.8%
1.4%
0.5%
1.2%
1.2%
10%
1.6%
       The high GDP growth rates assumed for the
developing country studies reflect the potential for
                                                      Average Annual Growth Rate (AAGR)
economic growth consistent with past performance (see Table 17).  For Asian countries, GDP growth rates
are higher in the 1990s and then gradually decline. For Latin American countries, they are lower in the 1990s
(tempered by the economic performance over the last two decades) and then increase through 2025.  Growth
rates in China are high enough for the average GDP per capita to reach $2000 by 2025.  Average GDP per
capita for the Republic of Korea will reach about $18,000 (roughly the U.S. level in 1985) by 2025.
                                               45

-------
Residential Energy Use
                                                                    Table 17
                                                                     GDP
          '.   ^            ,  .  m     .. _  ,.                (1985 billion UA dollars)
       Residential energy use is influenced by the

                                     ^  .   ,.      Country        1985   2025   AAGR'
level of urbanization, access to modern fuels, the     ^^~~^

                                                  China           322   2827     5.6%
ownership of appliances, and the size of households,     ^^           207   1381     4.9%

                                                  Korea             88    881     5.9%
each of which is in turn influenced by income, price     Indonesia         86    285     3.0%

                                                  Brazil           222    796     3.2%
of fuels, cost of appliances, lifestyles, and population     Venezuela         53    292     43%

                                     ,   .    .      Mexico          164    649     3.5%
growth.  Growth hi the  level of urbanization ts
generally associated with growth in income even     • Average Annual Growth Rate (AAGR)

though urbanization varies between regions with the


same income. For the long term, urban population
is expected to exceed 80% in three Latin American countries and reach roughly 50% in China and India (see


Figure 10).  Household size is expected to decline with rising incomes and increased  urbanization, as has


happened in the more economically advanced developing countries. Considerable reductions are expected in


household size in both urban and rural areas (see Figure 11). The level  of electrification is assumed to


continue to increase in the scenarios. Electrification is already high in urban areas and is expected to reach


saturation.  Electrification in rural areas will vary by country but is assumed to increase (see Figure 12).





        Cooking is the primary end use for which energy is used in developing countries.  Non-commercial


fuels such as fuelwood, dung, and charcoal are almost non-existent in cities, with the exception of India where


they are used by 42% of the population. These fuels are used to a large extent by rural households: 90% of


rural households in Brazil use traditional biomass fuels, 82% in India, 70% in Mexico, 34% in China, and 27%


in the Republic of Korea. The main commercial fuels used for cooking are kerosene and LPG, although


natural gas is used in some countries where it is available, for example, in Mexico and Venezuela.  Electricity


is used by higher income households.
                                               46

-------
                  FIGURE 10
              URBANIZATION RATES
                                                               RQURE 11
                                                       SHRINKING HOUSEHOLD SIZE
100%
      Population in urban areas
                                           Persons/HH
 80% H
 60% -\
 40%
 20%
  0%J

1

I
               pill
               ill


I!!!! |
iliil
ill
 I
 I
                                           111

                    ^i::^
ill!
1

•**!
1
1
I
Tttt
I
i

s

fm
ilii
i::j
!:::
1
1
•m
:::
Hi:
::::
till
1
     China   India  S.Korea  Brazil VenezuelaMexico
                                           China    India   S.Korea   Brazil Venezuela Mexici
                      FIGURE 12
       ,        RURAL ELECTRIFICATION
 100%
  80%
  60%
  40%
  20%
   0%
                I

       China   India S-Korea Brazil  Venez Mexico
      Source: Sathaye and Ketoff, !•••
                             1986
                             2025
                                                             FIGURE 13
                                                       HOT WATER SATURATION
                                                     100%
                                                      80%
                                                      60%
                                                      40% H
                                  20% H
                                                           % of households owning
                                          0%


                                                           Urb. Rural
                                                              S .Korea
                                                              Urb.  Rural
                                                                 Brazil
                                                                      Urb.  Rural
                                                                      Mexico
                                                 47

-------
        Changes in fuel shares are expected as a result of increased penetration of electricity (especially in



China) and reductions in the share of households using biofuels.  However, any additional natural gas used



in Mexico will be absorbed by the industrial sector. Changes in energy intensities for cooking also vary by



country.  In the three Latin American countries, fuel intensities (energy use per household for cooking) are



expected to decrease. But hi the three Asian countries, the fuel intensities are expected to increase as poorer



families will become able to afford more cooked meals per day.







        Estimates of ownership of water heating devices and energy use for water heating were made for



Brazil, Mexico, and the Republic of Korea. Diffusion of water heating is currently high in urban areas of



Brazil where almost 80% of all households have inexpensive electric showers. As shown in Figure 13,100%



of urban households in Brazil and Mexico are assumed to be equipped with hot water service by 2025, as will



80%  of the households in the Republic of Korea, which  currently has a very low level of ownership.



Ownership in rural households is assumed to lag behind urban ownership.  Changes in energy intensity reflect



not only changes in ownership, but also changes in the type of system. Natural gas takes an increasing share



of the new market in Brazil and the Republic of Korea, mostly as a result of expanding urban grids:







        Space heating is common and significant in the Republic of Korea and China, where energy used for



space heating per household is about 5 times that used for cooking. In China, space heating is assumed to



spread to southern regions, which would increase the incidence of space heating from 45% of households today



to 60% by 2025.  Space heating intensities are assumed to remain stable in China but drop in the Republic



of Korea.








        Energy use for appliances increases substantially in the developing world.  With the exception of air



conditioning, ownership of appliances in urban areas reaches saturation in most countries by 2025 even though



current levels of ownership vary substantially (see Figure 14).  Ownership reaches higher levels at much lower



income levels than experienced historically in the industrialized countries, due primarily to flailing appliance






                                                48

-------
                           FIGURE 14

                    REFRIGERATOR SATURATION

                    (Urban and Rural Households)
100%
      % of Electrified HH Owning
 80%-
 60%-
 40%-
 20%-
  0%-*

       U   R
       China
 U   R
S.Korea
U   R
Brazil
  U    R
Venezuela
 U   R
Mexico
  Source: Sathay* and K«toff, 1989
                               49

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prices relative to real incomes.  As the demand grows for larger size refrigerators, energy consumed per unit



increases in all countries except Venezuela. The present stock of refrigerators in Venezuela is large and



inefficient, and high economic growth allows for faster substitution of more efficient devices.  Electric lighting



grows in all countries except Mexico, where efficient electric lightbnlbs show strong penetration.  Overall,



electricity use per household increases four-fold in China and two-fold in the Republic of Korea and Brazil



Growth in Venezuela and Mexico, particularly in urban households, is minimai.








        Overall energy use in the residential sector increases by about 40% between 1985  and 2025 in the



three Asian countries and by even more in the three Latin American countries (see Figure 15). This growth



is small relative to that in the other sectors because of switching from biomass to commercial fuels. Growth



is especially high in  Venezuela, where no energy savings could be gained as a result of shifts away from



biomass toward more efficient commercial fuels, since almost no biomass is currently used there. Also in



Venezuela, population growth and large reductions in household size yield a three-fold increase in the number



of households expected to be fully equipped by 2025.







Transportation







        Transportation energy use depends critically on assumptions about mobility, motorization, and



efficiency (vehicle kilometers per unit of energy). Currently, traditional human and animal-powered forms of



transportation predominate in rural areas of developing countries and the  transition to motorized transport



will increase  modern energy use.







        As societies develop, they move from labor intensive economies to more material based ones, and then



to higher value added and more service oriented economies.  Economic growth during the early stages of the



transition is accompanied by increases in freight transport (measured in units of ton-km).  During the later



stages, the transition is accompanied by declines in freight transport Data indicate that the freight ton-






                                                50

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o
o
     350
     300  -
     280  -
     200  -
      150  —
      100  —
      50  —
                                  FIGURE 15


                      RESIDENTIAL DELIVERED ENERGY
               CHINA     INDIA    S.KOREA    BRAZIL   VENEZUELA  MEXICO
         Source: Sathay* and Katoff, 1989
                                  51

-------
km/GDP ratio is declining in industrialized countries, but is stable in the Republic of Korea and China. Rail,
trucks, water barges, ships, and airplanes are the principle modes for freight movement, and the share of these
modes, as well as trends in shares, vary by region.  In India, the trend is towards more movement of freight
by track and away from rafl. In water-dominated countries bice Indonesia, barge and ships account for a larger
proportion and their share is likely to remain stable or increase.

        Energy use for passenger transport will depend on trends in vehicle ownership and the use and
efficiency of the vehicles. ' As seen in the Republic of Korea, rapid growth in the ownership of vehicles can
occur if economic conditions and government policy permit  The scenarios assume that consumers will
continue to demand private cars to satisfy their demand for higher mobility, and that congestion and local
pollution might limit the use and efficiency, but not ownership, of the vehicles.

        Automobile ownership currently ranges from a low of 0.6 per thousand persons in China to about 87
in Venezuela (see Table 18). China and India reach 20 cars per thousand persons by 2025, or a level of 28
and 26  million cars in each country, respectively.
On average, congestion levels in urban centers of  •••••••••••••••••••••••^••^•^••^^^
                                                                    Table 18
these countries can be expected to exceed that of               ^an _
Bombay today, unless infrastructure is significantly             Country        1985   2025
improved. High motorcycle saturation is projected             China           06     20
                                                          India            2.1     20
for Brazil, as  drivers value these vehicles  for             Korea          11.2    130
mobility in congested cities.                                 Brazil          63      245
                                                          Venezuela      87      320
                                                          Mexico         64      250
        Declines in distance driven per car partially
offset increase in ownership. Average distance driven is assumed to decline dramatically as ownership passes
from very low levels (under 25 cars per 1000) through levels of 80 to 100 cars per 1000. Beyond these levels,
the drop in distance traveled per car is less.

                                               52

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       Fuel efficiency increases as a consequence of technological improvements (see Table 19). Although

each country expects significant  improvements in  the
efficiency of their fleet, demand for larger and more   ••••••••^^^•^•^^••••^^^•^^
                                                                     Table 19
comfortable can offsets the technological improvements                  Car Efficiencies
                                                                    (liters/km)
in the Republic of Korea. Cars and motorcycles tend to
                                                            Country        1985   2025
Jbe less energy intensive in Asian countries than in Latin
                                                            Qiina         Q.10    0.06
American ones and distances traveled in China, India,            ^^          Q09    QQ$
                                                            Korea         0.10    0.09
and Korea are lower than typical distances travelled in
                                                            Brazil         0.13    0.07
Brazil and Venezuela.  Improvements in efficiency will            Venezuela      023    0.12
                                                            Mexico        0.19    0.06
be stimulated by increasing fuel prices and technological
development, and will  increase faster  with  higher

economic growth due to more rapid penetration of new vehicles in the fleet.


        Combining these assumptions yields seven- to ten-fold increases in fuel use in the transport sector in

Asian countries with smaller increases for Latin American countries (see Table 20).  Increases in the Asian

countries are due to  rapid growth in personal vehicle
ownership, as well as to an increase in mass transport   ••••••^^^^^^^•^•^^^^•••••••i
                                                                     Table 20
Still, fuel used for freight transport dominates energy use           Transportation Energy Demand
                                                                    (exajoules)
in the transportation sector in Asia. The type of energy
                                                            Country       1985    2025
used changes in India and China.  Coal, which is used in            	        	    	
                                                            China          1.26    8.45
rail transport, is being phased out and replaced by oil            ^^          089    723
                        ,...„,        t               Korea          0.28    2.09
(and to a minor extent, electnaty).  Biomass, which            Brazil          124    4 61
    ...   •   •«          • •   ,  ,  ^ , ^ . .  «                Venezuela      037    0.61
provides significant quantities of alcohol fuel in Brazil,            Mexico        111    237
plays an even larger role in the future.
                                              53

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Industry
        Industry includes mining, manufacturing, and construction sectors.  Industrial structure depends on

the level and type of final demand (including exports) that industries satisfy and the type of domestic resources

that industry can readily exploit Industry shares of value added in the seven countries range from 42 to 47%

of GDP, except in India, where agriculture dominates the economy (see Figure 16). Because Venezuela is a

significant exporter of oil, mining (which includes oil and gas exploration and development) accounts for a
    «
large share (30%) of the industrial value added in 1985.



        While energy intensive industry has accounted for smaller fractions of industrial value added in recent

years, it consumes a disproportionately large fraction of the energy used in the industrial sector. Output of

basic materials per capita varies by an order of magnitude among the countries.  Steel output per capita in

China is currently three times that of India and increases to seven times that of India by 2025 (see Figure 17).

Korea, Venezuela, and Brazil each have material output levels substantially above those for the former two

countries with exports of  steel accounting for 65 Kg/Capita in Korea and 60 Kg/Capita in Venezuela.

Fertilizers constitute an important element of Indian policy of self-reliance on food and rapid increases in its

manufacture are expected in the future. Petrochemicals and aluminum are important in Venezuela due to

abundant oil, gas, and hydroelectric resources and their output increases to meet economic growth targets.

These trends are in contrast to those in the U.S., where production of basic commodities has declined since

1973.



Summary




        These factors lead to rapid increases in primary energy use and CO2 emissions in the seven developing

countries discussed here. Increases of primary energy use in  the period 1985 to 2025 range from 153% in
                                                54

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                             FIGURE 18
                      STRUCTURE OF INDUSTRY
    Percent of Total Value Added
60%
40%
20%
 0%
   Other Industry
   Other Mfg
   Energy Intensive
            lit I lit  i  fLi I I il  i  I t I I t I  i
    •35'25    '85*25    '85*25    '85*25   *85'25    *85'25    '85*25
    China     India   Indonesia  SJCorea    Brazil    Mexico Venezuela
     KQ/Capita
                        norm 17
               MATERIALS OUTPUT PSA CAPITA
1500
1000
 500
O Aluminum
ffi3 Petroenem.
Bl Fertlllara
CU Pulp/Paper
    Cement
    Steel
                                                               F=|
     '85'25
     China
       •85*25    '85*25   '85'25   '85'25   '85'25    '73'86
        India    SJCorea   Brazil   Mexico Venezuela  U.3.
                          55
                                  Source: Setheye and Ketoff, 1S89

-------
Brazil to 416% in Indonesia. Energy intensity declines at an annual rate ranging from 0.7% to 2.7% in all


countries except Indonesia "where it increases by 1.1% annually.





COMPARATIVE ANALYSIS USING THE ASF
                                                                                               e




       One disadvantage of performing individual country studies and then combining the results is that the


studies may not provide a consistent and plausible scenario of future energy use.  Inconsistencies can result


because individual studies of energy use may not be able to account for the global implications of energy


demands.  Rapid increases in global demand implied by the different studies could strain supply sources


resulting either in rapid increases in prices for that supply or inability to meet demand.





       The Atmospheric Stabilization Framework (ASF) was used to evaluate the consistency of the results


from the Country Study Base Case, verify the feasibility of the energy supply requirements, and identify issues


concerning the global energy market possibly not addressed within the country studies. The ASF is an


integrated set of models that estimates emissions of greenhouse gases, changes in atmospheric concentrations


of these gases due to these emissions, and increase in net radiative forcing and global temperatures.  The ASF


contains an energy model which estimates global and regional energy supply and demand and emissions of


greenhouse gases from energy production and use.





       The economic growth assumptions and energy efficiency results from the Country Study Base Case


were extracted and supplied as input to the ASF energy model Inputs included economic growth (GDP) and


final energy use through 2025 by sector and energy type  (fuels and electricity).  Traditional uses of biofuels


were separated from the energy use estimates so that the ASF only dealt with commercial energy uses.


Traditional uses were added later to the ASF results to get total energy demand.  In addition, the ASF


contains  only three sectors compared to four used  in  the Country Study Base Case. For purposes of
                                               56

-------
comparison, the results of the Country Study Base Case for  the fourth sector were allocated to the



residential/commercial and the industrial sectors using simple rules.







        Thus, we developed an ASF comparison scenario that matched the total energy demand estimates of



the Country Study Base Case but independently estimated energy supply.  Primary energy by source was



.compared and differences identified. Information that was compared included carbon emissions (CO2 and



CO); primary energy use by energy type and region; final energy use by region, sector, and energy type; and



energy use for electricity generation and synthetic fuel production.  Where differences existed, the supply



estimates from the ASF scenario were then evaluated in order to explain the differences.







        As expected from the design of the ASF comparison scenario, global final and primary energy demand,



as well as final demand for electricity, match well with the Country Study Base Case. Some differences existed



in the factors used to convert electricity from nuclear and hydro energy sources and in the efficiency of



electricity generation, transmission, and distribution. Also, the ASF comparison case was developed based on



a preliminary version of the County Study Base Case, final changes to the Country Base Cast not incorporated



into the ASF comparison case include increases in energy use in France and the USSR.







        Future supply of fossil energy represented the main differences between the two scenarios. In the ASF



comparison scenario, coal production was much higher, and the conversion of coal and to synthetic fuels



played a much larger role. Crude oil production depended heavily on unconventional oil resources in the U.S.



and  Latin America.  Natural gas production and consumption of gaseous fuels fell well below the levels



estimated in the Country Study Base Case, but energy from biofuels increased more rapidly in the ASF



comparison scenario.  Emissions of CO2 from energy compared closely through 2010 but then started to



diverge as more coal and unconventional oil resources played a larger role.
                                               57

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Final Energy Demand







       As expected, the ASF comparison scenario reproduced the regional estimates of final demand for



energy and for electricity (see Table 21 and Figure 18). The only significant differences occurred in Western



Europe and the USSR due to revisions in the country studies for France and the USSR not incorporated in



the ASF comparison case. The maximum difference in global final energy use is 6%, with energy use in the



ASF comparison scenario slightly lower than the Country Study Base Case.
Table 21
Final Energy Demand by Region
(enjootes)
ioo« «MY»«
t
i
Region
North America
Western Europe
Eastern OECD
USSR & Eastern Europe
Centrally Planned Asia
Middle East
Africa
Latin America
South and East Asia
Total
Country ASF
Study Comp.
Scenario Scenario
64.7 66.6
39.5
119
61.7
262
6.1
11.1
15.0
18.0
255.2
44.7
143
53.5
25.5
4.6
103
16.0
183
253.6
Country
Study
Scenario
943
573
24.5
132.4
64.5
31.2
41.7
40.8
78.1
564.6
ASF
Comp.
Scenario
99.4
49.1
23.7
110.6
63.1
323
41.1
40.9
73.6
533.8
       Final energy use by energy type, shown in Table 22, varies due to a number of reasons.  The major



reason for the different results is the structure of the two different modeling frameworks.  While the Country



Study Base Case explicitly identified district heating in the USSR and Poland, the ASF cannot. For the ASF



comparison scenario, district heating is accounted for as a final use of liquid, gaseous, or solid energy with no
                                              58

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                                                      K
                                                      UJ
                                                       U
                                                       S

                                                       o
                                                       Ul

                                                       UJ
                                                x
                                               •3
                                                3
                                               **
                                               (A
                                                O
                                               U
                                                it
                                               
-------
conversion losses (all conversion losses are assigned to the electricity generation sector). Similarly, direct uses

of biofuels, except for the traditional uses estimated outside of the ASF, are combined with final uses of ofl,

gas,andcoaL
                                            Table 22
                               Final Energy Demand by Energy Type
                                           (exajooles)
   Electricity
     Country Study Base. Case
     ASF Comparison Case

   Liquid Fuels
     Country Study Base Case
     ASF Comparison Case

   Gaseous Fuels
     Country Study Base Case
     ASF Comparison Case

   Solid Fuel
     Country Study Base Case
     ASF Comparison Case

   District Heat
     Country Study Base Case
     ASF Comparison Case

   Other
     Country Study Base Case
     ASF Comparison Case

   Total
     Country Study Base Case
     ASF Comparison Case
 1985

 318
 315
10L1
1003
 414
 49.4
 46.8
 44.7
 6.1
 26.1
 263
255.2
253.6
 2010

 68J
 633
149.8
140.5
 89.5
 80.8
 80-5
 81.7
 9.8
 29.9
 25.0
428.1
391.8
 2025

100.7
 95.5
185.9
196.9
1273
105.6
103.4
111.4
 133
 33.9
 23.7
564.6
533.8
Electricity Generation



        The demands for electricity in the two scenarios compare closely, but the amount of energy used to

produce the electricity and the share of fuels used varies. In 2025, global demand for electricity varies between
                                               60

-------
the two scenarios by less than 5%. Differences in energy used to produce electricity are slightly larger and

are due to a number of factors ranging from generation efficiencies, conversion of electricity use to primary

equivalents for hydro and nuclear energy, and different fossil fuel shares.
        As shown in Table 23, nearly 7%

less energy is used to produce only 5% less

electricity, indicating that on a global basis,

electricity generation, transmission,  and

distribution are assumed to be slightly more

efficient in the ASF comparison scenario.

Coal, nuclear, and hydro sources contribute

about  the same amount  of  energy to

electricity generation, while the use of gas

and liquid fuels are much lower in the ASF
                      Table 23
     Energy Use for Electricity Generation in 2025
                     (ex^jonles)

                                        ASF
                      Country Study  Comparison
                        Base Case       Case
Total Fossil Fuel
Coal
On
Gas
Nuclear & Hydro
Other
215.2
12&8
41.0
45.4
103.0
5.7
189.7
1213
27.6
40.8
98.9
15.3
Total
323.9
303.9
comparison scenario. This difference is due primarily to more rapidly increasing prices of delivered gas (which

closely follow oil prices) and to the greater use of solar electricity in the in the ASF comparison scenario.  Due

to the regional structure with ASF, it may overstate gas prices in regions with large production capacity and

understate gas use in the utility sector.



Synthetic Fuels



        A major difference between the two scenarios is in the  production of synthetic fuels in liquid or

gaseous forms from coal or biomass. In the Country Study Base Case, 6.2 EJ of coal is used to produce only

3.9 EJ of liquid fuels, all of which occurs in China.  In the ASF comparison scenario, increases in oil and gas

prices result in 18 EJ of coal and 19 EJ of biomass consumption to produce 11 EJ of synthetic liquid fuel and

15 EJ of gaseous fuels.
                                                61

-------
Primary Energy Demand







       As shown in Table 24, the ASF projects less use of natural gas and more use of coal and other energy



sources, such as solar and biofnels, to meet primary energy demands. Much of the difference in primary uses



of natural gas is due to the reduced use of natural gas in the electricity generation sector and the greater



supply of synthetic gaseous fuels from both coal and biomass. Most of the differences in primary coal



consumption are due to synthetic fuel production in the ASF.  Higher use of liquid fuels for final energy in



the ASF comparison scenario is offset by less use in electric generation and more synthetic liquid fuel



production so that the use of primary oil compares closely between the two scenarios.








Primary Energy Supply







       Since primary energy supply was not estimated in most of the country studies, the Country Study Base



Case did not include estimates of regional primary energy supply.  It is possible to analyze the estimates of



primary energy supply from the ASF comparison scenario to understand why primary energy use differed



between the two scenarios.







       Several important issues emerge from the results of both the scenarios. First; the scenarios will



require rapid growth in the production of all forms of energy, fossil fuels in particular.   Environmental



problems associated with these increases, other than global warming, can be substantial Second, such large



increases in consumption of crude oil can be expected to result in large increases in oil prices.  In the ASF



scenario, crude oil production from the Middle East grows from 22 EJ in 1985 to 63 El in 2025, an amount



that far exceeds current excess production capacity. Third, for all regions except the U.S. and Canada, the rate



of growth in consumption of natural gas in the Country Study Base Case exceeds growth rates in consumption



for other fossil fuels.  Thus, there would likely  be a strain  on production  and distribution capacity, which
                                               62

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                                            Table 24
rruaarj navrgj use in 4
(exajonles)
Country Study Base Case

Coal
Ofl
Gas
Electricity
Hydro & Nuclear
District Heat*
Other
Total
ASF Comparison Scenario1*

Coal
Ofl
Gas
Electricity
Hydro & Nuclear
Other
Total

Final
Energy Use
103.4
185.9
1273
100.7
133
33.9
564.6

Final
Energy Usec
111.4
196.9
105.6
95.5
23.7
533.1

Electricity
Generation
128.8
41.0
45.4
(100.7)
103.0
(133)
5.7
209.9

Electricity
Generation
1213
27.6
40.8
(95.5)
98.9
153
208.4
                                                               Synthetic
                                                                 Fuels

                                                                 6.2
                                                                (3-9)
                                                                 23
                                                               Synthetic
                                                                 Fuels

                                                                17.6
                                                               (11.1)
                                                               (14.8)
                                                                19.0

                                                                10.7
Total

238.4
223.1
172,7
103.0

 39.6

776.9
Total

2503
213.4
131.6
 98.9
 58.0

7512
1 Includes district heat in final energy use and combines energy used for district heating with
electricity generation.

b Due to independent rounding, the totals in this table are slightly different than ASF final energy
use results reported in previous tables.

c Includes district heat in final energy use as direct use of energy.
                                               63

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would imply higher prices. As a result, a policy proposing to reduce CO2 emissions through the increased use



of natural gas instead of other fossil fuels may have limited impact.








Natural Gas                                               .                    x







        One of the largest differences between the two scenarios is in the primary use of natural gas.  In the



Country Study Base Case, primary use of natural gas increases from 59 EJ in 1985 to 173 El in 2025, a growth



of 193%, with nearly all of the growth occurring outside of the U.S. and Canada. This compares to growth



in total primary energy use of 132%.  Excluding the U.S. and Canada, primary uses of natural gas increase



227% in this time period compared to a 155% increase in total primary energy use. The Middle East accounts



for nearly a fourth of the increase in primary use of natural gas:  from 22 EJ in 1985 to 26.5 EJ in 2025.



Large growth in this region can be expected because of their abundant existing resources, but by 2005 natural



gas accounts for over half of primary energy use in the region in the Country Study Base Case.








        The ASF model analysis results in a less optimistic projection of natural gas use, primarily because



the model accounts for high transportation costs and resource constraints. Because natural gas resources are



located far from urban and  industrial areas in most of the  world, expensive pipeline and/or liquefaction,



transportation, and regasification facilities are required. The high costs associated with transportation and



distribution are the reason why, on a global scale, natural gas does not provide a larger share of primary



energy. In the ASF, these costs reduce the price received by producers by as much as an equivalent S18/barrel



(1988 U.S. dollars) from the delivered price and act to inhibit development of gas resources in areas requiring



these large costs.  In the ASF comparison scenario, Latin America, Africa, and the Middle East become the



large exporters of natural gas, with combined production for these regions increasing from 5.0 EJ in 1985 to



50.1 EJ in 2025.  Exports in the form of LNG from these regions equal 15.6 EJ by 2025.  Gas production in



the USSR serves primarily to meet demand for gas in the USSR and in Eastern Europe.
                                                64

-------
       The natural gas production implications of the scenarios vary. While production of natural gas in the
USSR and Eastern Europe is roughly the same in the ASF comparison scenario as primary gas energy use for
the same region in the Country Study Base Case, it should be noted that in the ASF comparison scenario,
production of natural gas through 2025 in the USSR would exhaust all existing proven reserves and would
require that over half of the estimated remaining resource be proved and producing.  The patterns of natural
gas use and production in the U.S. and Canada are also different While both scenarios suggest relatively flat
production profiles over the time period, the ASF scenario suggests an increase in the use of gaseous fuels,
satisfied primarily by imports of LNG.
Coal
       Coal use is 5% higher by 2025 in the ASF comparison scenario than in the Country Study Base Case;
half of the difference reflects greater use in synthetic fuel production in the ASF.  Coal production in the ASF
comparison scenario increases 187% between 1985 and 2025.  Regionally, the smallest growth in coal
production occurs in Western Europe, where production increases 129%, with the U.S, the USSR and Eastern
Europe increasing 148%, and Centrally Planned Asia increasing production by 278%. Although growth
averages roughly 300% in other developing regions, current production in Africa, Latin America, and the rest
of Asia accounts for only 10% of global coal supplies.
Oil
       While the primary use of crude oil increases by similar amounts in both scenarios, to roughly 220 EJ
by 2025, the supply implications of the scenarios are quite different  Since little information on oil supply is
provided in the country studies, scant attention is paid to oil production from unconventional sources. The
country studies for Latin America assumed somewhat lower oil prices and did not examine the potential need
to exploit their abundant unconventional resources. The U.S. study showed a steady decline in oil production,

                                              65

-------
also assuming that the unconventional sources were uneconomic or for some other reason were not exploited.

The ASF, on  the other hand, shows either constant or slightly declining patterns  of conventional oil

production in all regions except for the Middle East and Africa, whose combined conventional oil production

grows from 33.2 EJ in 1985 to 8&8 EJ in 2025.  This amount of oil production exceeds historic levels and

suggests significant upward pressure on oil prices.
Other
       The global estimates of future nuclear and hydro energy are similar in the two scenarios, although

some regional differences exist Solar electricity and commercial biofuels play a much larger role in the ASF

comparison scenario, supplying over 20 EJ more primary energy in 2025 than in the Country Study Base Case.

The ASF results are based on modest improvement in the costs of solar electricity and modest assumptions

about cost reductions in commercial biofuels and availability of these energy sources.



CO2 Emissions
        CO2 emissions from energy in the two scenarios are similar through 2010 but then start to diverge

as synthetic fuel production and unconventional oil

resources  start to play a larger role in  the  ASF

comparison scenario.  As shown in Table 25,  CO2

emissions  are within  0.1  billion  tons of carbon

through 2010 but diverge after that time.  TheCO2

emissions  in the table include all carbon emissions

in the form of CO2 and CO (which is assumed to

quickly oxidize to
                 Table 25
              CO2 Emissions*
           (billion tons of carbon)

       Country Study  ASF Comparison
         Base Case        Scenario
1985
2010
2025
 52
 9.1
12.4
 5.5
 9.0
12.8
                                                  1 Includes carbon in form of CO2 and CO
                                               66

-------
COMPARISON TO U.S7NETHERLANDS SCENARIO



       Comparing the results of the Country Study Base Case with the U^/Netherlands scenarios puts the

Country Study Base Case into a context where increases in concentrations of greenhouse gases are emphasized.
*
It also allows comparison of different estimates of energy use.
JScoDOuuc
           Table 26
Annual Rate of Economic Growth
           (percent)
            Country Study  U.S./Netherlands
             Base Case      High  Low
        The economic growth rates used in the Country Study Base Case generally Call between the growth

rates assumed for the two detailed scenarios  used to construct the average U.SJNetherlands 2030 High

Emission Scenario, although regional variations exist  In the Country Study Base Case, global income grows

at an average annual rate  _

of 3.0% while the high and

low growth rates assumed

in  the U.S./Netherlands

scenarios   ranged   from

2.0% to 3.4%. As seen in

Table  26,  the  rate of

growth  in  the  Country

Study Base  Case for most

regions fell within the high

and low rates assumed in

the ILS^Netherlands scenarios except for Pacific OECD nations, the Middle East and Centrally-Planned Asia,

which had higher rates.
US. and Canada
Western Europe
Eastern OECD
USSR and Eastern Europe
Centrally Planned Asia
Middle East
Africa
Latin America
South and East Asia
22
23
3.1
32
32
43
4.0
33
4.6
•M«^M
2.7
2.6
2.8
43
5.1
4.4
4.2
4.4
5.0
1.7
1.7
1.6
23
3.1
23
22
23
2.9
                                              67

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Energy Use



       Even though the economic growth rates in the Country Study Base Case fall between those in the

ILSJNetheriands scenarios, energy use is higher. Primary consumption of fossil fuels accounts for much of

the differences between the scenarios. As seen in Table 27, primary consumption of coal in the Country Study

Base Case Calls between the primary consumption estimates in the two detailed U.&/Netherlands scenarios

while primary uses of oil and gas  are much larger than any of the estimates from the U.S./Netherlands

scenarios. Primary energy consumption of other energy sources including nuclear and hydro energy compare

more closely.
                                           Table 27
                Comparison of Country Study Base Case and U.S/Netherlands Report
                                      Primary Energy Use
                                           (exajoules)
   Energy Type

   Coal
   Oil
   Natural Gas
   Hydro & Nuclear
   Other

   Total
                                                        -2025-
                                                               U.S./Netherlands
                                                               2030 High Emissions
                                                              Lower       Higher

1985
86.4
12L5
58J
34.9
26.8
Country Study
Base Case
238.4
223.1
172.7
103.0
39.6
Economic
Growth
159.1
142.8
903
72.9
30.8
Economic
Growth
276.8
153.7
105.5
99.0
45.6
3283
776.9
495.9
680.6
                                              68

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CO2 Emissions
            emissions (including carbon in the form of CO) from energy in 2025 range from 33 to 10.4

billion tons of carbon in the U.&/Netherlands scenarios, all of which are at least 20% lower than the 12.4
*
billion tons  of  carbon  estimated in the Country

Study  Base Case  (see  Figure   19).     The

US.\Netherlands  scenario  that  compares  most

closely to the  Country Study Base Case  is the

average 2030 High Emissions Scenario.  As shown

in Table  28, the emissions of carbon from energy

use start to  diverge immediately and continue to

diverge through 2025.  Even though the Country

Study Base Case does not include  projections of

other greenhouse gases, it could be assumed that
                 Table 28
        CO2 Emissions from Energy*
           (billion tons of carbon)

                      U.S./Netherlands
       Country Study  2030 High Emissions
        Base Case        Scenario
1985
2010
2025
 52
 9.4
12,4
 53
 7.8
10.2
• Includes carbon in form of CO2 and CO
growth in emissions from these gases will follow the same patterns with respect to the 2030 High Emissions

Scenario.  If the U.S./Netherlands estimates of emissions of greenhouse gases from other sources, such as

cement manufacturing and tropical deforestation, (see Table 29) are accounted for in the Country Study Base

Case, then emissions of all greenhouse gases will be higher. This implies that equivalent CO2 concentrations

from the Country Study Base Case will be  higher than the concentrations  projected  in the 2030  High

Emissions Scenario and that the equivalent doubling of CO2 will occur before 2030.



COMPARISON TO OTHER LONG-RUN GLOBAL ENERGY FORECASTS



       Other organizations produce forecasts of global energy use, using diverse methodologies in order to

address various concerns. These estimates provide additional comparisons for the Country Study Base Case.

Three studies provide a range of forecasts:
                                              69

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                                           Table 29
                                Carbon Emissions from all Sources
                                     (billion tons of carbon)*

  Emissions of CO2 from energy currently represent an estimated 85% of net emissions of CO2 from
  all sources.  In the Country Study Base Case, net emissions of CO2 from all sources, including
  deforestation and cement manufacturing, is nearly 14 billion tons of carbon if emission estimates
  from the U.&/Netherlands 2030 High Emission scenario are used for these other sources.
                                                      1985          2010

   Country Study Base Case
    Energy                                            52            9.1
    Deforestation and Cement Manufacturing5            0.8            13             1.6

    Total Emissions                                    6.0           10.4           14.0

   U.S. Netherlands 2030 High Emissions Scenario
    Total Emissions                                    63            9.1            11.8
  * Includes carbon in the form of CO2 and in the form of CO (which is quickly oxidized to COj).

  b From U.S./Netherlands 2030 High Emissions Scenario
       •       The International Energy Agency forecast used in constructing the County Study

               Base Case extends to the year 2005 (EEA, 1988);



       •       The Commission of the European Communities gives a global energy forecast to the

               year 2010 (CEC, 1989); and



       •       The 14th World Energy Conference provides a range of global energy perspectives

               in the year 2020 (WEC, 1989).



These estimates contain sufficient detail on primary energy supplies to construct CO2 emission estimates. The

same emission coefficients that were used in interpolating and/or extrapolating CO2 emission results in the

                                              70

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Country Study Base Case were applied to energy consumption estimates for the OEGD as well as global totals.

In order to conform to the Country Study Base Case and the ASF derived scenarios, only commercial energy

use was accounted for, e.g. traditional biofuels were excluded from the calculations.  The results are displayed

on Figure 19 and Table 30.  Both the IEA and CEC emission estimates are higher than the Country Study

Base Case, although the differences are fadgmfigflnt. The calculated emissions under both WEC scenarios

remain below those of the Country Study Base Case. The emissions in the Country Study Base Case exceed

the all of the U^^Netherlands emission scenario, which are also shown on Figure 19. Figure 19 also displays

the 20% reduction from 1988 emission levels recommended by the Toronto Conference.
                                            Table 30
                   Comparison of CO2 Emissions in the Country Study Base Case
                                              with
                                   Alternative Energy Forecasts
                                      (billion tons of carbon)
   Study/Forecast                 1985   1987   1990    1995   2000   2005    2010   2020

   Country Study Base Case       5.15           5.87    &51    730    8.16    9.08    11.23

   International Energy Agency           5.64           6.71           8J2

   Commission of the
    European Communities       535           6.09    6.81    7.53    8.27    9.01

   14th World Energy Conference
Moderate Scenario (M)
Limited Scenario (L)
5.02
5.02
6J7
6.01
8.45
7.10
       The findings of these studies tend to reinforce each other, especially when accounting for the fact that

emission  estimates tend to diverge as forecast horizons lengthen.  Absent changes in energy policies, CO2

emissions from the OECD will continue to rise, albeit slowly, over the next several decades. Emission growth
                                              71

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2030 High Emissions

      A-PolsAccelerated Policies
      Alt-Pol=Alternatlve Accelerated Policies

      * Recommended 20% reduction from 1988 levels by 2005
                               72

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in the rest of the world will be more rapid, and global CO2 emissions will continue to increase CO2
                                                                                b
concentrations for the foreseeable future.




REGIONAL AND COUNTRY STUDY RESPONSE OPTIONS ANALYSIS




       This section summarizes analysis presented to the EPCC by independent experts and member countries.

These studies are considered preliminary and generally do not reflect official government positions. They are

presented here to provide insight into the effect of different response options, but do not indicate government


policy commitments.




       The section  is organized into four parts which divides the participating countries into four main

groups. The first part, selected Western European Countries, summarises studies for a set of countries where

either growth in emissions of energy use and CO2 emissions are expected to be low and/or options examined

have been identified that can achieve stabilization or reduction of CO2 emissions.  The second part, selected

other OECD Countries, «uwnap?*« studies for OECD countries outside of Western Europe where generally

energy use is expected to rise and options examined do not generally lead to stabilization (except for Canada).

The third part summarizes studies for the USSR and Eastern Europe where energy use and CO2 emissions

are expected to grow significantly but where a number of options examined including structural change have

the potential  to stabilize and reduce CO2 emissions.  The fourth pan summarizes studies  for selected

developing countries, where growth in energy use and CO2 emissions is expected to be high  and options

evaluated in the studies have the impact of only reducing this growth. The criteria for the examination of
                                          .                       •
options differ between studies, so the results obtained are difficult to compare among countries.
                                              74

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SELECTED WESTERN EUROPEAN COUNTRIES







       In several Western European market economies, future energy use and greenhouse gas emissions are



expected to be relatively low or decline over the next 20 years if response options are implemented to address



climate change and other economic issues. A broad range of possible response options including energy taxes,



-fuel switching, and efficiency standards and regulation could  result in low or declining emissions in some



countries in the next 20 years.
        Table 31 «™marire$ expected future changes in energy demand and CO2 emissions for the different



countries. As seen from the table, reference projections show that average annual rates of growth for primary



energy could range from -0.4% to 1.6%. Changes in CO2 emissions follow changes in primary energy.  Impacts



of options vary. In the Netherlands, options are evaluated that halt an average 13% annual growth in CO2



emissions and result in an annual decline of 1.1%. In the Federal Republic of Germany, options examined



accelerate the annual decline in emissions from 03% to 0.8%. In Norway, options  to stabilize emission at



current levels are explored.



                                                       •




Federal Republic of Germany








        Current government policy encourages energy conservation and efficiency.  Primary energy use is



estimated to grow by only 1% by 2000, and then decline to 3% below the 1987 levels by 2010. Additional



response options over and above current ones may yield an additional 10% reduction in energy and  CO2



emissions in 2010. The impact of unification of the Federal Republic of Germany (FRG) and the  German



Democratic Republic have not been analyzed.
                                              75

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                                         Table 31
                           Summary Results from Country Studies
                           Selected Western European Countries^
      Country

      RR.G.
      France
      Netherlands
      Norway
      Switzerland
      United Kingdom
GDP Growthb

     23%
     2.4%
     22.%
      n/a
     2.0%
     23%
—Primary Energy—
   (exajoules)

Initial    —Forecast—
         Ref.c   Pol.d
11.4
&5
2,6
L2
L2
9.0
11.0
11.4
4.1
1.4
LI
15.4C
9.9
n/a
n/a
13
n/a
n/a
—-CO? Emissions—
 (million tons C)

Initial  —Forecast—
 Year  Ref.  Pol.
197
94
40
10
14
184
117
71
12
12
164
n/a
28
10
n/a
 158   242«   n/a
      Country

      FJLG.
      France
      Netherlands
      Norway
      Switzerland
      United Kingdom
                —Primary Energy—
                  (annual growth)
                         Ref.    Pol.

                         -0.2%   -0.6%
                         1.4%     n/a
                         1.0%     n/a
                         1.0%   0.5%
                         -0.4%     n/a
                         1.6%     n/a
—CO2 Emissions—
 (annual growth)
       Ref.  Pol.

       -03% -0.8%
       1.0%  n/a
       13% -1.1%
       12% 0.0%
       -0.4%  n/a
              n/a
' Data for each country study are provided for initial year and forecast year, initial years and forecast
years (initiaUorecast) are (1987, 2010) for F.R.G., (1988, 2010) for France, (1985, 2030) for the
Netherlands, (1985,2000) for Norway, (1988,2010) for Switzerland, and (1985,2020) for the United
Kingdom.

b Average annual rate of growth

0 Ref. - Reference scenario

d PoL - After implementation of policies

e Represents average of multiple scenarios
                                            76

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        The response option evaluated by the forecasters uses the premise that taxes and other initiatives work
to stimulate conservation and that further price increases and other conservation policy programs will reduce
energy demand.  The response option included doubling the energy tax on producers and consumers and
     apanying the conservation process with additional energy-policy promotion measures.  Primary energy
in 2010 is reduced from 11.0 exajoules (EJ) in the reference scenario to 9.9 EJ and CO2 emissions are reduced
4rom 184 mt C to 164 mt C, a level 17% below 1987 emissions.  Use of renewable energy for electricity
production is increased 12% over levels achieved in the reference scenario including increases of 4 PJ from
hydropower, 23 PJ from combustion of wood and straw; 1.9 PJ from use of refuse gas, sewage gas, and biogas;
3.1 PJ from wind power, and  22 PJ from active solar energy.  Use of renewable energy for final energy heat
increases from 94 PJ in reference scenario in 2010 to 123 PJ.  Of the increase, 83 PJ is from active solar
energy, 5.5 PJ is from passive solar energy, and 16.6 PJ is from combustion of wood and straw.
France
        French policy currently supports reductions in CO2 emissions through energy conservation policy and
an electronuclear program, both started in 1973. Since 1973, CO2 emissions have been reduced by 26% while
French GNP has grown 40%.  Currently, 90% of electricity production in France is from non-CO2 emitting
energy forms including 70% from nuclear energy and 20% from hydro energy.

        A policy scenario has been studied. It increases annual growth in energy efficiency from 1.0% in the
reference scenario to L5% and more importantly increases the share of nuclear, natural gas, and renewable
energy compared with those in the reference scenario.

        The rapid improvement in energy efficiency results from the strengthening of the national effort aimed
at saving energy based on regulations (mainly in the building sector), taxes (transportation  sector), and
information and incentives (research).
                                               77

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The Netherlands







       The Netherlands reference scenario contains a 58% growth in primary energy consumption resulting



ma 78% growth in CO2 emissions from 1985 to 2030. These results reflect an assumed average annual growth



in ODP of 22% during the period (136% cumulative) coinciding with the development of a less energy



intensive economy.  Energy efficiency improvements are expected to continue and reduce unit energy



consumption by 27% in 2030 from current levels.  Coal plays a much more dominant role in the future and



accounts for most of the increase in primary energy use.








       Options analyzed to reduce greenhouse wanning have the potential of slowing the growth of emissions



and even reducing emissions from current levels, but absolute reductions require either new energy supply and



end-use technologies or use of nuclear energy to supply a large share of electricity needs.  Half of the



reductions can be achieved through energy conservation, recycling, and changes in the transportation sector.



Further fuel switching in the electricity generation sector provides additional but modest  gains.  Further



utilization of new energy supply and end-use technologies can achieve reductions in CO2  emissions from



current levels.  Reliance on nuclear to provide a dominant share of electricity,  or the application of CO2



removal and storage technologies to fossil fuel generation facilities, are needed to meet a 20% reduction in



CO2 emissions by 2030.







Stabilization Strategies for 1995 - 2000







       The first set of response strategies are intended to stabilize emissions by 1995. They include changes



in the transportation sector, recycling, and emphases on energy conservation. Possible transportation options



include promoting  use  of bicycles  for short  distance and public transport for longer  distances.  Energy



efficiency of vehicles would improve an additional 25% by 2030 (representing a 50% improvement in total).



Efficiency standards for new dwelling and gas appliances are increased and compulsory standards for electric






                                              78

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appliances introduced.  Investment subsidies are increased for retrofitting existing building, combining heat

and power production, and utilizing wind energy.


Fuel Mix Strategies
-»

        The second set of response strategies explores the possibility of significant changes in the energy

supply mix used to generate electricity.  If nuclear power is not promoted, the share of natural gas for

electricity generation is expanded to 66% of energy used for electricity generation in 2030. If nuclear power

is allowed to play a major role, it represents 73% of energy used for electricity generation by 2030. If natural

gas is expanded, CO2 emissions are limited to levels 13% greater than 1990 levels while in the nuclear scenario

CO2 emissions are reduced 6% from 1990 levels. Costs of these reductions are uncertain are highly dependant

on future energy prices.


Other Technological Options


        The third set of response strategies include reduction of CO2 emissions by energy technology options

including alternative automotive fuels, high efficiency heat pumps, additional renewable energy, more efficient

electricity generation, and recycling of carbonaceous materials.  Examples of technologies assumed included

compressed natural gas (CNG), electricity, and bio-ethanol for automobiles; gas  engine heat pumps with

groundwater gain for apartments, offices, and greenhouses; off-shore wind energy, and use of molten carbonate

fuel cells for  use in combined heat and power production. These additional options would reduce CO2

emissions by 9% from 1990 levels if nuclear is not allowed and by 26% if nuclear is allowed.


        The last option evaluated involves  removal of CO2 and storage in depleted natural gas reservoirs.

Emphasis is placed on fossil fuels used in electricity production and when combined with the other options,
                                               79

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results in a 21% to 29% reduction in emissions by 2030 from 1990 levels.  The technical and economic



feasibility of this options is uncertain.
Norway
       The Norwegian government has set targets to stabilize Norwegian CO2 emissions at 1989 levels by



the year 2000. Response options aimed at achieving this goal include price increases, reinforcement in the



field of energy conservation, and development of alternative energy.








       The reference scenario assumes that no efforts are made to stabilize CO2 emissions. Real oil prices



increase slightly to 20 U.S. dollars per barrel in the year 2000 and energy use in Norway increases roughly 1%



annually through 2000, from 1.2 EJ in 1987 to 1.4 EJ in 2000.  CO2 emissions grow from 10 mt C to 12 mt



C, an increase of 20%.








       Energy taxes were identified as one of the major option for Norway, and were analyzed in detail. With



a goal of stabilization of CO2 emissions, increases in energy taxes that had the effect of increasing energy



prices by 75% over the levels in the reference scenario were estimated to be necessary.  The changes in the



tax regime include increasing indirect taxes on fossil fuels combined with reduction in taxation on wage



incomes and some increases of transfers.







       Effects of the tax increase on key macro-economic indicators are smalL The budget share for energy



is low in most sectors and increases in indirect taxes are compensated by reductions in wage income taxes.



Reductions in wage income taxes are assumed to lead to lower wage claims and reduced wage costs.  The



consumption of heating oil and transportation oils are reduced by 35% and 15-20%, respectively, compared



to the reference scenario.  Other benefits include reductions in emissions of SO2 by 20% and NOX by 15%.
                                               80

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 Switzerland



          /

        Among the various response options (scenarios) which have been examined, the lowest CO2 emissions


 would be achieved with the strongest energy efficiency policies. These are efficiency improvements, as well
•m

 as efforts to substitute fossil fuels by fuels with low- or no carbon-content (assuming some increase in nuclear


'capacity and renewable energy sources after the turn of the century.) These are being pursued by the Swiss


 government. This policy response could, more or less, result in a stabilization of CO2 emissions at 1985 levels


 until the year 2000 with a slight decrease thereafter (-7% between 1985 and 2025). This scenario shows what


 could reasonably be achieved with considerable additional efforts. It does not oblige the Federal Government,


 because of numerous uncertainties, including the outcome of public votes, in September 1990, on two popular


 initiatives directed against nuclear energy and on a government proposal to establish a more comprehensive


 legal basis for energy policy.





 United Kingdom





        The U.K.  Study  includes six baseline scenarios which reflect different assumptions about future


 economic growth and energy prices. The two central economic growth scenarios were  used in the  Country


 Study Base Case and to evaluate the potential impact of different technical options for reducing greenhouse


 gas emissions.





        In the reference scenario, economic growth averaged 2^3%  annually through 2020. Primary energy


 use grows from 9.0 EJ in 1985 to 15.4 EJ in 2020  representing a decrease in energy intensity of 21%.  CO2


 emissions grow somewhat more slowly than  primary energy from 158 Mt C in 1985 to emissions ranging from


 233 to 250 Mt C in 2020 depending on the  energy price assumptions.
                                               81

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Near Term Options







       The response options with the largest potential for reducing emissions in the near term fall into two



categories:  expanded use of natural gas and conservation and increased energy efficiency.  Use of high



efficiency combined-cycle gas turbines to displace coal and oil also  have a large impact in the near term.



Expansion  of combined-cycle gas turbine capacity to 58 gigawatts  in 2020 can yield reductions in CO2



emissions of 7.8 mt C to 35 mt C annually.  The expanded use of wind turbines and tidal power also have



significant potential for reducing CO2 emissions ranging from 11 mt C for wind turbines to 4.9 to 5.9 mt C



by 2020 for tidal barges.  Costs of these options depend heavily on the relative prices of coal, oil, and natural



gas.







       The potential saving from energy conservation and end-use efficiency improvements are high, maybe



as high as 60%, but historic experience suggests that a 20% reduction is a more reasonable expectation. In



2020, CO2 reductions of 12 mt C are possible from domestic uses of energy, most of which are cost effective



at the higher energy prices. In the commercial sector up to 4 mt C are possible, 2 to 3 mt C with cost savings.



Extensive development of combined heat and power systems can yield reductions of 11 to 15 mt C  Nine



different options to increase fuel efficiency of automobiles each yield improvements of 6% to 25% which can



lead to significant reductions in CO2 emissions from the transport sector which range from 54 to 58 mt C in



2020 in the reference scenario.







Long Term Options








       Of all of the options for alternative energy sources for electricity generation, the use of nuclear energy



has the largest impact An aggressive program to increase nuclear capacity to 55 gigawatts in 2020 can yield



annual reductions in CO2 emissions of 40 mt C to 69 mt C Under high energy prices, this option can be less



expensive than the  fossil energy options.






                                               82

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OTHER SELECTED OECD COUNTRIES



       In other selected OECD countries, Japan and Australia, energy use and CO2 emissions are expected

to rise rapidly due in large part to rapid economic growth.  Response options identified in the country studies
 »
could result in reducing the growth of emissions. Table 32 summarizes the expected future changes in energy

use and CC^ emissions from these countries.
                                           Table 32
                             Summary Results from Country Studies
                                    Other OECD Countries *
   Country

   Australia
   Canada
   Japan
   Country

   Australia
   Canada
   Japan
GDP Growthb

    3.1%
    16%
    3.5%
•Primary Energy*
 (exajoules)

Initial  —Forecast—
Year   Ref.c    PoLd

 3.4     53    n/a
10.2     16.1    n/a
18.7    28.1    262

•Primary Energy-
-annual growth-
Ref.    Pol.

12%   n/a
13%   n/a
1.9%    1.5%
-CO2 Emissions-
(million tons C)

Initial  —Forecast-
Year   Ref.   Pol.

 67     109    n/a
 114    175    107
 294    422    363

-CO2 Emissions-
•annual growth-
Ret    Pol.

14%    n/a
12%   -0.3%
1.7%    1.0%
  * Data for each country study are provided for initial year and forecast year, initial years and forecast
  years (initiaUorecast) are (1985,2005) for Australia, (1985,2005) for Canada, and (1988,2010) for
  Japan.

  b Average annual rate of growth

  c Ref. - Reference scenario

  d PoL - After implementation of policies
                                              83

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Australia







        Energy use and CO2 emissions are expected to grow substantially within the next 15 years.  Policies



and tfchnfrnl options have been |'ri*ntifv'*1 with the technical potential of reducing the growth in emissions



although the combined effect of the policies as well as the total costs are uncertain.







        Absent policies to reduce greenhouse gas emissions, both primary energy and CO2 emissions are



expected to grow at an average annual rate of 22% and 2.4% respectively.  This growth is closely tied to



relatively high near term economic growth with averages 3.0% in the same time period. In the  time horizon,



the share of primary energy provided by different energy sources remains relatively constant







        The options with the largest potential to reduce emissions in the short to medium term include



increased use of natural gas for domestic space heating and cooking; increased use of domestic solar hot water



systems; increased energy efficiency in refrigerators, freezers, other domestic appliances; retrofitting  and



improved design of residential buildings; improved energy intensity in industry, and high steam boilers.



Combined these options represent a maximum annual reduction of 11.6 mt C in the short and  medium term



with current emissions at 67  mt C  Large reductions  in the  long term will require major industrial



restructuring, infrastructure modification, changes to living practices, and sustained long  term research and



development.







        Some of the options are expected to provide benefits. Some result in cost reductions including some



of the efficiency  measures and  use of photovoltaics in remote locations.  Solar water heaters are currently



competitive  with electric water heaters for new  houses or where existing systems need replacement



Development of coal bed methane provides an alternative fuel with lower CO2 emission coefficients, reduces



emissions of CH4 to the atmosphere, and improves safety in the coal mines.
                                               84

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       The reference scenario for Canada has energy demand growing at an average annual rate of 23% from



1965 to 2005 and 2.0% from 2005 to 2020. Energy intensity decreases O2% annually on average through 2020,



less than the CL8% realized between 1962 and 1985. Hydrocarbon fuels, primarily natural gas and petroleum



products remain the most important source of primary energy.  Hydro and nuclear energy are the fastest



growing energy source through 2020 with an average annual rate of growth of 2.9%.  CO2 emissions increase



from 114 Mt C in 1985 to 223 mt C in 2020, an average annual rate of growth of 1.9%.








       For the period 1985 to 2005, around 140 measures pertaining to energy end-use and electricity



generation were evaluated. These measures include conservation and energy efficiency measures, fuel switching



options, and lifestyle changes such as increased use of public transport instead of private cars. Some of these



options are technically feasible but not expected to be utilized through market forces. Some are technically



feasible and economic but not expected to be utilized at its maximum potential due to market distortions.
        The economic options reduce growth in CO2 emissions in the time period 1985 to 2005 by 48 Mt C,



a reduction of 75%, leaving emissions of 144 Mt C in 2005.  If all technical options were utilized, growth in



CO2 emissions could be reduced 69 Mt C in total, a reduction of 3% from 1985 levels.  Of the economic



options, 41% of the impact is from  options addressing end-use consumption of fossil fuels, 52% is from



options addressing end-use consumption of electricity, and the rest is from fuel substitution and the electricity



generation sector. Of all of the technically feasible options, 57% of the impact is from options addressing end-



use consumption of fossil fuels, 38%  is  from options addressing end-use consumption of electricity, and the



rest is from fuel substitution and electricity generation.
                                               85

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       In the longer term, energy efficiency, alternative fuels, and lifestyle change options in the automotive
sector  could  contribute to significantly to any desired  CO2 reduction.  However, without substantial
technological developments, the potential for further efficiency gains likely will be limited. As lifestyle changes
may be difficult to implement, the use of alternative fuels could prove to be. one of the most feasible of the
long-term options to reduce emissions in the transportation sector.  These alternative fuels include propane,
compressed natural gas, and methanol and ethanol from biomass.

       Other options include demand management techniques similar to the options proposed for 1985 to
2005, increased inter-regional transfers of hydro power from regions with surplus hydro capacity, use of nuclear
energy, use of Integrated Gasification Combined Cycles combined with fuel cells, and removal of CO2
emissions from smokestacks of power plants.
Japan
        Primary energy consumption in the absence of policies to reduce CO2 emissions is expected to increase
significantly along with CO2 emissions.  Policies have some impact on this growth in emissions but do not
stabilize or reduce emissions.

        Growth in primary energy use is explained in large pan by expected rapid growth in the economy.
Real average annual GNP growth rates are expected to be 4.0% from 1988 to 2000 and to decline to 3.0%
through 2010.  Primary energy grows from 18.6 EJ to 28.1 EJ by 2010 and reaching  37.1 EJ by 2030
representing an average annual growth rate of 1.9% through 2010 and 1.4% after 2010. While use of all forms
of energy increases, the share of primary energy provided by nuclear and natural gas increase throughout the
time period while the shares provided by coal and oil decrease. CO2 emissions increase at a slightly lower rate,
from 294 million tons of C (mt C) in 1988 to 422 mt C in 2010 and 493 mt C in 2030, due primarily to
increases in nuclear and new energy sources.

                                               86

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        Policies reduce the growth of CO2 emissions by 45%.  CO2 emissions grow to 363 mt C by 2010



representing an average annual rate of growth of CO2 emissions of less than 1%. This is achieved by reducing



primary energy use by 1.9 EJ (7%) and shifting away from oil and coal to natural gas, nuclear energy, and new



energy sources. The share of primary energy in 2010 provided by coal and oil decline from an estimate of 71%



to 63%.







Analysis by the HA Secretariat








        An EEA analysis for the OECD region evaluated the  impact of a carbon tax on all fossil fuels



equivalent to USS 50 per tonne coal equivalent and of a switch to 70% nuclear electricity generation by 2005.



 It is not suggested that the later is feasible.  The effect of a combination of both these  policies was also



examined.








        There are many uncertainties attached to such analyses but in broad terms the carbon tax might reduce



OECD emissions by about 12% in 2005 compared to the reference scenario.  The nuclear policy would have



a greater effect, perhaps a 19% reduction from the reference scenario in 2005.  A combination of both might



achieve a 24% reduction compared to the base case. The effect on atmospheric CO2 concentrations by 2050,



on optimistic assumptions about accumulation would be of the order of a few percent.







USSR AND EASTERN EUROPE







        Energy use and CO2 emissions are projected to grow considerably in the USSR and Eastern Europe



over the next 35 years. A policy of perestroifca aimed at restructuring the economy and improving energy



efficiency in the USSR can have a significant impact While increasing economic growth, this policy shift and



similar actions in Eastern Europe could lead to reduction in emissions.
                                               87

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       The USSR and Eastern Europe accounts for one quarter of global energy-related CO2 emissions,
about 1360 mt C in 1985 with the Soviet Union accounting for 70% of this total, 899 mt C The Soviet and
Eastern European nations rank among the most energy intensive in the world, around 80% more intensive
than Western European countries. In Poland, energy consumption per capita is 85% greater than that of the
Federal Republic of Germany but income per capita is only one third as large.

       Economic growth in this region is expected to drive demand for amenities towards Western European
levels as incomes approach those of Western Europe.  Improvements in energy intensity will be realized as
demand for less energy-intensive consumer goods increases with income while demand for basic  materials
declines per unit of economic output  In the reference case, economic growth is expected to be constrained
by limitations on resources and capital necessary for expanding energy production. Aggressive implementation
of policies to promote structural change would allow more rapid economic growth with the same or reduced
energy requirements.

       In  the reference case, energy demand in the region increases  50%  to 100%  by 2025 with  CO2
emissions growing accordingly.  Policies aimed at reducing this growth vary by country but share two major
themes: structural change and energy efficiency. Structural change would promote continued economic growth
while reducing growth in CO2 emissions. Additional measures, primarily energy efficiency and fuel switching,
have been identified which can be incorporated at little or no cost  In combination with structural change,
these measures  can reduce  emissions below current levels in the case studies. In each  of the individual
countries, the discussion presents results of the reference scenario, energy implications of structural change,
and results of additional policies. Table 33 illustrates the results of the country studies  for the  reference
scenarios and combined  impact of all of the policies.
                                               88

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   Country

   USSR
   Poland
   Hungary
                                           Table 33
                             Summary Results from Country Studies
                                   USSR and Eastern Europe
Income/Capita —Primary Energy—     —CO2 Emissions—
  (index)        (exajoules)           (million tons C)
                      Ret*   Pol*          Ret    PoL
       2025   1985    2025   2025   1985   2025    2025
100
100
100
351
296
221
54.4
53
U
117.2
11.4
L9
59.9
5.7
12
899
119
21
1752
255
30
773
100
18
   Country
                      -Primary Energy-
                      —annual growth*
                      Ref.    PoL
                      2025   2025
-CO2 Emissions-
-annual growth-
Ret    PoL
2025   2025
USSR
Poland
Hungary
1.9% 0.2%
1.9% 0.2%
1.1% 42%
1.7% -0.6%
1.9% -0.4%
0.9% -0.5%
   1 Ret - Reference scenario

   b PoL - After implementation of policies
USSR
       The Soviet Union accounts for 5% of global population and 17% of global CO2 emissions. Their

energy supply mix is relatively low in carbon due primarily to extensive use of abundant natural gas, which

supplies 40% of primary energy demand. Future energy use, in the absence of policies to reduce emissions

of greenhouse gases, depends heavily on economic growth and the success of efforts to restructure the Soviet

economy. Continuation of historic energy use patterns would be expected to retard economic growth, because

of the amount of capital and other resources needed to maintain and increase energy production.
                                              89

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       Current energy use in the Soviet Union is very different from energy use in Western Europe and the



U.S. Industry is very material intensive; the Soviet Union produces twice as much steel as does the U.S. where



incomes are two to four times as great  Living space averages 15 square meters per capita compared to 25



to 55 square meters in Canada, France, and the U.S.  Ownership of automobiles is low, averaging 1 car per



29 persons. Potential for major reductions in energy use through cost effective measures could reduce current



energy use by 25%.








Reference Scenario







       The reference scenario assumes that the Soviet economy continues to evolve in a manner consistent



with historic trends, that progress in implementing fundamental structural change is very slow, and economic



growth is 3.2% per year for 1985 to 2020.  Although consistent with growth rates expected for Western



Europe, this rate of growth is lower than rates expected if structural change in the economy is aggressively



pursued.  The slower growth is due primarily to constraints on capital and other resources needed to increase



energy production. In the reference scenario, this economic growth yields annual growth in primary energy



demand averaging 1.9% (54 EJ in 1985 to 117 EJ in 2025) and annual growth in CO2 emissions of 1.7% (899



mt C in 1985 to 1752 mt C in 2020).  The share of energy provided by coal and natural gas grows modestly



(4%) with the share provided by oil declining 17% by 2025 and nuclear and renewable energy combined



increasing 10%.







Policy  of Perestroifca and Structural Change








       Rapid progress towards structural change would yield a number of benefits to the  economy and



environment. If Soviet capital investments are shifted from energy intensive heavy industry to consumer goods



and services, the growth in energy use will slow and incomes expand.  In this scenario, Soviet income is



projected to be around 65% higher by 2020, resulting in improvements in standards of living that include 25%






                                               90

-------
more living space and 20% more automobiles. Structural change would also automatically reduce overall

energy intensity, resulting in lower energy use and annual CO2 emission reductions of 300 mt C by 2025 (a

reduction of 17% from estimated levels without structural change).


Additional Policies
«

        Aggressive pursuit of additional energy efficiency improvements combined with structural reform could

reduce growth in CO; emissions completely and leave Soviet C(>2 emissions relatively constant at 960 mt C

A specific analysis of the cost of energy saved verses the cost of energy supply estimated the existing potential

for energy saving in 2005 to be roughly 25% of current Soviet energy demand. Pursuit of these measures

through 2025 would yield primary energy use that is slightly lower than estimated 1990 levels.


        Further CO2 emission reductions can be achieved through extensive development of nuclear and

renewable energy supplies. When combined with structural change and aggressive energy efficiency policies,

CO2  reductions to 20% below current levels  are  projected  if nuclear and renewable energy sources are

promoted.  However, the  nuclear and renewable options are much less cost effective than energy efficiency

measures and would reduce annual growth in income by 0.5%.
Poland
        Poland is undergoing profound economic and environmental change.  It is already in the process of

shifting from central planning to a market system to allocate economic resources, and attempting at the same

time to conserve and protect environmental resources. The high energy intensity of the Polish economy,

combined with heavy reliance on coal cause much of Poland's serious air and water pollution problems. The

high energy intensity is partly due to pervasive energy subsidies that discount the price of energy 25% to 80%

below supply costs.

                                               91

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       Almost 80% of Poland's primary energy mix is derived from coal and lignite. However, coal resources



are being depleted and the average heating value of coal used domestically has fallen from 24.1 gigajoules



(GJ)/ton in 1978 to 215 GJ recently.  Costs of producing coal have been increasing, thereby presenting the



nation with prospects of energy shortages and permanently rising energy costs.








       Future energy use and opportunities to reduce energy use  reflect current energy use patterns. In



Poland, 80% of industrial sector energy use is consumed by four sectors: iron and steel (31%), chemicals



(22%), food processing (16%), and building materials and ceramics (12%). Living space averages 16 square



meters per capita, half that of France.  Automobile ownership is low, similar to rates in the Soviet Union.








       The current energy saving potential is estimated to be 40% of current energy use. Opportunities to



improve energy efficiency in steel production include adoptions of continuous casting, continuous hot rolling



and finishing lines, replacement of open hearth furnaces by the basic oxygen furnaces, and proper use of



electric arc furnaces. In building materials production, opportunities include replacing wet process cement



kilns with semi-dry and dry processes, broader use of enormous supplies of ash from power stations as a



cement additive, full recycling of glass-scrap, and better management of direct fired processes in ceramics



manufacture.  In food processing, potentials  include switching from coal boilers to oil and gas.  Major



improvements can be realized by improving the thermal performance of buildings.







Reference Scenario








       Primary energy use and CO2 emissions would increase rapidly if programs to encourage structural



change are implemented slowly and energy efficiency and fuel switching are not given high governmental



priority.  Driven by economic growth  in the time period 198S to 2025 averaging 25% to 3.0% annually,



primary energy use in the reference scenario increases from 53 EJ to 11.4 EJ with growth in the building and



transportation sectors slightly faster than in the industrial sector. Primary use of oil grows faster than coal






                                                92

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or oil, increasing its share of primary energy use from 21% in 1985 to 24% in 2025. CO2 emissions grow from

119 mt C in 1985 to 255 mt C in 2025.



Structural Change


•
        Structural changes in the economy would yield major reductions in energy intensity at net costs that

are negative or zero. These changes include new energy price mechanisms that stimulate technical energy

efficiency improvements and rffrirfnate some unnecessary segments of heavy, energy intensive, industry. It also

includes a structural shift towards less material intensive sectors.  Natural gas can be expected to play a larger

role due to price increases in coal resulting from elimination of price subsidies. This scenario estimates that

growth in CO2 emissions would be reduced by over 75%, leaving CO2 emissions in 2025 at 150 mt C .



Additional Policies



        Additional steps, primarily energy efficiency policies, can reduce growth in CO2 emissions at negative

or near zero costs,  leaving emission levels virtually constant as 120 mt C  CO2 emission levels by 2025 can

be reduced from current levels by 20% through response measures that include major shifts in fossil energy

supply through interfuel substitution and major reductions in primary energy demand due to higher energy

quality and energy conservation.  Nuclear power was not considered due to high costs, long lead times, effects

on external debt, and public opposition.  Imports of natural gas need to increase by 1.7 EJ in 2025 and is used

for electricity generation and direct  fuel requirements.
Hungary
       Unlike Poland and the Soviet Union, Hungary imports half of its energy supply and energy prices are

close to market levels. But like Poland and the Soviet Union, energy intensity is high, creating a number of


                                               93

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environmental problems.  Like Poland, the Hungarian government has recently announced its intention to
move toward greater market allocation of resources but the economic reforms needed to implement this policy
goal are not yet in place.

       In die reference scenario, progress toward structural change is assumed to be slow, resulting in growth
in primary energy demand by 2025 of 50% with CO2 emissions growing from 21 mt C to 30 mt C Production
of steel and non-ferrous metals remain constant while slight increases are seen  in the chemical, stone, clay,
and glass sector and the pulp and paper sector.  Car and light truck fuel economies improve by 25%.  Oil,
coal, and electricity prices increase at annual rates of 2%, 1.5%, and 1.2%.  Imports of electricity from Soviet
nuclear power plants increase.

       Assuming a major shift in the Hungarian economy from raw materials processing industries to
manufacturing can reduce growth in CO2 emissions by 2025 from 50% to 33%. Half of the current Hungarian
heavy industry is shut down by 2025 and its value added is replaced by manufacturing, a shift that is justified
by the observation that Hungary's economy is weighted far too heavily by materials intensive industries.  The
reduction in emissions is due in large part to the electricity intensity of manufacturing being one order of
magnitude less than that of heavy industry. The reduction in the CO2 emissions is constrained by the large
size of the agricultural and services sector in Hungary (compared  to Poland or the Soviet Union) and by
current high energy prices.

       Greater reductions in CO2 emissions could be achieved through energy efficiency policies. Additional
efficiency gains averaging 1.5% annually could be possible at no extra cost to the economy and combined with
structural change yield reductions in CO2 emissions of 20% from current levels by 2025.
                                               94

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SELECTED DEVELOPING COUNTRIES



        In the country studies for developing countries, population and economic growth lead to a substantial

increase of greenhouse gas emissions despite significant improvements in efficiency of energy use. The share

of CO2 emissions from Asia (including China), Africa, Latin America, and the Middle East increases from
%
slightly over one-fourth of global total in 1985 to nearly one-half the total by 2025.  Response options are

mainly aimed at curbing emissions through improved efficiency of energy use and through the use of less-

carbon-intensive fuels.  In some countries response options include replacing energy-intensive activities with

alternatives while maintaining the same level of services and reducing emissions.  Table 34 summarizes the

results of the studies for these countries.



Changes in Structure



        Long-term economic growth expected in the developing countries will naturally alter patterns of

manufacturing and service industries and within manufacturing, of energy intensive and other industries. In

the reference scenarios, industry becomes less energy-intensive as production of other goods assumes a larger

share relative to basic materials. This occurs despite an increase in the production and consumption per capita

of steel, aluminum, paper, cement and other energy-intensive materials. Prices of these commodities do not

increase as rapidly and their share of value added declines by 2025. The consequent structure in the reference

scenario is assumed to remain unchanged in the response options scenario.

                                                                                           *•


        In the reference scenario, the mix of vehicles changes. For example, the saturation of motorcycles

increases in Brazil  For some countries,  response options  further change this mix of vehicles.  Policies

encourage substitutions of buses and train subway systems for personal vehicles. This may be achieved through

restricting the licenses for the manufacture and import of cars and motorcycles and higher registration and

sales taxes on these vehicles while at the same time encouraging joint ventures for the manufacture of buses.


                                               95

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  Country

  Brazil
  China
  India
  Indonesia
  Rep. of Korea
  Mexico
  Venezuela
   Country

   Brazil
   China
   India
   Indonesia
   Rep. of Korea
   Mexico
   Venezuela
                                           Table 34
                             Summary Results from Country Studies
                                     Developing Countries
GDP Growth
 (index)

1985   2025
 100
 100
 100
 100
 100
 100
 100
358
877
669
332
997
396
547
              —Primary Energy—
                (exajoules)
                     Ret*   PoLb
              1985   2025   2025
—CC*2 Emissions—
 (million tons C)
       Ret   PoL
1985   2025   2025
6.0
29.0
8.1
L8
2.4
45
1.7
152
86.0
36.6
93
102
12.0
7.1
9.6
732
29.0
7.7
7.5
9.1
65
41
503
98
22
44
68
23
129
1719
620
141
166
199
67
63
1360
480
111
103
133
52
                             -Primary Energy-
                             -annual growth-
                                    Pol.
                                           —CCs Emissions*
                                           —annual growth-
                                           Ref.    Pol.
                             2.7%   1.2%
                             2J8%   23%
                             3.8%   32%
                             4.2%   3.7%
                             3.7%   2.9%
                             15%   1.8%
                             3.6%   3.4%
                                           2.9%
                                           3.0%
                                           4.0%
                                           4.4%
                                           3.4%
                                           25%
                                           2.5%
               1.1%
               2.4%
               3.4%
               3.8%
               2.2%
               L5%
               1.9%
  " Ret - Reference scenario

  b PoL • After implementation of policies
The Republic of Korea has successfully pursued some of these policies in the past to restrain the ownership

of motor vehicles.   Hong  Kong and Singapore, two city states, have  shown  how through the use of

disincentives such as increases in various car related taxes in combination with alternative transport modes,

ownership of vehicles may be controlled.
                                              96

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 Reducing Energy Consumption



        Today, the developing countries lack the extensive stock of factories, appliances, and vehicles that are

 the focus of end-use efficiency policies in the developed market economies.  However, the economies of the

 developing countries are expected to grow at a pace Caster than that for the developed economies.  This has
«•
 two implications.   First, the vintage of capital stock  in 2025 will be much more recent  in the former

 economies.  For China and India, over 85% of the capital stock is new in the year 2025. Second, the fact that

 much of the stock wfll be new will provide a larger scope for penetration of more efficient technologies. This

 suggests that large improvements  in  efficiency may be  possible  in much of  the  developing world.

 Improvements in efficiency in the reference scenarios have significant impacts on energy demand in the future.



        Table 35 shows the improvements in unit energy consumption that are assumed in the scenarios for

 some of the end-uses. The table shows the improvements assumed for both the reference scenarios and after

 application  of policies, both compared to unit energy consumption of the devices in 1985. Average unit energy

 consumption for cars today, for example, tend to be lower for Asian countries than for Latin American ones

 due in pan to size of the cars. Thus, the  potential for reductions in unit energy consumption is larger in Latin

 America than in Asia because larger reductions in size can be achieved. Also, Caster economic development,

 particularly in Asia, is expected to create a desire for added comfort which can lead to acquisition  of larger

 cars and refrigerators. This can offset part of the gains from more efficient end use technologies.



        Laboratory tests show that the efficiency of cook stoves can be improved by wide margins. However,

 experience  thus far suggests that such  improvements  are difficult to achieve in practice.   The reference

 scenarios assume small improvements in efficiency in most countries.  Efficiency figures are higher  in China

 where biogas use is more prominent and a switch to this fuel is easier to accomplish.  Promoting the use of

 more efficient stoves will require very country-specific and innovative policies.
                                               97

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                                           Table 35
                                          Changes in
                                    Unit Energy Consumption
                                    for Developing Countries

                          -Biomass Cooking-  —Refrigerators—
                             (GJ/year)*   (kWhyyear)*            (liters/100 km)a
                        1985   Refer6  Low6   1985   Refer   Low   1985   Refer   Low
Qtfaa
India
Indonesia
Rep. of Korea
Brazil
Mexico
Venezuela
42.0
306
1&5
12.6
53.0

33.5
25.0
27.6
13.2
103
53.0

26.8
22.0
24.5
9.9
103
42.4

2ai
— Tracks —
(liters/100 km)
1985 Refer Low
China
India
Indonesia
Rep. of Korea
Brazil
Mexico
Venezuela
3.10*
24
25
22
23

50
1.71d
19
18
16
18

25
L55-
16
13
14
9

15
400
300

389
666

900
348
200

622
1000

540
348
150

467
400
19.6
540
	 Steel —
(GJAon)
1985 Refer
39
39

23
26

30
21
33

17
24

26
Low
19
28

14
13

24
102
9.4
9.4
102
13.1
6.7
23.5
62
62
62
9.4
73
5.5
7.1
52
52
52
73
53

5.9
— Cement —
(GJAon)
1985 Refer
4.8
5.6

3.8
4.1

5.7
2.6
5.0

2.9
3.7
•
4.6
Low
2.4
4.2

2J
2.1

4.1
  1 Units of measure are: GJ - gigajoules;  kWh • kilowatt hours; km • kilometers

  b Refer • Reference Scenario in 2025

  c Low - After implementation of policies in 2025

  d Units for trucks in China are in megajoules per ton-kilometer.
       The unit energy consumption of energy-intensive industries in the developing countries is higher than

that in the developed world by wide margins. The manufacture of steel requires 39 GJAon of output in China

and India compared to about 18 to 20 in Japan and the U.S. The  manufacture of cement requires about 4.8

and 5.6 GJAon of output in China and India but only 3 in the developed world.  Comparable differences in

unit energy consumption exist for the other energy intensive basic industries.


                                               98

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Decrease Conversion Losses







        Conversion losses in generating electricity tend to be higher in the developing countries, since the



plant and equipment is often outmoded, spare parts are scarce, power plants have a mix of imported and



incompatible equipment, fuel quality is lower then desired, etc. Substantial efficiency improvements already



occur in the reference scenarios, in part because of the use of combined cycle plants using natural gas.



Additional, though small, efficiency improvements can be realized with policies by mitigating the problems



listed above.








        A major element of the losses occur in transmission and distribution of electricity. Among the study



countries, India and Indonesia indicate large losses while the others have relatively more efficient systems.



Losses in India  are 26%, including own plant use, and are even higher reaching 45% in some African



countries. Much of this loss is due to non-technical reasons, pilferage and theft of electricity are common.



Policies examined in the case studies reduce these losses but not appreciably.







Shift to Less-Carbon-Intensive Fuels








        A shift away from carbon-intensive fuels is a major potential strategy to reduce CO2 emissions. The



extent to which such strategy can be adopted by a country depends on its reliance on domestic fuels,  its



domestic energy resources, and its ability to import other fuels.  China and India which rely largely on coal



for energy have difficulty implementing policies to shift to other fuels.  Some other resources, such as hydro



and nuclear  are utilized to the man'm^m extent considered feasible in the reference scenarios by 2025.








        On the other hand, Brazil and the Republic of Korea are able to exploit other resources.  The strategy



in Brazil calls for judicious development of more hydro resources while that in the Republic of Korea call for



importing more natural gas to substitute for imported coal and also a strong utilization of solar energy for






                                               99

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electricity generation.  Solar capacity in Korea provides 13% of the power after imposing policies compared

to 5% in the reference scenario.
Brazil
        In the reference scenario, primary energy use grows from 6.0 EJ in 1985 to 15.2 EJ in 2025, with CO2

emissions growing from 41 mt C to 129 mt C The study analyzed the potential to reduce growth in primary

energy by 61%, resulting in energy use of 9.6 EJ in 2025, and to reduce growth in CO2 emissions by 75% to

63 mt C in 2025.4 Specifically, ener& efficiency and conservation are estimated to decraxe po^

demand by 65%.  Technological efficiency is assumed to reach the level of the best currently available in the

world market. Increasing the size of appliances offsets part of the efficiency improvement in households.

Natural gas use is expected to expand to heat production processes in all the sectors.  Development of natural

gas grids in larger cities allows the substitution of gas for electricity and LPG in water heating and cooking.

Use of biomass (Le., alcohol) for transportation is expected to increase beyond current government plans.

Growth in demand for electricity is  estimated to be reduced by 60%; combined with increases in efficiency of

electricity generation, this results in a 58% decrease in the growth of energy used for electricity generation,

most of which is in fossil fuel use. Hydropower is estimated to provide 85% of the generation, an increase

from 50% compared to the reference scenario. Even at this higher share of total generation, the total amount

of hydropower required was less than in the reference scenario.
    4 The IPCC study participants did not evaluate specific policies, but analyzed the potential to achieve
reductions in emissions. The specific policies that would need to be adopted to achieve the objectives
evaluated by the IPCC require further analysis.

                                               100

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China
        In the reference scenario, primary energy use increases from 29 EJ in 1985 to 86 EJ in 2025, with CO2



emissions increasing from 503 mt C to 1,719 mt C daring this same period.  The policy objectives reduce the



growth in primary energy use by 22%, resulting in energy use of 732 EJ in 2025, and reduce the growth in



CO2 emissions by 30%, resulting in emissions of 1^60 mt C in 2025. Policies in China'are aimed at reducing



emissions from energy use, including improved unit energy consumption and fuel switching.  Reductions in the



growth in coal use are greater than total reductions in primary energy use and occur in the industrial sector,



for electricity generation, and for synfuels production. These reductions in coal use are partially offset by



increases in oil imports, nuclear energy, and hydro energy.
India
        In the reference scenario, primary energy use increases from 8.1 EJ in 1985 to 36.6 EJ in 2025, with



CO2 emissions increasing from 98 mt C to 620 mt C during this period. The policy objectives reduce the growth



in primary energy use by 27%, resulting in energy use of 29.0 EJ in 2025, and also reduce the growth in CO2



emissions by 27%, resulting in emissions of 480 mt C in 2025.  Key policy objectives include improvements in



unit energy consumption and fuel switching.  Additional improvements  are assumed to be possible in  the



industrial sector through policies that  address some of the historical factors that may have constrained



efficiency improvements, including government ownership of all large infrastructure industries, the higher



energy-consuming characteristics of  imported technology, and fundamental characteristics of inputs (e.g.,



reliance on iron ore rather than scrap steel and the poorer-quality coals that are often utilized). Additional



improvements are assumed to be possible through programs to promote the use of more efficient stoves in



urban areas, which would then spread to rural areas. Decreases in demand for electricity would reduce growth



in energy use for electricity generation by 22%, mostly through reductions in coal-fired generation.  Natural



gas is used more extensively.






                                               101

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Indonesia



        In the reference scenario, primary energy increased from 1.8 EJ in 1985 to 93 EJ in 2025, which

increased CO2 emissions from 22 mt C in 1985 to 141 mt C in 2025. In the policy case, policies ore aimed at

reducing emissioris and include improved unit energy consumption and fu^           Growth in primary energy

use by 2025 is assumed to be reduced 21% and growth in CO2 emissions by 25%. Half of the reductions in

energy use is in the transportation sector and a quarter is in the industrial sector. Growth in coal and oil use

is reduced 57% and 33%, respectively, while natural gas is used more extensively.



Republic of Korea


                                                                                        •
        In the reference scenario, GDP grows at an average annual rate of 5.9% from 1985 to 2025 with

primary energy growing at an annual rate of 19% in the same period, from 2.4 EJ in 1985 to 10.2 EJ in 2025.

CO2 emissions grow from 43 mt C hi 1985 to 103 mt C in 2025.  Rates of growth in final energy use are

highest  in the transportation sector (increasing from 03 EJ in 1985 to  23 EJ in 2025) and lowest in the

residential sector (increasing from  0.6 EJ in 1985 to LO EJ in 2025).  The unit energy  consumption for

refrigerators would increase because the average size is projected to double by 2025 to 20 cubic feet and

refrigerators are used throughout the year instead of eight months as they are used today.  Car sizes also

increase in the  Republic of Korea, but added comfort is  offset by higher efficiency engines which  lead to

reduced unit energy consumption.  Use of natural gas and nuclear energy grow fastest  with natural gas

increasing from 0.003 EJ in 1985 to 13 EJ in 2025 and nuclear energy increasing from 0.2  EJ in 1985 to 1.4

EJ in 2025.



        Policies have a larger impact on growth of energy use and emissions than in other Asian countries,

reducing growth in primary energy by 35% and growth in CO2 emissions by 52%. Reductions in the industrial

and transportation sector account for 30% and 31% of the total reductions in primary energy use with energy


                                               102

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use for electricity generation accounting for most of the balance. Use of coal is reduced below 1985 levels and



use of natural gas and hydro are increased.
Mexico
        In the reference scenario, primary energy increases from 45 EJ in 1985 to 110 EJ in 2025; CO2



emissions increased from 68 mt C in 1985 to 199 mt C in 2025. The study identified policies that would



reduce growth in primary energy use by 39% and growth in CO2 emissions by 50%. Most of the reductions




were estimated to occur in the residential sector, where growth in final energy use was reduced by 80%, primarily
     \


through the diffusion of efficient lighting and solar water heaters, and in the transportation sector, where



reductions below 1985 levels were assumed to occur. Energy use in the industrial sector is affected very little.



Hydro energy, which grows from 0.2 EJ to 0.5 EJ in the reference scenario, is used more extensively, growing



to 1.0 EJ in 2025.  Increases  in coal use are reduced by 71%, and the use of natural gas increases by 0.2 EJ



in 2025 compared with the reference scenario.








Venezuela








        In the reference scenario, GDP grows at an average annual growth rate of 43% for 1985 to 2025 with



primary energy growing at an annual rate of 3.6% in the same time period. CO2 emissions grow from 25 mt



C in 1985 to 67 mt C in  2025.  Growth in energy demand is lowest in the transportation sector and highest



in the services and industrial sectors.  Hydro energy grows at the fastest rate, increase its share of primary



energy from 16%  in 1985 to 37% in 2025. Use of biomass declines and oil's share of primary energy use



decreases from 40% in 1985 to 19% in 2025.








        Policies reduce growth in primary energy by only 10% but reduce growth in CO2 emissions by 36%.



Higher reductions in CO2 emissions are achieved by expanding use of hydro energy to 45% of primary energy






                                               103

-------
in 2025 and reducing the use of oil by roughly equal amounts in the industrial sector, transportation sector,



and for electricity generation.
                                                 104

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                                        REFERENCES                                *

Bennett, L.L, F. Niehaus, WD. Guthrie, and T. Muller.  1989. Electricity Production and Carbon Dioxide:
Nuclear Power in Perspective. Paper presented to the IPCC Response Strategies Working Group, Sub-Group
on Energy and Industry. December 1. 15+ pp.

Boonekamp, P.G.M, T. Kram, P.A. Okken, MJtouw, and DM. Tiemersma.  1989.  Baseline and CO2-
Response Scenarios for the Netherlands.  Draft Report by the Energy Study Center, Netherlands Energy
Research Foundation. December.
•
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                                             107

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