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Coal cleaning:. A viable strategy for reduced carbon emissions and improved environment in China?. Cooperation between National Bureau of Statistics of China and Statistics Norway 1998-2002 Methods for environmental accounting Analytical tools, energy-environmental-economic analysis
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Coal cleaning: A viable strategy for reduced carbon emissions and improved environment in China?
Cooperation between National Bureau of Statistics of China and Statistics Norway 1998-2002 • Methods for environmental accounting • Analytical tools, energy-environmental-economic analysis • NORAD funded
3E-analysis • General equilibrium model (CGE) with emphasis on energy use and emissions to air • Coal cleaning – measure to reduce CO2-emissions and local pollutants (WB, Govt) • Mechanical coal washing
Pilot study of coal cleaning • Two coal varieties in the CGE – raw coal and washed coal • Users may fairly easily switch • Input of thermal energy per unit produced kept constant • Incentives for switch: cost per unit thermal energy
Coal washing • Particulate matter washed out • Less carbon and PM emissions per unit thermal energy
More heat value per tonne means lower transportation costs Coal transportation about 40 percent of transportation capacity. Saving transportation
CDM-project • Capital allocated to coal cleaning as part of a CDM project • Cleaned coal twice as costly as raw coal • Coal cleaning unprofitable at project level –acceptable as CDM project
Increase in total energy use 2.5 % • Increase in total coal use 10 % • Higher economic growth 0.2 % • Reduced particle emissions 2 %
At project level • users switch to cleaned coal, hence more raw coal is available to other users –at a lower price • less transportation is needed, hence more T-services are available to other users – at a lower price.
CDM and the leakage problem • Leakage – an unanticipated CO2-emission in a CDM project • The Kyoto process: much less focus on leakage in Energy related projects than in Land use change-projects.
Böhringer et al. (2003) • Simulate CDM project in India – inproved energy efficiency incoal based electricity production • CGE model including host (India) and purchasers of ER (Germany) • Result: 56 percent of credited carbon reductions are lost in indirect market effects.
Leakage in CDM energy projects are probably huge Leakage in all CDM projects should be considered more closely Tax schemes should follow the project approach Leakage effects
Interim measures for management of CDM June 2004 Requires project developer to share the benefits from CER-transfers with the govt. Only projects with 50% pluss Chinese ownership China and CDM?