A case study on project-level CO2 mitigation costs in industrialised countries: the Climate Cent Foundation in Switzerland
AbstractThis paper analyses CO2 emissions reduction costs based on project data from the Climate Cent Foundation (CCF), a climate policy instrument in Switzerland. Four conclusions are drawn. First, for the projects investigated, the CCF on average pays €63/ton. Due to the Kyoto Protocol, the CCF buys reductions only until 2012. This cut-off increases reported per ton reduction costs, as the additional lifetime project costs are set in relation to reductions only until 2012, rather than to reductions realised over the whole lifetime. Lifetime reduction costs are €45/t. Second, correlation between CCF's payments and lifetime reduction costs per ton is low. Projects with low per ton reduction costs should thus be identified based on lifetime per ton reduction costs. Third, the wide range of project costs per ton observed casts doubts on the widely used identification of the merit order of reduction measures based on average per ton costs for technology types. Finally, the CCF covers only a fraction of additional reduction costs. Decisions to take reduction efforts thus depend on additional, non-observable and/or non-economic motives. Any generalisation of results has to consider that this analysis is based on prospective costs of a sub-sample of projects in Switzerland.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Journal of Environmental Planning and Management.
Volume (Year): 53 (2010)
Issue (Month): 5 ()
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Web page: http://www.tandfonline.com/CJEP20
Other versions of this item:
- Kunz, Laura & Muller, Adrian, 2009. "A Case-Study on Project-Level CO2 Mitigation Costs in Industrialised Countries - The Climate Cent Foundation in Switzerland," Working Papers in Economics 342, University of Gothenburg, Department of Economics, revised 01 Feb 2009.
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
- Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Costs; Distributional Effects; Employment Effects
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
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- Urge-Vorsatz, Diana & Novikova, Aleksandra, 2008. "Potentials and costs of carbon dioxide mitigation in the world's buildings," Energy Policy, Elsevier, vol. 36(2), pages 642-661, February.
- Niederberger, Anne Arquit, 2005. "The Swiss Climate Penny: An innovative approach to transport sector emissions," Transport Policy, Elsevier, vol. 12(4), pages 303-313, July.
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