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A case study on project-level CO2 mitigation costs in industrialised countries: the Climate Cent Foundation in Switzerland

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  • Laura Kunz
  • Adrian Muller

Abstract

This 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.

Suggested Citation

  • Laura Kunz & Adrian Muller, 2010. "A case study on project-level CO2 mitigation costs in industrialised countries: the Climate Cent Foundation in Switzerland," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 53(5), pages 657-676.
  • Handle: RePEc:taf:jenpmg:v:53:y:2010:i:5:p:657-676
    DOI: 10.1080/09640561003730049
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    References listed on IDEAS

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    1. Jakob, Martin, 2006. "Marginal costs and co-benefits of energy efficiency investments: The case of the Swiss residential sector," Energy Policy, Elsevier, vol. 34(2), pages 172-187, January.
    2. 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.
    3. 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.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    abatement cost curve; Climate Cent Foundation; climate policy; emissions reduction; mitigation costs;

    JEL classification:

    • 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 Adoption and Costs; Distributional Effects; Employment Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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