Climate Change 2001:
Working Group III: Mitigation
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8.2.3 The Impact of Considering Multiple Gases and Carbon Sinks

The overwhelming majority of T-D mitigation studies concentrate upon CO2 abatement from fossil fuel consumption, while an increasing number of B-U studies tend to incorporate all the GHG emissions from the energy sector, but still not include emissions from the agricultural sector and sequestration. However, the Kyoto Protocol also includes methane (CH4), nitrous oxide (N2O), perfluorocarbons, hydrofluorocarbons, and sulphur hexafluoride (SF6) as gases subject to control. The Protocol also allows credit for carbon sinks that result from direct, human-induced afforestation and reforestation measures taken after 1990. This may have significant impacts on abatement costs.

A recent study (Reilly et al., 1999) estimated the mitigation costs for the USA and included consideration of all of these gases and forest sinks. The study assumes that the Kyoto Protocol is ratified in the USA and implemented with a cap and trade policy. The analysis considers the effects of including the other gases in the Kyoto Protocol in terms of the effect on allowable emissions, reference emissions, the required reduction, and the cost of control.

For the USA, the authors estimate that base year (1990) emissions were 1,654MtCeq, converting non-CO2 gases to carbon equivalent units using 100-year global warming potential indices (GWPs) as prescribed in the Kyoto Protocol. This compares with 1,362MtCeq for carbon emissions alone. The result is that allowable emissions are 1,539MtCeq in the multigas case compared with 1,267MtCeq if other gases had not been included in the agreement.

The authors also projected emissions of other gases to grow substantially through 2010 in the absence of GHG control policies, so that total emissions in the reference case reach 2,188MtCeq compared with 1,838MtCeq of carbon only. The combination of these factors means that the required reduction is 650MtCeq in the multigas case compared with 571MtCeq if only carbon is subject to control. To analyze the impact of including the other gases in the Kyoto Protocol the authors consider three policy cases:

Case 1 is thus comparable to many other studies that only consider CO2 and provides an approximate ability to normalize results with other studies. For Case 1 the resultant carbon price is US$187 in 1985 price (US$269 in 1997 price). Case 2 illustrates that, if the USA does not adopt measures that take advantage of abatement options in other gases and sinks, the cost could be significantly higher (US$229 in 1985 price or US$330 in 1997 price). In 1997 US$, the total cost in terms of reduced output is estimated to be US$54 billion for Case 1, US$66 billion in Case 2, and US$40 billion in Case 3.

By comparison with Case 1, the introduction of all gases and the forest sink results in a 20% decline in the carbon price to US$150 (1985 price, US$216 in 1997 price).

Cases 2 and 3 are comparable in the sense that they nominally achieve the same reduction in GHGs (when weighted using 100-year GWPs). Thus, for a comparable control level, the multigas control strategy is estimated to reduce US total costs by nearly 40%.

The Reilly et al. (1999) study did not conduct sensitivity analyses of the control costs, but noted the wide range of uncertainties in any costs estimates. Both base year inventories and future emissions of other GHGs are uncertain, more so than for CO2 emissions from fossil fuels. Moreover, some thought will be required to include other GHGs and sinks within a flexible market mechanism such as a cap and trade system. Measuring and monitoring emissions of other GHGs and sinks could add to the cost of controlling them and so reduce the abatement potential.

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