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Permit supply from the CDM

Permit supply from the CDM. Nico van der Linden ECN Policy Studies, the Netherlands. Approach to constructing Marginal Abatement Cost(MAC) curve for the Non-Annex I region. Gathering potential & cost information from country abatement costing studies

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Permit supply from the CDM

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  1. Permit supply from the CDM Nico van der Linden ECN Policy Studies, the Netherlands

  2. Approach to constructing Marginal Abatement Cost(MAC) curve for the Non-Annex I region • Gathering potential & cost information from country abatement costing studies • Information from 30 non-Annex countries have been collected covering some 80 % of total non-Annex I region. • Simple extrapolation method to account for the missing countries • Developing database on GHG reduction options • Potential and cost information on some 550 reduction options • Assessing the CDM-transaction costs • Costs related to bringing the reduction option under the CDM • Constructing Marginal Abatement Cost curves for non-Annex I region as a whole and for selected sectors and countries • Sectoral curves for electricity sector, rest of industry, household sector, agricultural products & forestry and transport sector • MAC curves for China, India, Brazil and South Africa

  3. MAC curve for the whole non-Annex I region

  4. Main findings • Total identified GHG reduction potential in 2010 in the non-Annex region as a whole amounts to 2.1 GtCO2 equivalent • Most reduction potential (62 per cent) in the power sector (energy efficiency, fuel switch) and demand side energy efficiency measures • Approximately 1.9 GtCO2 eq. is feasible at costs of up to US$ 4 per tCO2eq reduction • Large potential with low costs makes CDM attractive instrument for countries with GHG emissions reduction targets • Large fraction of identified potential can be realized in a limited number of non-Annex I countries. Most reduction potential has been identified in China and India (some 60 per cent)

  5. Limitations to the study • The estimated reduction potential should be viewed with caution: • Different assumptions and approaches are used across the studies which make it difficult to aggregate the country results: • base year • discount rate • fuel prices • baseline • Country abatement studies are not always comprehensive; studies do not always consider all reduction options

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