Stacking of abatement credits for cost-effective achievement of climate and water targets

I.M. Gren, F.K.G. Ang

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

In a stacking system abatement measures with simultaneous effects on climate and water targets, such aswetland construction and cultivation of energy crops, are credited for the abatement of multiple pollutants. Inthis study we calculated and compared the abatement costs of achieving multiple environmental targets withand without stacking under different policy regimes (emissions trading, charge, standards). To this end, a staticmixed integer programming model was constructed. Theoretical analysis showed that, irrespective of policy regime, the cost of achieving predetermined emission targets is always lower when stacking is allowed. Another result was the excess abatement of pollutant under a no stacking system. Application to the Baltic Sea region showed that cost savings from stacking of pollutant abatement vary between policy regimes, being smallest for price regulation and highest for emission standards. However, the gains from stacking were unevenly distributed among the nine countries surrounding the Baltic Sea under all policy regimes, with Poland making the largest gain and Estonia, Russia and Latvia facing losses. Excess abatement without stacking in relation to the target was highest for nitrogen under all policy regimes, comprising up to 52% of the target abatement.
Original languageEnglish
Number of pages12
JournalEcological Economics
Volume164
Issue number106375
DOIs
Publication statusPublished - Oct 2019

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stacking
climate
cost
water
pollutant
abatement cost
energy crop
emissions trading
credit
Abatement
Climate
Water
Credit
savings
policy
nitrogen
Baltic Sea

Keywords

  • Interacting pollutants; Stacking; Cost-effectiveness; Mixed integer programming; Baltic Sea region

Cite this

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title = "Stacking of abatement credits for cost-effective achievement of climate and water targets",
abstract = "In a stacking system abatement measures with simultaneous effects on climate and water targets, such aswetland construction and cultivation of energy crops, are credited for the abatement of multiple pollutants. Inthis study we calculated and compared the abatement costs of achieving multiple environmental targets withand without stacking under different policy regimes (emissions trading, charge, standards). To this end, a staticmixed integer programming model was constructed. Theoretical analysis showed that, irrespective of policy regime, the cost of achieving predetermined emission targets is always lower when stacking is allowed. Another result was the excess abatement of pollutant under a no stacking system. Application to the Baltic Sea region showed that cost savings from stacking of pollutant abatement vary between policy regimes, being smallest for price regulation and highest for emission standards. However, the gains from stacking were unevenly distributed among the nine countries surrounding the Baltic Sea under all policy regimes, with Poland making the largest gain and Estonia, Russia and Latvia facing losses. Excess abatement without stacking in relation to the target was highest for nitrogen under all policy regimes, comprising up to 52{\%} of the target abatement.",
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Stacking of abatement credits for cost-effective achievement of climate and water targets. / Gren, I.M.; Ang, F.K.G.

In: Ecological Economics, Vol. 164, No. 106375, 10.2019.

Research output: Contribution to journalArticleAcademicpeer-review

TY - JOUR

T1 - Stacking of abatement credits for cost-effective achievement of climate and water targets

AU - Gren, I.M.

AU - Ang, F.K.G.

PY - 2019/10

Y1 - 2019/10

N2 - In a stacking system abatement measures with simultaneous effects on climate and water targets, such aswetland construction and cultivation of energy crops, are credited for the abatement of multiple pollutants. Inthis study we calculated and compared the abatement costs of achieving multiple environmental targets withand without stacking under different policy regimes (emissions trading, charge, standards). To this end, a staticmixed integer programming model was constructed. Theoretical analysis showed that, irrespective of policy regime, the cost of achieving predetermined emission targets is always lower when stacking is allowed. Another result was the excess abatement of pollutant under a no stacking system. Application to the Baltic Sea region showed that cost savings from stacking of pollutant abatement vary between policy regimes, being smallest for price regulation and highest for emission standards. However, the gains from stacking were unevenly distributed among the nine countries surrounding the Baltic Sea under all policy regimes, with Poland making the largest gain and Estonia, Russia and Latvia facing losses. Excess abatement without stacking in relation to the target was highest for nitrogen under all policy regimes, comprising up to 52% of the target abatement.

AB - In a stacking system abatement measures with simultaneous effects on climate and water targets, such aswetland construction and cultivation of energy crops, are credited for the abatement of multiple pollutants. Inthis study we calculated and compared the abatement costs of achieving multiple environmental targets withand without stacking under different policy regimes (emissions trading, charge, standards). To this end, a staticmixed integer programming model was constructed. Theoretical analysis showed that, irrespective of policy regime, the cost of achieving predetermined emission targets is always lower when stacking is allowed. Another result was the excess abatement of pollutant under a no stacking system. Application to the Baltic Sea region showed that cost savings from stacking of pollutant abatement vary between policy regimes, being smallest for price regulation and highest for emission standards. However, the gains from stacking were unevenly distributed among the nine countries surrounding the Baltic Sea under all policy regimes, with Poland making the largest gain and Estonia, Russia and Latvia facing losses. Excess abatement without stacking in relation to the target was highest for nitrogen under all policy regimes, comprising up to 52% of the target abatement.

KW - Interacting pollutants; Stacking; Cost-effectiveness; Mixed integer programming; Baltic Sea region

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