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Climate policy




L. Andrew Bollinger

PhD student
Infrastructure Systems & Services Department
Faculty of Technology, Policy & Management
TU Delft

1 March 2012




                                               INCAH
Effective policy?




                    Impact
The challenge of complexity




                    Complexity
                              Irrational actors   Impact
The EU Emissions Trading Scheme

                                                                          - The Wall Street Journal, 2010




                                                                           •    High volatility
                                                                           •    Price crashes
                                                                           •    Gaming
                                                                           •    Windfall profits




             Image source: Z.H. Feng, et al. Carbon price volatility: Evidence from EU ETS. Applied Energy 88 (2011) 590–598.
Climate policy
How can we bridge the gap between intervention and impact?




                           ?                   Impact
Our approach

             1. Socio-technical systems




    The European electricity network        The European “Facebook” network


                                       Image source: http://www.r-bloggers.com/graphics-and-statistics-the-facebook-map/
Our approach

            1. Socio-technical systems
            2. Complex adaptive systems




     Emergence of a starling flock
                                                    Emergence of a solar PV infrastructure
                                                    http://www.youtube.com/watch?v=lcpBz7qri1U



                                     Image source: http://www.amusingplanet.com/2011/11/acrobatic-display-of-starling.html
Our approach

              1. Socio-technical systems
              2. Complex adaptive systems
              3. Agent-based modeling




     Modeling the flocking of birds   Modeling the transition to a low carbon power sector
An example – climate change mitigation policy
The question:
Which policies can enable a transition to low carbon electricity
generation?


The policies:
1. Emissions trading scheme
2. Carbon taxation scheme
3. No intervention
An example – climate change mitigation policy
The question:
Which carbon policy/ies can enable a transition to low carbon
electricity generation?


The policies:
1. Emissions trading scheme
2. Carbon taxation scheme
3. No intervention



Results:
•   Price uncertainty can be a major deterrent to investment in low-carbon
    generation technologies
•   A carbon tax sends a much clearer and more predictable signal to
    investors
An example – infrastructure adaptation to climate change
The question:
How can we support the development of climate resilient electricity
infrastructures?
(1)   De Groot, 2006
(2)   Wilbanks, et al, 2008
(3)   Rothstein and Halbig, 2010
(4)   Bresser, et al, 2005
An example – climate change adaptation policy
The question:
How can we support the development of climate resilient electricity
infrastructures?




                       Uncertainty:
                       •   Climate change uncertainty
                       •   Socio-economic uncertainty
                       •   Technological uncertainty
                       •   …
An example – climate change adaptation policy
The question:
How can we support the development of climate resilient electricity
infrastructures?

The approach:
•   Exploratory modeling - expose the modeled system to a large range of
    possible futures
•   Seek robust policies, and policies that hedge against the worst
    possible consequences.
•   Identify sufficient solutions and understand key dynamics, e.g. tipping
    points
Collaborative data cultivation
The question:
How can we combine data from different sources, collaboratively
upgrade it and make it openly available?




  Enipedia.tudelft.nl – a collaborative platform for the cultivation of energy and industry data
Collaboration
   •   We can’t navigate complexity on our own
Collaboration
   •   We can’t navigate complexity on our own      TU Delft
   •   We need to bring together data, e.g. about   Climate
       sea-level rise, extreme weather and
       infrastructures.
                                                    Institute
Thank you

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Climate policy

  • 1. Climate policy L. Andrew Bollinger PhD student Infrastructure Systems & Services Department Faculty of Technology, Policy & Management TU Delft 1 March 2012 INCAH
  • 3. The challenge of complexity Complexity Irrational actors Impact
  • 4. The EU Emissions Trading Scheme - The Wall Street Journal, 2010 • High volatility • Price crashes • Gaming • Windfall profits Image source: Z.H. Feng, et al. Carbon price volatility: Evidence from EU ETS. Applied Energy 88 (2011) 590–598.
  • 5. Climate policy How can we bridge the gap between intervention and impact? ? Impact
  • 6. Our approach 1. Socio-technical systems The European electricity network The European “Facebook” network Image source: http://www.r-bloggers.com/graphics-and-statistics-the-facebook-map/
  • 7. Our approach 1. Socio-technical systems 2. Complex adaptive systems Emergence of a starling flock Emergence of a solar PV infrastructure http://www.youtube.com/watch?v=lcpBz7qri1U Image source: http://www.amusingplanet.com/2011/11/acrobatic-display-of-starling.html
  • 8. Our approach 1. Socio-technical systems 2. Complex adaptive systems 3. Agent-based modeling Modeling the flocking of birds Modeling the transition to a low carbon power sector
  • 9. An example – climate change mitigation policy The question: Which policies can enable a transition to low carbon electricity generation? The policies: 1. Emissions trading scheme 2. Carbon taxation scheme 3. No intervention
  • 10.
  • 11. An example – climate change mitigation policy The question: Which carbon policy/ies can enable a transition to low carbon electricity generation? The policies: 1. Emissions trading scheme 2. Carbon taxation scheme 3. No intervention Results: • Price uncertainty can be a major deterrent to investment in low-carbon generation technologies • A carbon tax sends a much clearer and more predictable signal to investors
  • 12. An example – infrastructure adaptation to climate change The question: How can we support the development of climate resilient electricity infrastructures?
  • 13. (1) De Groot, 2006 (2) Wilbanks, et al, 2008 (3) Rothstein and Halbig, 2010 (4) Bresser, et al, 2005
  • 14. An example – climate change adaptation policy The question: How can we support the development of climate resilient electricity infrastructures? Uncertainty: • Climate change uncertainty • Socio-economic uncertainty • Technological uncertainty • …
  • 15. An example – climate change adaptation policy The question: How can we support the development of climate resilient electricity infrastructures? The approach: • Exploratory modeling - expose the modeled system to a large range of possible futures • Seek robust policies, and policies that hedge against the worst possible consequences. • Identify sufficient solutions and understand key dynamics, e.g. tipping points
  • 16. Collaborative data cultivation The question: How can we combine data from different sources, collaboratively upgrade it and make it openly available? Enipedia.tudelft.nl – a collaborative platform for the cultivation of energy and industry data
  • 17. Collaboration • We can’t navigate complexity on our own
  • 18. Collaboration • We can’t navigate complexity on our own TU Delft • We need to bring together data, e.g. about Climate sea-level rise, extreme weather and infrastructures. Institute