The Canadian Approach To Compiling Emission Projections

Marc DeslauriersEnvironment CanadaPollution Data Division Science and Technology Branch

Projections expert panel (PEP) meetingDublin, Ireland25th October 2007

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Outline

Explain the emission projections framework used in Canada

Discuss the current application for the emission projections

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Modeling Framework

A modeling framework called E3MC (Energy, Environment, Economy Model for Canada) is currently used for the estimation of future emissions for GHG and air pollutants

The modeling framework was developed during the past 1.5 years and includes two models

An energy demand model called Energy 2020 A macroeconomic model call TIM (The Infometrica Macroeconomic

model)

E3MC is used to estimate the Business As Usual Projections (with existing measures and policies) and evaluate various emission reduction strategies up to 2075 and estimate the associated costs

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Energy 2020 Model

Integrated multi-region, multi-sector model for North America

It simulates the supply, the price, and the demands for all fuel types

The model’s main outputs include: Changes in energy use Energy prices Investment costs and potential costs savings resulting from

policy changes GHG and air pollutant emissions as a function of energy use

and economic activity (using emission coefficients for each pollutant and industrial sector)

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TIM (Macroeconomic) Model Examines the consumption, investment, production, and

trade decisions for the whole economy It captures the interaction among industries and the

implications for changes in producer prices, relative final prices and income 

It also factors in government fiscal balances, monetary flows, interest and exchange rates

It accounts for 133 industries at the provincial and territorial levels

It includes an international component to account for exports and imports, which covers approximately 100 commodities

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TIM (Macroeconomic) Model

This model projects the direct impacts on the economy's final demand, output and employment, price formation, and sectoral income that result from various GHG and air pollutants emission reduction policies

Similarly to other macro economic models, E3MC provides directional guidance with respect to the broad economic consequences that are likely to arise from policy changes

TIM is liked to the energy model to capture the interactions between the energy sector and the economy

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Interaction Between The Two Models

DEMANDResidentialCommercial

IndustrialTransportation

SUPPLYElectric Utility/IPPs

Gas SupplyOil Supply

Coal SupplyInternational SupplyInternational Trade

THE INFORMETRICA MACROECONOMIC (TIM) MODEL

(i) changes to investments in energy using equipment and structures by sector and industry;(ii) changes to energy intensity (energy input per unit of output) by sector, by industry and fuel

ENERGY 2020

Outputs•Gross output by industry and jurisdictions

•Personal income

Inputs

•Inflation

•Taxe rates

•Exchange rates

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Background On The Framework Energy2020 has been used for the past 20 years to analyze energy

and environment policies in the U.S. (state and federal level) and Canada

It can provide facility level emissions for all power plants in Canada

Informetrica TIM Model has been used for the past 30 years to assess the economic impacts of Canadian and provincial governments’ policy initiatives

Historical emission inventories (1995 to 2006) are used to develop emission coefficients in the framework (for energy and other emission sources)

The framework also uses inputs from other departments (finance, Natural Resources, National Energy Board) and organizations (National Round Table on Energy and the Economy, industry associations)

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Review Of The Emission Projections

Economic and emissions projections are estimated by Environment Canada

They are reviewed by sector experts in Environment Canada

They are then reviewed by the provinces

The comments obtained from the reviewers are discussed and adjustments are applied where necessary

The process is used to obtain agreement (consensus) on the projections which are then published

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Current Uses of The Projections Framework

A new regulatory program (named CARA) to improve air quality and reduce GHG is currently in development in Canada

Emission reduction targets and intensities are being developed for 16 industrial sectors, transportation vehicles, and solvent uses

For the development of the reduction targets different scenarios are proposed and analyzed

E3MC is being used to estimate: The costs to the industries The impact on the economy

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Projected Emission Inventories

The emission projections from the E3MC framework are used to prepare future year emission inventories required for air quality modeling (eg. 2015 and 2020)

Facility specific emissions are developed for the each industry sectors taking in consideration:

The future capacity of existing facilities (proposed expansions and possible closures)

Expected capacity of new facilities (based on permit application and environmental assessments information, knowledge of sector experts, information obtained from individual industry and industrial associations)

Process technology changes, changes in control equipment, changes in fuel consumption, etc.

Emission intensities of old and new or modernized facilities

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Cost and Benefit Analyses of Emission Reduction Targets For Air Pollutants

2006 and historical emission

Inventories

Projected Emissions

(by province and sector)

Air Quality ModelOutput - Components of Smog and Acid Rain: O3,

PM2.5, deposition of acidifying compounds, visibility, critical loads

Ecosystem Effect Models

Human Health Impact Model

E3MC framework

Cost Estimates

Benefit Estimates

2015 BAU emission inventory

2015 emission inventory with proposed reduction targets

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Next Steps For E3MC

Develop new module to model the emissions by facility for the oil sands industry

Continue to improve the alignment of the sectors in the emissions inventory with those in the projections framework

Automate and accelerate the process to generate detailed emission inventories for 2015 to 2020, which are required for air quality modeling