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|Title:||A multi-model study of energy supply investments in Latin America under climate control policy|
|Authors:||KOBER Tom; FALZON James; VAN DER ZWAAN Bob; CALVIN Katherine; KANUDIA Amit; KITOUS ALBAN GABRIEL; LABRIET Maryse|
|Citation:||ENERGY ECONOMICS vol. 56 p. 543-551|
|Publisher:||ELSEVIER SCIENCE BV|
|Type:||Articles in periodicals and books|
|Abstract:||In this paper we investigate energy supply investment requirements in Latin America until 2050 through a multimodel approach as jointly applied in the CLIMACAP-LAMP research project.We compare a business-as-usual scenario needed to satisfy anticipated future energy demand with a set of scenarios that aim to significantly reduce CO2 emissions in the region. We find that more than a doubling of annual investments, in absolute terms, occurs in the business-as-usual scenario between 2010 and 2050, while investments may treble over the same time horizon when climate policies are introduced. Investment costs as share of GDP, however, decline over time in the business-as- usual scenario as well as the climate policy scenarios, as a result of the fast economic growth of the region. In the business-as-usual scenario, cumulative investments of 1.4 trillion US$ are anticipated between 2010 and 2050 in electricity supply. These investments increase when additional climate policies are introduced: under a carbon tax of 50 $/tCO2e in 2020 growing with a rate of 4%/yr, an additional 0.6 trillion US$ (+45%) of cumulative investment is needed. Climate control measures lead to increased investment in low-carbon electricity technologies, primarily based on wind and solar resources, as well as CCS applied to fossil fuels and biomass. Our analysis suggests that, in comparison to the business-as-usual case, an average additional 21 billion US$/yr of electricity supply investment is required in Latin America until 2050 under a climate policy aiming at 2 °C climate stabilisation. Conversely, there is a disinvestment in fossil fuel extraction and transformation. For oil production, a growth to 130 billion US$ annual investment by 2050 is anticipated in a business-as-usual scenario. Ambitious climate policy reduces this to 28 billion US$. Mobilising the necessary additional investment capital, in particular for low-carbon energy technologies,will be a challenge. Suitable frameworks and enabling environments for a scale-up of public and private investment will be critical to help reach the required low-carbon energy deployment levels.|
|JRC Directorate:||Energy, Transport and Climate|
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