Contribution to Belgian National Debate on Carbon Pricing, Brussels, 25th Jan 2017 Michael Grubb

Annual abatement in 2030 GtCO2e
Cost $USD/tonne of CO2e
Hidden & Implement
-ation costs
A.
ECONOMIC SCEPTICISM
B.
BUILDINGS EXPERTS
Default (inefficient) baselines & holistic solutions
D.
REBOUND
Warmer homes, more driving with lower energy costs
C. CO-
BENEFITS
Health, energy subsidies, environmental benefits

opens new possibilities for distributed generation and elec transport, with integration of electricity with transport & urban systems

https://www.bloomberg.com/gadfly/articles/2016-11-23/solar-industry-makes-feast-of-price-famine
http://reneweconomy.com.au/how-the-jaw-dropping-fall-in-solar-prices-will-change-energy-markets-55160/
http://www.bloomberg.com/features/2016-ev-oil-crisis/
http://www.bloomberg.com/news/articles/2016-07-27/elon-musk-says-it-s-pencils-down-for-tesla-s-model-3
PV: New record installed power prices
Chile = $30/MWh
Masdar = $25/MWh
Abu Dhabi = $24/MWh
Module costs: -29% in 2016 to $0.39/Watt
Whilst huge fall in PV and battery costs
Carbon pricing in buildings and transport
Paradoxes and possibilities
Brussels, 25th Jan 2017
Michael Grubb
Prof. International Energy and Climate Change Policy, UCL
Chair, UK government Panel of Technical Experts on Energy Market Reform

• The “classical” reasoning and its paradox
• The wider reality
• The energy efficiency gap
• The infrastructure challenge
• Carbon pricing – integrating ‘old’ and ‘new’

Electricity revolution – distributed services
Source: Prof Jun Dong, North China University of Electric Power

Tackling old inefficient housing and realising the modern vision both require major infrastructure investment

• Public money – carbon revenues?
• A carbon price of €30/tCO2 applied across EU buildings sector (not including ETS, ie. electricity or cement-related) would raise c. €15bn/yr across EU
• (very much more if also auctioned to power & cement production)
• Same applied to gasoline would raise > €50bn/yr
• A predictable and rising carbon price would also attract low carbon private investment

Carbon pricing in buildings and transport
Paradoxes and possibilities