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A case-study on project-level CO2 mitigation costs in industrialised countries - the Climate Cent Foundation in Switzerland


Kunz, L; Muller, A (2010). A case-study on project-level CO2 mitigation costs in industrialised countries - the Climate Cent Foundation in Switzerland. Journal of Environmental Planning and Management, 53(5):657-676.

Abstract

We analyse CO2 emissions reduction costs based on project data from the Climate Cent Foundation (CCF), a climate policy instrument in Switzerland. We draw four conclusions.
First, for the projects investigated, the CCF on average pays € 63/t. Due to the Kyoto Protocol, the CCF buys reductions until 2012 only. This cutoff increases reported per ton reduction costs, as the additional lifetime project costs are set in relation to reductions until 2012 only, rather than to reductions realised over the whole lifetime. Lifetime reduction costs are € 45/t. Second, correlation between CCF's payments and lifetime reduction costs per ton
is low. Projects with low per ton reduction costs should thus be identified based on lifetime per ton reduction costs. Third, the wide range of project costs per ton observed casts doubts on the widely used identification of the merit order of reduction measures based on average
per ton costs for technology types. Finally, the CCF covers only a fraction of additional reduction costs. Decisions to take reduction efforts thus depend on additional, non observable and/or non-economic motives. Any generalisation of results has to consider that this analysis is based on prospective costs of a sub-sample of projects in Switzerland.

We analyse CO2 emissions reduction costs based on project data from the Climate Cent Foundation (CCF), a climate policy instrument in Switzerland. We draw four conclusions.
First, for the projects investigated, the CCF on average pays € 63/t. Due to the Kyoto Protocol, the CCF buys reductions until 2012 only. This cutoff increases reported per ton reduction costs, as the additional lifetime project costs are set in relation to reductions until 2012 only, rather than to reductions realised over the whole lifetime. Lifetime reduction costs are € 45/t. Second, correlation between CCF's payments and lifetime reduction costs per ton
is low. Projects with low per ton reduction costs should thus be identified based on lifetime per ton reduction costs. Third, the wide range of project costs per ton observed casts doubts on the widely used identification of the merit order of reduction measures based on average
per ton costs for technology types. Finally, the CCF covers only a fraction of additional reduction costs. Decisions to take reduction efforts thus depend on additional, non observable and/or non-economic motives. Any generalisation of results has to consider that this analysis is based on prospective costs of a sub-sample of projects in Switzerland.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Language:English
Date:July 2010
Deposited On:24 Sep 2010 13:47
Last Modified:05 Apr 2016 13:39
Publisher:Taylor & Francis
ISSN:0964-0568
Publisher DOI:https://doi.org/10.1080/09640561003730049
Official URL:http://www.informaworld.com/smpp/content~db=all~content=a922666554~frm=titlelink?words=adrian|muller&hash=157114731
Permanent URL: https://doi.org/10.5167/uzh-26098

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