Appendix G: Key Assumptions for the IEO2006 Kyoto Protocol Case   

Energy-Related Emissions of Greenhouse Gases

The System for the Analysis of Global energy Markets (SAGE)—the model used by EIA to prepare the IEO2006 mid-term projections—does not include non-energy-related emissions of greenhouse gases, which are estimated at about 15 to 20 percent of total greenhouse gas emissions, based on inventories submitted to the United Nations Framework Convention on Climate Change (UNFCCC). SAGE models global energy supply and demand and, therefore, does not address agricultural and other non-energy-related emissions. 

EIA implicitly assumes that percentage reductions of non-energy-related emissions and their associated abatement costs will be similar to those for energy-related emissions. Non-energy-related greenhouse gas emissions are likely to grow faster than energy-related emissions; however, the marginal abatement costs for non-energy-related greenhouse gas emissions are not known and cannot be estimated reliably. In SAGE, each region’s emissions reduction goal under the Kyoto Protocol is based only on the corresponding estimate of that region’s energy-related carbon dioxide emissions, as determined by EIA data. It is assumed that the required reductions will also be proportionately less than if all gases were included. 

Carbon Dioxide Emissions 

For IEO2006, EIA modeled only energy-related carbon dioxide emissions. Energy-related emissions of other greenhouse gases, such as methane, nitrous oxide, and sulfur hexafluoride, are not included in the analysis. The current SAGE framework uses historical data on fuel consumption and emissions from EIA’s International Energy Annual 2003 to calibrate the base year for the model’s Reference Energy System (RES).¹⁹ The International Energy Annual does not provide historical data for methane and nitrous oxide emissions, and currently there are no plans to do so in the future. 

EIA assumes that emissions reduction proportions and abatement costs for energy-related methane and nitrous oxide will be sufficiently similar to those for carbon dioxide that—given their lesser share of total emissions (approximately 15 percent from energy and non-energy sources combined)—the per-unit carbon price derived by modeling carbon dioxide alone is representative of the abatement costs for all energy-related greenhouse gas emissions. The UNFCCC estimates that total Annex I emissions of greenhouse gases (in carbon dioxide equivalents) in 2003 had the following composition: carbon dioxide, 81.1 percent; methane, 9.1 percent; nitrous oxide, 6.5 percent; and other gases, 1.6 percent.²⁰ 

Notes and Sources