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BUSINESS OVERVIEW
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6.1 Markets for nuclear power and renewable energies
Are the current reduction intentions sufficient?
TheUnitedStates andChina – the largest producers of GHG fromenergy, accounting
for more than half of all emissions – committed in 2014 to future reductions. The
United States established the Clean Power Plan in 2015 under President Obama’s
leadership. This plan calls for reductions of 17% in 2022, 26-28% in 2025, and
32% in 2030 compared with 2005 levels in the power generation sector. Each
state will have to meet a reduction objective set by the Federal government, which
differs from state to state.
In 2014, China stated that it was committed to using 20% non-fossil fuels in its
energy mix by 2030 while limiting its coal consumption.
The European Union, which was a pioneer with its Energy-Climate policy, has
already committed to a 20% reduction of its GHG emissions by 2020 compared
with 1990 levels. The reduction to be met by 2030 is 40%.
The compilation of the Nationally Determined Contributions (NDC) submitted
in 2015 shows that the desired objective cannot be achieved: the temperature
increase would range from +2.7°C to +3.5°C by 2100. The countries’ intended
contributions currently cover only half of the requirements.
To achieve the +2°C objective, carbon emissions would have to be limited to
42 billion metric tons in 2030, yet forecasts put those emissions in the range of
55-60 billion metric tons of CO
2
.
Carbon dioxide emissions and the generation of electricity have increased
proportionately since the 1990s. In the New Policies Scenario to 2040 of the IEA-
WEO 2016, which includes the NDCs of the different countries, there is a gap
between those two numbers. Whereas power generation rises nearly 67% over the
period, energy-related CO
2
emissions grow by only 11%, thanks to energy efficiency
and less use of coal. This scenario leads to a long-term temperature increase of
2.7°C (
Source: WEO 2016
).
The logical conclusion of all these debates is that no source of energy should be
ignored in the mix, in particular nuclear power, recognized as one of the means
to fight climate change.
To change the direction of the emissions curve, several States have decided to
assign an economic value to carbon and have created emissions trading markets.
Currently, a global market for emissions permits does not exist. However, the
emissions avoided by projects connected with the Clean Development Mechanism
(CDM) of the Kyoto Protocol may be exchanged between States.
STATUS OF THE LEADING EMISSIONS TRADING SYSTEMS (ETS)
Market system in place
Regional market system in place
Market system considered
Source: ICAP, 2016.
Regional initiatives:
p
Québec (2013) now linked with California since 2014
p
Considered in Ontario, Manitoba and British Columbia
p
Pilots in China: 5 cities and
2 provinces since 2013-2014
p
National ETS planned for 2017
Linkage between the Swiss
(2008) and European ETS since
January 2016
Turkey: Particularly considered
for the power sector
KAZ ETS since 2013
Australian Carbon Pricing Mechanism abolished in 2014
NZ ETS since 2008
Regional initiatives:
p
RGGI (2009)
p
California (2013)
p
Emissions standards in the state
of Washington since 2016
Assessment of several market tools
for a national ETS
Regional initiatives in Sao Paulo
and Rio de Janeiro delayed
EU ETS since 2005
Russian and Ukrainian
ETS considered
Regional initiatives:
p
Tokyo (2010)
p
Saitama prefecture (2011)
Korean ETS implemented in 2015
At the global level, more than 40 countries have set up or scheduled economic
instruments to monetize carbon, whether through emission trading systems or
taxes. The map shows the largest emission trading markets, which are in varying
stages of maturity.
p
In January 2005, Europe set up a system for capping CO
2
with the emissions
trading system (ETS). The EU-ETS is one of the first such systems in the world
and currently remains the largest, with the 28 Member States of the European
Union in addition to Norway, Iceland and Liechtenstein. It is one of the most
mature systems.
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2016 AREVA
REFERENCE DOCUMENT