Non-CO2 Mitigation Model and
Offsets Analysis
RFF GHG Offsets Workshop
Shaun Ragnauth
Climate Change Division, U.S. EPA
May 12, 2009
U.S. EPA Office of Atmospheric Programs
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Overview
• Overview of non-CO2 marginal abatement
cost analysis
• Current MAC model development efforts
• Adaptation of MACs for offset curves
U.S. EPA Office of Atmospheric Programs
2
Mitigation Model Framework
• Bottom up engineering cost analysis
• Spreadsheet model utilizing engineering cost data from
industry
• Inputs include:
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Baseline emission projections
Mitigation technologies
Capital, O&M, and project costs for technologies
Energy costs
Labor index
• Model output is a marginal abatement cost curve (MAC)
for each sector and gas evaluated
• MACs are presented in Global Mitigation of Non-CO2
Greenhouse Gases. June 2006. EPA 430-R-06-005
– Peer reviewed
U.S. EPA Office of Atmospheric Programs
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Model Development Activities
• MACs have numerous applications – important
to keep up to date
• Current model development:
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Updated mitigation technologies
Updated engineering cost estimates
New methodology for estimating market penetration
Updated baselines and projections
Dynamic with respect to energy prices
• Using AEO2009 baseline and projections
• Areas for future development
– Sectoral estimates of transaction costs
– Representation of technology change
U.S. EPA Office of Atmospheric Programs
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Offset Curve Development
• Framework developed to support EPA legislative
analyses
• Each mitigation technology was evaluated to
determine if amenable to monitoring,
measurement and verification requirements of a
future offset program
• Disabled technologies in MAC model based on
MMV determination
• Resulting curves determine domestic offset
supply schedules
U.S. EPA Office of Atmospheric Programs
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Offset Curve Example
• Provide a realistic view of reductions that can be
measured, monitored and verified.
Landfill Offset Mitigation Option Comparison
Year 2020 Baseline
DR - 5% TR - 40%
$70
$60
$50
$/TCO2eq
$40
$30
$20
$10
$0
0.00
20.00
40.00
60.00
80.00
100.00
120.00
($10)
MtCO2eq
With Mitigation Option Adjustment
No Mitigation Option Adjustment
U.S. EPA Office of Atmospheric Programs
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Applications of Offset Curves
• Resulting offset supply schedules for each
sector are aggregated and used in
economy wide modeling
• Similar methods can be applied for
international offset curves
• Data available on the web
http://epa.gov/climatechange/economics/economicanalyses.html
U.S. EPA Office of Atmospheric Programs
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Contact Information:
Shaun Ragnauth
U.S. EPA Climate Change Division
1200 Pennsylvania Ave., NW (6207-J)
Washington, DC 20460
ragnauth.shaun@epa.gov
202-343-9142
http://epa.gov/climatechange/economics/
U.S. EPA Office of Atmospheric Programs
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