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Report: Costs and benefits of CO2 emission reducing measures

25 June 2012

In May 2012, ECN and SEO Economic Research have published a report about the societal costs and benefits of CO2 emission reducing measures. How can we guarantee the supply of energy at reasonable costs and without exacerbating global warming?

The analysis was commissioned by the Dutch Ministry of Infrastructure and the Environment and compares several scenarios. It gives a balanced overview of different options (energy saving, renewable energy, nuclear energy, CCS, biomass, geothermal energy, et cetera) and their costs. A broad range of options is required to reduce emissions in a cost-effective way. CCS is neither a very cheap nor an extremely expensive option, according to this study. It is mentioned as an important transition technology.


The full report is available in Dutch.

Abstract (quoted in full from the report)

The Dutch Ministry of Infrastructure and the Environment has requested the Energy Research Centre of the Netherlands (ECN) and SEO Economic Research (SEO) to investigate the costs and benefits of a broad range of technical measures to realise CO2 emission reductions. The research aims to identify the options that are cost-effective to achieve an 80% reduction of greenhouse gas emissions in 2050, and to determine the total social costs of realising such a reduction of emission levels. Social costs comprise both direct costs and benefits, such as investments and lower energy costs, and indirect costs. The latter include policy costs, effects on air pollution, supply security, economic effects and the benefits of lower GHG-emissions themselves. Uncertainties are huge, but a robust finding is that a broad range of options is required to reduce emissions in a cost-effective way. Only a few options disqualify based on the cost criteria. Social costs depend heavily on policy assumptions and the global context. Without ambitious global climate agreements, net societal costs are the result for the Netherlands, varying from slightly negative to highly positive. If only Europe implements drastic climate policy, the balance may be less positive for the Netherlands, as the welfare benefits of lower European emissions cannot be included. After all, other countries are not bound by the European targets. With such a global climate coalition, benefits may be huge, but net costs still remain possible. A main factor in the calculated welfare benefits is the uncertainty in the valuation of CO2 emissions.

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25 June 2012

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