1、ASIAN DEVELOPMENT BANK Greenhouse Gas emissions accountinG for aDB enerGy Project economic analysis GuiDance note DECEMBER 2019 ASIAN DEVELOPMENT BANK Greenhouse Gas emissions accountinG for aDB enerGy Project economic analysis GuiDance note DECEMBER 2019 Creative Commons Attribution 3.0 IGO license

2、 (CC BY 3.0 IGO) 2019 Asian Development Bank 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines Tel +63 2 632 4444; Fax +63 2 636 2444 www.adb.org Some rights reserved. Published in 2019. ISBN 978-92-9261-766-0 (print), 978-92-9261-767-7 (electronic) Publication Stock No. TIM190476-2 DOI

3、: http:/dx.doi.org/10.22617/TIM190476-2 The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies ofthe Asian Development Bank (ADB) or its Board of Governors or the governments they represent. ADB does not guarantee the accuracy of the da

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8、our use of the material. Please contact pubsmarketingadb.org if you have questions or comments with respect to content, or if you wish toobtain copyright permission for your intended use that does not fall within these terms, or for permission to use theADB logo. Corrigenda to ADB publications may b

9、e found at http:/www.adb.org/publications/corrigenda. Notes: In this publication, “$” refers to United States dollars. Printed on recycled paper CONTENTS TABlES AND FIGURES iv ACkNOwlEDGMENTS v ABBREvIATIONS vi ABSTRACT vii 1. INTRODUCTION 1 1.1 Economic Analysis Approach to “without Project” Scenar

10、io 2 1.2 Energy Emissions Approach to “without Project” Scenario 3 1.3 Economic Principles and “without Project” Scenario 4 2. IllUSTRATION OF DIFFERENCES IN APPROAChES 6 2.1 Example 1: Non-Incremental (Supply Side) Power Generation 6 2.2 Example 2: Non-Incremental (Demand-Side) PowerGeneration 10 2

11、.3 Example 3: Incremental Power Generation 13 2.4 Example 4: Mix of Incremental and Non-Incremental (Demand-Side) Power Generation 16 3. wAY FORwARD 20 4. CONClUSION 22 APPENDIx: EMISSIONS FACTORS FOR ElECTRICITY GENERATION 23 iii TABlES AND FIGURES Tables 1 Comparison of Emission Reductions in Non-

12、Incremental (Supply Side) PowerGeneration Example 8 2 Comparison of Economic Internal Rate of Return Calculations inNon-Incremental (Supply Side) Power Generation Example 9 3 Comparison of Emission Reductions in Non-Incremental (Demand-Side) Power Generation Example 11 4 Comparison of Economic Inter

13、nal Rate of Return Calculations in Non-Incremental (Demand-Side) Power Generation Example 12 5 Comparison of Emission Reductions in Incremental Power Generation Example 14 6 Comparison of Economic Internal Rate of Return Calculations in Incremental Power Generation Example 15 7 Comparison of Emissio

14、n Reductions in a Mix of Incremental and Non-Incremental (Demand-Side) Power Generation Example 17 8 Comparison of Economic Internal Rate of Return Calculations in a Mix of Incremental and Non-Incremental (Demand-Side) Power Generation Example 19 aPPeNDIX Tables A1 Emissions Factors of Coal-Fired El

15、ectricity Generation 23 A2 Emissions Factors of liquid Fuel Electricity Generation 24 A3 Emissions Factors of Gas Electricity Generation 25 FIgures 1 Consumer Surplus Effects of ADB Projects 2 2 Comparison of Electricity Outputs in Non-Incremental (Supply Side) PowerGeneration Example 7 3 Comparison

16、 of Electricity Outputs in Non-Incremental (Demand-Side) PowerGeneration Example 10 4 Comparison of Electricity Outputs in Incremental Power Generation Example 13 5 Comparison of Electricity Outputs in a Mix of Incremental and Non-Incremental (Demand-Side) Power Generation Example 16 iv v ACkNOwlEDG

17、MENTS T his guidance note was written by David Anthony Raitzer, Manisha Pradhananga, and lotis Quiao under the direction of Rana hasan, Director of the Economic Analysis and Operational Support Division, and Edimon Ginting, Deputy Director General, Economic Research and Regional Cooperation Departme

18、nt. Gee Ann Carol D. Burac proof-read the note. Jindra Nuella and Roslyn Perez provided administrative support. Tuesday Soriano copyedited the note, while Joe Mark Ganaban did the layout and typesetting. we are grateful to the Climate Change and Disaster Risk Management Division of the Sustainable D

19、evelopment and Climate Change Department, especially Preety Bhandari, Christian Ellermann, and virender k. Duggal for engaging with the study-team and providing valuable feedback and suggestions. kee-YungNam, Sustainable Development and Climate Change Department Energy Sector Group also provided val

20、uable comments that improved the quality of the document. ADB Asian Development Bank CO2 carbon dioxide EA economic analysis EE energy emissions EIRR economic internal rate of return GhG greenhouse gas Gwh gigawatt hour kwh kilowatt hour Mwh megawatt hour OPEx operating expense tCO2 tons of carbon d

21、ioxide TJ terajoule vi ABBREvIATIONS vii ABSTRACT T his guidance note reviews and compares how current approaches for project economic analysis and for calculating greenhouse gas emissions effects of energy projects define “without project” or “baseline” scenarios. Economic analysis generally treats

22、 the comparison “without project” scenario as the absence of any new projects or investment, whereas greenhouse gas calculations treat the comparison baseline scenario as expansion of the current power generation mix. This leads to differing estimates of mitigation and project economic benefits betw

23、een the two comparison scenarios, which this note illustrates. Recommendations are offered for future practice to keep the basis of greenhouse gas emissions effect valuation and mitigation reporting clearer. 1 1 1 INTRODUCTION T he Asian Development Bank (ADB) introduced shadow pricing of greenhouse

24、 gas emissions in its 2017 Guidelines for the Economic Analysis of Projects (which define accepted practices for “economic analysis” EA).1 These guidelines require that projects in the energy and transport sectors and those with a primary objective of greenhouse gas emissions mitigation should quant

25、ify and value those emissions as part of calculating the projects economic internal rate of return (EIRR). They also stipulate the use of a global marginal damage cost of $36.3 per ton of carbon dioxide (tCO2) equivalent in 2016 prices, which is to be increased at 2% per annum in real terms, as well

26、 as adjusted for inflation. The source of the damage estimates is an average of a summary of estimates presented in the Intergovernmental Panel on Climate Changes Fifth Assessment Report for 1% and 3% pure rates of time preference.2 Only projects that hurdle ADB EIRR requirements (9% for most projec

27、ts, 6% for poverty or environmentally oriented projects), inclusive of carbon valuation, are to be approved. Although the guidelines are clear on the carbon value to be applied in economic analysis, they specify little about how emissions are to be accounted. ADB has also developed Guidelines for Es

28、timating Greenhouse Gas Emissions of Energy Projects (which define the “energy emissions” EE approach) to facilitate consistent reporting on climate change achievements.3 The EEapproach was developed without reference to economic analysis and for different audiences.4 As a result, there is a substan

29、tial difference in the conceptual basis applied for the EE and EAapproaches. The difference must be recognized and addressed for carbon valuation to be conducted in a manner that is internally consistent with current economic analysis procedures. As most ADB energy investment is for electricity supp

30、ly/access, this document is framed toward power supply/access investment. 1 ADB. 2017. Guidelines for the Economic Analysis of Projects. Manila. https:/www.adb.org/documents/guidelines-economic- analysis-projects. 2 Arent, D.J., R.S.J. Tol, E. Faust, J.P. hella, S. kumar, k.M. Strzepek, F.l. Tth, an

31、d D. Yan. 2014. key economic sectors and services. In: Climate Change 2014: Impacts, Adaptation, and vulnerability. Part A: Global and Sectoral Aspects. Contribution of working Group II to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change. Field, C.B., v.R. Barros, D.J. Do

32、kken, k.J. Mach, M.D. Mastrandrea, T.E. Bilir, M. Chatterjee, k.l. Ebi, Y.O. Estrada, R.C. Genova, B. Girma, E.S. kissel, A.N. levy, S. MacCracken, P.R. Mastrandrea, and l.l. white (eds.). Cambridge University Press, Cambridge, United kingdom and New York, NY, USA, pp. 659-708. 3 ADB. 2017. Guidelin

33、es for Estimating Greenhouse Gas Emissions of Asian Development Bank Energy Projects: Additional Guidance for Clean Energy Projects. https:/www.adb.org/documents/guidelines-estimating-ghg-energy-projects. 4 The ADB Safeguard Policy Statement requires that greenhouse gas (GhG) emissions from projects

34、 emitting 100,000 tCO2 or more to be monitored. GhG reduction is monitored and reported as one of the level 2 results framework indicators. Greenhouse Gas Emissions Accounting for ADB Energy Project Economic Analysis2 1.1 economic analysis approach to “Without Project” scenario Calculations of proje

35、ct-level EIRRs are premised on the difference between a “with project scenario” and a “without project scenario” over a 20- to 40-year time frame. The with project scenario reflects the cost and benefit flows with the project facility in place, while the without project scenario usually reflects abs

36、ence of any new facility providing the same service.5 Different ways of providing the service are compared before EIRR calculations, during least- cost analysis, in which the lowest present-cost option to provide the service is selected. In most cases, the without project scenario thus reflects no e

37、xpansion of the service from the present level. For example, in a power generation project, on-grid generation capacity for the beneficiary area is often held constant in the without project scenario, whereas capacity expands in the with project scenario. The costs and benefits derived from establis

38、hing or expanding a project facility are usually conceptualized as consumer surplus for those sectors for which carbon valuation is required (energy and transport). Consumer surplus is the difference between willingness-to-pay for the service, as reflected in a downward sloping demand curve relating

39、 price to quantity, and the actual price paid. Projects in the energy sector are usually considered as providing lower-cost service (such as electricity cost per kilowatt hour kwh) to end users than would exist without the project. Effects on consumer surplus from that cost reduction can be consider

40、ed as consisting of two elements: non-incremental and incremental benefits. Non-incremental benefits are derived from a substitution effect, in which the lower-cost project service replaces consumption of a higher-cost non-project service. For example, expanded lower-cost grid electricity can replac

41、e the use of more costly diesel generators, candles, or kerosene. Incremental benefits are derived from increased consumption of the project service when the price is lower. These are the benefits, for example, from expanded energy use after electrification or other improved energy service. 5 The wi

42、thout project scenario reflects the consequences of the absence of public sector investment to provide the same service, under the assumption that market failures prevent the investment from being financially attractive to the private sector. Figure 1:Consumer surplus effects of aDb Projects Increme

43、ntal consumer surplusNon-incremental consumer surplus Quantity Price P0 P1 Q0Q1 P0 = price without project, P1 = price with project , Q0 = quantity without project , Q1 = quantity with project Source: Authors. Introduction3 when the demand curve is approximated linearly, simple shapes and algebra ca

44、n be used to reflect these two effects on consumer surplus (Figure 1). Non-incremental benefits can be considered as a rectangle with the height of the difference in energy unit costs without (P0) and with (P1) the project, multiplied by the quantity of the service without the project (Q0). Incremen

45、tal benefits consist of a triangle defined as half of the difference in average energy unit costs without (P0) and with (P1) the project, multiplied by the difference in number of unitsconsumed with (Q1) and without (Q0) theproject. 1.2 energy emissions approach to “Without Project” scenario To date

46、, guidelines for estimating ADB greenhouse gas emissions cover the (clean) energy and transport sectors. For the transport sector, greenhouse gas emissions guidelines follow a clear division between incremental (generated traffic) and non-incremental (existing and diverted traffic) effects.6 Transpo

47、rt infrastructure development is assumed not to occur in the without project scenario. In addition, economic analysis tools, such as the highway Development Model 4, also perform emissions calculations, so that approaches are harmonized with those of EA.7 however, EE calculations takes a very differ

48、ent approach to both EA and the transport sector guidelines. The EE approach is derived from the methodologies used more broadly in climate change mitigation modeling, policies, and projects. The perspective is regarding potential future emissions trajectories in the context of expected peak levels

49、of radiative forcing and global warming, which occur in 2100 or later in many climate scenarios and models without mitigation action. Mitigation is considered as reduction of future emissions relative to these “baseline” or “reference” scenarios in which infrastructure development continues according to economic growth. This approach has underpinned both international climate negotiations and national targets, as well as the methodologies for mitigation calculations under the Clean Development Mechanism. It has be