## Framework for broad policy packages in PBL modelling for the OECD Environment Outlook

8 February 2008

This table lists the core set of policy measures for various comprehensive cases - including baseline & baseline variant – for the OECD environment outlook as far as they can be implemented in the modelling. It focuses on environment-related policies.

OECD Baseline is the ‘no new policies’ baseline of the outlook. ‘No new policies’ implies no major initiatives or breakthroughs, such as a Doha accord. Existing policies will continue to operate and will be succeeded by equivalent policies after they formally expire. Policies that currently have been concretely legislated and instrumented and are yet due to enter into practice, will do so.

Baseline variant is the globalisation variant to the baseline, as described in the ‘Key Variants’ chapter. It is not policy driven but a “sensitivity” case, assuming a quicker decrease of cost of international trade than in the baseline and a quicker convergence of prices on domestic and world markets. It has been included here especially in order to analyse the environmental implications of the larger shift in location of production that can be expected in these circumstances, in combination with regional differences in environmental efficiency.

pp OECD sees OECD countries move more ambitiously on solving environmental problems than under baseline conditions. Non-OECD countries continue as under baseline conditions.

pp OECD+BRIC depicts collaboration between the countries that by 2030 will be the significant players in the world: OECD members and in particular Brazil, Russia China and India. The collaboration comprises other policies than environment proper; of these other fields, in particular liberalisation of agricultural production and trade is modelled.

pp global depicts worldwide collaboration on environmental and other issues. Of these other issues, in particular liberalisation of agricultural production and trade is modelled.

Outside these packages, the following special analyses are have been conducted:

- Worldwide climate policy aimed at stabilizing greenhouse gas emissions at 450 ppm as carbon dioxide equivalents by the end of the century. This is included in the table (case 6) because it shows all runs with the full suite of models. Among many other measures, it assumes that deforestation is slowed down and therefore assumes a more compact agriculture.
- Variations regarding burden sharing of climate policy reported in the oulook, but not included in the viewer.
- Various propositions regarding timing variations of climate policy, in order to illuminate cost and benefits of early or delayed action. In part, this serves to re-establish what is already known from literature. These analyses feed the chapters on Climate Change and on Cost of Policy Inaction. See the separate, smaller table at the end of this note.

The policy cases are built on economic projections (with ENV-Linkages) that take into account the effects of climate policy, in particular a carbon tax, in terms of shifts between aggregate economic sectors and between regions. However, the modelling of this effect in ENV-Linkages is restricted to energy-related measures while impacts of climate mitigation in land-use, and impacts of other environmental policies are not addressed.

- | Specific focus | Modeling aspects | OECD Baseline | Baseline variant | pp OECD | pp OECD+BRIC | pp global | 450 pm multigas | Comments, questions, implications
- | - | - | baseline no new policies | globalisation variant. As described in the ‘Key Variants’ chapter | Environmental policy package in OECD | Environmental policy package in OECD as well as in BRIC. | Global cooperation for environmental policy | Climate Policy only case: 450 ppm GHG | -
Agriculture | subsidies and tariffs | LEITAP Productivity trends based on interpretation of FAO material and iteration LEITAP-IMAGE (climate change, location of expansion) | - | - | baseline | baseline PLUS agricultural liberalization between OECD and BRIC. Subsidies and Tariffs are reduced by 50% by 2030: starting in year 2010, decreasing by 3% per year. This is applied to import tariffs and export subsidies between countries of OECD and BRIC (bilateral) as well as input, output and factor subsidies within OECD and BRIC countries (unilateral) . | baseline PLUS global agricultural liberalisation. Subsidies and Tariffs are phased out and reduced by 50% by 2030: starting in year 2010, decreasing by 3% per year. This is applied to import tariffs and export subsidies between all countries AND Input, output and factor subsidies in all countries | baseline | Energy crops: TIMER/IMAGE assume 2nd generation (woody) biofuels on abandoned, marginal or degraded soils. Hence no trade-off with food production is visible. Production of energy crops is steerded by climate policy settings.
Climate Policy | pp OECD, pp OECD+BRIC, pp global take carbon taxes as entry point 450 ppm multigas is structured along technology wedges | ENV-Linkages, FAIR,TIMER IMAGE. ENV-Linkages is used to identify economic shifts induced by the carbon taxes. FAIR is used to find optimal response combination by region, sector and gas for each case. This includes abatement of land-use related emissions. | - | Baseline. Includes EU emission trading scheme. | Carbon tax in OECD only starting at 25 $ per ton of carbon dioxide and increasing 2.4 % per year. Start in 2012. | Carbon tax in OECD and BRIC, starting at 25 $ per ton of carbon dioxide and increasing 2.4 % per year. OECD countries start 2012. BRIC start 2020. | Carbon tax in OECD, BRIC and RoW starting at 25 $ per ton of carbon dioxide and increasing 2.4 % per year. OECD countries start 2012. BRIC start 2020. RoW start 2030. | 450 ppm global case. Detailed description available (article Van Vuuren et al) Includes effort to contain deforestation | -
Air pollution | Emissions of sulphur and nitrogen oxides; methane and other volatile organic compounds; carbon monoxide Urban concentrations of particulate matter and ground level ozone. Impacts on population health | EDGAR and adjustments to emission factors for TIMER. Hemispheric transport on the basis of TM3. Urban local contributions on the basis of GMAPS and regional emission projections MERGE is used to identify maximum feasible reduction paths on the basis of cost-curves Health impacts (excess mortality; and health loss in DALYs) on the basis of WHO Comparative Assessment of Risks ENV-Linkages to identify economic effects resulting from abatement costs | - | Baseline | Development towards but not quite reaching Maximum Feasible Reduction (as defined in from IIASA study) in OECD countries. Onset and speed differentiated by region (26 region-level) and sector (Transport; Power, Refineries and Industry; Domestic and other.) Phased decrease of emissions of sulpur oxides from marine shipping. | Development towards but not quite reaching Maximum Feasible Reduction (as defined in from IIASA study) in OECD countries and BRIC. Onset and speed differentiated by region (26 region-level) and sector (Transport; Power, Refineries and Industry; Domestic and other.) Some countries reach target level after 2030. Phased decrease of emissions of sulpur oxides from marine shipping | Development towards but not quite reaching Maximum Feasible Reduction (as defined in from IIASA study) worldwide . Onset and speed differentiated by region (26 region-level) and sector (Transport; Power, Refineries and Industry; Domestic and other.) Some low-income countries reach target level long after 2030. Phased decrease of emissions of sulpur oxides from marine shipping |  |
Water quality | Nutrient loading of surface and coastal waters | MNP Global Nutrient Model, using IMAGE (non-point) + separate point sources | Baseline (=IMAGE + point-source trend following from population, GDP and regional/country differences). For sanitation, it is assumed that access to improved sanitation in terms of number of inahbitants increases at the same rate as urbanisation. This is somewhat optimistic for some countries. For treatment, it is assumed that removal of nitrogen compounds on average improves halfway to the next best step in effectiveness (typical removal rates: primary/mechanical treatment=10–20%; secondary/biological= 35-55%; teriary/advanced= up to 80%) | baseline | in OECD countries Acces to improved sanitation: baseline Connection to sewage: relative to a target ol connecting all urban dwellers with improved sanitation to sewage: 50% of the gap between the 2000 situation and this target will have been closed by 2030. Treatment: relative to a target of having sewage treatment installed and upgraded to the next best removal efficiency for nitrogen compounds, it is assumed that by 2030 all participating countries have treatment installed and/or have upgraded installations to an average removal rate of the next best type of treatment. | in OECD countries and BRIC: Acces to improved sanitation: baseline Connection to sewage: relative to a target ol connecting all urban dwellers with improved sanitation to sewage: 50% of the gap between the 2000 situation and this target will have been closed by 2030. Treatment: relative to a target of having sewage treatment installed and upgraded to the next best removal efficiency for nitrogen compounds, it is assumed that by 2030 all participating countries have treatment installed and/or have upgraded installations to an average removal rate of the next best type of treatment. | IN OECD, BRIC and RoW Acces to improved sanitation: baseline Connection to sewage: relative to a target ol connecting all urban dwellers with improved sanitation to sewage: 50% of the gap between the 2000 situation and this target will have been closed by 2030. Treatment: relative to a target of having sewage treatment installed and upgraded to the next best removal efficiency for nitrogen compounds, it is assumed that by 2030 all participating countries have treatment installed and/or have upgraded installations to an average removal rate of the next best type of treatment. | Baseline | Synergy with reaching health objectives. Upgrading treatment from mechanical to biologcal or better ensures removal of pathogens.