Energy and climate protection

In 2011, Germany embarked on its energy transition (Energiewende) with the aim of making its energy supply clean, secure and affordable. The Climate Action Plan 2050 confirms and specifies the German government’s ambitious climate targets. Germany’s stated goal is to become largely greenhouse gas-neutral by 2050, mainly through renewables use and energy efficiency.

However, the German government’s ambitious plans have faltered. There is a looming climate gap: the German government has already distanced itself from its aim of cutting emissions by 40 per cent to 2020 compared with 1990 levels, and has set new interim sectoral targets up to 2030 in the Climate Action Plan. Major challenges exist in relation to the coal phase-out and climate change mitigation in the mobility and heat sectors, and more intensive efforts are needed in agriculture, forestry and the biomass industry, for example.

Energy and climate in Europe

These efforts also form part of Germany’s contribution to meeting Europe’s energy and climate targets. Here, the goal is to achieve at least a 40 per cent cut in greenhouse gas emissions from 1990 levels, at least a 32 per cent share for renewable energy and at least a 32.5 per cent increase in energy efficiency by 2030. For fulfilment of the climate goal, all the member states must reach targets for emissions that are not covered by the EU’s carbon trading scheme. However, without further action, Germany is likely to face costs running into tens of billions of euros, since the latest forecasts show that it is set to miss its target by a wide margin.

International climate action

At the Paris climate negotiations in December 2015, the international community pledged to hold the increase in the global average temperature to well below 2˚C and to pursue efforts to limit temperature rise to 1.5˚C above pre-industrial levels. A radical transformation of our energy supply, away from fossil fuels and towards renewable energies, is a key step in meeting this ambition. And yet worldwide, climate protection faces immense challenges, not least in relation to land use and land-use change. For example, tropical forests are being cleared to make way for the cultivation of palm oil and other lucrative crops, while the extraction of shale gas – a fossil fuel – through fracking poses untold risks to soils and groundwater. At the international climate talks, clear rules were negotiated on the accounting and reporting of emissions, along with policies and actions for reducing them. Distribution issues are another key focus of attention at the international climate negotiations: where can emissions be reduced most cost-effectively, which adaptation measures should be taken, what kind of transfers are feasible and necessary, and how can justice be served?

A long way to go

Back in 1980, the Oeko-Institut published an in-depth analysis, entitled The Energy Turnaround – Growth and Prosperity without Oil and Uranium, which showed that a world without nuclear power and fossil fuels is possible with no renunciation of growth and prosperity. Decades after the publication of this study, Oeko-Institut researchers are working on a range of topics to support and drive forward the necessary transition to a low-carbon society. We develop appropriate strategies and toolkits, monitor and assess policies and actions, and provide sound scientific advice for policy-makers and stakeholders.

Expertise

Developing and assessing climate policies and actions

The development of policy instruments is a specific form of policy advice and strategy consulting. The Oeko-Institut’s researchers draw up proposals on ways to address specific challenges in the field of energy and climate protection – through regulatory law, planning law, incentive schemes, information or procedural approaches. They focus not only on environmental outcomes but also on social sustainability, economic efficiency, policy coherence, enforceability and acceptance. Climate protection covers policies and actions in a range of areas, including transport, industry, households, buildings, agriculture and forestry, with Oeko-Institut experts working together to address these issues on a multidisciplinary basis.

Policy advice and strategy consulting

The Oeko-Institut’s researchers are often involved in the practical development of programmes, legislation, strategies and instruments. By sharing their technical and legal expertise and their knowledge of processes and stakeholders at national, sub-national or municipal level, in the EU or within companies, the Oeko-Institut’s team of experts contributes to more sustainable solutions.

Policy evaluation

Researchers at the Oeko-Institut evaluate policy instruments, strategies and programmes before they are implemented (ex-ante evaluation, impact assessment) or during and after the implementation process (ex-post). They draw on a variety of evaluation methods, including theory-based evaluation, empirical appraisals and modelling. Using qualitative and quantitative methods, they assess aspects of the measures adopted, such as environmental effectiveness, social sustainability, economic efficiency, policy coherence, enforceability and acceptance.

What are the effects of climate change mitigation measures? Energy-economic models and analyses

Scenarios and visions

Scenarios and visions help to map potential pathways towards compliance with climate goals. For Germany, the Oeko-Institut’s researchers develop scenarios based on the national climate targets for 2030 and 2050 and the emission reductions needed to achieve them; they also assess the environmental, economic and social impacts. Projections are developed and evaluated on behalf of the European Union as well. As part of this process, actions are integrated into the scenarios and sets of measures are compared.

Energy-economic models and analyses

Distributional Analysis of Energy Efficiency Measures (EnEffDist)

Every energy and climate policy measure brings about distributional effects within the population. Detailed household data can be used as a means of determining the distributional effects of measures or policies. EnEffDist shows how an induced change in the price of consumer goods or changes in the quantities demanded affect different types of household. The individual dimensions of distribution that are considered include disposable income, household composition and social status.

Infographic: Distributional effects of energy efficiency and energy saving measures

Building Stock Transformation Model (Building STar)

The Building Stock Transformation Model applies a stock exchange approach to Germany’s building sector. It covers residential and non-residential buildings and models ‘building cohorts’ in different resolutions. It can be used to assess the effect of various policies that support upgrading activities (refurbishment rate, intensity), such as measures to improve the building shell or to decarbonise the heat supply.

Electricity Investment Analysis Modell (ELIAS)

The Electricity Investment Analysis Model (ELIAS) is a capital cost model for the German electricity sector. It determines which power plant investments represent the lowest cost options under given environmental conditions. In the Policy Scenarios (Politikszenarien) project, researchers at the Oeko-Institut analyse impacts of different climate change mitigation measures on the future electricity generation mix and the corresponding CO2 emissions. ELIAS is also applied to examine the impacts of renewable energies and e-mobility on the generation mix.

FABio-Farming

The Oeko-Institut employs two separate agricultural modelling tools: one Excel-based, the other a simulation model (FABio). Both these tools model arable and livestock farming under various management systems (e.g. conventional and organic farming, extensification). The Excel model calculates greenhouse gas emissions and can be used to quantify the effects of climate protection measures in agriculture. FABio can additionally model environmental parameters (biodiversity, nitrogen content, carbon) and is based on more nuanced economic assumptions.

FABio-Forestry

The FABio-Forestry tool for modelling forest growth and silvicultural management is based on data collected for phases 2 and 3 of the German National Forest Inventory (BWI-2 and BWI-3). It is a distance-independent individual tree growth model that can be applied to various forest development scenarios. FABio includes the following components: a model for calculation of tree growth, an ingrowth model for the characterisation of new trees, mortality, deadwood and soil carbon models, and a model for the sorting and classification of wood products. FABio supports scenario analyses as a basis for comparison of model results for various silvicultural practices and management scenarios and their effects on wood supply, carbon sequestration and aspects of nature conservation.

FABio-LULUCF

For the Land Use, Land Use Change and Forestry (LULUCF) sector, Oeko-Institut developed an Excel-based model that - based on historic reported data – projects land management and their changes and associated emissions up to 2050. Mitigation measures such as a ban on grassland conversion or the rewetting of bogs can be addressed in scenarios. The model is available in a version for Germany and the EU. FABio-LULUCF for Germany integrates the results from FABio-Wald and transfers changes in agricultural land to FABio-Agrar.

Input-output modelling (EmIO)

EmIO is an input-output model which models the linkages between sectors within the national economy and includes a specific module for impacts on jobs. It is available in two forms – EmIO-D (Germany) and EmIO-EU – based on the input-output tables produced by the German Federal Statistical Office and Eurostat respectively, which are published each year within the scope of national economic accounting. EmIO can be used to calculate the employment effects of investment, cost savings or additional costs resulting from energy and climate policy measures in the various sectors. It also takes into account the linkages within the national economy and inputs from other sectors.

Econometrics and statistics (OekoStat)

With the help of econometric analyses of time series and household or company data, researchers at the Oeko-Institut are able to determine historical linkages between different factors and draw conclusions on their further development. A key purpose of these analyses is to model the influence of energy and climate policy measures on prices and the behaviour of households and companies.

PowerFlex

PowerFlex is an electricity market model which is used to calculate the optimum operation of power plants, storage and flexibility options (e.g. cold storage facilities and electric vehicles) in the fulfilment of the electricity and district heating demand and the provision of balancing capacity. What is special about this model is that it presents a variety of flexible options on the electricity demand and supply sides in detail. From the calculated dispatch profiles, additional key results are modelled, such as CO2 emissions, storage losses and the resulting electricity prices. PowerFlex is used in various research projects at the Oeko-Institut and can be coupled with the ELIAS investment model.

Infographic: Interaction between the ELIAS und PowerFlex models

PowerFlex-Grid

PowerFlex-Grid models the German transmission grid with approximately 500 nodes. Neighbouring European countries are also incorporated in simplified form as network nodes to enable modelling of electricity imports and exports between these countries.

Computable general equilibrium model (FARM-EU)

FARM-EU is a multi-regional dynamic computable general equilibrium (CGE) model with a focus on assessing the impacts of energy and climate policies on macroeconomic and sectoral development to the year 2040. FARM-EU shows the effects of policies and measures on prices, trade, energy demand and CO2 emissions. It also analyses competition effects and the risks of carbon leakage. This type of multi-country macroeconomic analysis and assessment is of particular relevance from an international climate policy perspective.

Infographic: Computable general equilibrium model developed by the Oeko-Institut

Further information on energy-economic models and analyses

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