Integrated cost-effectiveness analysis of greenhouse gas emission abatement: The case of Finland

In Finland greenhouse gas emissions are expected to increase during the next decades due to economic growth, particularly in the energy intensive industrial sectors. The role of these industries is very central in the national economy. The emission control according to the Kyoto Protocol will therefore be quite difficult and costly. The study analyses the cost-effectiveness of different technical options for reducing the emissions of carbon dioxide, methane, and nitrous oxide in Finland. The analysis is performed with the help of a comprehensive energy system model for Finland, which has been extended to cover all major sources of methane and nitrous oxide emissions in the energy sector, industry, waste management and agriculture. The focus being on technical options, no consi-deration is given to possible policy measures, emission trading or joint implementation in the study. Under the boundary conditions given for the development of the Finnish energy economy, cost-effective technical measures in the energy system include increases in the use of wood biomass, natural gas and wind energy, increases in the contribution of CHP to the power supply, and intensified energy conservation in all end use sectors. Additional cost-effective measures are landfill gas recovery, utilisation of the combustible fraction of waste and catalytic conversion of N2O in nitric acid production. With baseline assumptions, the direct annual costs of emission abatement are calculated to be about 2000 MFIM (330 MÎ) in 2010. The marginal costs are estimated to be about 230 FIM (40 Î) per tonne of CO2-equivalent in 2010. The cost curve derived from the analysis could be used in further analyses concerning emissions trading.