Post Kyoto Options for Belgium, 2012-2050

This report examines possible post-Kyoto options for Belgium. Climate change is coming up again at the top of the policy agenda with the decision of the European Commission to reduce its GHG emissions by 20% by 2020. The analysis is done with the MARKAL/TIMES model, a partial equilibrium model for the energy system. It is a technico-economic model, which assembles in a simple but economic consistent way technological information (conversion-efficiency, investment- and variable costs, emissions, etc.) for the entire energy system. Two CO2 reduction scenarios for Belgium are analysed up to the horizon 2050, with and without the possibility of nuclear and carbon capture technologies. The scenarios analysed show that it is possible to attain very stringent CO2 reductions in Belgium. The welfare cost remains limited in the case of a -22.5% reduction in 2050 compared to 1990. The cost is 0.7% of GDP on an annual base but it can become more expensive and reaches up to 1.3% of GDP on an annual base, when the reduction is -52%. These costs are the costs within the energy system without considering any potential side benefits (reduction of other air pollutants and energy security) and assuming a CO2 tax or a permit system as policy instrument for achieving the CO2 reduction target, i.e. an efficient instrument.