Is the optimal decarbonization pathway influenced by indirect emissions? Incorporating indirect life-cycle carbon dioxide emissions into a European TIMES model

Abstract Energy system optimization models (ESOMs) such as MARKAL/TIMES are used to support energy policy analysis worldwide. ESOMs cover the full life-cycle of fuels from extraction to end-use, including the associated direct emissions. Nevertheless, the life-cycle emissions of energy equipment and infrastructure are not modelled explicitly. This prevents analysis of questions relating to the relative importance of emissions associated with the build-up of infrastructure and other equipment required for decarbonization. We have soft-linked an environmentally-extended input-output (EEIO) model to a European TIMES Model (ETM-UCL) with the aim of addressing the following questions: - In what ways does the inclusion of indirect emissions change the optimal technology pathway for decarbonizing the European energy system? - How much does the present value of key low-carbon technologies change when indirect emissions are accounted for in a decarbonization scenario for Europe? We show that, although indirect emissions are a relatively small portion of overall power sector emissions ( increased relative deployment in 2050 when indirect emissions are accounted for, since it displaced other technologies with higher life-cycle emissions (notably solar PV). Optimal cumulative installed capacity of PV in the EU 2050 is at least 7% lower when indirect emissions are included. We conclude that policy advice derived from ESOMs that focuses on the roles of specific technologies should ensure that it is robust to the possible effects of indirect emissions.