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Add multiple versions of carbon-price variables #38

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Add multiple versions of carbon-price variables #38

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26 changes: 26 additions & 0 deletions definitions/variable/socio-economic/carbon-price.yaml
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- Price|Carbon:
description: Price of carbon (as reported by the model)
unit: USD_2010/t CO2
region-aggregation:
- Price|Carbon (mean):
method: mean
- Price|Carbon (weighted by Emissions|CO2):
weight: Emissions|CO2
drop_negative_weights: false
- Price|Carbon (weighted by Final Energy):
weight: Final Energy
check-aggregate: false
- Price|Carbon (mean):
description: Price of carbon (computed as unweighted mean across regions)
unit: USD_2010/t CO2
skip-region-aggregation: true
- Price|Carbon (weighted by Emissions|CO2):
description: Price of carbon (weighted by regional CO2 emissions)
unit: USD_2010/t CO2
skip-region-aggregation: true
note: Regional CO2 emissions can turn negative at different points in time, which
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I wonder whether aggregating by Gross Emissions|CO2 would be preferable, avoiding this really counter-intuitive and confusing issue of negative or undefined (division by 0) carbon prices

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Not sure about that, this solution would also deviate from the "standard" solution where the price is weighted by net emissions.

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There is no "perfect" solution. In my view, the version "weighted by final energy" would be the best default setting, as it represents the angle "how large is the energy system for which a carbon price is relevant" (this could also be "primary", but I think final is a bit better), but if one takes a different angle, other aggregations can be more fitting.

If there is a specific angle for which weighting by "gross emissions" would be better, it could be added as well, right?

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Yes, we can always add other aggregation metrics and variables for specific projects. For example, ECEMF uses final-electricity as weight (in addition to other weights) because this has project includes electricity-only models.

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Gross and Net emissions are both fine.
Having negative mean pricing should be rare: in my understanding, this would happened if regions without NET have higher carbon prices than in regions with NET, which is really counter-intuitive and is more a modelling issue.

In the past Gross emissions were used (previous papers and the IPCC) to compute the net present value of the global carbon price in order to cover negative prices, but again I think at that time the issue was the use of a discount rate not compatible with some model results, rather than using "Gross" over "Net" emissions.

Anyway those should be moved to the "macro" list now.

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@FlorianLeblancDr I don't understand the comment - it is quite easy to get weird results when using net emissions as weights.

Here two cases with two regions with different carbon prices - while emissions are quite similar between the two cases, they flip from -800$/tCO2 in case A to +1200 $/tCO2 in case B:

image

So I still think weighing by another metric that is more stable and preferably related to the overall size of the energy system (such as FE) is much more robust and useful when calculating average carbon prices - if one is interested in "what carbon prices does the world see on average", and not simply "what are carbon pricing revenues" - the second question is very different from the first one.

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Thank for this numerical example @robertpietzcker
I agree then.

With the caveat: carbon price trigger energy efficiency, which in this case decrease the weight applied.

can result in counter-intuitive timeseries when used as weights for averages
- Price|Carbon (weighted by Final Energy):
description: Price of carbon (weighted by final energy consumption across regions)
unit: USD_2010/t CO2
skip-region-aggregation: true