Modeling of CO2 Reduction Impacts on Energy Prices with Modelica

There is growing evidence that anthropogenic carbon dioxide (CO2) emissions as a by-product of the com-bustion of fossil fuels for energy use is raising the earth’s temperatures and potentially leading to irre-versible climate change. Additionally the growth in global emissions is likely to rise at an increasing rate due economic growth, especially in developing countries. Leading climate change mitigation strate-gies require a global CO2 emission permit trading regime which is postulated to facilitate the lowest cost emission reduction options and technologies. However, given the technologies are still maturing the economic considerations appear to dictate slow initial reductions which will then grow at an increas-ing rate as technologies such as wind, solar and car-bon capture and storage mature. These economic considerations however may be in conflict with longer-term optimization of costs and benefits, which may be better addressed by earlier interven-tion. In this paper we present a Modelica model de-signed to allow exploration of the tradeoffs between least cost emission cuts and early stabilization of atmospheric carbon dioxide.