Adopting Carbon Pricing Tools at the Local Level: A City Case Study in Portugal
Round 1
Reviewer 1 Report
The determination of carbon price is a critical issue. Unfortunately, this article does not have a solid analysis of the results.
There are three research contents in this article.
The first is an overview of the Social Cost of Carbon (SCC) and Marginal Abatement Cost (MAC) methods.
The second is an overview of the current carbon trading pilots including the Chinese case that comprises five more cities and three provinces, totaling 14 cities, and verify that either did not adopt neither of the two cost methodologies or did not make it publicly available.
The third content describes the approach applied to determine a CO2 price to be used in the AYR platform project in Matosinhos municipality in Portugal. By simulating different scenarios and using the energy system model TIMES, which usually the climate economy module for analysis, relevant results are obtained.
However, the three parts are irrelevant to each other and the connection between these three part is very weak. As we know, the integrated assessment models (IAMs), such as the TIMES, their climate economy module may use the cost-effectiveness, cost-benefit, cost-impact and other analytical methods to focus on maximizing social benefits or minimizing losses (Dowlatabadi, 1995; Peng et al. 2017), which may provide solid base for the carbon pricing. Therefore, in particular, I would anticipate the author to elaborate the review of the integrated assessment models (IAMs) and how the IAM models evaluate costs, so as to analyze and verify the rationality and scientificity of the method used in the case in terms of carbon prices, rather than expounding the traditional two methods and the practice of the pilot, but no practical information can be obtained.
Dowlatabadi H. 1995. Integrated assessment models of climate change: An incomplete overview. 23(4-5): 289-296.
Peng P, Zhu L, Fan Y. 2017. Performance Evaluation of Climate Policies in China: A Study Based on An Integrated Assessment Model. Journal of Cleaner Production, 2017, 164(oct.15):1068-1080.
Author Response
Response to Reviewer 1 Comments
Reviewer comment #1
The determination of carbon price is a critical issue. Unfortunately, this article does not have a solid analysis of the results. There are three research contents in this article. The first is an overview of the Social Cost of Carbon (SCC) and Marginal Abatement Cost (MAC) methods. The second is an overview of the current carbon trading pilots including the Chinese case that comprises five more cities and three provinces, totaling 14 cities, and verify that either did not adopt neither of the two cost methodologies or did not make it publicly available. The third content describes the approach applied to determine a CO2 price to be used in the AYR platform project in Matosinhos municipality in Portugal. By simulating different scenarios and using the energy system model TIMES, which usually the climate economy module for analysis, relevant results are obtained. However, the three parts are irrelevant to each other and the connection between these three parts is very weak.
Response #1
Thank you for your comments! We took them into account carefully and implemented them accordingly.
We improved and extended the linkages between manuscript different components. We added new content to explain our methodology (Section 2. Methods and Materials) and relocated some other content (specific text of Section 4. Carbon Pricing Initiatives at Local Level – pages 6-9). Besides, we improved the content in various parts of the manuscript, namely: Abstract, Section 1. Introduction, Section 3.2 Integrated Assessment Models in the last paragraph, and Section 4. Carbon Pricing Initiatives at Local Level.
To improve the analysis of the results, we added a new section dedicated to discussing the results. (Section 6. – pages 18-19)
Reviewer comment #2
As we know, the integrated assessment models (IAMs), such as the TIMES, their climate economy module may use the cost-effectiveness, cost-benefit, cost-impact and other analytical methods to focus on maximizing social benefits or minimizing losses (Dowlatabadi, 1995; Peng et al. 2017), which may provide solid base for the carbon pricing. Therefore, in particular, I would anticipate the author to elaborate the review of the integrated assessment models (IAMs) and how the IAM models evaluate costs, so as to analyze and verify the rationality and scientificity of the method used in the case in terms of carbon prices, rather than expounding the traditional two methods and the practice of the pilot, but no practical information can be obtained.
Dowlatabadi H. 1995. Integrated assessment models of climate change: An incomplete overview. 23(4-5): 289-296.
Peng P, Zhu L, Fan Y. 2017. Performance Evaluation of Climate Policies in China: A Study Based on An Integrated Assessment Model. Journal of Cleaner Production, 2017, 164(oct.15):1068-1080.
Response #2
Authors acknowledge the reviewer’s comment. We addressed it by adding the analysis of the IAM models use for carbon pricing estimation, focusing on the main characteristics that are of interest for policy making, namely the challenges of smaller scale and local level analysis (Section 3.2 Integrated Assessment Models – page 7)
Both references provided by the reviewer are extremely important for enhancing the IAMs assessment in our manuscript. We added them and other literature to improve this component (see Section 3.2 Integrated Assessment Models).
Moreover, we added specific aspects of how our work contributes and specify TIMES_PT model relevance (Section 5.2 TIMES_PT Model – pages 13-14) with the following text:
“The model results provide insights on climate mitigation transition cost for the full energy system and correspondent sectors. The model structure determines the energy system costs consistent with net-zero GHG emission target.” (see Section 5.2. - page 13)
“The model allows to develop scenarios that represent varying degrees of conditions associated with climate transition. In this work the scenarios focus on the combination of strong climate mitigation objectives and variations on low carbon mobility solutions deployment. The developed scenarios aim to assess complex energy systems configurations and contextualize associated cost to inform policy and local transition mechanisms design.” (see section 5.2 - page 14)
Reviewer 2 Report
The paper has scholarly value however it requires clarity of thought organization. It is widespread which includes discusssion and comparison od SCC or MAC then moving to 14 cities adopting various carbon pricing strategies. Then moving to case of portugal city which is under represented. Adoption of SCC or MAC as base and then conducting analysis for Matosinhos. A link between part 2,3 and 4 of the paper is inconsistent and do not project clear thoughts.
Methods and Materials section can be written clearly defining variables
Significance of using TIME_PT model to be explicitly stated
No clear recommendations for Portuguese municipalites
Author can cite some paper of Sustainability Journal as reference
At certain places paper is depicting Error! reference not found
Overall the paper has scholarly value but the flow and cohesion between the section is missing hence confusing readers about the carbon pricing methods discussed and methodology adopted for research.
Author Response
Response to Reviewer 2 Comments
We have all the comments point to point. We have uploaded two versions of the manuscript: track changes version and clean version.
Reviewer Comment #1
The paper has scholarly value however it requires clarity of thought organization. It is widespread which includes discussion and comparison of SCC or MAC then moving to 14 cities adopting various carbon pricing strategies. Then moving to case of portugal city which is under represented. Adoption of SCC or MAC as base and then conducting analysis for Matosinhos. A link between part 2,3 and 4 of the paper is inconsistent and do not project clear thoughts.
Response #1
Authors appreciate the reviewer’s comment. We improved and extended the linkages between manuscript different components. We also added additional content (Section 2. Methods and Materials) and relocated some others (specific text of Section 4. Carbon Pricing Initiatives at Local Level – 6-9). Furthermore, we improved the manuscript content in various chapters, namely: Abstract, Section 1. Introduction, Section 3.2 Integrated Assessment Models (last paragraph), and Section 4. Carbon Pricing Initiatives at Local Level.
Reviewer Comment #2
Methods and Materials section can be written clearly defining variables.
Response #2
Thank you for your suggestion. In order to clarify manuscript methodological approach, we added a new section of Methods and Materials (Section 2. – pages 2-3) dedicated to explaining our methodological steps and detail the correspondent rationale.
Reviewer Comment #3
Significance of using TIME_PT model to be explicitly stated
Response #3
We enhanced our arguments about the relevance of TIMES_PT model usage, and added suplementar description in Section 5.2 TIMES_PT Model (pages 13-14), namely the following text:
“The model results provide insights on climate mitigation transition cost for the full energy system and correspondent sectors. The model structure determines the energy system costs consistent with net-zero GHG emission target.” (see Section 5.2. - page 13)
“The model allows to develop scenarios that represent varying degrees of conditions associated with climate transition. In this work the scenarios focus on the combination of strong climate mitigation objectives and variations on low carbon mobility solutions deployment. The developed scenarios aim to assess complex energy systems configurations and contextualize associated cost to inform policy and local transition mechanisms design.” (see Section 5.2 - page 14)
Reviewer Comment #4
No clear recommendations for Portuguese municipalites
Response #4
Thank you for your comment. We improved our final recommendations content to explicitly evidence our research relevant for Portuguese communities, by adding the following paragraph in Section 7. Conclusion and Recommendations (pages 19-21):
“Portuguese municipalities should include in their energy and climate mitigating strategies similar frameworks to guide effective and efficient solutions selection and deployment. The establishment and structure of economic instruments for climate action at municipality level must be based on extensive scientific assessment processes to identify core aspects for effective objective fulfilment. Using integrated tools and scenario design it’s possible to assess and understand the implications of explicit policy decisions and instruments configuration. More particular the results showed with this work evidence how different low carbon mobility choices and level of utilisation can determine the correspondent CO2 price.”
We also added another recommendation for municipalities in general and comment the potential of international cities networks to leverage the adoption of economic instruments for climate mitigation (also in Section 6.).
Reviewer Comment #5
Author can cite some paper of Sustainability Journal as reference
Response #5
Authors followed the reviewer’s recommendation and added the following references from the Sustainability Journal:
Section 1. Paravantis, J. A. et al. (2021) (page 2) (Sustainability); Section 4. Chu, W. et al. (2020) (page 9) (Sustainability); Section 5.4. Liu, N. et al. (2021) (page 17) (Sustainability); Section 3.1. Ibrahim, N. and Kennedy, C. (2016) (page 6) (Energies)
Reviewer Comment #6
At certain places paper is depicting Error! reference not found
Response #6
These errors were corrected
Reviewer Comment #7
Overall the paper has scholarly value but the flow and cohesion between the section is missing hence confusing readers about the carbon pricing methods discussed and methodology adopted for research.
Response #7
Thank you for your positive feedback. We restructured part of the manuscript sections to provide a more logical flow and smoother transition between each component. In a more general perspective, we improved and extended the linkages between manuscript different components. We also added new content (Section 2. Methods and Materials) and relocated some others (specific text of Section 4. Carbon Pricing Initiatives at Local Level – pages 6-9). We improved the content in various parts of the manuscript namely Abstract, Section 1. Introduction, Section 3.2 Integrated Assessment Models in the last paragraph, and Section 4. Carbon Pricing Initiatives at Local Level.
The various modifications can be seen in the edited version of the manuscript:
We improved the Abstract
We extended the last paragraph of Section 1. Introduction to clarify the cohesion of the work
We added Section 2 Methods and Materials where we indicate and explain the rationale of our methodological steps
We altered the title of Section 3 to Concepts and tools for estimating the cost of carbon and Subsection 3.2 was added to introduce Integrated Assessment Models
We relocated Section 4. Carbon Pricing Initiatives at the Local Level in order to create a more logical flow of the content
We added a sentence in Section 5. Case Study – Assessment of a CO2 Price to Support City Transportation Mobility Decarbonization: “The assessment of the CO2 price emerged from the necessity to have a carbon price consistent with the circumstances of the case study rather than values based only on the literature.”
We have made the use and relevance of our choice of model more explicit in Subsection 5.2 TIMES_PT Model
We added Section 6. Discussion to integrate and extend our discussion of results
We expanded Section 7. Conclusion and Recommendations made more specific recommendations to Portuguese municipalities. We also added one more recommendation addressed to international cities networks for climate.
Round 2
Reviewer 1 Report
- This article provides a more detailedoverview of the MAC, SCCand IAMs methods used in carbon emissions trading and carbon pricing, as well as those used in practice. But there still seems to be little connection between the two traditional methods of MAC and SCC and IAM. These three should be different types of method, that is, before the advent of IAMs methods, using economic methods such as MAC and SCC to estimate, and IAMs are tools that can be used for further and more complex analysis with the advent of complex models. In this way, it may be possible to merge these types of methods by timeline.
- As shown in the supplement review of the 14 cities, there are few publicly available methods, except “the application of energy system models for the decarbonization of Oslo, based on the TIMES abatement cost model, with three scenarios, indicate optimal solutions with an overall cost of NOK 2300 (€223.5) per ton of CO2e removed(Lind and Espegren, 2017)”, so this article should be an important relevant ref. addressed in the article.
- The results obtained after the model simulation need more stronger bases to verify its rationality. Pricing for the basic REF. scenario need to be explained in more detail; and it is not enough to only compare the price from different cities and regions with completely different economic conditions and purchasing power, etc. The basis for the relevant pricing is clearly shown in (Lind and Espegren, 2017).
Author Response
Response to Reviewer 1 Comments
Point 1: This article provides a more detailed overview of the MAC, SCC and IAMs methods used in carbon emissions trading and carbon pricing, as well as those used in practice. But there still seems to be little connection between the two traditional methods of MAC and SCC and IAM. These three should be different types of method, that is, before the advent of IAMs methods, using economic methods such as MAC and SCC to estimate, and IAMs are tools that can be used for further and more complex analysis with the advent of complex models. In this way, it may be possible to merge these types of methods by timeline.
Response 1: The authors appreciate the reviewers’ comments. We clarified that MAC and SCC are two concepts that refer to distinctive and complementary ways of carbon cost calculation, and that IAMs are tools that are developed to operationalize the different ways of carbon cost calculation. Verbs and expressions are more direct (last paragraph of Section 1., first paragraphs of Section 2. and Section 3.). We added a new paragraph (last paragraph of Section 3.) where we further clarify the connections between concept, methods and models and look into the future. We agree that it is reasonable to expect that IAMs will be developed into more complex tools with features, as science tends to integrate knowledge, considering the growing nuances required in carbon cost calculation, especially when the scales become smaller.
Point 2: As shown in the supplement review of the 14 cities, there are few publicly available methods, except “the application of energy system models for the decarbonization of Oslo, based on the TIMES abatement cost model, with three scenarios, indicate optimal solutions with an overall cost of NOK 2300 (€223.5) per ton of CO2e removed (Lind and Espegren, 2017)”, so this article should be an important relevant ref. addressed in the article.
Response 2: Thanks for your sharp notice. We added/moved the quote of Lind and Espegren (2017) research into the end of fourth paragraph Section 4. We also noticed that the other quote in our text of the same research was not referenced (last paragraph of Section 6.). Both are now in the references list.
Point 3: The results obtained after the model simulation need more stronger bases to verify its rationality. Pricing for the basic REF. scenario need to be explained in more detail; and it is not enough to only compare the price from different cities and regions with completely different economic conditions and purchasing power, etc. The basis for the relevant pricing is clearly shown in (Lind and Espegren, 2017)
Response 3: We added a sentence in the end of the second paragraph of Subsection 5.4 to clarify the rationality of the results. The data on the system total costs for each scenario can be found in Annex 3. in the Supplementary File. We agree that conditions between cities/regions are very different. We didn’t include a detailed comparison of prices from different cities as our aim was to have an overview perspective of other studies similar to ours.
