Achieving sustainability in non-ETS sectors using system dynamics modelling practice

The European Union (EU) has recently agreed on an ambitious framework for climate and energy policies by 2030. The new commitment foresees greenhouse gas (GHG) emissions reduction by 40 % compared to 1990. The part of these reductions is going to come from the EU Emission trading system (ETS) and other part from the sectors outside the EU ETS or, so called, non-ETS sectors: agriculture, transport, waste management and the part of energy sector and industry, which is not included in the ETS. As for now, much research has focused on studies relevant to the ETS; meanwhile, the largest part of GHG emissions in Europe is generated by non-ETS sectors. Therefore our study aims to strengthen the decision making capacity by providing the comprehensive modelling tool for policy analysis in non-ETS sectors. This tool is based on system dynamics modelling approach and encompasses the mathematical model for non-ETS sectors. With this model we analyse the effectiveness of various policy measures aiming to reduce GHG emissions in non-ETS sectors. The obtained results are compared with the benchmarks set by the EU climate and energy policy. Latvia is selected as a case study. We perform the analysis of baseline and green scenarios and test the model for sensitivity. The obtained results show that with the existing policy framework, in 2030, GHG emissions would increase by 19 % above the 2005 level. Since the developed model is white-box modelling approach therefore the dynamic relationships of driving forces behind the GHG emissions in non-ETS sectors can be transferred to other case studies and extended to the EU.