Roki Fukuzawa

Integration of Climate Change Policy to Foster Pollution Prevention and Sustainable Industrial Practices

Roki Fukuzawa

Integration of Climate Change Policy to Foster Pollution Prevention and Sustainable Industrial Practices

In order to reflect the co-benefits of climate change mitigation for improved environmental protection, changes in the current industrial practices and environmental legislation are needed. A case study of the nickel industry is examined in this dissertation. The nickel industry is faced with multi-faceted sustainability challenges as it is required to deal with declining ore grades, meet more stringent environmental regulations and be more energy efficient, all while remaining cost competitive and aligning with the international goals of climate policy. The objectives of this dissertation are to evaluate how the industry can strategically tackle these challenges simultaneously and how policy makers can design climate change policies that create opportunities for pollution prevention while reducing greenhouse gas emissions.

Nickel resources are categorized into two ore types: sulphide and laterite. They require fundamentally different processing methods to extract nickel products. Nickel production from laterite ores is expected to increase in the near future since laterite resources are more abundant and sulphide resources have been optimised. However, processing laterite ores is more energy intensive and hence emits more carbon dioxide (CO2) per unit of product than processing sulphide ores; this is a critical sustainability issue for the industry as it is susceptible to falling within climate change policy.

A material and energy input-output analysis was carried out for the laterite processing industry to identify CO2 reduction opportunities. A multi-criteria decision tool was developed to relate the economic, technological, environmental and institutional rationale with the selection of processing options and technologies. Using this model, the CO2 reduction options were compared with the current practice to establish a business-as-usual (BAU) scenario. Three climate change policy instruments (carbon tax, emission trading and emission limits) were incorporated into the model to understand how they would influence the preference compared to the BAU scenario.

The results suggest that for both greenfield projects and existing facilities, incremental efficiency improvements and process optimization should be pursued regardless of climate change policy, as they often result in cost savings. Energy recovery options will become attractive when a price is placed on CO2. Decarbonizing electricity usage is a cost-effective way to achieve significant CO2 reductions, particularly in the case of an imposed reduction target. However, none of the policy instruments investigated would promote process innovation at the price range envisioned.

In conclusion, the market-based instruments using a price range of $30 to $80 per tonne of CO2 are not sufficient to drive innovations in processing methods or upstream pollution prevention, but they will promote efficiency improvements and energy recovery. The co-benefits
of climate change mitigation and pollution prevention cannot be readily realized under climate change policy alone. Increased coordination between climate change policy and performance-based environmental regulations is necessary.