How ambitious can the Israeli Green Deal be?

Israeli policy makers are considering carbon reduction targets for 2050. This chapter provides a comprehensive, economy-wide analysis of the alternative pathways for energy-related carbon emissions reduction in Israel. An integrated modeling exercise, based on a newly developed MESSAGEix_IL-MACRO framework, was performed to assess the cost-effectiveness of greenhouse gas (GHG) emissions reduction options in the Israeli energy system. Renewable electricity generation, transport electrification targets and imposing a carbon tax were evaluated in particular. The results show that, by the adoption of such a policy or a more ambitious policy (with a higher carbon tax), energy-related GHG emissions could be reduced by about 60% to 90% respectively, by 2050 relative to the reference year of 2005, with only a minor impact on the growth of the national GDP. Decarbonization of the Israeli economy will necessarily be based on increasing the electrification of transport and industry and on generating power from renewable energy resources (mainly solar). The unique challenge for the Israeli policy makers is a population growth rate that is unprecedented in the developed world. The infrastructure will need to be developed rapidly to maintain and improve the standard of living. This challenge also presents the opportunity for a quick transition to a cleaner economy. The modeling tool and its outcomes can provide valuable insights for the design of clean energy policies that permit fostering sustainability targets. This methodology results in various scenarios that may help decision makers to understand the options available to them to accomplish the ambitious goals and targets they may set.