The Heat Is Online

EIA: Emissions Cuts Much Cheaper Than Previously Thought

EU seizes on Washington report to press US on climate change
The Financial Times, April 19, 2005

European officials made another attempt to put the US under pressure on climate change yesterday, as a delegation from the European Union met senior officials in Washington to discuss co-operation on environmental issues.

The meeting came as a report from the US Energy Department found that action to curb greenhouse gas emissions would have only a very small effect on the US economy.

Stavros Dimas, the European Union's environment commissioner, said: "Both climate change and sustainable development are top priorities. [It is] important that we achieve sustainable development and provide all the people in the world with decent living conditions."

Mr. Dimas was joined by Lucien Lux of Luxembourg, which holds the EU presidency, and Lord Whitty of the UK, which will take over the presidency in July. The meeting, with Paula Dobriansky, undersecretary of state for global affairs, and other senior US officials, took place in the middle of the UN's Sustainable Development Commission annual meeting in New York, which ends on Friday.

Previous talks between the EU and the US have led to little more than bland statements agreeing on the importance of developing new technology to combat global warming. While the EU is one of the strongest proponents of the UN-brokered Kyoto protocol on climate change, the US has explicitly rejected the treaty.

But this time, the EU had a new weapon: the report from the US Energy Information Administration, which found that reducing emissions would cost much less than opponents of emissions reduction had said.

The EIA analysed a set of recommendations made by the National Commission on Energy Policy late last year. It found that reducing US greenhouse gas emissions by 4 per cent by 2015 and by 7 per cent by 2025, in accordance with the NCEP's recommendations, would cost 0.15 per cent of gross domestic product.

That would be the equivalent of $78 per year to each US househould by 2025. Electricity prices would rise by less than 5 per cent more by 2025 than they are estimated to rise without the pressure of emissions reductions.

These reductions are somewhat less than the cuts the US would be likely to be required to make in the same period under the Kyoto protocol. But the costs of Kyoto would still be considerably less than 0.5 per cent of GDP using these calculations.

Under the NCEP's recommendations the use of coal would increase 16 per cent by 2020, compared with predictions that if the US implemented Kyoto its use of coal would have to drop 70 per cent.

Electricity generators would be expected to invest in forms of coal-burning plant that released fewer greenhouse gas emissions.

Paul Bledsoe, director of communications and strategy at the NCEP, said: "This is the difference between political feasibility and political infeasibility. The US is not going to adopt a plan that would reduce coal use by 70 per cent."

April 13, 2005 202-637-0400 -- National Commission on Energy Policy

US Energy Information Administration Releases Analysis of National Commission on Energy Policy Recommendations

The U.S. Department of Energys Energy Information Administration today released a detailed analysis of policy recommendations made by the National Commission on Energy Policy in its December report, "Ending the Energy Stalemate: A Bipartisan Strategy to Address Americas Energy Challenges."

The Energy Information Administration (EIA) study analyzed a number of the NCEPs major recommendations, including the Commissions cap and trade proposal to address climate change and its fuel economy recommendations.

According to EIA, the NCEP climate plan would have the following impacts over the next 20 years:

  • Costs to the U.S. economy would be no more than 0.15% of GDP or about $78 per household per year, while overall GDP is projected to grow by 87%;
  • Electricity prices would rise by less than 5% relative to forecast levels
  • Coal use would grow by 22% by 2025 relative to current levels;
  • Natural gas demand is projected to increase by 1.1% by 2025 compared to baseline forecasts;

- Non-hydro renewable electricity generation would rise by 65% by 2025 compared to baseline forecasts.

Other findings from the EIA study include:

  • Natural gas use is expected to fall 3.6% in 2025, versus a 1.1% increase under the emissions trading program alone, because of efficiency programs as well as increased renewables and increased deployment of IGCC.
  • Petroleum use is expected to fall 7.3% in 2025, compared to forecast levels, because of tighter vehicle fuel efficiency or CAFÉ standards.

 

  • Reductions in electricity sales of 77 billion kilowatt hours (2%) in 2015 and 163 billion kilowatt hours in 2025 due to improved building and appliance efficiency standards.
  • Accelerated deployment of coal-based IGCC facilities to 44 GW from a reference case of 16 GW in 2025.
  • Cumulative federal expenditures for tax incentives, research, development, demonstration and deployment of low carbon technologies (IGCC & sequestration, biofuels, renewables, advanced nuclear, efficiency etc) are fully offset by revenue generated from the sale of greenhouse gas permits.

The full EIA analysis can be found at: http://www.eia.doe.gov/oiaf/servicerpt/bingaman/index.html

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Bipartisan Commission Issues Strategy to Address Long-Term U.S. Energy Challenges

Detailed Recommendations on Oil Security, Climate Change, Natural Gas, Nuclear Energy, and Other Key Topics the Result of 2 Years of Research and Consultation

Consensus Plan; Group to Spend 2005 Advocating Package

(Washington, D.C.) 12-08-04 -- A bipartisan group of top energy experts from industry, government, labor, academia, and environmental and consumer groups today released a consensus strategy, more than two years in the making, to address major long-term U.S. energy challenges. The report, "Ending the Energy Stalemate: A Bipartisan Strategy to Meet Americas Energy Challenges," contains detailed policy recommendations for addressing oil security, climate change, natural gas supply, the future of nuclear energy, and other long-term challenges, and is backed by more than 30 original research studies.

"Political and regional polarization has produced an energy stalemate, preventing America from adopting sensible approaches to some of our biggest energy problems," said John W. Rowe, Commission co-chair and Chairman and CEO of Exelon Corp. "Our Commission reached consensus on effective policies because of a willingness to take on cherished myths from both right and left. We believe that this package of recommendations can be of value to Congress and the Administration in energy legislation next year and beyond."

"Taken together, the Commissions recommendations aim to achieve a gradual but decisive shift in the nations energy policy, toward one that directly addresses our long-term oil, climate, electricity supply, and technology challenges," said William K. Reilly, former EPA Administrator and Commission co-chair. "Oil reliance is a fact we will face for some time. So we recommend incentives to spur global oil production, to increase domestic vehicle fuel economy, and to increase investment in alternative fuels. Our climate change plan would both limit greenhouse gas emissions and cap the costs of doing so. At the same time, it provides incentives for low- and non-carbon sources like natural gas, renewable energy, nuclear energy, and advanced coal technologies with carbon capture and sequestration, as well as for increased efficiency of energy end use. We are proposing programs that can work in the real world."

"It's essential to take some prudent steps now to avoid intolerable costs and impacts later," said John Holdren, Heinz Professor of Environmental Policy at Harvard University and Commission co-chair. "The task of energy policy is to ensure the reliable and affordable energy services that a prosperous economy requires while simultaneously limiting the risks and impacts from overdependence on oil, from global climate change, and from other environmental and political liabilities of the available energy-supply options. Meeting this challenge requires measures to encourage increased use of the best available technologies for energy supply and energy end-use efficiency in the years immediately ahead, as well as increased investments in energy research and development to improve the options available to us in the future."