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The Incredible Shrinking Carbon Pollution Forecast - Part 2

Dan Lashof

Posted June 26, 2012 in Solving Global Warming

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(Updated with clearer figure 6/29/2012)

Back in February I posted about a surprising development: Despite the failure of comprehensive climate and energy legislation in 2010, U.S. carbon pollution emissions and projections of future carbon pollution have been coming down ever since. A new forecast out this week continues that trend.

While there has been some press coverage of these facts (see here and here) I continue to find that most people are surprised to learn about this progress.

My previous post was based on the “Early Release” version of the 2012 Energy Information Administration’s (EIA) Annual Energy Outlook and I noted at the time that the final version was likely to include a downward revision. On Monday EIA released its full Annual Energy Outlook 2012 (AEO 2012), and I get to say I told you so (see figure).

AEO2012 graph.jpg

The Reference case projection for 2020 was reduced by 2.1 percent, while the forecast for 2035 was reduced by less than 1 percent. The official forecast for 2020—assuming no new policies—is now for carbon emissions to be 9.4 percent lower than they were in 2005. This is a huge contrast to the forecast made by EIA just seven years ago: the AEO 2005 projected that emissions would increase by 25 percent between then and 2020.

The full version of the AEO also includes a number of “sensitivity” cases, which examine how the forecast changes in response to changes in various assumptions. EIA is very conservative in how it defines “current” policy—it generally only includes final regulations in its Reference case, even when additional standards are almost certain to be established. That’s the case with passenger vehicle fuel economy (CAFE) and carbon standards for 2017-2025 model year vehicles. The Obama administration proposed those standards last year and they have been embraced by automakers and environmental advocates alike, so they are almost certain to be finalized without major changes this year. Nonetheless, these standards are not included in the Reference case, but their effect is analyzed in the “CAFE” case shown in the figure (the previous round of vehicle standards for model years 2011-2016, which are final, are included in the Reference case). EIA projects that this second round of vehicle standards will reduce U.S. carbon emissions by 1.5% in 2025 and 3.4% in 2035. (This is about half of the impact I had expected based on an offline analysis of the standards. EPA and the Department of Transportation expect a larger impact that EIA, and EIA notes that it has not fully incorporated information from the record of the proposed standard into its model).

Another version of what could be considered “current” policy is provided by what EIA calls its “Extended Policies” case. This case assumes implementation of the 2017-2025 vehicle standards and that further improvements are required from 2026 through 2035. This case also assumes that the Department of Energy continues to update energy efficiency standards for appliances as required by law and consistent with the Department’s strategic plan. (This case does not assume carbon pollution standards for power plants or other stationary sources, which EPA is also required by law to issue). The Extended Policies case reduces emissions by 1.3 percent relative to the Reference case in 2020 and 8 percent in 2035. The resultant forecast is for U.S. carbon pollution emissions to be 10.5 percent below 2005 levels in 2020 and 11.7 percent below 2005 levels in 2035.

I discussed various reasons for this incredible shrinking carbon pollution forecast in my previous post, which I won’t repeat here. What does bear repeating is that this means that the target embraced by President Obama of reducing U.S. emissions to 17 percent below 2005 levels by 2020 is well within reach.

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Comments

Stan ScobieJun 26 2012 05:52 PM

Is there a comparable projection set for CO2e?

Dan LashofJun 29 2012 05:48 PM

Good question Stan.
As far as I know the most recent official forecast of total heat-trapping pollution in CO2e was released in June 2010 as part of the Fifth U.S. Climate Action Report (available from http://www.state.gov/e/oes/rls/rpts/car5/). That forecast used the 2009 Annual Energy Outlook for energy-related CO2 and projected that under business-as-usual total emissions in CO2e would increase by 4.3 percent between 2005 and 2020.
I consider that forecast to be seriously out of date at this point.

Michael ShepardJun 29 2012 05:51 PM

Thanks for sharing a rare bit of encouraging news on the emissions front. Since your prior post on EIA's emissions projections I've incorporated their charts into several presentations and audiences have responded positively. The challenge seems so daunting that seeing a wedge or two of GHG reductions appear that you weren't counting on really boosts people's spirits.

I believe that the news may get better because EIA is understating the amount of emissions-reducing combined heat and power that will come on line in the future. One reason for this is that more jurisdictions are allowing utilities to count CHP toward their energy efficiency goals, which is giving those utilities reasons to embrace CHP, rather than fight it. In 2011, about 30 percent of the savings National Grid achieved in its DSM program came from CHP projects. That's a big jump in CHP's share of Grid's portfolio. Just this week, utility regulators in New Mexico approved a plan for Southwestern Public Service to include CHP projects in its custom energy efficiency portfolio. And as I discuss in a recent blog post, http://www.esource.com/Blog/ESource/6-21-12-Model#comment-130 , there's growing interest in utilities rate-basing customer sited CHP and other clean generation. We already get about 12 percent of U.S. electricity from CHP. If it gains momentum, don't be surprised to see EIA revise their emissions projections for the power sector down even further.

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