Market Forces

Decarbonizing industry is difficult but possible

By / Bio / Published: July 10, 2020

Industry is the backbone of the U.S. economy: it provides and transforms raw materials, goods and chemicals needed for civilization, including the energy transition. Yet, it is also responsible for a third of global greenhouse gas (GHG) emissions and 30% of U.S. GHG emissions .

Industrial GHGs include direct (combustion of fossil fuels, leaks and byproducts) and indirect emissions (the purchase of electricity and heat). Even if we reduce indirect emissions through electrification and clean energy, uncontrolled direct emissions from industry would still be responsible for at least 20% of GHG emissions both globally and in the US. Heavy industry, which creates products like cement, iron and steel, chemicals and plastics is particularly carbon intensive, which is why we should invest in ways to mitigate its large direct emissions of CO2.

Why decarbonizing heavy industry is a challenge

Decarbonizing heavy industry is difficult, because its direct emissions are the byproducts of chemical reactions or related to processes that require very high heat or fossil fuels as feedstocks. And because industry uses fossil fuels like coal as feedstock, manufacturing processes often rely on them for heat as well, making it more challenging to reduce industrial fossil fuel consumption. Moreover, there are other obstacles to rapid decarbonization, such as the long lifetimes of industrial facilities (possibly 30+ years) and their high capital intensity. This makes it difficult—but also necessary—to retire or retrofit them on a timeline consistent with limiting warming to 2 degrees Celsius or less.

Another constraint: industrial products must often meet precise quality criteria to comply with safety regulations. In other words, lowering the carbon content of steel or cement manufacturing could impact the quality of the material outputs. Hence, if the characteristics  of carbon-intensive industrial products change, the specifications associated with  building codes and standards may need to change as well, especially if changes imply a modification of the physical properties of common building materials. Finally, geographical limitations like the local availability of renewable energy, key energy feedstocks and infrastructure as well as carbon storage capability may dictate the possibility of decarbonizing heavy industry or not.

That’s why we need to move forward with developing technology and processes that can decarbonize direct emissions from heavy industry. Luckily, several options are available.

Reducing CO2 emissions from high temperature industrial processes 

For industrial heat, there are temperature, quality and flow rate constraints on viable options that stand in contrast to electricity and residential heat (the temperatures required in heavy industry varies from 200°C to 2,000°C). The Columbia Center on Global Energy Policy identified hydrogen (blue, from natural gas or green, from renewable feedstocks), biomass and biofuels, electricity (resistance and microwave), nuclear (conventional and advanced), concentrated solar energy, and carbon capture utilization and storage (CCUS) as options for tackling decarbonization of industrial heat. Each has technical and economical tradeoffs:

  • Biodiesel and hydrogen have the highest heat potential, while conventional nuclear the lowest.
  • Nuclear is the least expensive option, while Green Hydrogen the costliest. They estimate CCUS adding up to 50% cost to the fossil fuel.
  • Green Hydrogen and nuclear have the lowest carbon footprint, while blue hydrogen the highest.
  • Biofuels and Hydrogen are the most feasible, while Nuclear is the most challenging to implement or build.
  • Considering indirect costs and quality of heat needed, these options could increase wholesale costs of production between 10 to 200 percent depending on the sector and specific application.
  • Many options are not cost competitive with retrofitting existing fossil fuels plants with CCUS, and low carbon hydrogen seems the most viable option in the future due to both costs and feasibility.

Cutting process CO2 emissions

The other major source of direct emissions, process emissions, represent an even greater challenge. This is where the rest of direct emissions fits: leaks, fossil fuels as feedstock for chemical reactions and GHG emissions as byproducts of chemical reactions. Rissman et al. (2020) identified the following options:

  • On the producer side: CCUS, use of new materials, energy efficiency, new chemical reactions, leak repairs.
  • On the consumer side: circular economy; 3D printing; reduced material use: longevity, intensity and material efficiency; alternate materials.

The role for policy 

Incentivizing industry decarbonization will require collaborating with industry and engaging policy makers. There are several ways policy can mobilize development and deployment of new processes and technologies in heavy industry, including:

  • Carbon pricing, which increases the costs of using fossil fuels in industrial processes. To ensure domestic producers are not put at a disadvantage in the global market and that there is no emissions “leakage” overseas, the carbon price should include a border adjustment on imported products and materials from heavy industry in other countries.
  • Energy efficiency and/or emission standards to drive deployment of low-carbon technologies.
  • Federally funded research, development, and deployment (RD&D) as well as robust financial incentives to spur private RD&D.
  • Procurement standards and government-sponsored pilot projects to help address the financial risks facing entrepreneurs and early movers.

New initiatives show promise

IEA has noted that in order to get to net zero emissions by 2050, it is important to avoid locked-in emissions from investment in the industry sector, especially considering investment cycles beginning around 2030 will endure for 25 years. By boosting spending on research and development, low carbon technology for the Industry sector might be mature enough to be marketable by the time new investments are done.

While there is still a long way to go, some companies are already exploring ways to deploy decarbonizing technology. The Hybrit initiative, backed by Swedish and Finnish state owned companies LKAB, SSAB and Vattenfall,  is preparing the construction of a demonstration plant to produce low carbon steel with hydrogen by 2035. Canadian Carbon Cure is already mixing recycled CO2 into cement reducing the carbon footprint of their production process. Massachusetts-based Boston Metal is already producing steel with molten oxide electrolysis, a process that removes the need to use coal as feedstock and therefore has no CO2 emissions. Archer Daniels Midland Company (ADM) has deployed a commercial scale Carbon Capture and Storage ethanol refinery plant in Illinois.

These examples highlight some of the strategies and tools that can be used to allow heavy industry to continue to provide the goods and materials we rely on – and the emerging technologies necessary for a clean economy – while decarbonizing. But it will take robust policy support and a significant increase in RD&D funding to reduce direct and indirect industrial emissions at the speed and scale science demands.

 

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How the Suspension of EPA Regulations Fails to Recognize the COVID-19 Crisis and Social Costs

By / Bio / Published: April 29, 2020

COVID-19’s burden on healthcare systems worldwide, a mounting death toll, and the impacts this has on people across the globe is truly alarming. In addition to the public health crisis, the pandemic has also brought most countries’ economies to their knees. Governments are making decisions today that will resonate for decades for future generations, which is why interventions must be intelligent and forward-looking, while practical, rapid and cost-effective. 

One of the macroeconomic aspects that has critical ramifications is determining what is deemed essential, in terms of jobs and services. Food, health care, and emergency services are clearly essential. And while policymakers can debate the merits of other positions, make no mistake, pollution monitoring and enforcement are also critical.

EPA’s Suspension of Enforcement

On March 26, EPA administrator Andrew Wheeler announced that the agency would suspend enforcement against violations of a broad set of environmental regulations, with no end date. This announcement effectively provides companies across the United States with a waiver from clean air and other public health protections, and has massive implications for human health at a time when keeping citizens healthy is paramount. We know air pollution causes diabetes, heart and lung diseases and worsens asthma, putting people at higher risk of severe effects of COVID-19. In fact, recent analyses find areas with high air pollution levels before this crisis reported higher COVID-19 death rates.

The naive expectation is that companies will continue to abide by the law and self-report any pollution amid the pandemic. This ignores well-established economics literature demonstrating how self-regulation does not work. Even if it is argued that reducing regulation will ease economic burdens at a time when it should be redirected for economic stimulus – that is also a fallacy that is undercut by the current administration’s analysis.

The Clear Benefits of Environmental Regulation

Every year, the Office of Management and Budget (OMB) performs a benefit-cost analysis (BCA) of all government agencies and federal rulings. The table below is taken from the most recent OMB report that did a thorough analysis and took a retrospective look over a 10 year period. [n.b, slated for release in 2017, this report was not made public until 2019. OMB only released one report during the Trump administration years, which was one-fifth of the length of previous ones, only did single-year BCAs, and was released two days before Christmas in 2019.]

Estimates of the Total Annual Benefits and Costs of Major Federal Rules (For Which Both Benefits and Costs Have Been Estimated) by Agency, October 1, 2006 – September 30, 2016 (billions of 2020 dollars). Sorted from best to worst Benefit-Cost Ratio, figures rounded to the nearest billion.

Agency# of RulesBenefitsCostsBenefit-Cost Ratio
2020$2020$
Environmental Protection Agency (EPA)39215 to 76250 to 61 4.3 to 12.6
Joint DOT and EPA449 to 8612 to 22 4.2 to 3.9
Department of Labor1011 to 303 to 7 3.6 to 4.2
Department of Health and Human Services187 to 352 to 7 3.1 to 5.0
Department of Energy2723 to 449 to 13 2.6 to 3.3
Department of Transportation (DOT)2725 to 459 to 17 2.6 to 2.6
Department of Justice32 to 51 to 1 2.1 to 4.0
Department of Agriculture51 to 21 to 1 1.2 to 1.4
Department of Homeland Security41 to 21 to 1 0.8 to 1.6

The table above underscores the crucial role EPA regulations play in human health and benefits to society. For each dollar spent on EPA’s programs, Americans derive a $4-13 benefit in the form of improved livelihoods. In general, rules exhibiting the greatest benefit-cost ratio relate to air pollutants, which have a great deal of interplay in terms of at-risk populations for COVID-19 and associated respiratory impacts. An EPA report focusing on the Clean Air Act amendments of 1990 finds a central estimate of a 32$ return for each dollar invested. Critically, these analyses do not monetize all of the health benefits of regulations, and thus these figures likely undercount the true benefits to society (the costs, however, are much more certain).

In terms of their benefit-cost ratio, EPA and major environmental rules result in benefits to the public that far outweigh their costs to government and industry. These rules are designed to preserve and protect human life and ecosystems. Removing protections presents a tremendous social cost.

Of course, EPA’s ability to enforce regulations during a pandemic has its limits. We wouldn’t want to put anyone at risk of contracting coronavirus. Still, there are ways to continue enforcement. EPA could redesign monitoring initiatives to continue digitally in places where this isn’t already the case. But announcing a sweeping, indefinite suspension that ignores most of what we know from behavioral economics and human nature makes little sense.

While the future is full of uncertainty, and economic turmoil is already here, we need to think carefully and critically about how to best protect people, the environment, and avoid slipping into a deep recession. Removing EPA’s ability to provide health protections to society during a public health crisis is lunacy. Doing it in the name of cutting costs is entirely misguided, as each dollar taken away results in an additional $4 to $13 in social costs.

Posted in Clean Air Act, Uncategorized / Leave a comment

How we can make Time of Use Pricing work for everyone

By / Bio / Published: March 9, 2020

How we pay for electricity has important implications for our bills, as well as for the costs of the electric system. Most people pay a flat rate, essentially one price per unit of electricity (or kWh) they consume, regardless of when they consume it. However, because the cost of generating and delivering electricity varies throughout the day, having varying prices over the course of the day creates an important and actionable signal: use less electricity during high-priced and high-cost times; use more of it when it’s cheaper. This helps keep costs down in the long run and allows customers to save money by shifting their consumption to low cost times.

Yet there is some evidence that certain communities may be disadvantaged under this type of pricing structure; thus, we must identify and implement policy solutions to address this misalignment.

New study highlights inequities

A new study by Lee White and Nicole Sintov published in Nature Energy highlights some of these challenges. They looked at a pilot study in a southwestern electric utility that implemented time-of-use (TOU) tariffs (with a high cost peak period and a low cost off-peak period). White and Sintov gathered data from participants, including Hispanic, low income, elderly, and those with disabilities, and found some areas for concern.

For example, they find that the elderly and customers with disabilities saw greater increases in bills on TOU than their non-vulnerable counterparts, likely due to a reduced ability to shift their consumption to cheaper, off-peak times.

They also find that some of these customers who faced smaller bill increases, likely due to underlying preferable load profiles, faced either worse health outcomes (this was true for Hispanic households), or more discomfort than others (true for low income households).

Low-income and Hispanic households reported turning off AC more often than their non-vulnerable counterparts, but did not have a greater reduction in on-peak use. These households appear to have made a much more extreme sacrifice to achieve the same level of peak time reduction achieved by other pilot participants without negative health and comfort impacts.

It is likely that these potential negative health and comfort outcomes of TOU rates are exacerbated by the stock of older, less efficient appliances and leaky homes, common in low-income households. When households have to rely on less efficient appliances, it is harder for them to shift the timing of their cooling to cheaper hours of the day; many have to turn off the A/C altogether, leading to severe discomfort. Furthermore, when the house is leaky, any efforts to pre-cool the home during cheap times will not result in comfortable indoor temperatures during costly times of day.

Policy solutions can make TOU rates work for everyone

So we face a dilemma: TOU rates can help improve the system, and could help all customers reduce their bills, but achieving these benefits with old appliances and leaky homes is a major challenge. How can we maximize the benefits of implementing TOU rates while ensuring that all communities can participate?

Fortunately, policy solutions exist that can help level the playing field.

  • Bill protection: Utilities can implement bill protection, whereby customers will not face bill increases under a TOU rate for a limited period of time. This allows customers to benefit if they are able, but will not harm those who find themselves unable to adequately shift consumption. In California, for example, Southern California Edison provides a full year of bill protection for customers transitioning to TOU rates.
  • Programs to help with weatherization and appliance upgrades: Programs like the Low Income Home Energy Assistance Program (LIHEAP) target less affluent customers and can provide assistance with either weatherization or efficiency improvements in appliances.
  • Robust marketing, education and outreach (MEO): Ensuring electric customers understand what rate they are on, and how changes in consumption can help them achieve lower bills is key to maximizing the benefits of TOU rates. This requires significant marketing, education and outreach. For customers who may face language or information barriers, the need for targeted MEO is even more pronounced.
  • Ensure that TOU rates are actionable: For TOU rates to be most effective at reducing consumption during peak hours, the ratio of peak to off-peak prices needs to be significant, and the length of the peak hours manageable. This provides ample space for customers to shift away from peak times and benefit from a greater number of low cost hours.
  • Allow TOU rates to be opt–out: Mandating TOU for all customers can exacerbate these disparities, especially among those who face challenges in responding to the time differences. Many low-income customers rent rather than own their homes, making it more difficult to invest in home weatherization or energy efficient appliances, two strategies that can make TOU rates easier to respond to. Allowing customers to opt out provides an important option to ensure equitable outcomes from more advanced electricity pricing, particularly for low-income renters. California utilities currently implement all TOU rates as opt-out.

TOU rates can provide many benefits to society and the environment, and could help put money back in the pockets of low-income and elderly customers. However, in order to avoid any negative consequences due to inefficient appliances and leaky homes, we will need to take extra measures outside of rate setting itself.

Posted in Energy efficiency / Leave a comment

How an open-source tool helps state climate policy

By / Bio / Published: February 20, 2020

Empowered by the Paris Agreement and a lack of national leadership on climate policy in the United States, state and local governments are leading on their own climate initiatives. California, New York and Colorado have set ambitious greenhouse gas emission and renewable energy targets for 2030. Just last week, Massachusetts introduced sweeping climate legislation targeting net zero emissions by 2050.

As these environmental and energy policies move ahead, experts need to invest in economic data and tools that allow them to conduct robust economic analysis, to better inform policymakers, stakeholders and the public on how to design robust alternative climate and energy policies.

To target this capacity need, Environmental Defense Fund collaborated with Thomas F. Rutherford (University of Wisconsin-Madison), Andrew Schreiber (United States Environmental Protection Agency) and Christoph Böhringer (University of Oldenburg) to launch a project  to build a subnational economic model framework for climate and energy policies in North America.

An Open-Source tool emerges

An important byproduct of the first phase of this project is the Wisconsin National Data Consortium (WiNDC), an open-source data and modeling framework for the U.S. WiNDC is comprised of regional (state-level) social accounting matrices and a calibrated static multi-regional, multi-sectoral computable general equilibrium model that runs on the constructed dataset. This tool, the technical details of which can be found in a peer-review article about its development, makes it possible to conduct analysis of environmental and energy regulations as well as trade policies taken both at the subnational level and at the national level.

A forthcoming paper investigating the potential economic and environmental impacts from the imposition of a carbon adder on New York Independent System Operator’s energy market is the first to utilize the WiNDC accounts in a state-level analysis of climate and energy policies. The study finds that the carbon adder—a carbon tax equal to marginal environmental damages from carbon emissions not already covered under existing policies—gives the “right” price signal for New York’s power generation to turn into a greener one.

In another paper by Balistreri, et al. (2018) “The Impact of the 2018 Trade Disruptions on the Iowa Economy,” WiNDC is used to analyze the state-level impacts of the 2018 tariffs on a wide range of Chinese imports ranging from agriculture and manufactured goods on the state of Iowa. The authors examined the overall gross state product impacts, as well as lost labor income and tax revenue due to additional tariffs.

WiNDC’s aim is to meet the demand for more robust evidence-based regional analysis of environmental and energy regulations. It provides an easy-access, open-source platform for all stakeholders to conduct analyses of environmental and energy regulations taking place at both state and federal levels. The open-source nature aims to encourage further collaboration within the research community and development of this valuable resource.

WiNDC is a powerful and unique tool that could give states the opportunity to design their own climate policies in the light of their economic and environmental objectives and help them align with policies implemented by other states that are increasing economic and environmental efficiency.

Posted in Economics, emissions / Leave a comment

What a small country’s successes and mistakes can teach us about emission pricing

By / Published: January 21, 2020

I’m from Aotearoa, New Zealand, and I really love its land and people, but I am fully aware that from a global perspective it appears pretty insignificant – that’s actually one of its charms.  But being small doesn’t mean you can’t make big contributions including toward stabilizing the climate. This recently published article highlights some lessons New Zealand’s experience with emissions trading can offer other Emissions Trading System (ETS) designers at a time when effective climate action is ever more urgent.

Talking intensively to ETS practitioners and experts around the globe about their diverse choices and the reasons why they made them has made me acutely aware of the need to tailor every ETS to local conditions.  In a complex, heterogeneous world facing an existential crisis, diversity in climate policy design makes us stronger and frankly, improves the odds that the young people we love will live in a world where they can thrive.

New Zealand created the second national emissions trading system in 2008, and the system established a number of firsts, some of which have been repeated widely, like output-based allocation of allowances to combat leakage risk.  Others offer cautionary tales, like linking a small country’s emissions trading market to a large emissions trading market over which you have little control.

Simplicity helps make an ETS more manageable and effective

New Zealand’s small scale makes simplicity a key virtue. Our regulators are well educated, but there just aren’t many of them.  This simplicity would also be a strength in a country with capability constraints, or where corruption is a problem and simplicity naturally increases transparency and reduces opportunities for manipulation.

Regulating fossil-fuel production and imports (that inevitably lead to predictable amounts of emissions – in the absence of effective carbon capture and storage) at the first point of commercialization, another first, made monitoring simple and, in the New Zealand context, minimized the number of regulated agents needed to cover almost 100% coverage of energy-related emissions including all domestic transport.

An ETS needs to match a country’s profile and culture

New Zealand’s small scale and our unusual emissions profile (around half our emissions are biological emissions from agriculture – cow burps and other unmentionables – and lots of land ripe for reforestation) led New Zealand to aim for an ‘all sources – all sectors’ coverage of emission pricing – and this worked well for our politics.  In New Zealand ‘fairness’ is a critical cultural value.  New Zealand’s ETS covers energy, transportation and industrial process emissions but also deforestation, reforestation, and fugitive emissions from fossil fuel production and landfill waste management.  We are still working out how to cover those challenging cows in a way that allows rural communities to thrive – with the current intention being to regulate with emission pricing at the farm level starting in 2025.

The cultural value of fairness also led to a strong linkage between the motivations for free allocation and th methods chosen.  Sectors and companies (sometimes pretty much the same thing in NZ) who lobbied for free allocation had to make a logical case that was publicly scrutinized. Lump-sum allocations were given as compensation to those who were losing the value of stranded assets – e.g. owners of pre-1990 forests, including Māori Iwi (tribes) who lost some of the value of forests they had recently received in Treaty settlements when deforestation began to attract carbon liabilities.  Output-based allocation is still provided for industrial activities that are emissions intensive and trade exposed and therefore face a risk of leakage of these economic activities to other countries where climate policy is weaker.  By effectively subsidizing the activities that might move, output-based allocation reduces that risk.

Political instability can negatively impact markets

Not all experiences have been positive however.  As the report highlights, New Zealand’s ETS has suffered from a lack of policy stability and hence lack of emission price stability.  This was partly because our emissions price was largely determined by international markets (from 2008 to mid-2015, New Zealand companies could buy and surrender unlimited amounts of international Kyoto units such as those from the Clean Development Mechanism and Joint Implementation).  New Zealand’s emission prices bobbed like a cork on the international market. Another critical flaw: not embedding our ETS firmly in a long-term vision for low-emissions transformation and within a wider non-political institutional framework that gives predictability of purpose in the inevitable ETS evolutionary process.

The ability to guide, enable and incentivize dynamic efficiency (e.g. efficient low-emissions investment) has always been a key argument for emissions pricing, but, as a profession we economists have paid too little attention to the political and cultural stability that is critical to enable this. Policy makers need to regularly adapt and update policies. That process of policy evolution can help guide us efficiently through a low-emissions transformation, or, in the face of powerful vested interests and strong temptations to globally free-ride, it can open up repeated opportunities to undermine ambition.

New Zealand is now engaged in the next step of its ETS evolution, learning from others and through critical reflection on our own positive and negative experiences, but continuing to innovate and tailor ETS solutions to our own unusual circumstances. The direct impact on global emissions will be small whatever New Zealand does with its ETS, but the lessons and the example that even small yet significant  countries can act and find new solutions, will hopefully help and inspire others.

Kia kaha Aotearoa

Posted in Cap and Trade, International, Markets 101 / Leave a comment

How renewables, natural gas and flat demand led to a drop in CO2 emissions from the US power sector

By / Bio / Published: August 30, 2019

New state-by-state research shows significant reductions across the country from 2005-2015

 Decarbonizing the power sector in the United States will be critical to achieving the goal of a 100% clean economy by 2050 – especially since reaching “net-zero” greenhouse gas emissions across the economy means that other energy-using sectors such as buildings and transport will increasingly need to be electrified, switching away from direct fossil fuel use and relying on low-carbon electricity instead. Demand for electricity is therefore very likely to grow in the future – which makes it critical that its CO2 emissions sharply decrease through the accelerated deployment of low carbon technologies, such as wind and solar power, in the decades ahead.

US power sector CO2 emissions, 1990-2015

For now, US power sector CO2 emissions appear to have turned a corner. While CO2 emissions from the U.S. power sector increased between 1990 and 2005, they peaked shortly thereafter, and then decreased to the point that by 2015, they had fallen by 20% (or 480 million metric tonnes CO2) compared to 2005.

In recently published research, my co-authors and I wanted to understand the drivers behind the drastic fall in the country’s—and individual states’–power sector CO2 emissions, and in particular the role that low carbon technologies such as wind and solar power have already played in reducing US power sector CO2 emissions. Our analysis, published in Environmental Research Letters  used an approach called index decomposition analysis and found that natural gas substituting for coal and petroleum coupled with large increases in renewable energy generation—primarily wind—were responsible for 60% and 30%, respectively, of the decline in CO2 emissions from the US power sector between 2005 and 2015.

Renewable growth in red states

Most of the emissions reductions driven by renewable energy growth came from Texas and states in the Midwest — Iowa, Kansas, Illinois and Oklahoma. While many of these states are not necessarily known for supporting aggressive climate policies, the combination of federal tax credits, state energy policies, decreasing costs of renewables and windy conditions appears to have provided powerful support for renewable energy deployment.

Texas, in particular, is an interesting case. In 2005, it was the leading emitter of U.S. power sector CO2 emissions across the country. But by 2015, its gross reductions from wind energy totaled 27 million metric tons, or more than 5% of the total net US reduction in power sector CO2 emissions since 2005 (i.e., a sixth of the total US reduction attributed to renewables). The state achieved its final renewable portfolio standard (RPS) target in 2008—seven years ahead of its 2015 goal. In addition to reduced costs of turbine technologies, federal tax credits and positive wind conditions also likely played a role in wind’s growth.

Wind generation in Texas, Iowa, Kansas, Illinois and Oklahoma together contributed half of the renewables-related emission reductions (70Mt or 3%-points out of the 20% reduction in US power sector CO2 emissions since 2005).

Over the same period, many states that had relied heavily on coal like Pennsylvania, Georgia, Alabama and Florida, reduced emissions by substituting natural gas for coal in electricity generation. While that prompted a decline in CO2 emissions, it’s important to note that while natural gas emits less CO2 emissions than coal and petroleum when producing electricity it is still a source of CO2 emissions and can only take us so far in decarbonizing the power sector. In addition, methane leakage across the supply chain remains a significant issue–and is not accounted for in this analysis, meaning the overall net greenhouse gas benefit from this natural gas expansion was–potentially significantly—lower.

Need for new policy

While there are positive signs in the power sector—the cost of renewables continues to decline and a growing number of states are taking crucial action to cut CO2 emissions, these trends as well as the specific factors identified in this analysis cannot be relied upon to achieve the deep emissions reductions needed in the decades ahead.

U.S. power sector CO2 emissions are projected to remain relatively flat over the next decade and rise slowly after that, absent new policies. This is particularly significant given that, much of the decarbonization of other sectors such as buildings and transportation will need to rely heavily on electrification.

Ultimately, new policy interventions are necessary, including strong limits on climate pollution – not only in the power sector, but across the entire economy to drive reductions at the pace and scale needed for the US to be 100% clean no later than 2050.

Posted in emissions, Markets 101 / Leave a comment