U.S. SCIENTISTS DESIGN NEW ENERGY ECONOMY

U.S. Can Curb Global Warming and Lower Energy Costs with Carbon Cap and Smart Energy, Transportation Policies, New Study Finds; Consumers and Businesses in Delaware, D.C., Florida, Georgia, Maryland, N. Carolina, S. Carolina, Virginia and West Virginia Would Save Billions
May 19, 2009 (Union of Concerned Scientists)

SUMMARY
Climate 2030; A National Blueprint For A Clean Energy Economy, a two-year, peer-reviewed study from the Union of Concerned Scientists (UCS), analyzes the economic and technological feasibility of meeting stringent targets for reducing greenhouse gas emissions (GhGs).

It examines the implications of cutting GhGs to 26% below 2005 levels by 2020 and 56% below 2005 levels by 2030.

To reach the 2020 and 2030 goals, the UCS Blueprint hypothesizes a comprehensive policy that includes a national cap&trade system to cut GhGs in industry, buildings, electricity, and transportation as well as land management emissions sequestration through agriculture and forestry practices.

The UCS Blueprint is a modified version of the U.S. Department of Energy’s National Energy Modeling System (referred to as UCS-NEMS), supplemented with more Energy Efficiency in industry and buildings as described by the American Council for an Energy Efficient Economy (ACEEE) and biomass practices described by University of Tennessee research. It combines such theoretical information with studies on energy use, energy prices, energy investments, the economy and land use practices.

UCS offers 3 scenarios, (1) a business-as-usual (BAU) analysis, (2) a Blueprint incorporating cap&trade and other measures, and (3) a “sensitivity” scenario with various complimentary policies included. They would be, the UCS concluded, progressively more effective at steering the country and the world away from the worst impacts of climate change.

The UCS Blueprint shows it is entirely feasible and technologically within reach to achieve the 2020 and 2030 emissions reductions targets while providing benefits to consumers and businesses and maintaining strong economic growth.

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The Blueprint Cuts Carbon Emissions and Saves Money:
(1) The 2020 26% GhG reduction (from 2005) and 2030 56% GhG reduction are achieved while saving consumers and businesses $465 billion a year by 2030 and building $1.7 trillion in net cumulative savings between 2010 and 2030.
(2) Though the Blueprint policies provoke costs, savings on energy bills from reductions in electricity and fuel use more than offset the expense of the investments, creating a net annual savings for households, vehicle owners, businesses, and industries of $255 billion by 2030. $8 billion in government-related administrative and implementation costs are made up by emissions allowance auction revenues of $219 billion, producing Blueprint savings of up to $465 billion by 2030.
(3) The study breaks the U.S. into 9 regions. Every region of the country saves billions.

The Blueprint Keeps Carbon Prices Low:
(1) The UCS plan foresees an emissions allowance price of ~$18 per ton in 2011 rising to $34 in 2020 and $70 in 2030.
(2) These prices keep emissions caps firm by investing in New Energy and Energy Efficiency.
(3) Because the cap&trade system feeds the New Energy economy, the emissions prices and caps do not impede economic growth. GDP expands 81% from 2005 to 2030 while a business-as-usual (BAU) scenario sees 84% GDP growth. By 2030, economic growth slows by less than 1.5%.
(4) Employment is unchanged from BAU. Non-farm employment grows a bit.
(5) Household cost of energy and transportation is reduced $900 in 2030. Transportation expenses for the average household fall ~$580 per year in 2030. Businesses save nearly $130 billion in energy-related expenses annually by 2030.

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COMMENTARY
Among the reasons action is necessary are: Reducing oil dependence, strengthening energy security, creating jobs, tackling global climate change, addressing air pollution and improving health. The UCS Blueprint is a description of the policies and practices through which those things can be achieved.

The UCS sees the rapid growth in the wind energy industry and the appeal to the U.S. buying public of hybrid cars as indications the time of the New Energy economy is at hand. UCS believes, however, that action is too urgently needed to simply wait for such developments. Its goal is to stimulate action whereby emissions can be cut 80% from 2005 levels by 2050 and thereby avoid the worst impacts of global climate change.

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The Blueprint Changes Energy:
(1) U.S. energy use will be cut one-third by 2030 through implementation of Energy Efficiencies.
(2) New Energy composes one-third of U.S. power generation in 2030. New Energy is increased 25%. Nuclear and hydroelectric power also increase.
(3) Petroleum product use is cut 6 million barrels per day. Imports are cut to less than 45% of use, saving $85 billion per year in 2030.
(4) Smart energy and smart transportation policies are essential in achieving the projected savings of more than a trillion dollars for consumers and businesses. Without these policies, the per-ton price of emissions is likely to double.

Where the Blueprint Cuts Emissions/Saves Money:
The blueprint cuts emissions and saves money in all 5 of the major GhG-generating sectors (Electricity, Transportation, Buildings (commercial and residential), Industry and Land use) of the U.S. economy.

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The major cuts are in:
(1) Electricity – 57%, mostly from Energy Efficiency increases in industry and buildings; (2) Transportation – 16%;
(3) Offsets – 11%;
(4) Non-CO2 emissions – 7%;
(5) Direct fuel reductions by the residential (3%), commercial (2%) and industrial sectors (4%).

National savings on annual energy bills total $414 billion in 2030 on an investment of $160 billion for a net annual savings of $255 billion for households and businesses in 2030. Nearly half of that is in households and businesses that rely on the transportation sector ($119 billion). Lower electricity costs for industrial, commercial, and residential customers are responsible for $118 billion in net annual savings.

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The Blueprint Cuts Emissions in Each Sector:
(1) It cuts power plant CO2, SO2 and NOx, mostly by reducing reliance on coal.
(2) It increases Energy Effieciency in buildings.
(3) It increases use of combined-heat-and-power (CHP) natural gas systems in commercial and industrial buildings.
(4) It increases use of hydroelectric power and nuclear power through 2030.
(5) Next generation nuclear and carbon capture and storage (CCS) do not play roles in the Blueprint through 2030.
(6) The Blueprint cuts car and light truck exhaust emissions 40% below 2005 levels by 2030 from cleaner fuels but does not see big growth in electric vehicles until after 2030. It does not assume cuts in freight truck emissions.it assumes growth in airplane emissions.

To be conservative and practical, the Blueprint projects action using only technologies and methods that are commercially available or will very likely be available and excludes many promising technologies or assumes for them only a limited impact by 2030.

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Recommendations/Future Building Blocks:
A New Energy economy makes sense in every material and non-material way. The way to it is via smart policy. The smartest policy is the policy that is enacted soonest because every year of delay means greater cost.
Step One: Science-based legislation directed at cutting GhGs 26% or more below 2005 levels by 2020 and 80% or more by 2050 via a cap&trade system with hard caps ratcheted down vigorously and a minimum of safety valves. There is no safety valve from global climate change. The market must be made to work.
Step Two: Policy that locks in a transition to New Energy and maximizes Energy Efficiency in industry, buildings, and electricity generation.
Next Step: Incentives for cleaner cars, trucks, and fuels and low emissions alternatives to personal transport.
Last Step: International participation by helping to fund the fight against deforestation, sharing Energy Efficiency and New Energy technologies with emerging economies and assisting undeveloped nations in their adaptation to the impacts of a global climate change 2 centuries of burning fossil fuels now makes unavoidable.

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QUOTES
- From the UCS report cononclusion: We are at a crossroads…on a path of rising energy use and heat-trapping emissions…already seeing significant impacts…If such emissions continue to climb at their current rate, we could reach climate “tipping points” and face irreversible changes to our planet…
- From the UCS report cononclusion: The most expensive thing we can do is nothing… if climate trends continue, the total cost of global warming in the United States could be as high as 3.6 percent of GDP by 2100…

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- From the UCS report cononclusion: The Climate 2030 Blueprint demonstrates that we can choose to cut our carbon emissions while maintaining robust economic growth and achieving significant energy-related savings. While the Blueprint policies are not the only path forward, a near-term comprehensive suite of climate, energy, and transportation policies is essential if we are to curb global warming in an economically sound fashion. These near-term policies are also only the beginning of the journey…The nation can and must expand these and other policies beyond 2030 to ensure that we meet the mid-century reductions in emissions that scientists deem necessary to avoid the worst consequences of global warming.
- Kevin Knobloch, President, UCS: "We can protect the environment and Americans' pocketbooks by adopting the right policies…Our analysis shows we have the technology and the know-how to do this. What we now need is the political will."
- Rachel Cleetus, climate economist/study co-author, UCS: "To reduce emissions, save people money and move us to a clean energy future, Congress must take a comprehensive approach…A strong cap would get us the emissions reductions we need. The energy and transportation policies would help deliver them cost-effectively."

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- Steve Clemmer, Clean Energy Program research director/study co-author, UCS: "Efficiency and renewable energy technologies are ready today to power our economy with carbon-free electricity…Our analysis shows that clean energy sources can lead the way in cutting U.S. emissions, lower electricity bills, and curb our addiction to dirty, high-carbon coal power…Our policy recommendations also would cut the cost of natural gas, home heating oil, and industrial and commercial oil use…But the lion's share of the savings would come from cutting electricity demand."
- David Friedman, Clean Vehicles Program research director/study co-author, UCS: "Our transportation system needs a major tune-up to help consumers fight rising gas prices, curb our oil addiction, and reduce our carbon emissions…Our analysis shows that cleaner cars, low-carbon fuels, and alternatives to getting stuck in traffic can cut emissions and transportation costs at the same time."