EIA: EXTENDING CURRENT ENERGY POLICIES WILL REDUCE GHG EMISSIONS 6%

Tamar Hallerman
GHG Monitor
5/3/13

The United States would see a slight dip in energy-related carbon emissions if lawmakers continue current renewables and energy efficiency-related policies, according to new Energy Information Administration data released this week. The Department of Energy’s statistical arm said that indefinitely continuing the production tax credit currently in place for wind, biomass, geothermal and hydroelectric power, as well as the 30 percent investment tax credit for solar generation and a handful of energy efficiency policies for buildings and cars, would reduce CO2 emissions by roughly 6 percent through 2040. “This reduction adds up to a cumulative emission savings approaching five billion metric tons,” according to the brief report released April 30.

The EIA compares that approach—known as its ‘extended policies’ scenario—with the country’s current energy policies, which the office calls its ‘reference’ scenario, in the new data, released as part of its Annual Energy Outlook. Policies currently in place have several ‘sunset’ provisions cooked in, where many renewable energy incentives expire or are phased out gradually. The production tax credit for wind and other renewables, for example, expires at the end of the calendar year, and the 30 percent investment tax credit for solar is scheduled to be scaled back to 10 percent in 2016. Extending both incentives would require Congressional approval, which could be an uphill task given current attitudes about deficit reduction and tax reform. The PTC for wind was nearly killed late last year until lawmakers approved a last-minute, one-year extension as part of a larger budget deal.

Meanwhile, the ‘extended policies’ scenario also counts on the continuation and regular updating of popular energy efficiency programs such as ENERGY STAR for appliances, as well as other standards for residential and commercial buildings—actions that can be extended via executive-branch regulations that would not need to be approved by Congress. Another executive action the scenario calls for in order to reach the 6 percent reduction in CO2 emissions is maintaining and slightly increasing fuel economy standards for light-duty vehicles by an annual average rate of 1.4 percent beyond 2025.

Is 6 Percent Enough?

The data stops short, though, of analyzing whether following the ‘extended policies’ scenario would be a good policy approach moving forward. On its own, that pathway would fall short of reaching the Obama Administration’s 2009 pledge of reducing the country’s greenhouse gas emissions 17 percent below 2005 levels by the end of the decade, and 80 percent by 2050. Environmentalists and progressive groups have long argued that flattening CO2 emissions at current levels will not be enough to limit some of the more severe impacts of climate change.