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Charges wetween rás 1993 CCAP and 1997 CAR for the Year 2000
The overall reductions in this column would be even larger if foundation actions were not included here as in the 1993 CCAP.
Nonetheless, climate change actions have produced measurable reductions in greenhouse gas
emissions and could produce much more in the years to come if current funding levels are
maintained. Table 4-11 reports the net reduction of projected actions' performance for the years
2000, 2010, and 2020. The 1993 CCAP performance projections are also provided to facilitate
comparisons. The discussion that follows outlines the key forces driving differences from the 1993
CCAP analysis for each major greenhouse gas and source category.
Note: Totals may not sum due to independent rounding or interactive effects.
Assumes receipt of legislative authority for parking cash-out by the end of 1997.
**Foundation action partners provide additional reductions in almost all sectors and gases.
These values only represent incremental savings not accounted for in other actions or
baseline activities. They exclude 0.4 MMTCE for forest sequestration activities accounted
for in forest sinks below.
The projected decrease in natural gas prices and increased electricity sales compared to the 1993
CCAP have increased the projected market share for new natural gas-fired electric-generating
capacity. Although the reduction in projected natural gas prices is beneficial from a climate change
perspective because natural gas is a less carbon-intensive fuel per unit of energy than other fossil
fuels and because natural gas technologies tend to be more efficient, it reduces the efficacy of
climate change policies designed to reduce electricity use.
Many of the 1993 CCAP actions reduce carbon emissions through their impact on electricity
demand. Changes in the marginal fuel used for generation has important implications for translating
electricity savings into carbon reductions. Marginal fuel is the fuel consumed to produce the last
"unit" of electricity generated. In this instance, the unit is defined as the kilowatt-hour savings from
electricity-related actions.
In the original 1993 CCAP, the marginal fuel mix for electricity production was 80 percent coal and
20 percent oil and natural gas in the year 2000. This resulted in carbon emissions decreasing by
0.28 MMTCE for every decrease in 1 billion kilowatt-hours of electricity (0.28 MMTCE/bkWh). In
the current estimates, due to an increased market share of natural gas-fired generation, coal
accounts for 32 percent and natural gas and oil for the remaining 68 percent of marginal electricity
production in the year 2000. As natural gas garners a greater market share of electricity production,
the marginal carbon savings per unit of electricity reduced becomes smaller. In the 1997 CAR, the
coefficient of reduction decreases from 0.20 MMTCE/bkWh in 2000 to 0.13 MMTCE bkWh by
Mitigating Climate Change (cont.)
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2020. This change decreases carbon emission reductions by electricity-saving actions by 10
MMTCE in 2000.
Overall, due to funding shortfalls and other factors, carbon emission reductions from energy-related
actions have decreased by 34 MMTCE in 2000 compared to the 1993 CCAP. However, after 2000,
1997 CAR-projected reductions are larger than those envisioned in the 1993 CCAP for 2000.
Methane
Overall, carbon-equivalent emission reductions of 16 MMTCE from methane-related actions in
2000 are about the same as the 1993 CCAP.
Action 40 (Narrowing the use of High GWP Chemicals) is being expanded to form partnerships
with newly identified sources described in the beginning of this chapter. Increases in the global
warming potentials for HFCs and PFCs have lead to increased effectiveness in Action 42°
(Voluntary Aluminum Industrial Partnership Program).
Overall, HFC and PFC reductions are about the same as the 1993 CCAP in 2000. The addition of
policies to reduce newly identified gases, such as the Environmental Stewardship Initiative, results
in reductions in other gases exceeding the amount claimed in the 1993 CCAP.
The revised global warming potential for nitrous oxide increases the carbon-equivalent measure of
actions taken to reduce nitrous oxide by about 0.8 MMTCE in 2000.
Decreases in other federal tree-planting and technical assistance programs for forest landowners
increases the potential for participation in this program.
Kay Uncertainties Affecting Projected Emissions
Any projection of future emissions, even for a period as short as four years, is subject to
considerable uncertainty. Key factors that can increase emissions include more rapid growth in
electricity demand, flat rather than slightly rising real energy prices, more rapid economic growth,
and further cuts in 1993 CCAP funding or effectiveness. Key factors that can reduce emissions
include slower growth, increased CCAP program efficacy, greater penetration of baseline
energy-efficiency measures, higher energy prices, increased program funding levels, and relatively
mild weather in 2000. A qualitative analysis of key uncertainties suggests that net greenhouse
emissions in 2000 could exceed their 1990 level by 150-230 MMTČE.
CCAP Program Funding Levels (+ or -)
The point estimate assures that CCAP funding through 2000 reflects an extrapolation of fiscal
1996 funding. Increases or decreases in 1993 CCAP program funding relative to the "current
funding" level in fiscal years after 1996 would result in higher or lower levels of projected
emissions in 2000.
Required Legislative Authority (-)
Included in the estimates of emission reductions are the assumed adoption of policies that require
no additional funding, but require some congressional or regulatory action, such as tire-labeling and
energy-efficiency standards. Many of the actions in this category are still assumed to occur, but
their deployment has been adjusted to account for delay in their implementation. If legislative
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authority to initiate these programs is not received, emissions will be higher than projected.
The relationship between energy prices and emissions is complex. Lower energy prices generally
reduce the incentive for energy conservation. However, reductions in the price of natural gas
relative to other fuels also encourages fuel switching that can reduce carbon emissions.
The energy price projections from the 1997 Annual Energy Outlook used in developing the updated
emissions baseline are significantly lower than those used for the 1993 CCAP (U.S. DOEЛEIA
1996a). However, real prices for oil and gas are still projected to rise at respective average annual
rates of 1.1 percent and 2.5 percent between 1995 and 2000.
The Annual Energy Outlook also provides sensitivity scenarios to changes in oil prices. In the year
2000 high oil price scenario, emissions are lower by about 4 MMTCE than projections using the
reference-case scenario oil price assumptions. In the year 2000 low oil price scenario, emissions are
higher by about 13 MMTCE not using the reference case scenario.
Higher economic growth increases the demand for energy services, such as vehicle miles of travel,
square feet of lighted and ventilated space, and process heat used in industrial production. However,
faster growth also reduces the average age of the capital stock, increasing its average energy
efficiency. The energy-service demand and energy-efficiency effects of higher growth work in
offsetting directions. The effect on service demand is the stronger of the two, so that levels of
primary energy use are positively correlated with the size of the economy.
In addition to the reference case used in developing the updated baseline, the Annual Energy
Outlook provides high and low economic growth cases.
In the high-growth case, the percentage change increase in energy use is slightly more than
half the percentage increase in the size of the economy. By 2000, the high-growth economy
is 3.5 percent larger than the reference economy, but energy consumption is only 1.8 percent
higher. In addition, carbon emissions are 33 MMTCE larger than the reference case.
. In the low-growth case, a 2.7 percent reduction in the size of the 2000 economy translates
into a 1.9 percent reduction in primary energy use. In this case, carbon emissions were 28
MMTCE lower than the reference scenario in the year 2000.
Electricity Demand Growth (+)
While the annual rate of growth in electricity demand from 1995 to 2000 is appreciably higher in
the present analysis than in the 1993 CCAP, there is a strong possibility of even faster growth.
Regulatory changes to allow competition in wholesale and retail electricity markets could
significantly lower prices to electricity end users, while at the same time reduce utility investments
in demand-side management and other conservation activities.
If electricity demand grows at 2.1 percent annually (as projected by the Gas Research Institute),
rather than by 1.9 percent (as projected in this analysis), carbon emissions will be about 7 MMTCE
higher in 2000. The Annual Energy Outlook also evaluates a sensitivity that assumes electricity
sales to grow at 3.3 percent annually between 1995 and 2000. In that scenario, emissions are 56
MMTCE higher in the year 2000.
Forest Carbon Sequestration (+ or -)
The estimates used here for annual carbon sequestration in U.S. forests include above-ground
carbon plus harvested carbon in wood products and landfills. The tree carbon estimates are derived
from two independent measurements of forest inventories and growth, and have standard errors of
Mitigating Climate Change (cont.)
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plus or minus 3 percent. The reported forest estimates do not include sequestration in the forest
floor understory complex.
Estimates of other carbon stocks (e.g., forest floor and understory) are likely to be less certain, since
there are no comprehensive, statistically valid inventories of non-tree organic matter for large areas
of the United States. USDA estimates their uncertainty at plus or minus 15 percent.
Additional unquantified sources of uncertainty should also be noted. First, deriving annual stock
change estimates from standing stock estimates would increase uncertainty further. Second,
estimates projected from historical data using econometric models will be less certain due to the
unknown uncertainty of the assumptions made in the econometric models. Estimates for all years
after 1992 are projected from 1992 data. Additionally, certain lands have not been included in these
stock estimates.
Energy use for heating and cooling is directly responsive to weather variation. The updated baseline
assumes thirty-year average values for population-weighted heating- and cooling-degree days.
Figure 4-6, which compares average population-weighted heating- and cooling-degree days with
actual values for 1990, an unusually mild year, illustrates the importance of interannual weather
variation for energy use and emissions. Under average weather conditions, primary energy
consumption for heating and cooling in 1990 would have been 1.1 percent higher than its actual
value, raising carbon emissions by roughly 16 MMTCE.
Unlike other sources of uncertainty, for which deviations between assumed and actual trends may
become apparent over time, the effect of weather on energy use and emissions in any particular year
is revealed only in that year. For the United States, a swing in either direction of the magnitude
experienced in 1990 could raise or lower emissions by plus or minus 20 MMTCE relative to a year
with average weather. While small relative to total emissions, a change of this magnitude is
significant relative to the aim of returning emissions to their 1990 level. Some European countries,
which also experienced low levels of energy use and emissions in 1990 due to mild winter weather,
have opted to compare 1990 and 2000 emissions levels on a "climate-adjusted" basis in their first
national communications.
Continuation of 4. Mitigating Climate Change
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