year 2000 over the projection in the 1993 CCAP.

Congressional appropriations for fiscal years 1996 and 1997 sharply reduced CCAP programs, compared to the levels originally envisioned and requested in the President's budget. If this lower level of funding is maintained through 2000 and if current levels of program efficacy per. sist, projected emissions will be 30-40 MMTCE higher in the year 2000 than if the CCAP actions were fully funded.

■Changes in assumptions about

increased emissions in the categories "Adjustments for U.S. Energy Territories" (includes U.S. Territories and unmetered gas) or "Other Sources" (includes cement production, gas flaring, and other industrial calcina

tion processes) increase projected 2000 emissions by 5 MMTCE. ■ Decreasing estimates of projected forest sinks, rather than rising sequestration of carbon in forests, increase projected 2000 emissions by 23 MMTCE over the projection in the 1993 CCAP.

■ Higher projected baseline emissions from methane, due in part to revised estimation techniques of agricultural methane emissions, contributed to an increase of 12 MMTCE. ■ Higher projected baseline emissions from nitrous oxides increased projected emissions by 4 MMTCE. ■ Higher projected baseline emissions of halogenated greenhouse gases, including newly identified gases, increased projected emissions by 13 MMTCE.

The Projected Baseline for Carbon Emissions

The current baseline estimate of gross energy-sector carbon emissions in the year 2000 is 1,567 MMTCE, which is 107 MMTCE higher than the year 2000 baseline value used in the 1993 CCAP. Three components are combined to estimate gross energy sector carbon emissions: gross domestic energy-related emissions (for fuel purchased in the United States), subtractions for international bunker fuels, and additions for adjustments for other sources and international territories. By far, the largest change occurred in projected gross domestic energyrelated carbon emissions. However, the baseline was also affected by slight revisions to historical emission estimates and revised accounting for fuels used in international transport (international bunkers). The projected change in adjustments for other sources and territories is insignificant (1 MMTCE) and will not be discussed.

The current energy baseline was roughly calibrated to the 1997 Annual Energy Outlook (U.S. DOE/EIA 1996a). The primary factors affecting baseline levels of projected energy use and related emissions are the economic and technical assumptions that underlie the projection methodology. Changes in each of these areas since issuance of the original CCAP have caused the projected difference in the growth of energy-related emissions between 1990 and 2000 to be 107 MMTCE higher than projected in the 1993 CCAP.

Changes in Economic Assumptions. As outlined in Table 4-6, the primary reason for the projected increase in carbon emissions between the 1993 CCAP and the 1997 CAR is the change in the projected energy prices. The increase caused by lower projected fossil-fuel prices is aggravated by an increase in expected population growth and disposable income, but is somewhat offset by decreases in expected industrial production growth and commercial floor space, compared to the 1993 CCAP.

Energy Prices. Since the issuance of the 1993 CCAP, most major forecasters of energy prices have significantly revised their expectations of fossil fuel prices downward, especially for natural gas and coal. Projections of fossil energy prices used in developing the updated baseline are significantly lower than those used in 1993-the projected world oil price in 2000 is 13 percent lower, the natural gas wellhead price is 25 percent lower, and the average minemouth price of coal is 30 percent lower. Figure 4-5 compares the original and updated energy price baselines, the latter estimates based on actual energy price data through 1995.

Lower energy price forecasts increase projected energy use and emissions by reducing the incentive for conservation and increased energy efficiency. The switch to a lower price trajectory increases projected baseline energy consumption and carbon emissions by roughly 2.6 percent, or 39 MMTCE.

Electricity Prices. In addition to the decrease in electricity prices caused by the decrease in primary energy prices, the U.S. electric power industry has been undergoing a major restructuring. The move to a more competitive industry has resulted in expectation of lower electricity prices. Although the projections contained in this report do not explicitly attempt to capture completely the move to a competitive electric power industry, the expectation of lower prices, as manifested in the 1997 Annual Energy Outlook has been captured. As a result, electricity prices are expected to slightly decrease, in contrast to the increase expected just a few years ago. Based on these revised expectations, projections of baseline gross energy-related carbon emissions are about 5 MMTCE higher in the year 2000. This increase is in addition to the increase projected for the change induced by lower fossil fuel prices.

consequence, industrial output is now projected to grow at 2.1 percent per year during the 1990s, rather than 2.5 percent as projected in the 1993 CCAP. This change reduces projected emissions by 13 MMTCE.

Other Economic Assumptions. Although relatively minor compared to the change in energy prices or industrial production, expectations for some of the other macroeconomic variables that shape the projections have changed.

For example, shortly after the 1993
CCAP was published, the U.S. Cen-
sus Bureau significantly revised its
population forecast, assuming higher
immigration and birth rates. As a
result, more energy is consumed in
the residential and transportation
sectors an increase of about 1
MMTCE in the year 2000. The
increase is modest because the 1993
CCAP projection of households did
not change.

In another area, disposable income
has been rising and is expected to
rise more rapidly than assumed just a
few years ago, increasing energy use
in the transportation sector and,
thus, carbon emissions. The change
in disposable income is responsible
for additional emissions of approxi-
mately 4 MMTCE.

Slightly offsetting these two effects
is the decrease in the projected
growth of commercial floor space,
which was estimated differently from
the 1993 CCAP. This decrease
results in a reduction of 3 MMTCE
in carbon emissions.

The net result of these three changes in economic assumptions is an increase in gross energy-related carbon emissions of about 2 MMTCE in the year 2000.

Changes in Technical Assumptions. Most of the changes in projected energy-related carbon emissions between the 1993 CCAP and the current update are the result of changes in technical assumptions used in the analysis (Table 4-7).

Increased Electrification. In the 1993 CCAP, the Administration baseline projected electricity sales to grow at 1.0 percent a year between 1990 and 2000. The current baseline estimate projects electricity sales to grow faster, at a rate of 2.2 percent per year between 1990 and 2000. For reference, electricity sales grew at 2.2 percent a year between 1990 and 1996, even including electricity-saving actions initiated in the 1993 CCAP. The higher rate of growth in electricity sales results in an increase in carbon emissions of 63 MMTCE. Some of the projected increase in electricity sales is thought to have occurred as a result of a decrease in program funding of energy-efficiency programs. Table 4-8 illustrates the differences in projected

electricity growth rates by sector. The largest sectoral differences between projected electricity sales in the 1993 CCAP baseline and the 1997 CAR baseline occur in the commercial sector (31 MMTCE), followed by the residential (19 MMTCE) and industrial (13 MMTCE) sectors.

Utility Technology Modifications. Two changes made since the 1993 CCAP have increased carbon emissions in the utility sector beyond those accounted for in changes in projected electricity sales: an increase in the assumed heat rate of gas combined-cycle plants and more conservative assumptions regarding the technological characteristics of renewable generating technologies. Although the heat rates of natural gas-fired plants are projected to increase from what they are today by the year 2000, the projected improvement will not be as large as originally envisioned. These two changes are somewhat offset by an assumed improvement in nuclear plant availability, resulting in a net increase in utility sector carbon emissions of approximately 5 MMTCE.

Changes in Carbon Coefficients for Feedstocks. Two changes were made to more accurately account for carbon emissions associated with industrial feedstocks: a decrease in the percentage of carbon sequestered in natural gas feedstocks and a change in the carbon coeffi

cient associated with petroleum feedstocks. Together, these changes accounted for a decrease of about 5 MMTCE in the 1997 CAR compared to the 1993 CCAP.

Other Nonelectric Changes. A number of other changes were made to the assumptions used in the 1993 CCAP to more accurately reflect current energy market conditions. Together, these changes account for an increase in energy-related carbon emissions of 12 MMTCE. An example of such a change is the recently enacted National Highway System bill, which removes current restrictions on state discretion to set speed limits on highways built or maintained with federal funds. This statutory change increases projected transportation sector energy use and emissions due to decreases in fuel economy as average speed increases. A review of state speed limit practices prior to enactment of this restriction and the relationship between fuel economy and speed suggests this legislative action will increase projected emissions in 2000 by 4 MMTCE.

Miscellaneous Policy and Funding Changes. The energy baseline used in the 1993 CCAP assumed adoption of the Administration's economic stimulus package, which was under consideration at the time but was subse