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with the largest impact is refrigerators, which will collectively be responsible for fewer carbon emissions in 2010 than in 1990 despite population growth and performance enhancements. The latest refrigerator standards adopted in 1993 and coming into effect in 2001 are aggressive enough to not only take inefficient units off the market but also accelerate the introduction of new technologies.

Within the building technologies program, additional funding is provided to DOE to accelerate the lighting and appliance efficiency standards program in order to encourage the deployment of more energy-efficient appliances and equipment. Program goals include the development of new standards for fluorescent lamp ballasts, water heaters, and clothes washers, with test procedures for residential central air conditioners and heat pumps, distribution transformers, commercial heating, ventilation, and air conditioning, and water heaters.

Because future standards are not specified, the potential impact is analyzed by evaluating the impacts of proposed standards in the American Council for an Energy-Efficient Economy study Approaching the Kyoto Targets: Five Key Strategies for the U.S.2 In 2010, it is projected by ELA that total energy consumption would be reduced by 143.9 trillion Btu, or 0.13 percent, and total carbon emissions by 5.4 million metric tons, or 0.30 percent (Table 3). Because of the energy efficiency improvements, consumers would save $2,335 million (1998 dollars) in 2010 alone in expenditures for energy, not accounting for additional equipment costs. As the technologies penetrate. the average efficiency of the equipment stock improves. As a result, the assumed efficiency standards have increasing impacts on energy consumption and carbon emissions after 2010. In fact, of the programs evaluated, the impact of the efficiency standards is the largest.

American Council for an Energy-Efficient Economy, Approaching the Kyoto Targets: Five Key Strategies for the U.S. (Washington, DC, August 1998).

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Table 3. Summary of impacts for Proposed Efficiency Standards, 2010

Reduction in
Energy Use
(Triflon Btu)

CCTI Initiative

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Reduction" in
Carbon EmissionsTM
Million Metric Tons)
5.4

Accelerated Efficiency Standards

143.9

"Reductions are relative to the CCTI reference case which is similar to that in Energy Information Administration, Annual Energy Outlook 1999.
DOE/EIA-0383(99) (Washington, DC, December 1998).
"Reductions in carbon emissions from electricity are calculated by displacing marginal generating plants.

Research, Development, and Deployment

Annual Energy Fuel Expenditure Savings (Million 1998 Dollars) 2335

CCTI also includes nearly $1.4 billion of funding in the fiscal year 2000 budget request for
research, development, and deployment of more energy-efficient and renewable energy and for
research into carbon sequestration. More than $1.1 billion is requested for programs within DOE,
with additional funding for EPA and the Departments of Housing and Urban Development
(HUD), Commerce, and USDA. In addition to developing new technologies, some programs aim
to reduce the costs and improve the operating characteristics of existing technologies, making
them more economically competitive with conventional technologies. Other initiatives include
programs to encourage the deployment of new technologies, such as consultations, partnerships,
and voluntary programs.

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Buildings. Programs include cooperative efforts with the building industry to improve the
energy-efficiency of homes, funding for new Energy Star products, the development of
energy-efficient technologies, and partnerships to improve the energy efficiency of
commercial buildings and schools.

Transportation. Proposed funding includes the Partnership for a New Generation of
Vehicles (PNGV) program, plus other partnerships to develop advanced diesel cycle
engine technologies for pickup trucks, vans, and sport utility vehicles and to improve the
fuel efficiency of new heavy trucks, and the continued development of ethanol and other
biofuels.

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Industry. Programs include partnerships to develop more energy-efficient technologies for the most energy-intensive industries and the continuing development of cogeneration systems and elimination of barriers for combined heat and power technologies.

Electricity Generation. Funding includes continued development for solar energy, biomass power, wind energy, geothermal power, and hydropower; the Renewable Energy Production Incentive, renewable energy demonstration projects; the International Solar Program; improvements for the quality and reliability of power service; distributed generation; hydrogen production and storage; superconducting technology; life extension of nuclear power plants; and development of more efficient coal and natural gas generation.

• Carbon Sequestration. This program funds research into the capture and storage of carbon dioxide by enhancing the natural capacity of terrestrial ecosystems and oceans to take up and store carbon dioxide in underground geological structures and the deep

ocean.

Accelerating the adoption of new technologies in the market at lower costs through research, development, and deployment can help reduce carbon emissions and also can contribute positively to the overall quality of life. Support for these activities at historic levels is assumed in the AE099 reference case. As a result, reductions in these programs would likely lead ELA over time to raise its carbon projections, and new or expanded programs could lead ELA to lower its carbon estimates.

The impacts of research and development funding for new technologies, whether ongoing or incremental, are difficult to quantify in the same manner as the tax incentives. Some of the proposed technologies may only achieve benefits in a long time frame beyond 2020 or may not achieve success at all; however, predicting which technologies will be successful is highly speculative. A direct link cannot be established between levels of funding for research and

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development and specific improvements in the characteristics and availability of energy technologies. In addition, successful development of new technologies may not lead to immediate penetration in the marketplace. Low prices for fossil energy and conventional technologies; unfamiliarity with the benefits, use, and maintenance of new products; and uncertainties concerning the reliability and further development of new technologies are all factors that may slow technology penetration and are barriers that the tax credits are intended to address. However, these limitations do not mean that the impacts of the research, development, and deployment programs could not be substantial over time.

It is also difficult to analyze the impacts of information programs, voluntary initiatives, and partnerships on realized technology development and deployment. Some voluntary programs appear to have achieved some success, such as Energy Star. The benefits of past efforts are difficult to quantify but are generally assumed in the reference case. They are even more difficult to quantify for the future.

This analysis addresses these initiatives by discussing the current state of development of the technologies and the economics of their development and deployment. For several of these programs. the potential impacts are addressed by assuming that program goals are achieved, then deriving the impacts on energy consumption and emissions, or by analyzing the impact of technology improvements based on current levels of research and development.

In AEO99, the baseline assumptions include continuing improvements in technology, consistent with ongoing research and development. The impacts of these improvements can be evaluated by comparing the reference case with a case in which it is assumed that all future equipment choices in the end-use demand sectors are from technologies available in 1999, building shell and industrial plant efficiencies are frozen at 1999 levels, and new fossil generating technologies do not improve beyond 1999. In 2010, energy consumption in this low technology case is 3.7 quadrillion Btu, or 3.3 percent higher, than in the reference case, increasing carbon emissions by 67 million metric tons, or 3.7 percent.

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In the AEO99 reference case projections, natural gas-fired generating plants are expected to dominate new capacity additions over the next 10 to 15 years, although advanced coal plants become economical after 2010. Renewable electricity generation increases in the reference case projections, particularly biomass, wind, and to a lesser extent geothermal generation; however, solar thermal and photovoltaic technologies do not contribute significantly to the electricity grid within the time frame of the analysis, and almost no new hydropower capacity is projected. In the transportation sector, alternative-fueled vehicle sales account for about 9 percent of the light-duty vehicle sales in 2010, with alcohol flex-fuel vehicles and dedicated electric vehicles each accounting for about one-fourth of the market; however, nearly all the penetration of electric vehicles is driven by mandates.

Analysis indicates that some of the programs for the development of renewable technologies may hold promise, as well as some of the programs for buildings if the program goals can be achieved. Stock tumover can slow the penetration of some of the improved technologies, even if successful, so that significant changes in the average stock of equipment may take a long time, which may be complemented by the tax incentives. In addition, some of the technologies may have noneconomic barriers to widespread acceptance. These include unfavorable impressions of the noise, odor, and performance of previous diesel vehicles and limitations on hydropower due to environmental concems. Some of the CCTI programs may have more longer-term benefits because stock tumover may slow penetration and because some of the research and development programs are likely to achieve success later in or beyond the 2020 horizon of the analysis. For those research, development, deployment programs that are evaluated quantitatively, most of them have increasing impacts on energy consumption and carbon emissions after 2010. These include Partnership for Advanced Technology in Housing (PATH), PNGV, advanced diesel trucks, and ethanol. Assuming the goals of these programs leads to improvements in the technologies which are gradually adopted over the time horizon of the analysis.

This analysis does not necessarily include all costs of technology development and deployment. For example, the full costs of developing and manufacturing new technologies, including costs to

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