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Preface

In February 1999, the Administration sent its fiscal year 2000 budget request to the U.S. Congress. It includes more than $4 billion in programs related to climate change. Nearly $1.8 billion of the funding is proposed for tax incentives, research and development, and other spending for the Climate Change Technology Initiative (CCTI). CCTI includes tax credits to serve as incentives for energy efficiency improvements and renewable technologies for buildings, light-duty vehicles, industry, and electricity generation. Other funding covers research, development, and deployment for energy-efficient and renewable technologies, more efficient generating technologies, and carbon sequestration research.

The analysis in this report was undertaken at the request of the Committee on Science of the U.S. House of Representatives. In its request, the Committee asked the Energy Information Administration (EIA) to analyze "the impact of specific policies on the reduction of carbon emissions and their impact on U.S. energy use and prices... in the 2008-2012 time frame," as noted in the first letter in the Appendix. The second letter from the Committee specified that EIA "analyze the impact of the President's Climate Change Technology Initiative, as defined for the 2000 budget, on reducing carbon emissions from the levels forecast in the Annual Energy Outlook 1999 reference case."

The projections and quantitative analysis in this report were conducted primarily using the National Energy Modeling System (NEMS), an energy-economy model of U.S. energy markets designed, developed, and maintained by EIA, which is used each year to provide the projections in the Annual Energy Outlook. Chapter 1 of this report provides background discussion of CCTI and the methodology of the analysis. Chapters 2, 3, and 4, respectively. analyze the impacts of the tax credits; research, development, and deployment programs; and funding for accelerated appliance standards proposed in CCTI.

The legislation that established EIA in 1977 vested the organization with an element of statutory independence. ELA does not take position on policy questions. It is the responsibility of EIA to provide timely, high quality information and to perform objective, credible analyses in support of the deliberations of both public and private decisionmakers. This report does not purport to represent the official position of the U.S. Department of Energy or the

Administration.

Energy Information Administration / Analysis of the Climate Change Technology Initiative

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2 CCTI Tax Initiatives

Introduction
Buildings ..
Tax Credits for Energy-Efficient Building Equipment

Background

Results
Tax Credits for Energy-Efficient New Homes

Background

Methodology and Results
Tax Credits for Rooftop Solar Equipment

Background

Results
Industry

Background.
Tax Credit for Combined Heat and Power
Methodology

Results
Transportation.

Background
Tax Credits for Electric, Electric Hybrid, and Fuel Cell Vehicles
Analytical Approach

Results and Discussion
Renewable Electricity Generation

Background.
Climate Change Technology Initiative
Methodology
Results

Biomass

Wind Conclusion

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Energy Information Administration I Analysis of the Climate Change Technology Initiative

Contents (Continued)

3. Research, Development, and Deployment

Introduction

Buildings.

Partnership for Advancing Technology in Housing (PATH)

Energy Star Products

Million Solar Roofs

Energy-Efficient Buildings and Energy Smart Schools

Federal Energy Management Program

Energy-Efficient Buildings Technologies

Industry

Background

Industries of the Future

Industrial Combined Heat and Power

Other Programs

Transportation..

Partnership for a New Generation of Vehicles

Background

Analytical Approach

Results and Discussion

Advanced Diesel Technologies for Light and Heavy Trucks

Background
Light Trucks
Heavy Trucks

Ethanol from Biomass

Electricity Generation

Fossil Fuel Technologies

Efficient Electricity Generating Technologies

Carbon Sequestration

Renewable Technologies

Solar Photovoltaics
Solar Thermal
Biomass

Wind

Geothermal

Hydropower

Nuclear Power

Other Energy-Related Research

Hydrogen Fuels

High-Temperature Superconductivity

Conclusion

4. Energy-Efficient Appliances and Equipment
Introduction
Analysis Results

Appendix A. Letters from the Committee on Science

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Tables

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ESI. Summary of Impacts for Selected Climate Change Technology Initiatives. 2010
ES2. Summary of Impacts for Selected Climate Change Technology Initiatives. 2002-2004
ES3. Summary of Impacts for Proposed Efficiency Standards, 2010.

1. Tax Credit Proposal for Energy-Efficient Building Equipment
2. Cost and Performance Data for CCTI Technologies .
3. Projected Energy Savings and Carbon Emissions Reductions from the CCTI Tax Incentive

for Energy-Efficient Building Equipment, 2005, 2010, and 2020
4. South Region Building Code Characteristics
5. North Region Building Code Characteristics
6. Projected Energy Savings and Carbon Emissions Reductions in the CCTI Analysis Case

for Energy-Efficient New Homes . 7. Cost Data for CCTI Solar Technologies 8. CCTI Requirements for Qualifying Combined Heat and Power Systems 9. Components of Cogeneration Capacity in the Reference Case, 1999 and 2002 10. Characteristics of Candidate Cogeneration Systems ... 11. Assumed Values for the CHP Investment Payback Acceptance Curve 12. Projected Effects of the CCTI Tax Credit on Traditional Industrial Cogeneration, 2000-2002 13. Projected Effects of the CCTI Tax Credit for Traditional Combined Heat and Power (CHP) Systems,

2005, 2010, and 2020 14. Electric Vehicles Currently Available in U.S. Markets and Announced Dates of

New Production Prototypes 15. Light-Duty Vehicle Sales by Technology Type, 1997-2020 16. Light-Duty Vehicle Fuel Consumption by Fuel Type, 1997-2020 17. Transportation Sector Carbon Emissions by Fuel Type, 1997-2020 18. Projected Vehicle Sales and Reductions in Projected Tax Revenues in the CCTI Analysis Case

by Vehicle Type, 2002-2006 19. New U.S. Wind Generating Capacity Concurrent with the EPACT Production Tax Credit, 1994-1999 20. Projected Effects of the CCTI Biomass Energy Production Tax Credit, 2005, 2010, and 2020 21. Projected Effects of the CCTI Biomass Energy Co-firing Tax Credit, 2004, 2005, 2010, and 2020 22. Projected Effects of the CCTI Wind Energy Production Tax Credit, 2005, 2010, and 2020 23. Reductions in Energy Use Projected To Result from CCTI Tax Initiatives, 2002-2010 24. Reductions in Carbon Emissions Projected To Result from CCTI Tax Initiatives. 2002-2010 25. Projected Energy Savings and Carbon Emissions Reductions for Successful PATH Program Goals

in New Housing. 2005, 2010, and 2020 26. Projected Residential Electricity Savings and Carbon Emissions Reductions for the Energy Star

TV/VCR Program in the AEO99 Reference Case, 2005, 2010, and 2020 27. Projected Energy Savings and Carbon Emissions Reductions for Successful Million Solar Roofs

Program, 2005, 2010, and 2020.. 28. Light-Duty Vehicle Sales by Technology Type, 1997-2020 29. Light-Duty Vehicle Fuel Consumption by Fuel Type, 1997-2020 30. Transportation Sector Carbon Emissions by Fuel Type, 1997-2020 31. Light Truck Sales, 1997-2020 32. Light-Duty Vehicle Fuel Consumption by Fuel Type, 1997-2020 33. Transportation Sector Carbon Emissions by Fuel Type, 1997-2020 34. Heavy Truck Diesel Technology Characteristics in the Reference Case 35. Heavy Truck Diesel Technology Characteristics in the CCTI Analysis Case 36. Heavy Truck Diesel Fuel Efficiency, 1997-2020 37. Market Penetration of CCTI Proposal Technologies in the CCTI Analysis Case 38. Combined Effects of CCTI Light Truck and Heavy Truck Technology Initiatives,

2005, 2010, and 2020 ..... 39. Ethanol Consumption and Resulting Carbon Emissions Reductions in the Reference Case,

1997, 2005, 2010, and 2020. 40. Projected Uses of Ethanol in the Reference Case, 1997, 2005, 2010, and 2020

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Tablos (Continuod)

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41. Office of Fossil Energy CCTI Funding. 1999 and 2000
42. Carbon Emissions for Fossil Generating Technologies
43. DOE's Biomass Power Systems Budget
44. Effective Dates of Appliance Efficiency Standards, 1988-2001
45. Efficiency of New Refrigerators, 1972-2001
46. Assumptions for Accelerated Minimum Efficiency Standards Affecting Buildings
47. Comparison of Results: Accelerated Standards Process

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