Analyzing energy security outcomes of decarbonization across income groups in GCAM-USA

Abstract

The equity implications brought on by climate change and the actions taken in response are a growing area of interest. Such implications are important for the design and implementation of transformative policies but are understudied at subnational levels, especially with considerations to impacts on human well-being. Specifically, integrated assessment models (IAMs), the primary tools for evaluating these policies and their implications, have advanced science and policymaking but lack detailed subnational information. In this study, we developed projections of U.S. state-level income distributions (Casper et al., 2023), represented by income deciles, and incorporated those projections into an IAM (GCAM-USA) to examine the effects of decarbonization policies on residential energy security, a key aspect of human well-being, across ten income groups in each state. Importantly, our projections of residential energy security include several metrics in order to represent the multi-faceted nature of energy security and to explore tradeoffs that consumers at different income levels may need to make in response to changing energy prices. Specifically, we estimate energy service consumption, the satiation gap, and energy burden for each decile. Our study identifies unequal impacts across groups, with the most significant impact observed among mid-to-low income groups. In 2050, the projected energy burden is lower than in 2020 due to the projected increase in income over time relative to changes in energy service prices. However, the lowest income group in most states still experiences ‘high’ energy burden in 2050 under business-as-usual, while the decarbonization policies leads to even higher energy burden for the lowest income group (households spending additional 0.6% out of income for residential energy services).With the lowest income groups experiencing worse outcomes, this work suggests that targeted policy interventions that consider the impacts on different groups will promote more equitable transitions to a net-zero greenhouse gas emissions economy. The results focus solely on the impacts of decarbonization policies on residential energy security metrics, excluding other potential positive effects on human well-being like reductions in air pollution. References Casper, K. C., Narayan, K. B., O’Neill, B. C., Waldhoff, S. T., Zhang, Y., & Wejnert-Depue, C. P. (2023). Non-parametric projections of the net-income distribution for all U.S. states for the Shared Socioeconomic Pathways. Environmental Research Letters, 18(11), 114001. https://doi.org/10.1088/1748-9326/acf9b8