Projected climate change impacts on Indiana’s Energy demand and supply

Abstract

This paper estimates changes in future energy demand and supply for Indiana due to projected climate change impacts. We first estimate demand changes under both the business-as-usual emissions scenario (RCP 8.5) and a scenario based on reduced emissions consistent with a 2-degree increase in global mean temperature (RCP 4.5), on both a statewide basis and for major urban areas. We then use our adjusted statewide energy demand projections as an input to a comprehensive model of Indiana’s energy system, to project expected changes in the state’s energy supply under both scenarios. Finally, we consider the potential impacts of two policy scenarios—a carbon pricing scheme and a renewable energy investment tax credit—on emissions and future energy supply choices. Our results suggest that climate change will have a relatively modest effect on energy demand and supply in Indiana, slightly increasing commercial demand and decreasing residential demand but having little effect on energy supply choices. In addition, our results suggest the potential for policy proposals currently being adopted in other states, such as a relatively small carbon price or investment credits for renewable energy sources, to have a larger impact on the state’s future energy mix, increasing production from low or zero carbon energy sources and reducing emissions.