Reducing carbon dioxide emissions beyond 2030: Time to shift U.S. power-sector focus

Abstract

Despite the impending withdrawal of the U.S. from the Paris Agreement and the replacement of Obama's Clean Power Plan (CPP) with Trump's Affordable Clean Energy rule, the carbon-dioxide (CO2) emission-reduction targets set as the contribution of the U.S. power sector to meet the Agreement goal appear likely to be met. Using data from the U.S. Energy Information Administration's Annual Energy Outlook (AEO) reports, we evaluate the impact of projected natural gas prices on these emissions. We find that while lower natural gas prices have historically resulted in lower CO2 emissions, the projections from the 2017 and 2019 AEOs differ dramatically in both the projected gas price and the associated impact on CO2 reduction. This change in the marginal emission-reduction rate relative to the natural gas price coincides with decreasing capital costs for solar and wind generation sources. As such, the contribution of the power sector to the Paris Agreement targets for 2020 and 2025, and the CPP 2030 target may be meet as early as 2020. With fulfillment of the shorter-term reduction targets now at hand without additional U.S. legislative or regulatory action, policy analysis should turn toward the strategies required to meet the longer-term, deeper-reduction targets.