The Value of End-Use Energy Efficiency in Mitigation of U.S. Carbon Emissions

Abstract

This report documents a scenario analysis exploring the value of advanced technologies in the U.S. buildings, industrial, and transportation sectors in stabilizing atmospheric greenhouse gas concentrations. The analysis was conducted by staff members of Pacific Northwest National Laboratory (PNNL), working at the Joint Global Change Research Institute (JGCRI) in support of the strategic planning process of the U.S. Department of Energy (U.S. DOE) Office of Energy Efficiency and Renewable Energy (EERE). The conceptual framework for the analysis is an integration of detailed buildings, industrial, and transportation modules into MiniCAM, a global integrated assessment model. The analysis is based on three technology scenarios, which differ in their assumed rates of deployment of new or presently available energy-saving technologies in the end-use sectors. These technology scenarios are explored with no carbon policy, and under two CO2 stabilization policies, in which an economic price on carbon is applied such that emissions follow prescribed trajectories leading to long-term stabilization of CO2 at roughly 450 and 550 parts per million by volume (ppmv). The costs of meeting the emissions targets prescribed by these policies are examined, and compared between technology scenarios. Relative to the reference technology scenario, advanced technologies in all three sectors reduce costsmore » by 50% and 85% for the 450 and 550 ppmv policies, respectively. The 450 ppmv policy is more stringent and imposes higher costs than the 550 ppmv policy; as a result, the magnitude of the economic value of energy efficiency is four times greater for the 450 ppmv policy than the 550 ppmv policy. While they substantially reduce the costs of meeting emissions requirements, advanced end-use technologies do not lead to greenhouse gas stabilization without a carbon policy. This is due mostly to the effects of increasing service demands over time, the high consumption of fossil fuels in the electricity sector, and the use of unconventional feedstocks in the liquid fuel refining sector. Of the three end-use sectors, advanced transportation technologies have the greatest potential to reduce costs of meeting carbon policy requirements. Services in the buildings and industrial sectors can often be supplied by technologies that consume low-emissions fuels such as biomass or, in policy cases, electricity. Passenger transportation, in contrast, is especially unresponsive to climate policies, as the fuel costs are small compared to the time value of transportation and vehicle capital and operating costs. Delaying the transition from reference to advanced technologies by 15 years increases the costs of meeting 450 ppmv stabilization emissions requirements by 21%, but the costs are still 39% lower than the costs assuming reference technology. The report provides a detailed description of the end-use technology scenarios and provides a thorough analysis of the results. Assumptions are documented in the Appendix.« less