Can U.S. carbon emissions keep dropping? That depends on Congress.

June 26, 2012

Here's a green trend that more people should know about: Since 2007, the United States has managed to curtail its global-warming pollution by quite a bit — energy-related carbon emissions have fallen roughly 6 percent over the past five years.


AEP's natural gas plant in Dresden, Ohio. (Michael Williamson/Washington Post)

Some of that, it's true, has been due to the recession. Less economic activity means less demand for energy. But not all of it. The drop has also come as cheap natural gas has forced power companies to shutter their coal plants. And some of that decline can be attributed to various conservation measures (Americans, for instance, are driving less and buying more fuel-efficient cars). All told, though, the drop in such pollution is real. The United States has been slowly inching toward President Obama's climate goal of cutting carbon emissions to 17 percent below 2005 levels by 2020.

The key question is whether this progress will continue. Will U.S. carbon emissions keep falling? Or were the past five years just a weird blip? Here's one way to look at it: The Energy Information Administration just published its Annual Energy Outlook for 2012 report (pdf), and this chart offers up three scenarios for the future.


Source: EIA Annual Energy Outlook 2012

Let's look at the options. The "Reference" case is what EIA predicts will happen if Congress doesn't enact any new energy measures between now and 2035. Renewable energy will keep getting cheaper and more popular, natural gas will continue to displace coal, and the energy-efficiency of buildings will improve slowly. Carbon emissions from the energy sector will start rising again, though the country will still stay below 2007 levels. The United States will miss its climate targets by a lot.

Now here's where Congress comes in. The "No Sunset" case is what happens if Congress keeps a slew of energy measures from expiring soon. That means extending the 2.2-cents-per-kilowatt-hour production tax credit for wind, solar and geothermal power. It means extending separate tax grants for solar power, cellulosic biofuels and energy-efficient buildings. Basically, Congress would keep all the policies that are on the books and not let anything lapse. Under this scenario, renewable power grows even more rapidly, and carbon emissions rise more slowly than in the Reference case -- but they still increase. Again, the country misses its climate goals.

Okay, let's check out that tantalizing third scenario — "Extended Policies." This would require politicians to take a few more proactive steps. Congress would not only renew all the tax credits described above, but the government would also set ambitious new federal efficiency standards for buildings, appliances and other equipment. For instance, building  codes would be updated so that new structures would be 30 percent more efficient by 2020. Under this option, carbon emissions keep falling for the next two decades. Also, electricity prices are drop significantly because Americans are using less energy overall:


Source: EIA Annual Energy Outlook 2012

Notice that none of these options involves Congress passing a sweeping cap-and-trade bill or even a "clean energy standard" that requires utilities to get a certain portion of their energy from low-carbon sources. EIA's scenarios all involve modest steps — an extension of tax credits that already exist, as well as new efficiency rules for buildings. But, according to the agency's modelers, those measures could make the difference between U.S. carbon emissions rising and falling in the decade ahead. (The country would likely miss its climate goals under all three scenarios, but it would at least come close under the "Extended Policies" option.)

P.S. And, yes, we've noted before that the EIA has occasionally been too pessimistic when predicting the growth of wind and solar power. That could well be the case in this latest report. (The agency expects U.S. renewable electricity generation to grow 50 percent between now and 2035 even if Congress lets all subsidies lapse.) But presumably that bias cancels out if we're comparing different scenarios by the same agency.

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Ezra Klein · June 26, 2012