Climate

The savings from cutting California’s carbon “outweigh the costs”

In 2006 the California legislature passed AB32, which required greenhouse pollution to return to 1990 levels by 2020. They left it up to state regulatory agencies to come up with the details.

Governor Schwarzenegger followed with an executive order that requires an 80% reduction from 1990 levels in greenhouse pollution by 2050 (at which time California’s is expected to be twice the 1990 population, so this represents a factor of ten per capita reduction in greenhouse pollution.)

The California Air Resources Board (CARB) has been working to meet various statutory deadlines for the reduction plan. Its proposed plan will be released next month (October). As part of the process, it has made estimates of the economic costs and benefits of its plans, and it released those estimates last week:

These estimates indicated that the overall savings from improved efficiency and developing alternatives to petroleum will, on the whole, outweigh the costs. This balance is largely driven by current high energy costs and the degree to which measures increase energy efficiency throughout the economy and move California toward ultimately cheaper alternatives to fossil fuels.

The measures pay for themselves — not even counting the benefit of helping to avoid catastrophic climate impacts. The executive summary lists the key elements of CARB’s preliminary recommendation for the 2020 target:

  • Expansion and strengthening of existing energy efficiency programs and building and appliance standards;
  • Expansion of the Renewables Portfolio Standard to 33 percent;
  • Development of a California cap-and-trade program that links with other WCI Partner programs to create a regional market system;
  • Implementation of existing State laws and policies, including California’s clean car standards, goods movement measures, and the Low Carbon Fuel Standard;
  • Targeted fees to fund the State’s long-term commitment to AB 32 administration.

There were two economic estimates prepared, one using CARB’s Environmental Dynamic Revenue Assessment Model (E-DRAM), and another done by U.C. Berkeley: Berkeley Energy and Resources (BEAR) model. The results were broadly similar. Both started with a Business As Usual (BAU) forecast, and then analyzed how that forecast would change in response to individual recommendations.

To calculate the economic benefits, the models need projections of future energy prices. They relied on a September 2007 report from the California Energy Commission, which, for example, forecast $3.67 for a gallon of gasoline in 2020. Keep in mind that if 2020 energy should cost more — which it surely will — the savings will be greater.

In the BEAR model, Real Output, Gross State Product, and Employment all rose under the proposed changes, compared to BAU. Carbon Emissions fell significantly, while Personal Income fell 0.2%. The E-DRAM results were similar, except that Personal Income rose by 2.8% in that model.

From CARB’s E-DRAM, here is Table I-2 from Appendix I, giving the costs and savings for individual recommendations (MMTCO2E is Million Metric Tons of CO2 Equivalent):

Measures MMTCO2E in 2020 Costs ($Millions) Savings ($Millions) Net per MMTCO2E ($)
Transportation
Light-Duty Vehicle GHG Standards I 27.7 1,372 11,371 -361
Light-Duty Vehicle GHG Stardards II 4.0 594 1642 -262
Low Carbon Fuel Standard 16.5 11,000 11,000 0
Low Friction Oil 2.8 520 1,149 -225
Tire Pressure Program 0.82 95 337 -295
Tire Tread Program 0.3 0.6 123 -439
Other Efficiency (Cool Paints) 0.2 0(1) 0(1) 0(1)
Goods Movement Efficiency 3.5 0(1) 0(1) 0(1)
Heavy-Duty Vehicle GHG Emisison Reduction (Aerodnamic Efficiency) 1.4 1,136(2) 496(2) (2)
Medium and Heavy-duty Vehicle Hybridization 0.5 93 177 -168
Heavy-Duty Engine Efficiency 0.6 26 213 -312
Local Government Actions and Targets 2 200 821 -321
High Speed Rail 1 0(1) 0(1) 0(1)
Subtotal 62.2      
Building and Appliance Energy Efficiency and Conservation
Electricity Reduction Program 15.2 3,294 4,904 -106
Increased Combined Heat and Power 6.8 362 1,673 -193
Natural Gas Reduction Programs 4.2 910 1,355 -106
Subtotal 26.3      
Renewable Energy
33% Renewable Portfolio Standard 21.2 3,671 1,889 84
California Solar Programs (3000 MW Installation) 2.1 0(1) 0(1) 0(1)
Solar Water Heaters (AB 1470 goal) 0.1 0(1) 0(1) 0(1)
Subtotal 23.4      
High GWP Measures
Reduction of Refrigerant from Non-Professional Servicing 0.5 60 0 120
SF6 Limits in Non-Utility and Non-Semiconductor Applications 0.3 0.22 0.14 0.3
High GWP Reduction in Semiconductor Manufacturing 0.15 2.6 0 17
Limit High GWP Use in Consumer Products 0.25 0.06 0.23 -0.7
Specifications for Commercial and Industrial Refrigeration 4 1.24 0.66 0.15
Foam Recovery and Destruction Proogram 1 94.83 0 95
SF6 Leak Reduction and Recycling in Electrical Applications 0.1 0.3 0.4 -1
Alternative Suppressants in Fire Protection Systems 0.1 1.96 0.2 18
Gas Management for Stationary Sources 6.3 1.02 3.6 -0.41
Residential Refrigeration Early Retirement Program 0.2 18.9 24.79 -29
Subtotal 16.2      
Others
Landfill Methane Capture 1.0 1 0 1
Methane Capture at Large Dairies(3) 1.0 0 0 0
Sustainable Forest Target 5.0 50 0 10
Water Use Efficiency(4) 1.4  
Water Recycling(4) 0.3  
Pumping and Treatment Efficiency(4) 2.0  
Reuse Urban Runoff 0.2  
Incease Renewable Energy Production 0.9  
Subtotal 6.0  
Recommended Measures Totals 134 23,835 37,533  

For the footnotes, please see Appendix I (pdf).
Please note in the above table how many of the rows represent net savings.

— Earl Killian

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4 Responses to The savings from cutting California’s carbon “outweigh the costs”

  1. Mighty good number of facts here. But wherever I see, whichever country it is, fact finding and report writing far outweigh actual implementation. I really wonder if anything will come off the already lost battle against climate change.

    Rhea.

  2. shop says:

    There were two economic estimates prepared, one using CARB’s Environmental Dynamic Revenue Assessment Model (E-DRAM), and another done by U.C. Berkeley: Berkeley Energy and Resources (BEAR) model. The results were broadly similar. Both started with a Business As Usual (BAU) forecast, and then analyzed how that forecast would change in response to individual recommendations.

  3. büyütücü says:

    coal today; South Carolina comes to mind. So to some extent, using modern rather than fossil carbon is possible. The problem is that the coal reacots tend to be congregated in but a few regions while growing biomass requires extensively spread-out operations. Much of the resulting biomass is then stranded by excessive transportation costs so it makes more sense to simply bury it there.