EUF > Policy Analysis > Costs of Greenhouse Gas Emission Reductions

Costs of Greenhouse Gas Emission Reductions

Project Description

The common perception among many policy makers and industry leaders is that the twin objectives of reducing greenhouse gas emissions and promoting a more competitive economy are inherently contradictory. Many believe that anything done to lower such emissions will necessarily restrict economic activity. Others argue that if the economy moves forward at current levels of efficiency, growth in greenhouse gas emissions will be inevitable and the global climate will be seriously damaged. Because of the "unavoidable tradeoff" between these two objectives, the various industry, government and environmental groups wage a constant policy battle over which objective merits the greater support. From a perspective of cost-effective investments in technology, however, it has become increasingly clear that these two goals are not at all contradictory. The reason is that the U.S. economy falls short of an optimal level of overall carbon efficiency. The reports highlighted in this section describe technology strategies to promote low carbon energy sources and improve efficiency.

Five Lab Study

This report presents the results of a study conducted by five U.S. Department of Energy national laboratories that quantifies the potential for energy-efficient and low-carbon technologies to reduce carbon emissions in the United States. Three overarching conclusions emerge from our analysis of alternative carbon reduction scenarios. First, a vigorous national commitment to develop and deploy cost-effective energy-efficient and low-carbon technologies could reverse the trend toward increasing carbon emissions. Along with utility sector investments, such a commitment could halt the growth in U.S. energy consumption and carbon emissions so that levels in 2010 are close to those in 1997 (for energy) and in 1990 (for carbon). It must be noted that such a vigorous national commitment would have to go far beyond current efforts. Second, if feasible ways are found to implement the carbon reductions, the cases analyzed in the study are judged to yield energy savings that are roughly equal to or greater than costs. Third, a next generation of energy-efficient and low-carbon technologies promises to enable the continuation of an aggressive pace of carbon reductions over the next quarter century.

LBNL-NEMS Analysis

This report describes an analysis of possible technology-based scenarios for the U.S. energy system that would result in both carbon savings and net economic benefits. We use a modified version of the Energy Information Administration's National Energy Modeling System (LBNL-NEMS) to assess the potential energy, carbon, and bill savings from a portfolio of carbon saving options. This analysis is based on technology resource potentials estimated in previous bottom-up studies, but it uses the integrated LBNL-NEMS framework to assess interactions and synergies among these options.

The High-Efficiency Low Carbon scenario analyzed in this study would result in significant annual net savings to the U.S. economy, even after accounting for all relevant investment costs and program implementation costs. This strategy would result in roughly half of the carbon reductions needed to meet the Kyoto target being achieved from domestic U.S. investments. Not pursuing this technology-led investment strategy would have an opportunity cost of more than $50B per year for the U.S. in 2010 and more than $100B per year by 2020.

Project Staff

Jonathan Koomey
R. Cooper Richey
Lynn Price
Nathan Martin
Mark D. Levine
Alan H. Sanstad

Key Data

Output tables from LBNL-NEMS analysis, in Microsoft Excel 5.0 format (NEMSsumm.xls)


Interlaboratory Working Group. 1997. Scenarios of U.S. Carbon Reductions: Potential Impacts of Energy-Efficient and Low-Carbon Technologies by 2010 and Beyond. Oak Ridge, TN and Berkeley, CA: Oak Ridge National Laboratory and Lawrence Berkeley National Laboratory. ORNL-444 and LBNL-40533. September. Full Report in PDF format

Jonathan G. Koomey, R. Cooper Richey, Skip Laitner, Robert J. Markel, and Chris Marnay. 1998. Technology and Greenhouse Gas Emissions: An Integrated Scenario Analysis Using the LBNL-NEMS Model. Lawrence Berkeley National Laboratory. LBNL-42054 215K PDF

Koomey, Jonathan G. 1996. "Trends in Carbon Emissions from U.S. Residential and Commercial Buildings: Implications for Policy Priorities." Berkeley, CA: Lawrence Berkeley National Laboratory. Report No. LBNL-39421. June. Abstract | 68K PDF

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