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How about a little good news for a change?

Despite Congress' failure to enact comprehensive energy and climate legislation, surprising, and underappreciated, progress has been made in reducing U.S. carbon dioxide emissions during the last few years. In 2011, U.S. emissions of energy-related carbon dioxide were 8.7 percent below 2005 levels, despite a 5.5 percent increase in the size of our economy. This remarkable result is due primarily to reduced reliance on coal-fired power plants and increased passenger vehicle efficiency, driven by a combination of policy and market forces.

The forecast for 2020, assuming extensions to existing policies that can be reasonably anticipated, is for a further reduction to 10.5 percent below 2005 levels -- a sharp contrast with the forecast made by the Energy Information Agency (EIA) in 2005 that emissions would rise by 25 percent by 2020. Instead, current trends put the 17 percent reduction target embraced by President Obama squarely within reach.

Recent Trends

U.S. energy-related CO2 emissions in 2011 were 2.4 percent below 2010 levels, and 8.7 percent below 2005 levels. While our economy remains sluggish, these pollution reductions can't be attributed primarily to the recession. The U.S. economy grew by 1.7 percent in 2011, and was 5.5 percent larger than it was in 2005.

Many factors affect U.S. carbon pollution, but almost half of the emission reductions from 2005 to 2011 came from power plants. Total electricity consumption increased by 1.2 percent from 2005 to 2011, implying that the 10.4 percent reduction in emissions from the electric sector is attributable to increased reliance on lower-emitting generation sources. Moreover, had electricity consumption instead increased by 2 percent per year, as had been forecast, these emission reductions would not have materialized.

A similar conclusion can be drawn about reduced emissions in the transportation sector. The total number of miles driven in 2011 was approximately 2 percent lower than it was in 2005, indicating that improved vehicle efficiency was the primary contributing factor to the 7.3 percent reduction in emissions during that period.

Improving Forecasts

Looking forward, the official forecast for 2020 -- assuming no new policies -- is now for carbon emissions to be 9.4 percent lower than they were in 2005, a huge contrast to the EIA's "Reference" forecast that emissions would increase by 25 percent between then and 2020.

The EIA also forecasts an "Extended Policies" case that makes the following "business-as-usual" assumptions:

  • the 2017-2025 vehicle standards proposed jointly by EPA and the Department of Transportation are implemented;
  • tax credits for various renewable fuels and technologies are extended; and
  • the Department of Energy continues to update energy efficiency standards for appliances as required by law and consistent with the Department's strategic plan.

Under these conditions (and not assuming pollution standards for power plants or other stationary sources), the Extended Policies case results in CO2 emissions 1.3 percent lower than the Reference case in 2020 and 8 percent lower in 2035. Relative to 2005, U.S. carbon pollution emissions are 10.5 percent lower in 2020 and 11.7 percent lower in 2035 in this scenario.

Where the Opportunities Exist

Effective implementation of the Clean Air Act has the potential to achieve substantial additional emission reductions, allowing the U.S. to meet or exceed the goal of cutting emissions by 17 percent from 2005 levels by 2020. In the absence of new legislation, federal performance standards for existing power plants provide the largest opportunity to reduce emissions relative to the Extended Policies case. That scenario projects that power plants will emit just over 2 billion metric tons of CO2 in 2020, meaning that a 20 percent reduction from that level would hit the target.

That 20 percent decrease could be reached by a 10 percent reduction in electricity demand, by increasing reliance on renewable sources of electricity by 10 percentage points (i.e., from 14 percent of total generation in the Extended Policies case to 24 percent of total generation), or a combination of these measures, assuming these gains were all used to reduce generation from high-emitting coal-fired power plants.

There are many other accessible emission reduction opportunities, from increasing deployment of Combined Heat and Power systems in industry, to installing solar systems on school roofs, and shifting toward electricity to drive our transportation system. The emission reductions achieved to date and the downward shift in the forecast just begin to scratch the surface of what's possible.

What Changed?

Fuel markets. Between 2005 and 2011, gasoline prices rose 33 percent and the average cost of natural gas used to generate electricity dropped 50 percent, and both of these trends drive down emissions.

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