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U.S. ENERGY INFORMATION ADMINISTRATION REPORT SUMMARY: Analysis of the Climate Change Technology InitiativeThe Service Report Analysis of the Climate Change Technology Initiative, prepared by the Energy Information Administration (EIA), was undertaken at the request of F. James Sensenbrenner, Jr. and George E. Brown, Jr., Chairman and Ranking Minority Member of the House of Representatives' Committee on Science. They requested that EIA analyze the impact of the Climate Change Technology Initiative (CCTI), as defined for the Fiscal Year 2000 budget, on reducing carbon emissions from the levels forecasted in the Annual Energy Outlook 1999 (AEO99) reference case. CCTI includes nearly $1.8 billion for tax incentives; research, development, and deployment programs; and accelerated efficiency standards. The proposed tax credits are intended to serve as incentives for more energy- efficient and renewable technologies for buildings, light-duty vehicles, industry, and electricity generation. The research, development, and deployment funding promotes the development and penetration of energy- efficient and renewable technologies and carbon sequestration research. The analysis provides a quantitative assessment of the tax incentives in the CCTI, which are new initiatives or extensions of current tax credits. In 2010, the tax credits for buildings, industrial, and transportation technologies would reduce primary energy consumption by 31.6 trillion Btu, or 0.03 percent below the 111 quadrillion Btu forecasted in the AEO99 reference case. Tax credits for wind and biomass electricity generation would reduce fossil energy use in electricity generation by 71.9 trillion Btu, or 0.06 percent of the total forecasted in the AEO99 reference case. The tax credits would result in carbon emissions in 2010 that are 0.17 percent , or 3.1 million metric tons, lower than the 1,790 million metric tons forecasted in the AEO99 reference case, reflecting lower energy consumption and a shift in the mix of energy fuels. This analysis finds that a large percentage of the tax credits would go to unintended beneficiaries, who would have undertaken the investments even without the tax credit. Tax credits of longer duration and/or higher value could encourage greater penetration of the technologies by making them more economically competitive to consumers. Research, development, and deployment programs also have benefits in reducing carbon emissions. However, it is not possible to link program expenditures directly to program results or to separate the impacts of incremental funding requested for FY2000 from ongoing program expenditures. AEO99 already includes the impacts of ongoing research and development programs in the reference case. Compared to a case in which technology characteristics are frozen at 1999 levels, energy consumption in the AEO99 reference case is 3.2 percent lower in 2010 than it would be without technology improvements and carbon emissions are 3.6 percent lower, a reduction of 67 million metric tons of carbon. Some of the CCTI research, development, and deployment programs are analyzed by observing the impact of each program in the AEO99 reference case. For other programs, including several of the buildings and transportation programs, the likely impacts on energy consumption and carbon emissions were analyzed by assuming that the specific program goals are achieved. The potential success of other programs are assessed qualitatively. Although many of these programs may contribute to improved energy efficiency and reduced carbon emissions through the 2020 time frame of the analysis, many of them may have much longer-term success, even beyond the 20-year horizon. Within the building technologies program, additional funding is provided to the Department of Energy to accelerate the lighting and appliance efficiency standards program to encourage the deployment of more energy-efficient appliances and equipment. Because future standards are not specified, the potential impact is analyzed by evaluating the impacts of proposed standards in the American Council for an Energy-Efficient Economy study Approaching the Kyoto Targets: Five Key Strategies for the U.S. In 2010, EIA projects that total energy consumption would be reduced by 143.9 trillion Btu, or 0.13 percent, and total carbon emissions by 5.4 million metric tons, or 0.30 percent. This analysis was conducted using primarily the National Energy Modeling System (NEMS), EIA's energy- economic model of domestic energy markets. NEMS underlies EIA's annual projections of U.S. energy demand, supply, and prices which are published in the Annual Energy Outlook. These baseline projections on energy trends are widely used by government agencies, the private sector, and academia for their own planning and energy analyses. NEMS has also been adopted by several national laboratories and private firms as the basis for their own analysis. Analysis of the Climate Change Technology Initiative is available on the EIA Internet site at: http://www.eia.doe.gov/oiaf/climate99/climaterpt.html. Printed copies of the report are available from EIA's National Energy Information Center, 202-586-8800.
EIA Program Contact: Mary Hutzler, 202/586-2222 EIA-99-09 Contact:
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