Sheryl Carter, Co-Director, Energy Program, San Francisco

Support continues to grow for including clean and low cost energy efficiency in the Environmental Protection Agency’s proposed rules for cutting dangerous carbon pollution from existing power plants, with two more positive developments just this week.

When NRDC released its original proposal to cut power plant carbon emissions in 2012, efficiency was a key element. When President Obama in June 2012 ordered EPA to issue the pollution rules by this June, he emphasized the importance of energy efficiency in the standards.

This week, the American Council for an Energy-Efficient Economy (ACEEE) released a new study demonstrating that energy efficiency efforts alone can reduce emissions to 26% below 2012 levels at no net cost to the economy, which means that adding the other clean and non-emitting resources will allow us to go much farther.

Meanwhile, a group comprised of the National Association of Clean Air Agencies (NACAA), the National Association of State Energy Officials (NASEO), and the National Association of Regulatory Commissioners (NARUC) – including state regulators from both Democratic- and Republican-led states - was reported to be putting the finishing touches on a new joint proposal for including energy efficiency in the EPA’s carbon pollution reduction standards scheduled for release next month.

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Photo by Michael Caruso, under Creative Commons

The Analytics

The new ACEEE study released today is an important addition to the body of analysis demonstrating the importance of energy efficiency to achieving significant reductions in carbon pollution from power plants at low cost.  In the United States, electric power plants emit about 2.2 billion tons of carbon dioxide (CO2) each year, or roughly 40 percent of the nation's total emissions.

The ACEEE findings are conservative and “suggest the minimum amount of CO2 reductions that could be cost-effectively achieved.” They state that “[s]ince we quantify only a subset of the efficiency potential that exists in states, our results represent a smaller set of savings than what might be addressed in a potential study… and is limited to conservative assumptions and adequately demonstrated practices and technologies.”

Despite these conservative assumptions, ACEEE found that 2030 carbon dioxide emissions from the power sector would be reduced by 26% relative to 2012 levels, and the nation would avoid 600 million tons of carbon dioxide emissions or the equivalent of 494 power plants. Under ACEEE’s analysis all states would also enjoy considerable economic and environmental benefits. ACEEE’s study focused only on conservative assumptions of energy efficiency from four policies and produced significant reductions at no cost. Not bad.

But we can do more. NRDC’s more comprehensive updated analysis released this past March included more substantial but still very achievable energy efficiency scenarios, and also looked at the broader range of pollution reduction options available. It shows that much deeper cuts are achievable and cost-effective.

The NRDC analysis found that that between 470 and 700 million tons of carbon pollution can be eliminated per year in 2020 (or 21-31%) compared to 2012 levels, reductions that would more than double EPA’s vehicle emission standards. At the same time, the NRDC approach would yield $28 billion to $63 billion in health and environmental benefits that far outweigh the costs of putting the nation’s first-ever limits on carbon pollution.

Some details to wet your whistle (more details in our technical appendices).  In our Full Efficiency scenarios we have 63 percent more efficiency in 2020 and 2 percent more efficiency in 2030. Similar to ACEEE we find zero net costs (and lots of benefits) in this scenario, but much deeper reductions. Our Constrained Efficiency cases have a less energy efficiency than ACEEE (22% less in 2020 and 43% less in 2030) but still obtain much deeper reductions in 2020 at modest costs because we allow for the full range of emission reduction measures.

The Stakeholder Support

States will have the responsibility for complying with the EPA’s carbon pollution standards, and since every state is different, they will need flexibility in compliance options. NRDC’s analysis recognizes this and includes different pathways.  But already there is one compliance option that several organizations of state officials are close to reaching agreement on – energy efficiency.

A draft proposal to EPA developed by state agency members of NACAA, NASEO and NARUC, advocates that energy efficiency be an “integral, creditable part of the state and tribal plans to be developed in response to” the EPA standards, and that the “EPA rule and accompanying and subsequent guidance should recognize the significant emission reductions that are achievable through energy efficiency and specifically allow states (and tribes) to credit energy efficiency activities in their compliance plans.” In addition, they ask the EPA to recognize the diversity of the resource and “invite multiple approaches to allowing energy efficiency emissions reductions to be a part of state’s plans.” This includes multi-state or regional efficiency efforts and compliance strategies, which NRDC very much supports.

The Bottom Line

Despite their differences, both the NRDC and ACEEE studies underscore the vast achievable potential for energy efficiency, and document significant economic and pollution reduction benefits represented by this valuable resource. 

Inclusion of energy efficiency will allow the EPA to set strong standards that protect our families, while giving states a low cost and flexible way to lower carbon pollution and drive local clean energy job growth.