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📄 "Evaluating U.S. Emissions Targets"

Energy 360°

Photo by Chris LeBoutillier / Unsplash

Table of Contents

Host: Joseph Majkut
Guest: John Larsen | Partner | Rhodium Group
Category: 📄 Climate Policy

Podcast’s Essential Bites:

[1:55] “We released a report in October called Pathways to Paris. […] Rhodium Group [is] an independent research firm. Our goal in all these types of analyses is to call it like we see it. And in this instance, we have been getting since the President set the target of 50 to 52% below 2005 levels by 2030, we've been getting a lot of questions about […] is it doable? How do you do it?”

[2:23] “We have spent a lot of time focusing on US emissions trends in the near medium term. We put out an analysis every year called Taking Stock, which is […] where's the US going without new action as an effort to just remind everybody of the progress or lack thereof on an annual basis here in America. And when we put out that report back in July [2021], we found that the US is currently on track for 17 to 25% below 2005 levels by 2030. So that is if there is no additional action by anybody after […] late May of 2021.”

[6:02] “Since 2005, the US net greenhouse gas emissions have gotten down to about 20% below 2005 levels in 2020. […] A 20% cut in 15 years, if you project that out, that's not going to get us to the 2030 target. […] We actually see emissions bumping back up in 2021 and 22, which is natural when economic recoveries tend to lead to higher emissions year on year. And actually, relatively high natural gas prices […] that directly influences the competitive economics of different generators and electric power market, which is […] one of the big swing sectors for emissions. So with higher gas prices, what that means is your renewables are competitive, but so are all of the existing coal plants that are in the system.”

[7:25] “But then we actually do see in our current policy projections, at least through mid decade, emissions come back down. And what that is, is fossil fuel prices kind of settle down, gas prices come back down, 10s of gigawatts of coal plant capacity slated for retirement by mid decade. […] And what we actually see is things kind of settle down and flatten out by mid 2020 and stay in that flat zone. So I think that it's fair to say, we get a few more easy points on the board in the next few years and then after that, not much else is going to change. And it’s worth remembering emissions matter from an absolute basis, like we need total tons to go down. In the meantime, that nation is growing, more people are living here and every new person has some amount of CO2 attached to them. And the economy is growing. And so flat is actually winning from the carbon intensity perspective. We are actually like doing more with less carbon and there are more people here, emitting less per capita, that is still structurally good. But to the larger point, none of this is good enough for the US to do its fair share or some amount towards contributing to reducing global emissions.”

[11:09] “When you're at 17 to 25% [emissions’ reduction] below 2005 in 2020, and you're trying to get to 50 to 52% [by 2030], we quantified an emissions gap between those two ranges of 1.7 to 2.3 billion tons. So in that year, the US has to be that much lower to get to the target. […] And just to put that in perspective, 1.7 billion is all the emissions from the entire transportation sector today. 2.3 is all the emissions from all of agriculture and all of electric power today. So basically, we're talking about zeroing out whole sectors from an admissions perspective in nine years, just just to state the challenge in total terms.”

[12:03] “We found is that there is no one sector that just solves this, that gets to the target. You need to have real change in multiple sectors in substantial ways between now and 2030 for the US to have a chance of putting that target and reach. The big one is electric power and it's true that the most exciting market trends and progress have happened in the electric power sector already, it's because that's where there's lots of different commercially available affordable alternatives to fossil fuels and a sector that is largely rational and price based.”

[12:45] “What we found is that by 2030, electric power sector emissions are floating around roughly half a billion tonnes […], which just for reference, in 2020, they were around 1.4 billion. So almost a billion tonnes change in a decade in electric power. And then to paint that picture more, more than half of all electric generation is from renewable sources in 2030, […] that is inclusive hydro, but the big contributors are wind and solar and nuclear is about 20% of generation as it is today. […] Coal in 2020, there was about 220 gigawatts of coal on the system. In 2030 in the Pathways to Paris outcomes, we are talking about around 90 gigawatts left, but the actual generation share is much lower. So it's like one to 3% of all electricity is coming from coal in 2030, compared to around I think 20% projected for this year. […] And then the rest is natural gas. I think the market share declines a little by 2030, but is largely flat, floating around 30% of total generation.”

[17:50] “There's two big packages there. There's the Infrastructure Package that is in law, and then the Build Back Better bill. And we actually see both of those together kind of working in tandem. […] Infrastructure does the kind of supply side innovation, getting a lot of these new technologies to the starting line for commercial deployment, as well as enabling build out of the infrastructure you're gonna need to manage the transition […]. And then looking at Build Back Better, that's the commercial deployment, market demand priming side of the package.”

Rating: ⚡⚡⚡⚡

🎙️ Full Episode: Apple | Spotify
🕰️ 51 min | 🗓️ 01/10/2022
✅ Time saved: 49 min

Additional Links:
Center for Strategic and International Studies (CSIS)

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