STATES GUIDANCE DOCUMENT
POLICY PLANNING
TO REDUCE GREENHOUSE GAS EMISSIONS
Second Edition
U.S. Environmental Protection Agency
Office of Policy, Planning and Evaluation
State and Local Climate Change Program
Washington, DC 20460
May 1998
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TABLE OF CONTENTS
CHAPTER 1 INTRODUCTION 1-1
1.1 PURPOSE 1-1
1.2 ORGANIZATION OF THE DOCUMENT 1-2
PARTI: INITIATION OF CLIMATE CHANGE PROGRAMS 1-1
CHAPTER 2 BACKGROUND ON CLIMATE CHANGE SCIENCE AND POLICY 2-1
2.1 INTRODUCTION TO CLIMATE CHANGE 2-1
2.1.1 Scientific and Technical Aspects
of Global Climate Change 2-1
2.1.2 Potential Impacts of Global Climate Change 2-2
2.2 POLICY CONTEXT FOR CLIMATE CHANGE MITIGATION 2-6
2.2.1 Introduction to International and National Responses to Climate Change 2-7
2.2.2 Importance of State Action 2-11
2.3 GENERAL FRAMEWORKS FOR CLIMATE CHANGE POLICY ANALYSIS 2-14
2.3.1 Barriers to Emission Reductions 2-15
2.3.2 Staicture of Policy Approaches 2-17
2.3.3 Timing Issues in Policy Development 2-19
CHAPTER 3 MEASURING AND FORECASTING GREENHOUSE GAS EMISSIONS 3-1
3.1 MEASURING CURRENT EMISSIONS 3-1
3.2 FORECASTING FUTURE EMISSIONS 3-1
CHAPTER 4 ESTABLISHING EMISSIONS REDUCTION PROGRAM GOALS AND
EVALUATIVE CRITERIA 4-1
4.1 EXAMPLES OF GREENHOUSE GAS REDUCTION GOALS 4-1
4.2 COMPLEXITIES IN EMISSIONS REDUCTION GOAL SETTING 4-3
4.2.1 Four Variable Aspects of Goal Setting Processes 4-3
4.2.2 Complications that Affect Goal Setting 4-4
4.3 ESTABLISHING CRITERIA FOR EVALUATING POLICIES 4-6
PART II: TECHNICAL APPROACHES AND POLICY OPTIONS FOR REDUCING
GREENHOUSE GAS EMISSIONS II I
CHAPTER 5 TECHNICAL APPROACHES AND SOURCE-SPECIFIC POLICY OPTIONS 5-1
5.1 GREENHOUSE GASES FROM ENERGY CONSUMPTION:
DEMAND SIDE MEASURES 5-3
5.1.1 Technical Approaches for Improving Energy Efficiency and Reducing
Energy Use 5-7
5.1.2 Direct State Actions to Promote Energy Efficiency 5-9
5.1.3 Policies to Promote Energy Efficiency. Renewable Energy, and Carbon
Offsets 5-13
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5.1.4 Conserve Energy through Improved Industrial. Agricultural, and
Municipal Waste Management Processes 5-14
5.1.5 Promote Urban Tree Planting 5-16
5.2 GREENHOUSE GASES FROM ENERGY PRODUCTION: SUPPLY SIDE
MEASURES 5-17
5.2.1 Reduce Greenhouse Gas Emissions from Electricity Generation 5-19
5.2.2 Reduce Emissions Through On-Site Power Production 5-21
5.3 GREENHOUSE GASES FROM THE TRANSPORTATION SECTOR 5-22
5.3.1 Reduce Vehicle Miles Traveled (VMT) 5-23
5.3.2 Reduce Emissions per Mile Traveled 5-26
5.3.3 Use Alternative Fuels 5-27
5.4 METHANE FROM NATURAL GAS AND OIL SYSTEMS 5-29
5.5 METHANE FROM COAL MINING 5-3 1
5.5.1 Methane Recovery and Use 5-32
5.5.2 Reduce Coal-Fired Energy Consumption 5-35
5.6 METHANE FROM LANDFILLS 5-36
5.6.1 Methane Gas Recovery 5-36
5.6.2 Keeping the Organic Fraction of Municipal Solid Waste Out of Landfills 5-39
5.7 METHANE EMISSIONS FROM DOMESTICATED LIVESTOCK 5-40
5.7.1 Improve Production Efficiency Per Animal 5-41
5.7.2 Improve Overall Production Efficiency of Animal Products by
Matching Animal Products to Customer Preferences 5-42
5.8 METHANE FROM MANURE MANAGEMENT 5-43
5.8.1 Methane Recovery and Use 5-44
5.8.2 Increase Aerobic Treatment of Livestock Manure 5-46
5.9 METHANE FROM RICE CULTIVATION 5-47
5.10 NITROUS OXIDE AND OTHER GREENHOUSE GASES FROM
FERTILIZER USE 5-50
5.10.1 Improve Nitrogen-Use Efficiency in Fertilizer Application 5-50
5.10.2 Replace Industrially-Fixed Nitrogen Based Fertilizers with Renewable
Nitrogen Source Fertilizers 5-53
5.11 EMISSIONS ASSOCIATED WITH FORESTED LANDS 5-55
5.11.1 Maintain Carbon Storage Capacity of Existing Forests 5-56
5.11.2 Improve Productivity of Existing Forest Lands 5-58
5.11.3 Integrate Climate Change Concerns into Fire Management Policies 5-60
5.11.4 Integrate Climate Change Concerns into Pest Management Policies 5-61
5.11.5 Institute Policies to Affect Demand for Forest Products 5-62
5.12 GREENHOUSE GASES FROM BURNING OF AGRICULTURAL WASTES 5-64
5.12.1 Plow Residue Back Into Soil 5-65
5.12.2 Remove Crop Residues and Develop Alternative Uses 5-66
5.12.3 Use Alternative Burning Techniques 5-68
5.12.4 Replace with Alternative Crops 5-69
CHAPTER 6 CROSS-CUTTING THEMES AND PROGRAM DEVELOPMENT 6-1
6.1 ENERGY CONSERVATION. RENEWABLE ENERGY. AND CARBON
OFFSETS IN THE ELECTRICITY SECTOR 6-1
6.2 MUNICIPAL SOLID WASTE MANAGEMENT 6-4
6.3 BIOMASS ENERGY DEVELOPMENT 6-8
6.4 TREE AND TIMBER EXPANSION PROGRAMS 6-10
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6.5 CITY AND REGIONAL PLANNING 6-12
6.6 AGRICULTURAL SECTOR PLANNING 6-14
PART III: PROGRAM DEVELOPMENT AND STATE ACTION PLAN PREPARATION III-l
CHAPTER 7 CLIMATE CHANGE PROGRAM DEVELOPMENT 7-1
7.1 TIME PERSPECTIVES IN CLIMATE CHANGE PROGRAM DESIGN 7-1
7.1.1 Staicturing Time Frame Considerations in Program Design 7-1
7.1.2 Models for Including Time Frame Considerations in Program
Development 7-3
7.2 IMPORTANT ACTORS IN CLIMATE CHANGE PROGRAM DESIGN 7-4
7.3 POLITICAL CONSIDERATIONS IN PROGRAM DEVELOPMENT 7-5
7.3.1 Developing Programs and Processes That Foster Broad-Based Political
Support 7-6
7.3.2 Using Policies Strategically Within the Time Frames of Program
Development 7-6
7.3.3 Utilizing Legislative and Executive Action Strategically When Feasible 7-7
7.4 COORDINATING CLIMATE CHANGE PROGRAMS:
INTERACTION BETWEEN AGENCIES 7-7
7.4.1 Partnerships Between State Agencies 7-7
7.4.2 Interaction With Federal and Local Agencies 7-8
7.4.3 Staicturing Partnerships/Program Coordination and Administration 7-10
7.5 CLIMATE CHANGE PROGRAM FINANCING 7-10
CHAPTER 8 ANALYZING POLICY OPTIONS 8-1
8.1 ESTABLISHING A CONSISTENT FRAMEWORK FOR POLICY ANALYSIS 8-1
8.1.1 Structure of the Policy Analysis Framework 8-1
8.1.2 Application of the Policy Analysis Framework 8-2
8.2 ESTIMATING BENEFITS " " 8-4
8.2.1 Using Greenhouse Gas Emissions Reductions as a Proxy for the Benefits
of Mitigating Climate Change 8-5
8.2.2 Considering the Ancillary Environmental and Social Benefits of Emissions
Reduction Policies 8-5
8.2.3 Considering the Political and Institutional Benefits of Addressing Climate
Change 8-7
8.3 ESTIMATING COSTS 8-7
8.3.1 Process for Calculating Social Costs 8-8
8.3.2 Complications Associated with Social Cost Calculation 8-10
8.4 ESTIMATING OTHER IMPACTS 8-1 1
8.5 GENERAL COMPLEXITIES IN ESTIMATING POLICY IMPACTS 8-12
8.6 BASIC METHODOLOGIES FOR EVALUATING CLIMATE CHANGE
ISSUES 8-14
8.7 MORE COMPLEX TECHNICAL TOOLS FOR ASSESSING GREENHOUSE
GAS POLICIES 8-18
CHAPTER 9 PREPARING THE STATE ACTION PLAN 9-1
9.1 EXECUTIVE SUMMARY 9-1
9.2 BACKGROUND ON THE SCIENCE OF CLIMATE CHANGE 9-1
9.3 REGIONAL AND LOCAL RISKS AND VULNERABILITIES 9-2
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9.4 1990 AND FORECAST BASELINE EMISSIONS 9-2
9.5 GOALS AND TARGETS 9-2
9.6 ALTERNATIVE POLICY OPTIONS 9-2
9.7 IDENTIFICATION AND SCREENING OF MITIGATION ACTIONS 9-2
9.8 FORECAST IMPACTS OF MITIGATION 9-2
9.9 RECOMMENDATIONS AND STRATEGY FOR IMPLEMENTATION 9-3
GLOSSARY G-l
REFERENCES R-l
STATE ACTION PLANS Appendix 1-1
IMOCKUP OF A STATE PLAN TO REDUCE GREENHOUSE GAS EMISSIONS
THROUGH IMPROVED SOLID WASTE MANAGEMENT PRACTICES Appendix 2-1
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CHAPTER 1
INTRODUCTION
1.1 PURPOSE
State-level policies to control greenhouse gas emissions are essential for mitigating the economic,
health, and environmental threats posed by global climate change. States play a caicial role in helping the
US as a whole to meet the national pledge to reduce greenhouse gas emissions. However, the circumstances
surrounding climate change creates a complicated and politically volatile situation for policy-makers who
must deal w ith complex and uncertain scientific issues and develop policies that potentially affect multiple
economic sectors, including energy, transportation, agriculture, industry, and forestry. This guidance
document is intended to help states evaluate these complex issue and develop response strategies that
address their distinct situations. EPA's objective is to assist each state in formulating a realistic State
Action Plan for addressing greenhouse gas emissions.
This document represents the second phase in EPA's State and Local Outreach Program. The first
phase produced the Stale Workbook: Methodologies for Estimating Greenhouse Gets Emissions, which
contains a set of guidelines and methodologies for states to use to compile an inventory of their greenhouse
gas emissions and sinks. Identifying emission sources and sinks and compiling an inventory is a critical
first step in building a comprehensive and long range state action plan. The Stale Workbook is available
through EPA's Office of Policy. Planning and Evaluation. Office of Economy and Environment.1
As follow -on to the Phase I materials, the States Guidance Document: Policy Options for
Reducing Greenhouse Gas Emissions provides a framework and supporting information to assist policy-
makers in further understanding the issues associated w ith climate change and in identifying and evaluating
options to mitigate emissions identified during the inventory process. The document presents background
information particularly relevant at the state level and examines emissions forecasting, setting goals and
policy criteria, policy evaluation, and organizational and political issues. It also offers suggestions on how
climate change mitigation programs can concentrate on reducing emissions where the greatest opportunities
exist within each individual state. To support this, a comprehensive survey of technical approaches and
policy options for addressing each greenhouse gas source is provided.
The information presented here should help states compile a practical and comprehensive State
Action Plan for addressing greenhouse gas emissions. This State Action Plan w ill lay out the institutional
and policy structure, including specific policy proposals or planning processes, that each state will use to
develop and implement its climate change mitigation program.
While providing extensive guidance for program development, this document is not intended to lead
states explicitly through the detailed steps of climate change policy formulation. Such policy formulation is
a process that depends critically on local economic, social, technical, and political circumstances. States
may also wish to consider potential adaptive responses to the probable effects of climate change. This
1 The Phase I State Workbook provides worksheets for calculating greenhouse gas emissions by source category,
accompanied by detailed explanations of the formulas and methodologies used, alternative approaches states may
consider, data on regional emissions characteristics, and references to additional information.
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document is. however, intended to supplement state efforts in a complex field by providing information,
resources, and references that highlight and help clarify the most caicial policy and organizational issues.
1.2 ORGANIZATION OF THE DOCUMENT
This document is divided into three parts, w hich are structured in the form of sequential stages that
states may pursue in developing State Action Plans. Each part reflects a different aspect of climate change
program design. Part I presents an overview of information and procedures that policy-makers should
consider before developing explicit programs in this field. Part II describes technical and policy
approaches for reducing the concentration of greenhouse gases in the atmosphere. Part III discusses the
structuring and administration of climate change programs.
Each of these three parts of the document, which are summarized in more detail below, is
subdivided into chapters. The chapters address more discrete components of climate change policy
formulation and are designed to be referenced independently. Consistent with the general theme that policy
formulation in this field is a dynamic process that incorporates various interconnected issues, each chapter
cross-references information in other sections of the document w here appropriate. All the chapters
maintain a common focus on how states can plan greenhouse gas policies around distinct local
environmental, economic, and political situations.
Part I: Initiation of Climate Change Programs
Part I. which includes Chapters 2 through 4. presents information to help state policy-makers
establish a focal point the initiation of climate change programs. As discussed throughout the document,
climate change and greenhouse gas emissions and sequestration span many sectors of society and extend far
into the future. Furthermore, policy measures to address greenhouse gases overlap with many other public
policy objectives, often in a complementary way. The chapters in Part I present background information
and planning mechanisms for sorting through this complex policy arena and developing a clear focus for
policy formulation.
Chapter 2. Background on Climate Change Science and Policy, provides scientific and policy
background information on climate change issues as they affect states. It includes an introduction to
greenhouse gases and to the probable impacts of climate change at the state and local level, summarizes
climate change policy initiatives around the w orld, and highlights the importance of state level action. To
help states envision their role in confronting this complicated issue, this chapter integrates these scientific
and policy issues, along with important time frame concerns, into a general framework for climate change
policy analysis that serves as a basis for State Action Plan formulation.
Chapter 3. Measuring and forecasting Greenhouse Gas Emissions, summarizes the
methodologies for estimating emissions that were presented in EPA's Phase I greenhouse gas inventory
document, described above. This chapter also explains how these methodologies can serve as a base for
forecasting the impact of various alternative policy options throughout future time periods.
Chapter 4. Establishing Emission Reduction Program Goals and Evaluative Criteria, examines
goal setting in climate change program development. It highlights the practical and political differences
between setting quantitative and qualitative emission reduction targets and emphasizes the importance of
establishing specific criteria for evaluating policy options over a range of time frames.
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Part II: Technical Approaches and Policy Options for Reducing Greenhouse Gas Emissions
Part II. w hich includes Chapters 5 and 6. describes the specific sources and sinks of greenhouse
gases across all sectors of society and highlights numerous emission reduction policy options. The chapters
in Part II should be used as a reference tool for learning about how greenhouse gases are generated and for
compiling a portfolio of policy options that can be further investigated and. potentially, implemented.
Chapter 5. Technical Approaches and Source-Specific Policy Options, contains a separate section
on seventeen greenhouse gas sources and sinks. Each section describes how the source generates gases or
the sink sequesters them, and discusses the technical approaches that government agencies can use to
reduce source-emissions or increase sequestration. The sections also elaborate on potential policy options
that states might use to implement those technical approaches, and how these options max interact with
other state policy objectives. This chapter emphasizes the range of policy options that are unique to a
particular source or sink.
Chapter 6. Cross Cutting Policy Options, describes policy approaches that offer promise for
reducing emissions from various sources simultaneously. These approaches highlight how innovative
government action tailored to particular situations can substantially affect greenhouse gas emissions and
can potentially promote other public sector goals as w ell. In presenting policy ideas, this chapter references
the technical information in Chapter 5 extensively.
Part III: Program Development and State Action Plan Preparation
Part III. which includes Chapters 7 through 9. addresses organizational and analytical topics
relating to climate change program design and offers guidance in preparing the State Action Plan.
Programs that are staictured to support flexible selection and evolution of policies will maintain a stronger
and more dynamic link with overall state policy objectives. This flexibility is especially relevant because of
the diversity of political circumstances surrounding climate change and the changing state of scientific and
technical knowledge in this field. The chapters in Part III draw on state experiences and current research to
present mechanisms states can use to evaluate options and to structure flexible and responsive programs in
an uncertain policy environment.
Chapter 7. Climate Change Program Development, addresses institutional, administrative, and
political issues that can affect the success of climate change mitigation efforts. This information highlights
how states can anticipate issues that max arise during the process of program design and presents ideas on
how programs might be staictured to deal with these concerns. Specific topics include time frame
perspectives in policy planning, understanding the important public and private sector actors in this field,
political issues in program development, program finance, and interaction between agencies within the state
and at the local and national level. The topic of partnerships between state agencies is extremely important
within the context of this chapter.
Chapter 8. Evaluating Policy Options, examines alternative approaches to balancing emissions,
costs, and other policy impacts. It summarizes the methodologies states might use to evaluate emission
control policies, and introduces models for analyzing the complicated interactions between various factors.
This chapter also discusses analytic constraints, such as uncertainty and multiple time-frames for planning.
This information illustrates the range of issues states should consider w hen evaluating policies and is not
intended to suggest any specific approach.
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Chapter 9. Guidance on State Action Plan I'ormuiation. offers a framework and model for
developing the State Action Plan on climate change mitigation.
Exhibit 1-1 illustrates the structure of the document and the primary contents of each chapter.
While the document presents policy formulation as a sequential process, the information and concepts
presented in each of the chapters may need to be referenced at different times throughout program
development.
Exhibit 1-1
Structure of Document
Part I: Initiation of Climate Change Programs
Chapter 2
Climate Change Primer
- Scientific Background
- Policy Context
- Policy Framework
Chapter 4
Setting Goals and Criteria
- Examples from States
- Complexities
- Sample Criteria
Chapter 3
Measuring Emissions
-Current Emissions
- Future Emissions
~
Part II: Technical Approaches and Policy Options
Chapter 5
Chapter 6
Seventeen Greenhouse Gas
>"
Cross Cutting Issues
Sources and Sinks
- Technical Approaches
.
- Administrative Issues
\.
- Policy Options
Part III: Program Development and State Action Plan Preparation
Chapter 7
Program Development
-Time Frame Issues
- Important Actors
- Political Considerations
- Coordinating Programs
- Finance
Chapter 8
Evaluating Policy Options
- Analytic Complications
- Emissions, Costs
- Other Impacts
-Toolsand Methodologies
Chapter 9
Sate Action Plan Formulation
- Important Components
- Example/Model
1-4
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PART I
INITIATION OF CLIMATE CHANGE PROGRAMS
The follow ing three chapters address issues that policy-makers should consider and understand at
the outset of climate change program development. These chapters advocate formulation of a strong and
deliberate program focus. They are intended to help states gather information, envision the climate change
policy context, and anticipate and prepare for critical issues that are likely to arise during program
development.
Chapter 2. Background on ('limate ('hange Science and Policy, presents background
information on climate change science, international, national and state responses to climate
change, and a general framew ork for policy analysis and program development.
Chapter 3. Measuring and Forecasting Greenhouse Gas Emissions, highlights how states can
measure greenhouse gas emissions and anticipate the probable impact of various policy
options.
Chapter 4. Establishing Emission Reduction Program Goals and Evaluative Criteria.
discusses the importance of setting clear and feasible program goals, and offers examples of
specific policy evaluation criteria that states can use.
This information sets the context for Part II. which discusses specific technical approaches and
policy options for reducing greenhouse gas emissions, and Part III. which elaborates on organizational,
political, and analytic complexities surrounding climate change policy selection and program development.
1-1
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CHAPTER 2
BACKGROUND ON CLIMATE CHANGE SCIENCE AND POLICY
Initiating climate change response programs requires a basic understanding of the underlying
scientific, technical, organizational, and political issues. The purpose of this chapter is to familiarize
policy-makers with the current scientific understanding of global climate change and to set the broader
policy context for greenhouse gas reduction measures. The first section of this chapter introduces the
greenhouse effect and the changes in climate expected to result from increasing atmospheric concentrations
of greenhouse gases. The second section describes international and national responses to climate change
and identifies the role of states in mitigating this threat. The third section presents a framew ork for climate
change policy analysis that provides the structure for the remainder of this document and the basis for
climate change program development. The final section uses an example of comprehensive policy planning
to illustrate many of the points made throughout this chapter.
2.1 INTRODUCTION TO CLIMATE CHANGE
The Earth's climate is the result of a complex system driven by many factors, including radiant
energy from the sun. volcanic activity, and other natural phenomena. Human activities, specifically those
that result in emissions of greenhouse gases, max affect this complex system and alter the Earth's climate.
While the atmosphere's natural greenhouse effect is relatively well understood, uncertainties surrounding
the effects of increased concentrations of greenhouse gases still exist. This section describes the scientific
and technical aspects of climate change and the impacts w hich max result at both global and regional
levels.
2.1.1 Scientific and Technical Aspects of Global Climate Change
The climate of the Earth is affected by changes in radiative forcing attributable to several sources
including the concentrations of radiatively active (greenhouse) gases, solar radiation, aerosols, and albedo.'
Greenhouse gases in the atmosphere are virtually transparent to sunlight (shortwave radiation), allowing it
to pass through the air and to heat the Earth's surface. The Earth's surface absorbs the sunlight and emits
thermal radiation (longwave radiation) back to the atmosphere. Because some gases, such as carbon
dioxide (CO2). are not transparent to the outgoing thermal radiation, some of the radiation is absorbed, and
heats the atmosphere. In turn, the atmosphere emits thermal radiation both outward into space and
downward to the Earth, further w anning the surface. This process enables the Earth to maintain enough
warmth to support life: without this natural "greenhouse effect." the Earth would be approximately 55° F
colder than it is today. However, increasing concentrations of these greenhouse gases are projected to
result in increased average temperatures, with the potential to warm the planet to a level that could disrupt
the activities of today's natural systems and human societies.
Naturally occurring greenhouse gases include water vapor, carbon dioxide, methane (CH4). nitrous
oxide (N2O). and ozone (O-5)." Some human-made compounds including chlorofluorocarbons (CFCs).
1 Albedo is the fraction of light or radiation that is relleeted by a surface or a body. Lor example, polar ice and cloud cover increase the Larth's albedo.
"Radiative forcing" refers to changes in the radiative balance of the Larth. i.e.. a change in the existing balance between incoming and outgoing
radiation. Iliis balance can be upset by natural causes, e.g.. volcanic eruptions, as well as by anthropogenic activities, e.g.. greenhouse gas emissions.
' Ozone exists in the stratosphere and troposphere. In the stratosphere (which starts about 8.4 miles above the Larth's surface), ozone provides a
protective layer shielding the Larth from ultraviolet radiation and subsequent harmful health effects on humans and the environment. In the
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partially halogenated fluorocarbons (HCFCs). hydrofluorocarbons (HFCs). and perfluorinated carbons
(PFCs) arc also greenhouse gases. In addition, there are photochemicalh important gases such as
oxides of nitrogen (NOx) and nonmethane volatile organic compounds (NMVOCs) that, although not
greenhouse gases, contribute indirectly to the greenhouse effect by influencing the rate at which ozone and
other greenhouse gases are created and destroyed in the atmosphere.
Greenhouse gases are emitted by virtually all economic sectors, including residential and
commercial energy use. industrial processes, electricity generation, agriculture, and forestry. Exhibit 2-1
contains a brief description of these gases, their sources, and their roles in the atmosphere.1 Exhibit 2-2
discusses how the potential w anning effects of these gases are usually expressed using a common scale,
viz.. global wanning potential. Figure 2-1 presents a summary of U.S. greenhouse gas emissions, by gas.
weighted by global wanning potential. Later in this document. Chapter 3 provides a complete list of
emission sources and Chapter 5 elaborates on the emission characteristics and options for addressing
emissions from each source.
2.1.2 Potential Impacts of Global Climate Change
Although CC>2. CH4. and N2O occur naturally in the atmosphere, rising levels of these gases in the
atmosphere are attributed mainly to anthropogenic activities. This buildup has altered the composition of
the earth's atmosphere, and possibly w ill affect the future global climate. Since about 1750. atmospheric
concentrations of carbon dioxide have increased by about 30 percent, methane concentrations
haveincreased by 145 percent, and nitrous oxide concentrations have risen approximately 15 percent
(IPCC. 1996). And. from the 1950s until the mid-1980s, when international concern over CFCs grew, the
use of these gases increased nearly 10 percent per year. The consumption of CFCs is declining quickly,
however, as these gases are phased out under the Montreal Protocol on Substances that Deplete the Ozone
Layer4 Use of CFC substitutes, in contrast, is expected to grow significantly.
Estimating the potential impact of increasing greenhouse gas concentrations on global climate has
been a focus of research within the atmospheric science community for more than a decade. While there is
considerable agreement within the scientific community that "climate has changed over the past century."
and that "the balance of evidence suggests a discernible human influence on global climate." (IPCC. 1996).
there is much less agreement about the timing, magnitude, or regional distribution of any climatic change.
Uncertainties about the climatic roles of oceans and clouds as w ell as the feedback effects of oceans,
clouds, vegetation, and other factors make it difficult to predict with certainty the amount of w anning that
rising levels of greenhouse gases will cause. Current evidence from climate model studies, however,
suggests that by 2100. global average surface temperature w ill increase by 1.8
troposphere (from the Karth's surface to about 8.4 miles above), ozone is a chemical oxidant and major component of photochemical smog. Most
ozone is found in the stratosphere, with some transport occurring to the troposphere through the tropopause (the transition zone separating the
stratosphere and the troposphere) (IPCC. 1992).
' For convenience, all gases discussed in this document are generically referred to as "greenhouse gases." although the reader should keep in mind the
distinction between actual greenhouse gases and photochemicalh important trace gases.
1 Recognizing the harmful effects of chlorofluorocarbons (CFCs). halons. and other compounds on the stratospheric ozone layer, main governments
signed the Montreal Protocol on Substances that Deplete the Ozone layer in 19X7. lliis agreement limits the production and consumption of a
number of these damaging compounds. As of June 1997. more than 160 nations are Parties to the Montreal Protocol. 'I lie I S expanded its
commitment to phase out these substances by signing and ratifying the Copenhagen Amendments to the Montreal Protocol in 1992. I nder these
amendments, the I S committed to eliminating the production of all halons by January 1. 1994. all CFCs by January 1. 1996. and all I ICFCs by
January 1. 2030.
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Exhibit 2-1. Greenhouse Gases and Photochcmically Important Gases
The Greenhouse Gases
(\irhon Dioxide ((Ilie combustion of liquid. solid, and gaseous fossil fuels is the major anthropogenic source of carbon dioxide emissions.
Some other non-energy production processes (e.g.. cement production) also emit notable quantities of carbon dioxide. C(>2 emissions are also
produced by forest clearing and biomass burning. Atmospheric concentrations of carbon dioxide have been increasing at a rate of approximately 0.5
percent per year (IPCC. 1996).
In nature, carbon dioxide cycles between various atmospheric, oceanic, land biotic. and marine biotic reservoirs. Hie largest fluxes occur between
the atmosphere and terrestrial biota, and between the atmosphere and surface water of the oceans. While there is a small net addition of C(>2 to the
atmosphere from equatorial regions, oceanic and terrestrial biota in the Northern I lemisphere. and to a lesser extent in the Southern I lemisphere. act as
a net sink of C(>2 (/.c.. remove more C(>2 from the atmosphere than they release) (IPCC. 1996).
Methane ((V/4V. Methane is produced through anaerobic decomposition of organic matter in biological systems. Agricultural processes, such as
w etland rice cultivation, enteric fermentation in animals, and the decomposition of animal w astes, emit methane, as does the decomposition of
municipal solid w astes. Methane is also emitted during the production and distribution of natural gas and oil. and is released as a by-product of coal
production and incomplete fuel combustion. Ilie atmospheric concentration of methane is increasing, although the rate of increase in the 1990s is
low er than the rate observed in the 1970s and 1980s (IPCC 1996).
Ilie major sink for methane is its interaction with the hydroxyl radical (OH) in the troposphere, Iliis interaction results in the chemical destruction
of the methane compound, as the hydrogen molecules in methane combine with the oxygen in OII to form water vapor (H2O) and CI I3. After a
number of other chemical interactions, the remaining CI 1^ turns into CO which itself reacts with OI I to produce carbon dioxide (CO2) and hydrogen
(II).
ffalogenated l-'luorocarhons. ///'( '.v. and I'l-t '.v. I lalogenated fluorocarbons are human-made compounds that include: chlorofluorocarbons
(CI'Cs). halons. methyl chloroform, carbon tetrachloride, methyl bromide, and hydrochlorofluorocarhons (HCPCs). Iliese compounds not only
enhance the greenhouse effect, but also contribute to stratospheric ozone depletion. I nder the Montreal Protocol and the ('openhagen Amendments.
w hich controls the production and consumption of these chemicals, the I .S. phased out the production and use of all halons by January 1. 1994 and
phased out CI'Cs. I ICPCs. and other ozone-depleting substances (Ol)Ss) by January 1. 1996. Perfluorinated carbons (PPCs) and hydrofluorocarbons
(I IPCs), a family of CPC and IICPC replacements not covered under the Montreal Protocol, are also powerful greenhouse gases.
Xitrotis Oxide (X2O). Anthropogenic sources of N2O emissions include soil cultivation practices, especially the use of commercial and organic
fertilizers, fossil fuel combustion, adipic and nitric acid production, and biomass burning.
Ozone (();). Normal processes in the atmosphere both produce and destroy ozone. Approximately 90 percent of atmospheric ozone resides in the
stratosphere, w here it regulates the absorption of solar ultraviolet radiation; the remaining 10 percent is found in the troposphere and could play a
significant greenhouse role. While ozone is not emitted directly by human activity, anthropogenic emissions of several gases influence its
concentration in the stratosphere and troposphere. Por example, chlorine and bromine-containing chemicals, such as CPCs. deplete stratospheric
ozone.
Pmissions of carbon monoxide, nonmethane volatile organic compounds, and oxides of nitrogen contribute to the increased production of
tropospheric ozone (otherwise know n as urban smog). Pmissions of these gases, know n as criteria pollutants, are regulated under the (lean .lir.lct of
ll)~0 and subsequent amendments.
Photocheniicallv Important Gases
(\irhon Monoxide (('()}. Carbon monoxide is created when carbon-containing fuels are burned incompletely. Carbon monoxide elevates
concentrations of methane and tropospheric ozone through chemical reactions w ith atmospheric constituents (e.g.. the hydroxyl radical) that would
otherwise assist in destroying methane and ozone. It eventually oxidizes to CO2
Oxides ofXitrogen (X ()K). Oxides of nitrogen NO and N(>2 are created from lightning, biomass burning (both natural and anthropogenic
fires), fossil fuel combustion, and in the stratosphere from nitrous oxide. Iliey play an important role in climate change processes because they
contribute to the formation of tropospheric ozone.
Xonmethane I 'olatile Organic ('ompounds (XMl'()(\s). Nonmethane VOCs include compounds such as propane, butane, and ethane. Volatile
organic compounds participate along with nitrogen oxides in the formation of ground-level ozone and other photochemical oxidants. VOCs are
emitted primarily from transportation, industrial processes, forest wildfires, and non-industrial consumption of organic solvents. (I .S. P. PA. 1991).
Source: I '.S. PPA. 1994.
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Exhibit 2-2: Global Warming Potential (GWP)
The potential contribution to radiative forcing of the various greenhouse gases differ dramatically. Accurately
calculating the amount of radiative forcing attributable to given levels of emissions of these gases, over some future
time horizon, requires a complex and time-consuming task of calculating and integrating changes in atmospheric
composition over the period. For policy purposes, the need is for an index that translates the level of emissions of
various gases into a common metric in order to compare the climate forcing effects without directly calculating the
changes in atmospheric concentrations (Fashof and Tirpak. 1990). This information can be used to calculate the cost-
effectiveness of alternative reductions, e.g.. to compare reductions in CO2 emissions w ith reductions in CI I4 emissions.
A number of approaches, called Global Warming Potential (GWP) indices, have been developed in recent years.
These indices account for the direct effects of carbon dioxide (CO2). methane (CII4). chlorotluorocarbons (CFCs).
nitrous oxide (N2O). hydrotluorocarbons (IIFCs). and perfluormated carbons (PF'Cs). They also estimate indirect
effects 011 radiative forcing due to emissions of gases which are not themselves greenhouse gases, but lead to chemical
reactions that create or alter greenhouse gases.
The concept of global wanning potential, which was developed by the Intergovernmental Panel 011 Climate Change
(1PCC). compares the radiative forcing effect of the concurrent emission into the atmosphere of an equal quantity of
C(>2 and another greenhouse gas. Facli gas has a different instantaneous radiative forcing effect. In addition,
emissions of different gases decay at different rates over time, w hich affects the atmospheric concentration. In general.
C(>2 has a much weaker instantaneous radiative effect than other greenhouse gases; it decays more slowly, however,
and hence has a longer atmospheric lifetime than most other greenhouse gases. While there is relative agreement 011
how to account for these direct effects of greenhouse gas emissions, accounting for indirect effects is more problematic
GWPs are used to convert all greenhouse gases to a C()2-equivalent basis so that the relative magnitudes of
different quantities of different greenhouse gases can be readily compared. The GWP potential will be an important
concept for states in determining the relative importance of each of the major emissions sources and in developing
appropriate mitigation strategies. A more detailed discussion 011 the development of GWPs can be found in the Phase 1
document. States Workbook: Methodologies for Ustimating (ireenlioitse Cms Emissions.
to 6.3 0 F. with a best estimate of 3.6° F (IPCC. 1996). Global wanning of just a few degrees would
represent an enormous change in climate. For example, at the height of the last ice age. w hen glaciers
covered the Great Lakes and reached as far south as New York, the global average temperature w as only 5
to 9° F colder than today (Hodges-Copple. 1990).
The impact of global climate change in various geographic areas and on various sectors of the
world economy could be significant. Coastal areas are especially vulnerable. A recent EPA study (Titus
and Narayanan 1995) projects that, in response to climate change, global sea level is most likely to rise 15
centimeters by the year 2050 and 34 centimeters by the year 2100. As global sea level rises, coastal areas
in the US (particularly w etlands and low lands along the Gulf and Atlantic coasts) are being inundated.
Adverse impacts in these areas include loss of dryland and associated structures. loss of w etland and
w ildlife habitat, accelerated coastal erosion, exacerbated flooding, and increased salinity of rivers, bays,
and aquifers (USEPA 1997).
Higher sea levels could also contaminate fresh water aquifers, w hich w ould increase the costs of
fresh w ater supply either through deeper w ell drilling or importation of w ater from inland supplies. Sea
level rise could also raise water tables in low lying coastal areas, which would increase flood damage,
impede drainage, and reduce the effectiveness of sew age disposal facilities (Lesser et al.. 1989). This
impact could also place additional stress on infrastructure such as roads and bridges.
Storm surges refer to the flooding induced by wind stresses and the barometric pressure reduction associated with major storms.
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Climate change could have other
impacts on water resources, as well.
Changing climate is expected to increase
both evaporation and precipitation in most
areas of the United States (USEPA 1997).
In those areas where the increase in
evaporation is greater, there will generally
be a decline in the availability of fresh
water; where the increase in rainfall is
greater, w ater may become more available.
Climate models also suggest that seasonal
changes are likely, with generally wetter
winters and drier summers. Both climate
models and empirical evidence suggest an
increase in the frequency of intense
rainstorms. The direct effects of a decline in
water availability include declines in river
flows, lake levels, and groundwater
availability. The resulting impacts on
society could include insufficient water for
navigation; low er production of
hydroelectric power; impaired recreational opportunities along rivers and lakes; poorer water quality; and
decreased availability of w ater for agriculture, residential, and industrial uses. At the same time, w anner
temperatures are likely to reduce soil moisture, which would increase the need for irrigation water.
Increased water availability would generally have the opposite effects (USEPA 1997).
Climate change may also affect ecosystems, with impacts on commercial forestry , agriculture, and
recreational and other uses of natural systems. I'orests are likely to be affected in terms of their geographic
distribution, species composition, and grow th. Some areas that currently support forests may no longer be
able to do so. w hile other areas that are not now forested could potentially support forests in the future. As
with other predictions of climate change effects, there is considerable uncertainty in the impact estimates
for forests, and results vary depending on assumptions made regarding forest type, region, climate
projections, water availability, and the effect of higher carbon dioxide concentrations (USEPA 1997).
Estimates also differ depending upon whether they address the transient period during which forests adjust
to a change in climate or an equilibrium period after adjustments are completed. During a transient phase
of adjustment to climate change, forests (particularly softwood forests in the southeast US) may suffer
diminished productivity and dieback. The transformation of forests is a slow process during w hich current
trees and other vegetation die and are succeeded by new vegetation, species migrate to sites with newly
suitable climates, and soils develop. This transient or adjustment phase is expected to last decades to
centuries after the climate ceases to change and has reached a new steady state. After forests are fully
transformed and in equilibrium with a new and stable climate, forests in many areas of the US may be more
productive than current forests and may expand in area (USEPA 1997).
Agriculture, always sensitive to climatic changes, is expected to be affected by global climate
changes. Yields of many crops are likely to be affected by changes in average temperatures and
precipitation as w ell as by changes in climate variability and the frequency of droughts and floods (USEPA
1997). Climate change may also affect availability of irrigation w ater, the prevalence of pests, and soil
erosion. Increased CO2 levels may increase yields (the "CO2 fertilization effect"). Most projected impacts
Figure 2-1
U.S. Greenhouse Gas Emissions and Sinks: 1994
Total U.S. Greenhouse Gas Emissions by Gas: 1994
(MMTCE)
1.800
1.500
1.200
900
600
300
0
N 0
Gas Types
HFC/
PFQ
SF.
Net
Emssons
'Sinks are not included here
Source: I'.S. I'.PA. 1995
Note: MMTCK stands tor million metric tons of carbon equivalent.
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in the agriculture sector involve considerable uncertainty: different assumptions generate very different
results that range from net benefits to net losses for US agriculture.
Existing studies suggest that the impacts on US agriculture will be modest in aggregate. Studies
indicate that a doubling of CO2 would change US agricultural production by a few percent. Total economic
w elfare changes are estimated to be within a range of plus or minus tw o percent. Projected nationwide
impacts range from annual benefits of $10 billion to annual losses of $18 billion (USEPA 1997). Regional
consequences could be greater in relative terms: there w ill be winners and losers. Climate change w ill
increase production and economic welfare in some locations and decrease it in others. Under some
scenarios, some regions could see losses of more than 10 percent w hile other see gains of more than 25
percent. When aggregated across regions, the gains and losses offset each other to produce a relatively
small net impact.
One of the key regional-scale predictions is that production of some crops may migrate. As climate
changes, some crops may expand into new regions and decline or disappear in some parts of their current
range. The southern agricultural regions may be more vulnerable to adverse impacts.
Finally, regardless of a state's landscape or geological features, increased summer temperatures are
expected to affect human health. In a warmer world, the frequency and intensity of extremely hot days are
expected to increase, and would likely result in significant increases in annual weather-related mortality in
US cities (USEPA 1997). Increased warmth and moisture may enhance the transmission of diseases by
mosquitoes, ticks, and other insects. Climatic impacts on marine ecosystems may lead to increases in toxic
algae species, contaminated seafood, and cases of seafood poisoning. Furthermore, increases in the
persistence and level of air pollution episodes associated with climate change may have adverse health
effects (Smith & Tirpak. 1989).
While scientists cannot predict the magnitude of climate effects from greenhouse gas emissions
with absolute precision, the decision to limit emissions cannot wait until the full impacts are evident.
Because greenhouse gases, once emitted, remain in the atmosphere for decades to centuries, stabilizing
emissions at current levels would still allow the greenhouse effect to intensify for more than a century
(Lashof and Tirpak. 1990). Thus, our emissions today have committed the planet to climate change well
into the 21st century. Delaying control measures w ill increase this "global wanning commitment" still
further."
2.2 POLICY CONTEXT FOR CLIMATE CHANGE MITIGATION
The scientific evidence indicates that continuing emissions of greenhouse gases are altering global
climate. In response, governments at the international and national levels are taking action to reduce
emissions of greenhouse gases. Many individual states have also recognized the potential dangers that
global climate change presents to both current and future generations. This section first describes
international and national responses to climate change and then discusses the role of states in addressing
this global concern.
2.2.1 Introduction to International and National Responses to Climate Change
6 While this document concentrates on policy formulation to reduce or stabilize greenhouse gas emissions in order to mitigate climate change, other
KP.\ and state research focuses on state-level adaptation to the significant impacts described above should the greenhouse effect intensify.
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The international community has coordinated efforts to address the potential impacts of climate
change, particularly within the last decade. Some of the more important events are described below.
Villach and Bel/agio Workshops: The Villach w orkshop assessed the role of carbon dioxide and
radiatively active constituents under various climate scenarios and assessed the potential impacts
under each. The goal of this w orkshop w as to provide a technical basis for a subsequent policy
workshop in Bellagio. Italy.
The Montreal Protocol on Substances That Deplete the Ozone Layer: In response to growing
international concern about the role of CFCs in destroying stratospheric ozone. 47 nations reached
agreement on a set of CFC control measures in September 1987. The control measures, know n as
the Montreal Protocol on Substances that Deplete the Ozone Layer, laid out a schedule of
production and consumption reductions for many CFCs. In June 1990 the Parties to the Protocol
agreed to a complete phaseout of CFCs and other ozone-depleting substances (ODSs) (this
agreement is known as the London Amendments). In November 1992 Parties accelerated the
phaseout schedule for ODSs and agreed to phaseout dates for HCFCs. which are CFC substitutes
in many current applications (this agreement is known as the Copenhagen Amendments). As of
June 1997. over 160 countries had ratified the agreement.
Toronto Con ference: This international conference focused on the implications of climate change
for world security and established a goal for industrialized countries to reduce carbon dioxide
emissions by 20 percent of 1988 levels by 2005. It was attended by more than 300 policy-makers
and scientists from 48 countries.
The Intergovernmental Panel on Climate Change: Under the auspices of the United Nations
Environment Program (UNEP) and the World Meteorological Organization (WMO). the
Intergovernmental Panel on Climate Change (IPCC) was formed in 1988 to conduct studies on
global wanning. Efforts undertaken include identifying emission sources, assessing possible
consequences, and developing mitigation strategies.
The International Ceosphere Biosphere Program: This program was established through the
International Council of Scientific Unions in 1988 to facilitate understanding the present state of
the earth and the potential impacts of global climate change. This extensive program maps recent
global deforestation, produces documents on climate and atmospheric changes, and combines
space-based scrutiny of climate change with extensive surveys of land and sea.
Noordwijk Conference on Atmospheric Pollution and Climate Change: The final declaration at
this conference encouraged the IPCC to include in its First Assessment Report an analysis of
quantitative targets to limit or reduce C02 emissions, and urged all industrialized countries to
investigate the feasibility of achieving such targets, including, for example, a 20 percent reduction
of carbon dioxide emissions by the year 2005. The Conference also called for assessing the
feasibility of increasing net global forest growth by 12 million hectares per year. During its Third
Plenary, the IPCC accepted the mandate.
Hague Declaration: This conference and Declaration (signed by 23 nations) established support
for new principles of international law . These principles promote the creation of standards to
guarantee protection of the world's atmosphere and combat global wanning. The U.S. and Soviet
Union were not invited to the conference to avoid potential East-West policy conflict.
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Cairo Compact: The compact calls on affluent nations to provide developing countries w ith the
technical and financial assistance to address global climate change.
United Nations World Climate Conference: The IPCC reported the findings of the IPCC Working
Groups to the United Nations (Scientific Assessment. Impacts Assessment, and Response). The
IPCC report, adopted by the General Assembly, set the stage for future international negotiations
on a framework convention on climate change.
Intergovernmental Negotiating Committee (INC): On December 21. 1990. the U.N. General
Assembly established the INC to prepare an effective framework convention on climate change,
containing appropriate commitments and any related legal instalments as might be agreed upon.
The INC. supported by the WMO and UNEP. has convened for ten sessions since its formation.
The INC serves as the international mechanism to monitor and enforce the provisions of the United
Nations Framew ork Convention of Climate Change (FCCC). The INC is also currently
negotiating to adopt a framew ork to implement a joint implementation regime.7
United Nations Conference on Environment and Development (UNCED): On June 12. 1992. at
UNCED (the Earth Summit) in Rio de Janeiro. 154 nations, including the U.S.. signed the U.N.
Framework Convention on Climate Change. The Convention contains a legal framework that
commits the world's governments to voluntary reductions of greenhouse gases, or other actions
such as enhancing greenhouse gas sinks, aimed at stabilizing atmospheric concentrations of
greenhouse gases at 1990 levels. To facilitate this. Article 4-1 requires that all parties to the
FCCC develop, periodically update, and make available to the Conference of the Parties, national
inventories of all anthropogenic emissions of greenhouse gases not controlled by the Montreal
Protocol, using comparable methodologies. In October 1992. the U.S. became the first
industrialized nation to ratify the Treaty, which came into force on March 21. 1994. The
Convention also contains other binding agreements related to its establishment, support, and
administration.8
Bilateral Sustainable Development Accord Between Costa Rica and the U.S.: On September 30.
1994. the U.S. and Costa Rica signed a bilateral accord intended to facilitate developing joint
implementation projects. These projects are intended to encourage the use of greenhouse gas-
reducing technologies (including energy efficiency and renewable energy technologies); develop
educational and training programs; diversify- energy sources; conserve, restore, and enhance forest
carbon sinks (especially in areas that promote biodiversity conservation and ecosystem protection);
reduce greenhouse gas emissions and other pollution; and promote the exchange of information
regarding sustainable forestry and energy technologies. This accord should provide the basis for
future similar arrangements between countries and contribute to establishing an international joint
implementation regime that is sensitive to environmental, developmental, social and economic
priorities. The accord is intended to encourage partnerships involving the federal government,
private sector, non-governmental organizations, and other interested entities.
1995 hirst Conference of the Parties: The INC was dissolved in February 1995. and the
Conference of the Parties (COP) became the new ultimate authority of the FCCC. During the first
Hie concept of "joint implementation" (.11) was introduced early in the negotiations leading up to the 1992 Karth Summit in Rio. and was formally
adopted into the text of the FCCC. Ilie term "JI" has been used subsequently to describe a w ide range of possible arrangements betw een interests in
two or more countries, leading to the implementation of cooperative development projects that seek to reduce or sequester greenhouse gas emissions.
h To fulfill its obligation under the FCCC Article 4-1. the I'.S. government published the Inventory ofl.'.S. (ireenhouse (his Emissions and Sinks:
1990-1993 (I'.S. F.PA. 1994). The I'.S. also published the (lunate .¦Action Report (I'.S. Government. 1994). in accordance with Article 4-2 and 12.
Ilie (lunate Action Report provides a description of the I \S. climate change program.
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Conference of the Parties in Berlin from March 28 - April 7. 1995 (COP-1). delegates agreed on a
mandate to establish appropriate action for the period beyond the year 2000. including stronger
commitments from developed countries. They formed an Ad hoc Group on the Berlin Mandate
(AGBM) to begin work on this process.
Ad hoc Group on the Berlin Mane/ale: At its first session in Geneva, held from August 21 - 25.
1995. delegates to AGBM -1 began the process of drafting a protocol on new commitments for the
post-2000 period. The AGBM has met 3 times since then, and has begun making specific
proposals for new reduction targets and strategies for both industrialized and developing countries.
1996 Second Conference of the Parties: COP-2 met in Geneva from July 8 -19. 1996 and
endorsed the "Geneva Declaration." which calls for legally binding objectives and significant
reductions in greenhouse gas emissions. For the first time, the US agreed to support a legally
binding agreement to fulfill the Berlin Mandate being developed by AGBM.
1997 Third Conference of the Parties: COP-3 met in Kyoto. Japan in December 1997. where the
parties agreed to an historic protocol to reduce global greenhouse gas emissions and set binding
targets for developed nations. (For example, the binding emissions target for the U.S. is 7% below
1990 emissions levels.) The Kyoto Protocol seeks to achieve targets on all six major greenhouse
gases by 2008-2012; international emissions trading is included as a compliance option. The
parties w ill meet again at Buenos Aires in November 1998. where the U.S. w ill attempt to secure
meaningful participation by developing countries.
In the negotiations that led to the FCCC. the United States "supported an approach to global action
that focused on the development of national policies and measures to mitigate and adapt to climate change,
recognizing that only concrete actions w ill enable the world community to effectively address climate
change, and that measures and policies must be rooted in specific national circumstances and fashioned
from a comprehensive set of options addressing all sectors, sources, and sinks of greenhouse gases" (U.S.
DOS. 1992). To fulfill this goal, the United States has undertaken actions to address climate change,
including scientific and economic research, policy analysis, and program development. These actions
culminated in the release of the Climate Change Action Plan (CCAP) by the Clinton Administration in
October. 1993 . The CCAP presents the U.S. strategy for reducing greenhouse gas emissions to 1990
levels by the year 2000. Neither the measures initiated in 1993 nor the additional actions developed since
then w ill likely be adequate to meet the emissions goal enunciated by the President, but they have
significantly reduced emissions below growth rates that otherwise would have occurred. The analysis used
to develop CCAP significantly underestimated the reductions that would be needed to return emissions to
1990 levels by the year 2000. Low er-than-expected fuel prices, strong economic grow th, improved
information on emissions of some potent greenhouse gases, and diminished levels of funding by Congress
are among the factors responsible for the need to revise the CCAP goals. Based on current funding levels,
the revised action plan is expected to reduce emissions by 76 million metric tons of carbon equivalent
(MMTCE) in the year 2000. or 70 percent of the reduction projected in the CCAP. Annual energy cost
savings to businesses and consumers from CCAP actions are anticipated to be $10 billion (1995 dollars) by
the year 2000. Even greater reductions are estimated from these measures in the post-2000 period:
reductions are projected to be 169 MMTCE in 2010. and 230 MMTCE in 2020. Annual energy savings
are projected to grow to $50 billion (1995 dollars) by the year 2010.
Also at the national level, the Department of Energy has released a set of draft guidelines for
entities to voluntarily report their reductions of greenhouse gas emissions and fixation of carbon, achieved
through any measure. The purpose of these guidelines is (1) to provide a database of information for
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entities seeking to reduce their ow n greenhouse gas emissions; (2) to establish a formal record of emissions
and emission reductions and carbon sequestration achievements: and (3) to inform the public debate in
future discussions on national greenhouse gas policy.
The CCAP and other U.S. actions are the outgrow th of more than $2.7 billion in global change
research conducted since 1990 (U.S. DOS. 1992). This research includes a variety of multinational
scientific projects. For example, the U.S. Global Change Research Program coordinates research of the
EPA. the National Aeronautics and Space Administration (NASA), the National Oceanic and Atmospheric
Administration, the National Science Foundation, and the Departments of Energy. Agriculture. Interior,
and Defense. The objectives of the Research Program are to evaluate and further current research activities
in the U.S. that address scientific questions concerning global climate change, to define future research
needs, and to establish federal agency roles. The Research Program is also intended to develop national
and international partnerships between governmental bodies, the academic science community, and the
private research sector to achieve long-term scientific goals. Much of this research has focused on steps to
strengthen the ability of economic, social, and ecological systems to adapt to adverse change: concrete
measures to mitigate the risk of future climate change through greenhouse gas reduction measures:
aggressive research to improve understanding of climate, climate change, and potential responses: and
international cooperation to broaden the global effort in each of these areas.
To foster international cooperation, the Climate Change Action Plan makes provisions for
reducing emissions internationally through the U.S. Initiative on Joint Implementation (U.S. IJI). U.S. IJI
is a voluntary pilot program that contributes to the international know ledge base regarding joint
implementation, through projects demonstrating a range of approaches for reducing or sequestering
greenhouse gas emissions in different geographic regions. U.S. IJI provides public recognition and selected
technical assistance to approved projects. These projects contribute to emissions reductions by promoting
technology cooperation with and sustainable development in developing countries and countries with
economies in transition. As of July 1997. 26 project proposals have been accepted by USUI.
Many individual states and localities have also initiated independent climate change responses. At
the state level. 29 states have developed a state-level GHG inventory, and 20 states have developed or
committed to develop a state-level action plan to reduce GHG emissions. More than 20 states and more
than 80 cities and counties have joined Rebuild America, a program w hich emphasizes energy efficiency
improvements, thus reducing greenhouse gas emissions. Over 30 state government agencies and more than
120 local governments have joined EPA's Green Lights program, making a commitment to replace old
lighting fixtures and bulbs with energy efficient lighting, thus reducing greenhouse gas emissions.
Portland. Oregon proposes to reduce carbon dioxide emissions from the Portland metropolitan area to 20
percent below the 1988 level by the year 2010 (PEO. 1993). The Urban CO2 Reduction Project, which is
a joint effort between cities, highlights both the international collaboration needed to combat global climate
change as well as the key role local governments can take in implementing solutions.
In addition to those deliberate efforts to address climate change, many other recent state and local
actions have helped to reduce greenhouse gas emissions. These include initiatives in energy efficiency,
urban planning, transportation planning, forest management, agricultural management, and other areas.
For example, the Iowa State Energy Bureau's Building Energy Management Program promotes cost-
effective energy management improvements in state buildings, schools, hospitals non-profit organizations,
and local government facilities. The program covers measures designed to reduce energy consumption,
including replacing lights and ballasts: replacing boilers and controls: improving heating and ventilation
controls: and improving insulation of roofs, w alls, and pipes. By reducing the demand for electricity, much
of w hich is generated from fossil fuel combustion, these measures reduce emissions of both greenhouse
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gases and other air pollutants. The program also provides financial savings to a state that imports 98
percent of its energy and creates jobs (Wells. 1991). In Minnesota, more stringent energy standards have
been adopted for the new constaiction of residential dw ellings and government offices. Oregon has
increased the w eatherization standards in the constaiction of low income homes. New York has recently
established a public-private partnership to encourage and support schools in making their facilities more
energy efficient (Energy Smart Schools), and Colorado has established the Colorado Green Program.
which assists builders and honors residents who constaict homes that conserve natural resources and
increase energy efficiency. As in Iowa, these programs reduce greenhouse gas emissions and other air
pollutants (by lowering electricity demand), while simultaneously providing financial savings and
promoting energy security.
States are also increasing the use of compressed natural gas (CNG) in state and municipal vehicles,
primarily school buses and buses used for public transportation. For example, in Mecklenberg County.
North Carolina all school buses have been converted to CNG vehicles, and in Maryland, the Department of
Transportation has replaced its fleet of diesel fuel shuttle buses at BWI w ith 20 new CNG vehicles. Also
in Maryland, the governor signed an executive order which formally expressed Maryland State
Government's commitment to improve air quality and to comply w ith the clean fuel provisions of the Glean
Air Act Amendments of 1990 (CAAA of 1990) and the Energy Policy Act of 1992 (EPAct). The order
established an interagency "Alternative Fuels Work Group" which is to evaluate and recommend alternative
fuels for use in state fleets. These types of programs provide economic and environmental benefits beyond
climate change mitigation. Similar activities are highlighted throughout this document.
2.2.2 Importance of State Action
On both a total and per capita basis, many states emit carbon dioxide in amounts comparable to
some of the highest emitting countries in the w orld. Although problems such as global warming need to be
addressed through cooperative national and international efforts, many of the critical responses can be
initiated locally. If the adverse effects of climate change are to be avoided, states will need to take an active
and immediate role in addressing greenhouse gas emissions. The section below presents several of the
foremost reasons that states may wish to take definitive action to reduce greenhouse gas emissions.
States retain much of the policy jurisdiction over emission sources.
States have the pow er to alter greenhouse gas emission patterns significantly through their
influence and authority over energy use. land use. transportation, taxation, environmental programs, and
other relevant policy areas. Although some states have started to deregulate some aspects of the utility
sector, many state governments still hold direct regulatory authority over electric and gas utilities, which
are responsible for one third of the current carbon dioxide emissions (US EPA. 1995). In addition, state
public utility commissions (PUCs) oversee decisions regarding the need for new generating capacity and the
choice of fuel mix. Many PUCs are now requiring utilities to include environmental considerations
explicitly in their decision making. The federal government does not have jurisdiction over many of these
areas.
States can also encourage local governments to revise or establish building codes and land use
regulations. Some local governments have implemented stringent energy efficiency requirements for new
housing. For example, two California cities. Davis and Berkeley, require compliance with minimum
residential energy standards as a condition for the sale of a home (Randolph. 1988). The state's authority
to conduct land use planning can also have a dramatic impact on emissions from the residential,
commercial, and transportation sectors. For example, several cities have undertaken large-scale tree-
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planting programs to improve air quality and low er summer temperatures, thereby reducing summer energy
needs for air conditioning.
Other opportunities for state and local action to reduce greenhouse gas emissions include
management of landfills and regulation of existing stationary sources of air pollution. For example, state
and local programs to increase recycling and source reduction of municipal solid w aste management
promote industrial energy savings from secondary materials manufacturing, reduce landfill methane
emissions, and promote forest carbon sequestration(USEPA 1997b)).
'/he Climate Change Action Plan creates new opportunities for states.
The Climate Change Action Plan offers both opportunities and support to state action in a number
of sectors. For example, the federal government has made a commitment to promote integrated resource
planning (IRP) by utilities, specifically including technical and financial assistance to states. Similar
opportunities are being fostered in the transportation, agriculture, and other sectors. The CCAP also
commits federal agencies to further link their programs to state and local initiatives.
States have the capacity for enacting "low risk"policies to address climate change.
States can implement many climate change mitigation measures that have immediate, non-climate
related benefits. This opportunity enables states to supplement existing policy goals with climate change
policies. For example, in addition to reducing greenhouse gas emissions, investments in energy efficiency
w ill low er energy bills of state residents and reduce emissions of local air pollutants. Promoting energy
efficiency not only benefits the consumer, but may also provide for a stronger and more efficient economy.
By saving energy costs in the production of goods, energy efficiency can improve the competitive position
of states in both national and international markets. Energy efficiency provides increased energy and
economic security by lessening dependence on foreign oil and other fuel supplies (Schmandt et al.. 1992).
Reforestation and urban tree programs not only sequester carbon but can also reduce cooling energy
requirements and aesthetically improve the urban and rural environment. Movement away from certain
fertilizers in agricultural practices may reduce problems of groundwater contamination from their
residues.Composting agricultural crop wastes enhances soil fertility while reducing particulate emissions
and smoke. All these actions reduce greenhouse gas emissions.
These types of measures often present little economic or political risk to policy-makers. Many
policies provide states with economic benefits regardless of any future changes in climate. For example,
the EPA's Green Lights Program encourages the use of energy efficient lighting. Energy efficient measures
result in lower energy bills and the overall benefits that society gains from such programs often outweigh
the total costs incurred. In addition, in most instances these policies carry little political risk because they
complement existing programs. For example, policies on greenhouse gas emission reductions in New York
are generally framed in the context of state energy planning. New York's State Energy Plan w as developed
jointly by the State Energy Office, the Department of Environmental Conservation, and the Public Sen ice
Commission. Together, these agencies developed energy policies to achieve environmental, energy, and
economic policy objectives. Thus, adopting low risk measures can not only result in multiple benefits, but
also enhance economic and political feasibility.
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Manx other "low risk" programs arc already in place. For example:
The Connecticut Department of Transportation has pioneered programs to increase the use of
car pools, van pools, and public transportation. By assisting commuters to find alternatives to
driving alone, these programs reduce traffic congestion, pollution, and greenhouse gas
emissions.
The Georgia Governor's Office of Energy Resources is increasing energy and agricultural
efficiency by facilitating six programs targeted to crop, poultry, and livestock producers.
These programs conserve energy and save money in addition to reducing greenhouse gas
emissions.
1'he Missouri Department of Natural Resources has created a reforestation program designed
to reduce heating and cooling needs w ith strategic landscaping, to arrest soil erosion, enhance
natural w ater filtration, and remove carbon dioxide from the atmosphere. The program
coordinator of this multifaceted project, called Operation TREE, must work to involve every
division of the Department of Resources and encourage cooperation among other state agencies
(Wells. 1991).
The Alabama Broiler Titter Program, co-sponsored by the Science. Technology and Energy
Division of the Alabama Department of Economic and Community Affairs and the USDA's
Tennessee Valley Resource Conservation and Development Council, addresses energy
conservation, reduces the landfill waste stream, promotes recycling, and improves agricultural
productivity. In this program newspaper is shredded and blown over the poultry house floor,
w here it becomes matted and slick from droppings and moisture content. When the litter and
paper is gathered from the floor, it is spread on crops as fertilizer, or is mixed with feed and is
fed to livestock. The paper also acts as an insulator for the poultry house, thereby reducing
energy needs {Conservation Update. September 1993).
The Minnesota Department of Public Service. Energy Division has adopted new standards to
achieve higher levels of energy efficiency in new construction. These regulations w ill not only
decrease energy demands of consumers, but w ill also reduce consumers' overall energy bills
while simultaneously reducing CO2 emissions through decreased electricity demand
{Conservation Update. July 1994).
The Governor of Wisconsin signed a major energy policy directive that mandates state
agencies and local governments to implement the following priorities when making energy
decisions: (1) energy efficiency; (2) non-combustible renewable energy resources; (3)
combustible renewable energy resources; and (4) non-renewable combustible energy resources
(natural gas first, then oil. then coal w ith low sulfur content, and then other carbon-based
fuels) {Conservation Update. June 1994).
These measures demonstrate how states have already implemented programs that address climate
change, and that action in this area does not place policy-makers on entirely new ground. Further, the
existence of such programs highlights coalition building as an important part of addressing climate-related
problems, since the responsibility for solving many environmental problems is often widely spread among
diverse state agencies (this issue is discussed in greater detail in Chapter 7).
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Stales will feel the impacts of climate change and will likely he called upon to address them.
Although climate is a growing concern, climate-related problems will ultimately affect local and
state economic sources. Further, recent surveys indicate that public opinion supports a greater
environmental consciousness. A growing number of Americans are becoming "green consumers" and
"green voters." i.e.. they incorporate environmental considerations into their buying habits and political
choices (Cale et al.. 1992). Thus, state governments may face public and political pressure to respond to
climate change.
Because state governments are often more attuned to local public sentiment than are their federal
counterparts, the state planning process can incorporate localized public input and priorities. Federal
agencies, however, must craft programs that cover larger regions of the country. As a result, state and
regional priorities may be overwhelmed by national interests during federal planning. By initiating their
own programs, states can make adjustments according to their own needs, allocate resources as they see
appropriate, and complement other state policy goals in ways that the federal government may not consider.
As greenhouse gas emissions continue to emerge as an international and national priority, federal
policies and programs w ill also continue to develop. States that have already started to plan accordingly
will experience the least social and economic disruption. By delaying the transition to a more energy
efficient economy, for example, a state risks having to make rapid and disruptive adjustments in the future.
In addition, by acting now . states will influence future decisions at the national level.
Further, states have the opportunity to assume a leadership role in the global climate change arena.
The ten states with the highest carbon dioxide emissions each produce more than the Netherlands, which
has taken a key role in promoting international agreements to curb climate change. Denmark w ould rank
3 1st among the states w ith respect to CO2 emissions (Lashof and Washburn. 1990). Even states w ith
relatively small contributions to climate change can demonstrate to the U.S. and to the world that emission
levels can be reduced while economic grow th is sustained. As summarized in Exhibit 2-3. a number of
states are already arguing for the key role that states can play in this critical area.
State agencies do not shoulder this burden alone. As EPA notes, "no single activity is the dominant
source of greenhouse gases; therefore, no single measure can stabilize global climate. Many individual
components, each having a modest impact on greenhouse emissions, can have a dramatic impact on the rate
of climate change w hen combined" (Smith and Tirpak. 1989). The state role in solving this global problem
can be significant. Although national and international effort is essential for an overall solution, states are
uniquely positioned to reduce emissions and. in doing so. to encourage the appropriate national and
international responses. The United States and other nations have already recognized the threat that climate
change poses and the need for action. States, armed with the same understanding, now face the same
decision.
2.3 GENERAL FRAMEWORKS FOR CLIMATE CHANGE POLICY ANALYSIS
Policy formulation can be a complex undertaking that involves understanding the issues at hand,
envisioning the range of actions that governments can take to address those issues, and selecting from
within this range the approaches that offer the most potential for achieving multiple public goals. The
policy formulation process must respond to local circumstances and must fit within institutional, fiscal,
political, and other constraints. The presence of uncertainties, diverse economic sectors, and long lag times
between emissions and affects, as well as the political sensitivity associated with the climate change issue,
further complicates actions to reduce greenhouse gas emissions.
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To help clarify this complex issue, this document develops an analytic framework that suggests,
first, establishing strong and w ell-founded focal points for program development and then structuring
programs around these focal points. This approach recognizes that states face impediments in effectively
reducing greenhouse gas emissions. These impediments take three forms: barriers that inhibit actions to
reduce greenhouse gases, perverse incentives that actually encourage greenhouse gas production, and time
frame issues that complicate the whole process.
This section addresses each of these three factors. First, it presents the types of barriers that may
inhibit effective policy implementation. Next, in order to provide a general orientation and organizing
principle for various policy options, it reviews the general structure used to present ideasfor policy
solutions in Part II of this document. Finally, this discusses timing issues in climate change policy
development.
2.3.1 Barriers to Emission Reductions
Designing climate change mitigation strategies is not a straightforward task. A number of barriers
to emission reductions confound the policy design process and may inhibit implementing mitigation
programs. These barriers may include technological capacity, information flow constraints, price
structures and other market related elements, legal or regulator} issues, organizational or institutional
considerations, political considerations, and analytic constraints. These barriers, in particular situations,
can either inhibit emission reductions or can actually create incentives that lead directly or indirectly to
emissions.
Technological ('opacity
Greenhouse gases are produced through the fundamental processes that help our economy and our
society function, including food production, commerce, and generation of other goods and sen ices on
which we depend in our everyday lives. Improving the technologies critical to these necessary and desirable
processes could result in low er greenhouse gas emissions as w ell as decrease the undesirable activities.
Frequently, technologies that can achieve specific greenhouse gas reduction goals are available but not
widely disseminated, while in other situations technological improvements or new ways of approaching
these fundamental tasks in our society have not yet been developed.
Information I low ('onstraints
Information barriers can take three forms. First, in the climate change field, incomplete
understanding of the atmospheric science as w ell as to the probable effects of various policy options on
greenhouse gas concentrations impedes developing effective policies. Second, those who emit greenhouse
gases, including the general public, may not fully appreciate their role and responsibility. Third, the
information that w ould empow er members of society to reduce greenhouse gas emissions is frequently not
available or understandable to them. This is often the case when technological improvements to various
processes have been developed but are not know n to the actors w ho use those processes in the field.
Price Structures ant/ Related Market Elements
Three distinct factors relating to prices and costs of goods and sen ices can contribute to
greenhouse gas production and emissions. First, government subsidies and taxes, which are designed to
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promote goals unrelated to climate change, can conflict with climate change mitigation policies. Second,
prices and costs often do not account for the environmental damage being caused by consumption of the
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Exhibit 2-3
State Reasons for Climate Change Response
Motivation (as published in state documents)
State (Source)
. . . it's a powerful concept, to think we can adjust the way we live and could have a
powerful effect on our global climate. It's a challenge we should take seriously and should
accept.
Louisiana
(Hodgcs-Copplc.
1990)
Americans. Iowans included, have become both more informed and more concerned about
the environment in the last two years to three years. Public consciousness has absorbed the
positive message of Earth Day as well as the horror of environmental disasters.
Iowa (Calc ct al..
1992)
Vermont has a strong incentive to lead the way in developing energy policies which
properly account for environmental risks. . . . Two problems stand out as demanding
special attention: global warming, which threatens all of the planet's people and ecosystems
and to which Americans make a disproportionate contribution; and acid deposition, which
poses a particular threat to Vermont's environment and way of life.
Vermont
(Vermont Dept.
of Public Sen ice.
1991)
. . . the limited nature of federal leadership means that California's efforts to reduce
greenhouse gas emissions will influence, rather than be directed by. federal leadership. . . .
In any event, while unilateral California action to reduce emissions will not solve the
problem. California leadership could help facilitate greater cooperation between the States,
the federal government, other countries to begin reducing greenhouse gas emissions.
California
(California
Energy
Commission.
1991)
Everyone is familiar with the need to pay insurance today for risks that may occur in the
future. Actions to slow global warming arc the insurance paid to accommodate the risks
from global warming. The insurance proposed in this report would also pay a dividend in a
more efficient and resilient economy, cleaner air. and less dependence on foreign oil
supplies. Responding to global wanning is another reason to manage resources wisely.
While this is a global problem, everyone must be part of the solution.
Oregon (Oregon
Task Force 011
Global Warming.
1990)
. . . good environmental stewardship and energy efficiency will make Missouri stronger
economically, improve our flexibility in the face of uncertain international markets, and
fulfill our environmental responsibilities. These benefits prevail regardless of whether
Missouri experiences substantial or subtle climate change.
If we fail to be accountable for our role in climate change and ozone depletion, we will pay
with diminished quality of life for ourselves and our children. Missouri, as a responsible
global citizen, has an important opportunity to create environmental and economic benefits
from this challenge.
Missouri
(Missouri
Commission 011
Global Climate
Change & Ozone
Depletion. 1991)
The legislature recognizes that waste carbon dioxide emissions, primarily from
transportation and industrial sources, may be a primary component of the global
greenhouse gas effect that warms the earth's atmosphere and may result in damage to the
agricultural, forest, and wildlife resources of the state.
Minnesota
(Minnesota
Statutes 116.86)
. . . although Washington's contribution to the greenhouse effect is small, the state can
demonstrate to U.S. and world policy-makers that CO2 emissions can be reduced while
sustaining economic growth.
Washington
(Lesser ct al..
1989)
Because Texas has a lot at stake in preserving and protecting its water and coastal
resources, it is incumbent upon state officials to start to develop the most cost-cffcctivc
strategies now. ... Texas docs have a role in solving this problem. Indeed, with so much of
the structure in place to correct this problem to which we so heavily contribute, it can be
asserted that we have an obligation. The next question is: Do we have the political will?
Texas (Schmandt
ct al.. 1992)
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goods or sen ices in question; thus, greenhouse gas emissions are an "externality" not reflected in prices.
Third, "transaction costs" for obtaining information about, or converting to. more environmentally friendly
processes are often high.
Legal or Regulatory Issues
Legal issues affect greenhouse gas emissions in several ways. First, many of the informational and
market distortions presented above originate in previous regulatory or other legal action. In these cases, the
law itself inhibits reduction of greenhouse gases or even encourages their production. Sometimes this may
be to society's benefit because of higher priorities, w hile in other cases the law inappropriately or
inefficiently pursues its objectives, some of which may be outdated. An example of this type of barrier
occurs in the regulations that require flaring of methane at landfills, w hich may exclude its recovery and
sale as a fuel source. Second, the absence of regulations or legislation may itself serve as a barrier, as
w hen the absence of certain consumer protection measures inhibits new environmentally friendly
technology or product acceptance. Third, ill-defined or vague property rights governing commercially
valuable greenhouse gases, such as methane produced from coal mines, can inhibit recovery efforts and
thus increase emissions.
Organizational and Institutional Considerations
Institutional factors also may constrain implementing emission reduction policies. Public agencies
responsible for developing, analyzing, implementing, and enforcing policies must maintain the skills,
resources, and motivation necessary to do this job; w ithout sufficient institutional support, many programs
cannot be implemented. In addition, designing emission reduction programs and formulating policy may
require distinct institutional mechanisms for coordinating action between public agencies and with many
diverse private sector actors. If these channels do not exist, programs can be difficult to develop and
administer.
Political (Considerations
Greenhouse gas emission reduction policies can affect many actors across all sectors of society.
Competing and conflicting interests across these individuals, groups, and organizations can generate
significant political tension. In this context, politics may become either an impediment or an asset to
climate change policy formulation. Political viability in the climate change arena, thus, depends on the
coordination of affected interests, popular or legislative familiarity w ith the policy instalments being
pursued, the perceived fairness of policy ideas, and consistency w ith other major political agendas.
Analytic ('onstraints
Several analytic factors may inhibit climate change policy formulation. These revolve around the
difficult) and costs of acting w hen the magnitude and timing of policy impacts are highly uncertain.
Chapter 8 discusses many of the issues that create such uncertainty, such as intertemporal comparisons of
costs and benefits and issues of interaction between different emission reduction policies.
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2.3.2 Structure of Policy Approaches
Because climate change responses must address the w ide variety of barriers and constraints
presented above, arranging a similarly varied portfolio of policy approaches can enhance program
effectiveness. The specific options available for greenhouse gas reduction programs, w hich are detailed in
Chapters 5 and 6. are grouped into four categories:
Providing information and education;
Restructuring legal and institutional barriers;
Providing (and correcting distorted) financial incentives; and
Implementing direct regulations.
Each of these policy approaches is elaborated on below.
Providing Information and Education
Information provision generally takes three forms: identify ing informational needs, generating new
information, and disseminating information. Such efforts are usually intended to change the behavior of
some target audience (e.g.. consumers, corporations, managers, or school children) in order to reduce
emissions. Doing so generally requires that policy-makers understand the target audience's current level of
know ledge as well as the links between that know ledge and how the audience behaves. For example,
energy consumers may not know the most effective ways to save energy, the time and costs involved, or
even the linkage to greenhouse gas emissions. By identifying what consumers do generally understand,
policy-makers can take action to fill gaps in understanding and know ledge, with the intent to change
consumer behavior.
Information dissemination programs may include public advertising or educational campaigns, the
provision of information through technical reports, publicity around voluntary standards, public service
announcements, media coverage of government activities, support for research and development,
technology or process demonstration projects, and direct technical assistance.
Restructuring Legal and Institutional Barriers
Certain legal and institutional barriers not only constrain but prevent effective implementation of
greenhouse gas reduction measures. These can include: laws with alternative purposes, such as economic
stimulation or public safety, that inadvertently and unnecessarily inhibit greenhouse gas reductions; existing
and long-standing operating procedures in public and private organizations that interfere with how policies
are implemented; and a lack of institutional or regulatory support capacity for greenhouse gas reduction
policy action.
Policy approaches to addressing these barriers frequently include changing existing laws,
formulating new laws, and developing new institutional procedures for administering these activities. For
example, resolving legal issues concerning the ownership of coalbed methane resources would establish
incentives for investment in methane recovery projects (U.S. EPA. 1993b). Similarly , revising outdated
laws governing fat content ratings for milk and beef production to reflect modem consumer preferences
could result in methane reductions in the livestock sector, by requiring less food intake and digestion per
animal for the same quantity of usable food output.
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Providing financial Incentives
Financial incentives involve stimulating private and public sector transactions in order to induce
actions that reduce greenhouse gas emissions. This can include changing how current transactions take
place, like subsidizing or taxing certain fuel prices to induce choice of cleaner home-heating or
transportation fuels, or it can involve fostering new actions all together, like subsidizing or rewarding
research on technology development.
Three main categories of action can provide financial incentives to promote public sector goals: 1)
direct government expenditures; 2) taxes, fees, loans, or subsidies that alter the consumption of a good or
sen ice by changing its price relative to other items consumers might freely choose; and 3) market
structures established by governments that stimulate transactions without further direct government action.
Financial incentives are often chosen as a least-cost mechanism for inducing a certain level of
production or consumption." For example, by allocating tradeable pollution permits, the federal
government is attempting to achieve a pre-detennined level of emissions through market interactions,
avoiding the rigidity of direct regulation and achieving emission reduction goals at the least cost to society.
Similarly, the gasoline tax serves to decrease carbon emissions by reducing gasoline consumption. The
four predominant sy stems through which governments provide financial incentives are tradable emission
rights, emission charges, deposit-refund systems, and basic consumption taxes.
Implementing Direct Regulations
Governments can also promulgate direct regulations to address the barriers to greenhouse gas
reductions. This may include any legislation or aile that directly limits the action of private and public
sector actors. In the climate change field, regulations may force private firms to incorporate social costs of
global wanning into their decision making process, although financial incentives or other approaches may
be more economically efficient and possibly more effective. Direct regulations generally can take two
forms: performance standards and technology controls. Performance standards set a limit on a firm's
emissions (e.g.. 20 lbs./day of a specific pollutant) and allow a firm to choose how to meet the standards.
Technology controls, in contrast, define specific design and operating requirements, often specifying
required emission control technologies by name.
2.3.3 Timing Issues in Policy Development
A final consideration w hen developing options for addressing climate change is the issue of timing.
Because of the dynamic and complex nature of climate change processes, policies for addressing
immediately controllable emissions in the short-term might be entirely distinct from long- term policies
necessary for tackling other types or levels of emissions. Given that scientific understanding and the state
of technology are evolving rapidly in this field, policy approaches should maintain flexibility . Flexibility is
also necessary to respond to changing economic and political circumstances.
The general policy context surrounding climate change roughly spans three time frames the
immediate- to near-term, the mid-term, and the long-term future. These are relative time frames that help
provide focus for programs and that should not constrain programs in any w ay. Near-term policy
responses can usually be initiated quickly. within one to four years, with direct emission reduction or other
important benefits. Ideally. they should be incorporated into larger, comprehensive programs. For
Sec Chapter X tor more information on least-cost planning.
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example, a technical assistance program to help fanners improve fertilizer application placement, timing,
and rate will help reduce N2O emissions immediately and may be the first step in a mid- to long-term
program to reduce emissions from the agricultural sector.
Mid-term policies, typically set within five to twenty year periods, frequently depend on issues
such as the development and introduction of new technologies and institutional capacity for administering
new programs, and are often constrained by the time frames used in economic and energy forecasts. A ten
to twenty year span frequently represents the longest periods with w hich analysts and policy-makers can
anticipate the outcomes of their actions. For example, states may not be able to implement programs to
support large scale methane recovery and use immediately because of lack of institutional support, but this
constraint may be overcome within a few years of program implementation. These policies should be
flexible to react to changes in the scientific, technical, economic, and political arenas.
Finally, long-term policies may take several decades to enact. Modifying land use and
transportation systems in major cities, for example, can take twenty to fifty years. It is expected that
dramatic changes in technology and lifestyles w ill occur and w ill have a substantial effect on the climate
change problem within this time frame. Thus, research and development and public education are critical
components of long-term policy planning.
The policy implications of these three relative time frames are defined in greater detail in Chapter
7. It is important to note at the outset, however, that specific policies may address only one time frame or
they can be integrated across time frames. Current policies, for example, can be designed to maximize
emission reductions now using available technologies and set the stage simultaneously for future reductions
through research and development, education, institutional strengthening, or other actions. Comprehensive
state programs should integrate all three time frames in order to maximize the benefits from climate change
response strategies. More specifically, effective policy design should ensure that emission reduction goals
set in the near-term allow for scientific, technological, economic, and political changes in the mid-term and
set the groundwork and the context for addressing long-range objectives.
Each chapter in this document addresses time frame issues. Chapter 3 considers time frames in the
context of measuring and forecasting greenhouse gas emissions. Chapter 4 discusses the process of setting
and adhering to short-, mid-, and long-term emission reduction targets and goals. Chapters 5 and 6
describe approaches for greenhouse gas emission reductions w ithin the context of w hat is currently feasible
and what scientists and others anticipate being feasible in the future. Chapter 7 discusses how time frames
can be used strategically to build political and institutional support in the present and for the future, and
provides examples and potential models of policy formulation across time frames. Chapter 8 explains how
time frame issues can be incorporated in the policy evaluation process.
Exhibit 2-4 presents a model of public planning that illustrates many of the points made in this
chapter. It describes the Air Quality Management Plan for the South Coast Air Basin, an effort organized
by multiple agencies that provides a wide variety of social benefits. This plan establishes long-term
program goals and then employs different policy approaches set within three distinct time frames,
highlighting land use changes that fall under state and local jurisdictions. The policies described here
include information and education projects, institutional restructuring and strengthening, and
implementation of financial incentives and direct regulations.
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Exhibit 2-4: The South Coast Air Quality Management Plan
In July 1991. the South Coast Air Quality Management District and the Southern California
Association of Governments adopted a revised, comprehensive Air Quality Management Plan (AQMP or Plan)
designed to achieve national and state ambient air quality standards. The 1991 AQMP continues the aggressive
emission control program established by previous plans, but also addresses requirements of the California Clean
Air Act (CCAA). In addition, the AQMP has been expanded to address global climate change, stratospheric
ozone depletion, and air toxics. The 1991 AQMP sets forth programs which require the cooperation of all
levels of government: local, regional, state, and federal. The AQMP can serve as a substantive and
organizational model for state and local governments in their emission reduction efforts. The Plan is organized
into three tiers, each distinguished by its readiness for implementation:
Tier I
Tier I calls for full implementation of known technological applications and effective management
practices within the next five years. This phase of the AQMP is action-oriented. It identifies specific control
measures for which control technology currently exists.
Tier II
Unlike Tier I. the second phase of the AQMP will require significant advances in current applications
of existing technology and strong regulatory action for successful implementation within the next ten to fifteen
years. The proposed Tier II control strategy is composed mostly of extensions or more stringent applications of
Tier I control measures.
Tier III
The final tier of the AQMP depends on the development, adoption, and implementation of new
technologies within the next twenty years. Achievement of Tier III goals depends on substantial technological
advancement and breakthroughs that arc expected to occur throughout the next two decades. This requires an
aggressive expansion of Tier II research and development efforts.
Since the adoption of the 1991 AQMP. the District has been studying the feasibility of implementing a
market-based regulatory program for the Basin. Recommendations and findings from this study were presented
as the Regional Clean Air Incentives Market (RECLAIM). An amendment to the 1991 AQMP incorporates the
concepts of RECLAIM into the existing Marketable Permits Program control measure originally proposed in
1991. RECLAIM calls for declining mass emission limits on the total emissions from all sources within a
facility and requires facilities to meet prescribed annual emission reduction targets. Facilities under RECLAIM
will be given a facility-wide permit that will detail all emission sources in their facility. Allowing sources to
"bubble" facility emissions to meet annual reduction targets increases compliance flexibility at each facility.
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CHAPTER 3
MEASURING AND FORECASTING GREENHOUSE GAS EMISSIONS
A state inventory of greenhouse gas (GHG) emissions and sinks is a useful tool both for establishing a
baseline level of GHG emissions, and for identifying options for GHG reductions. In addition to preparing an
inventory of current GHG emissions, a state may wish to forecast future levels of GHG emissions in the absence
of state policies to reduce emissions. Such a forecast could serve as a benchmark against w hich future emission
reductions could be measured. The purpose of this chapter is to discuss the usefulness of calculating current and
future greenhouse gas emissions, and the methods for doing so.
3.1 MEASURING CURRENT EMISSIONS
The first step in a state's effort to address climate change is to identify all source categories in the state
that emit greenhouse gases, and determine their current emission levels. By developing an inventory of greenhouse
gas emissions, states can identify those source categories that contribute the most to global warming. The
inventory can also be useful for identifying options for greenhouse gas mitigation policies. To assist states in
developing GHG inventories. EPA"s State and Local Climate Change Program developed a workbook that
describes how to prepare greenhouse gas emissions inventories. The Stale Workbook: Methodologies for
list/mating Greenhouse Gets Emissions offers relatively simple approaches to preparing an emissions inventory,
as well as more sophisticated approaches that generally require more detailed data and a greater level of effort.
Several states have used the Stale Workbook to develop a state-level GHG emissions inventory as the first step in
developing policies and strategies to reduce greenhouse gas emissions.1 Exhibit 3-1 presents the emissions
sources included in the State Workbook, along w ith a list of the independent variables that are used in the
emissions calculations.2
3.2 PROJECTING FUTURE EMISSIONS AND EMISSION REDUCTIONS
This section discusses (1) the concept of baseline (or reference case) GHG emissions. (2) methods for
forecasting reference case emissions and policy-induced emission reductions, and (3) the potential for "leakage" of
GHG emissions (i.e.. GHG emissions increases in one sector that result from GHG reductions in another sector).
A state may project the level of GHG emission reductions it w ill achieve through state-level policies in
one of two ways: (1) relative to a static baseline (i.e.. the level of GHG emissions estimated in the state's GHG
inventory) or (2) relative to a forecasted level of emissions.
Projecting emission reductions relative to a static baseline has the advantage of simplicity once the state
GHG inventory is developed, no further w ork is needed to estimate the static baseline. However, to the extent
GHG emissions are likely to grow in the absence of state policy, use of a static baseline will understate future
emission levels. Moreover, if static data are used to estimate GHG reductions due to state policy, the GHG
reductions may be understated as w ell. For example, if a state plans to implement a carpooling program
1 See Chapter 1 for more information on the State Workbook.
1 The results of equations used in the State Workbook to calculate emissions from each greenhouse gas source arc
determined by the values assigned to a set of independent variables. These variables reflect the measurable quantities or
intensities of various factors that produce greenhouse gases, such as fossil fuel consumption, area of city landfills, or the
amount of fertilizer used in a year.
-------
Exhibit 3-1
Independent Variables Used in Emission Calculations in the State Workbook:
Data Required to Estimate Current Greenhouse Gas Emissions
Source Category*
Required Data
Greenhouse Gases from the
Residential Sector
State Residential Energy Consumption for the following fuel types:
Gasoline LPG Distillate Fuel Oils Naphtha
Kerosene Other Solid Fuels Petroleum Coke Asphalt & Road Oils
Distillate Fuel Other Liquid Fuels Natural Gas
Residual Oil Coal (by type)
Greenhouse Gases from the
Commercial Sector
State Commercial Energy Consumption for the following fuel types:
Gasoline LPG Distillate Fuel Oils Naphtha
Kerosene Other Solid Fuels Petroleum Coke Asphalt & Road Oils
Distillate Fuel Other Liquid Fuels Natural Gas
Residual Oil Coal (by type)
Greenhouse Gases from the
Industrial Sector
State Industrial Energy Consumption for the following fuel types (list may not be inclusive):
Gasoline Other Liquid Fuels Other Solid Fuels
Distillate Fuel Bituminous Coal Natural Gas
Residual Oil Sub-Bituminous Coal
LPG Lignite
Greenhouse Gases from the
Electric Utility Sector
State Energy Consumption from the Electric Utility Sector for the following fuel types:
Gasoline Other Liquid Fuels Other Solid Fuels
Distillate Fuel Bituminous Coal Natural Gas
Residual Oil Sub-Bituminous Coal Anthracite
LPG Lignite
Greenhouse Gases from the
Transportation Sector
State Transportation Energy Consumption for the following fuel types:
Gasoline (by type) LPG Other Solid Fuels Jet Fuel (by type)
Distillate Fuel Other Liquid Fuels Natural Gas
Residual Oil Bituminous Coal
Greenhouse Gases from
Production Processes (e.g.. CO2
from Cement Production)
Annual Cement Production Annual Soda Ash Production Annual Lime Use
Annual Adipic Acid Production Annual Soda Ash Consumption Annual Aluminum Production
Annual Nitric Acid Production Annual Lime Production Annual HCFC-22 Production
Annual CO7 Manufacture
Methane from Oil & Natural Gas
Systems
Amount of Oil Produced Amount of Oil Transported Amount of Gas Produced
Amount of Oil Refined Amount of Oil Stored Amount of Gas Processed
Amount of Gas Distributed
Methane from Coal Mining
Annual Coal Production from Surface Mines
Annual Coal Production from Underground Mines
Amount of CH4 Recovered
3-2
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Exhibit 3-1 (Continued)
Independent Variables Used in Emission Calculations in the State Workbook:
Data Required to Estimate Current Greenhouse Gas Emissions
Source Category*
Required Data
Methane from Landfills
Amount of Waste in Place
Fraction of Waste in Place at Small vs. Large Landfills
Average Annual Rainfall
Amount of Landfill Gas that is Flared
Amount of Landfill Gas that is Recovered as an Energy Source
Methane from Domesticated
Animals
Populations of:
Dairy Cattle
Beef Cattle
Range Cattle
Horses
Mules
Asses
Sheep
Goat
Swine
Buffalo
Methane from Animal Manure
Populations of:
Fccdlot Beef Cattle
Dairy Cattle
Other
Steers
Heifers
Sheep
Heifers
Cows
Goats
Cows/Other
Swine
Donkeys
Other Beef Cattle
Market
Horses/Mules
Calves
Breeding
Heifers
Poultry
Steers
Layers
Turkeys
Cows
Broilers
Bulls
Ducks
Percentage of Animal Manure Handled in Each Manure Management System
Methane from Rice Fields
Total Area Harvested (Not including Upland or Dccpwatcr Rice Fields)
Length of Growing Season
Nitrous Oxide from Fertilizer Use
Annual Fertilizer Consumption
Forest Sector Carbon
Sequestration
Forested Area
Forest Ages
Species Composition
Greenhouse Gases from Burning
of Agricultural Wastes
Annual Production of Crops with Residues that arc Commonly Burned, e.g.:
Wheat Barley Corn Oats
Rye Rice Millet Sorghum
Pea Beans Soybeans Potatoes
FccdbcctSugarbcct Artichoke Peanut
Lentils
Sugarcane
Methane Emissions from
Wastewater T rcatmcnt
State Population Data
Pounds of Biochemical Oxygen Demand (BOD) Per Capita
Percentage Wastewater Treated Anacrobically
Amount of CH4 Recovered
* Note: The source categories presented in this table do not make an exact match with the categories addressed in Chapter 5. The source categories in
Chapter 5 arc based 011 the categories listed above, but have been modified somewhat to facilitate presentation of available policy options.
-------
Exhibit 3-1 (Continued)
Independent Variables Used in Emission Calculations in the State Workbook:
Data Required to Estimate Current Greenhouse Gas Emissions
3-4
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that w ill reach a certain percentage of all commuters, and assumes the same number of commuters in 2010
as in 1990. the GHG reductions due to the program are likely to be underestimated.
An alternative approach is to project emission reductions relative to a forecasted reference case
which accounts for projected changes in the state's population, economic activity, and other factors. This
approach has the advantage of greater realism and thus greater accuracy. Another advantage is that if a
state plans to achieve GHG emission levels equal to some percentage of baseline (e.g.. 1990) levels, use of
a forecasted reference case would allow the state to project whether its policies w ill achieve the target level
of emissions. For example, suppose a state had 1990 GHG emissions of 20 million metric tons of carbon
equivalent (MTCE). and forecasted a 2010 reference case of 23 million MTCE in the absence of state
policy to reduce GHGs. If the state w anted to reach a goal of achieving 2010 GHG emissions equal to 1990
levels, the state would need to reduce GHGs by 3 million MTCE per year by 2010. relative to the
forecasted reference case.
A hybrid approach w ould be to forecast future emissions only for those sectors in w hich the state
plans to implement GHG reduction policies. This hybrid approach would enable the state to project with
relative accuracy the GHG reductions its policies would achieve, in relation to future emission levels in the
absence of policy. However, forecasting emissions for only some sectors w ould not enable the state to
estimate total statewide GHG emissions in the absence of policy: thus the state w ould not know the total
GHG reductions needed to achieve some target level of GHG emissions.
One relatively simple method for forecasting future emissions in the absence of GHG reduction
policies is to extrapolate the State Workbook inventory methodologies using forecasted data (e.g.. forecasts
of population and economic activity). Under this approach, a state w ould predict changes in the
independent variables (and perhaps some changes in the coefficients in the emission equations), and then
recalculate emissions from each affected source category using the State Workbook methodologies. Exhibit
3-2 illustrates how changes in the independent variables can be used to forecast (1) emissions in the
absence of policy, and (2) emission reductions relative to a forecasted reference case.
Alternatively, an analyst might need to change the coefficients in the emissions equations, or the
structure of the equations themselves, in cases where policy alternatives are expected to alter the level of
greenhouse gases emitted per unit of activity. For example, technology improvements may increase the
amount of electricity produced per unit of fuel consumed, or may reduce the amount of methane that
escapes into the atmosphere per ton of municipal solid w aste placed in landfills. Exhibit 3-3 illustrates how
changes in coefficients can alter emission forecasts.
Note that uncertainty is a significant concern when forecasting greenhouse gas emissions. To
prepare reliable forecasts, states should extend emission forecasts only into the near future. Given the
degree of uncertainty already associated with existing methodologies and available data, carrying
projections beyond this point can undermine the usefulness of forecasts. The maximum time frame for
projecting emissions in most situations is likely to be 15 to 20 years the typical time frame for energy use
projections. Beyond that, uncertainties in technological changes alone w ill likely call into question the
accuracv of forecasts.
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Exhibit 3-2: Forecasting Sectoral GHG Emissions
Before and After a GHG Reduction Policy
Suppose a state had 1990 gasoline consumption of 200 trillion Btu (such data arc reported in U.S.
DOE. 1993). Using the Stole Workbook methodology. 1990 CO2 emissions from gasoline consumption
would be calculated as follows:
CO2 Emissions =Consumption x Carbon Content Coefficient x Percent Oxidized x 44/12
CO2 Emissions =200.000.000 million Btu x 41.8 lbs C/million Btu x 99% x 44/12
CO2 Emissions = 15.2 million tons CO2
Suppose the state forecasted that, in the absence of policy. CO2 emissions from gasoline
consumption would be 10 percent higher in 2005 than in 1990 (based 011 a projected increase in the driving
age population, an increase in the vehicle miles traveled per driver, and some assumption about average
mileage per gallon for all cars in the state). Then, forecasted 2005 CO2 emissions from gasoline
consumption in the absence of policy would be 10 percent higher than in 1990. or 16.7 million tons of CO2.
Finally, suppose that the state planned a carpooling program that was expected to reduce annual
vehicle miles traveled by two percent by 2005. The CO2 reductions and net CO2 emissions would be
calculated as follows:
CO2 Reductions in 2005 = 2% x 16.7 million tons CO2 = 330.000 tons CO2.
Net CO2 Emissions in 2005 = 16.7 million tons CO2 - 330.000 tons CO2 = 16.4 million tons CO2.
Forecasting can be complex because there are many factors that can affect future emissions,
including population grow th, economic grow th, technological improvements, and degree of urbanization.
Possible means of accounting for these external factors include the following: 1
Expert judgment relies on the insights of experts to forecast future values of key variables.
This approach can be effective in considering difficult-to-quantify factors, as well as important
interrelationships that may be accounted for by quantitative forecasting methods.
Content analysis is a technique sometimes used to forecast broad social and technology trends.
This technique involves reviewing and analyzing the content of the information carried through
various media with respect to emerging social trends.
Trending methods are simple linear or logarithmic projections of historical trends, and are
rarely used as stand-alone forecasting methods. A more sophisticated variant of trending uses
statistical time-series techniques to extract more precise information about trends from
historical data. Trend and time-series analyses may be most applicable to short-term forecasts
w here the influence of structural factors is not expected to be great.
1 The following bullets were taken from "Methods for Assessment of Mitigation Options" written for the IPCC
Second Assessment Report by IPCC Working Group II.
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Exhibit 3-3: Example of a Policy that Affects Methodological Assumptions
Suppose a state had 700.000 head of beef cattle in 1990. (Such data arc reported in USD A. 1990).
Using the State Workbook methodology, methane emissions from this source would be calculated as
follows:
CH4 Emissions = Animal Population x Emission Factor
CH4 Emissions =700.000 head x 152 lbs. CHyhcad/ycar
CH4 Emissions =53.2 thousand tons CH4
One strategy for reducing methane emissions from domesticated animals is to change their diet.
For example, certain feed additives can increase feed efficiency by approximately 10 percent. This change
will have a direct effect 011 the emissions factor above, regardless of any changes in animal population. The
magnitude of this change can be calculated using equations provided in the discussion section of the State
Workbook. Suppose a state implements a policy to increase feed efficiency, and this policy decreases the
emissions factor by three percent, to 147 lbs. CH4/hcad/ycar. The methane emissions may be forecasted by
using the new emissions factor in the State Workbook methodology (the following example assumes 110
change in the number of beef cattle):
CH4 Emissions = Animal Population x Emission Factor
CH4 Emissions =700.000 head x 147 lbs. CH4/hcad/ycar
CH4 Emissions =51.6 thousand tons CH4
Policy Impact = 53.2 thousand tons CH4- 51.6 thousand tons CH4
= 1.200 tons CH4
Economic forecasting methods use multiple regression techniques to relate behavior to a
series of explanatory independent variables. The specific quantitative form of an economic
model is estimated using historical, and in some cases, cross-sectoral data pertaining to the
model's independent variables. Forecasts of economic activity, the demand for transportation
or forestry products, and emissions can be understood in terms of underlying economic
behavior, and therefore, have wide application in the assessment of alternative mitigation
strategies.
End-use forecasting models primarily provide a finer level of detail to forecast emissions from
the energy sector by representing energy demand within sectors. These methods forecast
demand as a function of the efficiency characteristics of specific types of end-use equipment,
the utilization of the equipment, and the number of pieces of the equipment in use. Total
demand for a given fuel is estimated by aggregating over end-uses, at which point carbon
content coefficients and emission factors for other gases can be applied to determine the future
emissions potential of various options.
Finally, w hen accounting for emission reductions, forecasts should also take into account the
possibility of "leakage" ofGHG emissions -- that is. the possibility that as a state policy reduces emissions
in one sector, emissions may. as a direct result, increase in another sector. For example, if a state program
promotes use of biomass ethanol as a fuel, with no controls on the energy required to produce the ethanol.
the GHG emission reductions from displacing gasoline with ethanol might be offset by increased GHG
emissions from fossil fuels used in grow ing the biomass and producing the ethanol. Many other examples
3-7
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of potential "leakage" could be identified; the challenge for state GHG planners is to identify areas w here
potential leakage may be significant, and to adjust their estimates of GHG reductions accordingly.
3-8
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CHAPTER 4
ESTABLISHING EMISSIONS REDUCTION PROGRAM GOALS
AND EVALUATIVE CRITERIA
An appropriate mitigation strategy must combine
individual projects and programs into a coordinated
approach that meets both mitigation objectives and the
broader set of state economic, industrial, agricultural,
environmental, and other goals. The first step. thus, in a
mitigation assessment is to define the set of objectives a
mitigation program and/or strategy should meet and to
develop criteria for evaluating the success or failure of
alternative mitigation strategies. This chapter examines the
process of setting broad program goals and specific policy
evaluation criteria and highlights the complexities that
surround these issues (see Exhibit 4-1 for definitions of the
terms goals and criteria). States can choose to set
priorities and develop strategies in different ways. For
example, goals could be oriented around specific time
frames rather than infinite time horizons, focused on
quantitative targets rather than qualitative objectives, or
based on technical or scientific recommendations rather
than on perceived emission reduction capabilities. Exhibit
4-2 presents the key questions states max wish to pose
when defining and prioritizing emission mitigation goals.
After defining program goals and establishing evaluation
criteria, analysts can then assess the feasibility and
viability of implementing alternative greenhouse gas
mitigation options, such as those presented in Chapters 5
and 6. in light of other state policy objectives. The
material presented in this chapter also provides the basis
for the discussion in Chapter 8 on analy zing state
mitigation strategies.
4.1 EXAMPLES OF GREENHOUSE GAS
REDUCTION GOALS
Exhibit 4-2: Key Questions Related to Goal
Setting
Should an emission reduction goal be
relative measured against a prior, current,
or future reference year?
How do mitigation objectives relate to
existing energy, agricultural, and
development policies?
What type of processes can be used to reach
a decision on specific mitigation objectives?
How can objectives be prioritized?
Exhibit 4-1: Goals and Criteria
Goals: Program goals explicitly state the
broad aims that every climate change action
should support. By doing so. they provide a
consistent focal point for use across diverse
situations and between state agencies and
across sectors.
Criteria: Criteria arc the standards that
policy makers can use to assess alternative
policy options. Criteria arc fundamentally
rooted in two types of state policy goals: (1)
those that support the climate change
mitigation program; and (2) those that ensure
that climate change mitigation policies do not
impede or negate other state policy priorities
or objectives. In contrast to program goals,
criteria arc more specifically defined and arc
frequently more directly measurable.
For guidance in setting explicit goals, states can draw on the experience of and research conducted
by multilateral organizations, such as the IPCC. and other country, state, and local governments. For
example, emissions reduction targets established by the Framework Convention on Climate Change (as
discussed in Chapter 2) encourage nations to reduce missions of greenhouse gases to 1990 levels by the
year 2000.1 Several individual countries and some U.S. states and cities have also established their own
near- and long-term greenhouse gas reduction goals. Exhibit 4-3 provides examples of these explicit local,
state, national, and international program objectives.
1 This target is for Annex 1 countries only (i.e.. developed countries).
4-1
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Exhibit 4-3: Examples of Climate Change Program Goals
Local Goals
Portland. Oregon, set a target to reduce carbon dioxide emissions from that metropolitan area to a
level 20 percent below 1988 levels by the year 2010. This means a reduction of 42 percent from the 2010
level of emissions currently projected.
State Goals
The Wisconsin State Action Plan established a goal to stabilize GHG emissions to 1990 levels by
2010. in large part by cutting CO; emissions by 37 million short tons. The Action Plan identifies cost-
saving options for reducing CO; emissions by 26.2 million short tons, and options for further CO;
reductions of 36.9 million short tons for under $15 per ton.
Washington set a goal of emissions stabilization by 2010. to be achieved by cutting 18 million short
tons of CO;. Toward this end. the Washington State Action Plan outlines options that could reduce CO;
emissions by 19 million short tons for less than $5 per ton. or by 44.3 million short tons for about $100 per
ton.
The Illinois State Action Plan would stabilize GHG emissions by 2000. through a cut of 10 million
short tons of CO;. Thirty-seven percent of this goal (3.74 million short tons) can be achieved at no cost.
The Action Plan describes options which could reduce CO; emissions by 28.9 million short tons for about
$60 per ton. or by 92 million short tons for about $110 per ton.
Oregon's Action Plan predicts that the state's strategy will reduce GHG emissions by at least 2
million tons (presumably. 2 million short tons of carbon dioxide equivalent) in 2015. compared to a
"business as usual" scenario.
National Goals
In the October. 1993. Climate Change Action Plan, the United States set a target of returning U.S.
greenhouse gas emissions to 1990 levels by the year 2000 with cost-cffcctivc domestic actions. This includes
measures in all sectors of the economy targeted at all significant greenhouse gases.
Sweden passed legislation in 1986 to stabilize its carbon dioxide emissions at 1988 levels.
The German cabinet has established a goal of twenty-five percent carbon dioxide emission reductions
from 1986 levels by 2005.
International Goals
The objective of the U.N. Framework Convention on Climate Change (UNFCCC). established at the
1992 U.N. Conference on Environment and Development (UNCED) and ratified in March of 1994. is to
stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous
anthropogenic interference with the climate system and to do so within a time-frame sufficient to allow
ecosystems to adapt naturally to climate change. Signatories to the UNFCCC arc currently negotiating
binding national climate change goals which may be adopted as early as December 1997 in Kyoto. Japan.
The twelve nation European Union (EU) has agreed, in principle, to stabilize carbon dioxide
emissions at 1990 levels. The EU has proposed that developed countries reduce GHG emissions to 7.5
percent below 1990 levels by 2005. and 15 percent below 1990 levels by 2010.
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In addition, some national and state level
governments have chosen to concentrate on those
policy options that promise to reduce greenhouse gas
emissions while providing additional non-greenhouse
gas-related benefits. For example, measures to
increase energy-efficiency in appliances and other
technologies not only reduce greenhouse gas
emissions, but also increase energy independence and
economic competitiveness, and lower emissions of
criteria air pollutants. Policy options of this type are
referred to as "no-regrets" measures, i.e.. policies that
provide benefits other than those directly related to
climate change, such as increased energy security or
the creation of jobs. Options that can provide
significant additional benefits often encounter less
resistance politically and gamer more public support
than mitigation policies that focus solely on the
reduction of greenhouse gas emissions.
4.2 COMPLEXITIES IN EMISSIONS
REDUCTION GOAL SETTING
Exhibit 4-4: Goal Setting in Oregon
Oregon has been a pioneer in responding to
global climate change. The Oregon legislature
passed a law requiring the Oregon Department of
Energy (ODOE) and other agencies to develop a
strategy to reduce greenhouse gas emissions by
20 percent from 1988 levels by the year 2005.
ODOE fulfilled this mandate by incorporating a
greenhouse gas reduction strategy into its 1991
biennial energy plan, although the strategy did
not become a formal state goal. Still, the
presence of this strategy in the energy plan helps
the state project how it will meet its future energy
needs and offers specific policies and actions. In
this context, the energy plan calls explicitly for
the development of a state action plan to deal
with climate change, with a target of stabilizing
emissions at 1990 levels. This target was set as a
state benchmark through recommendation of a
"Progress Board" headed by the Governor.
Furthermore, within the context of the energy
plan. Oregon's qualitative goal is to achieve
reliable, least-cost, and environmentally safe
sources of energy. Oregon is able to monitor and
update its progress towards achieving these
quantitative and qualitative goals through the
preparation of energy plans every two years.
This section addresses the factors that make
goal setting an analytically difficult task, such as
contending with technological, economic, and political
constraints. As a result of these factors, goal setting
often becomes an iterative process of gathering
technical and economic data, analyzing these data and
potential response options in the context of resource constraints, projecting future emissions, and then
repeating this process until a realistic program can be developed that meets state objectives. Some state
governments have conducted this type of iterative analysis before setting any program goals, in order to
determine the most realistic approach. Other analysts, however, have based their goals from the outset on
pursuing actions required to meet specific mitigation targets, and then mold their programs to meet
competing demands at a later stage. Section 4.2.1 presents four basic variables that, among others, policy-
makers may wish to address during the goal setting process. Section 4.2.2 elaborates on the complications
that can arise during this process.
4.2.1
Four Variable Aspects of Goal Setting Processes
Policy-makers may find it valuable to consider four primary distinctions in goal setting when
formulating the core focal points for their climate change programs. These are discussed below.
Goals oriented around specific time frames versus permanent or perpetual goals
While each state should optimally establish a definitive primary objective for programs, such as no
net increase in greenhouse gas emissions or stabilization to some baseline level, more specific goals and
program milestones set within distinct time frames can provide critical guidance for policy development and
implementation. In the context of a long-term baseline goal, for example, specific near-term reduction
targets may provide important motivation to agencies and private sector actors to implement options.
4-3
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Similarly, certain policy actions arc appropriate in the near-term and others in the mid- or long-term.
Careful goal structuring that accounts for these time frame differences can significantly strengthen program
development. Policies adopted in the near-term max substantially low er the costs and increase the
acceptance of future actions by. for example, focusing on the development of technologies that minimize
emissions or by demonstrating early the cost-effectiveness of an option.
Quantitative goals versus qualitative goals
Programs max pursue specific numerical targets for emission controls, or they max focus on qualitative
issues, such as promoting the use of the most energy-efficient technologies and processes in all economic
sectors. Setting quantitative emissions reduction goals, such as Oregon or Missouri's twenty percent target,
can be extremely effective in focusing state efforts across sectors. Quantitative goals max also allow
analysts to assess more easily the feasibility for alternative policy options to meet specific targets and to
monitor with greater accuracy the progress of these options. The Oregon target, for example, seems to
provide continuing focus as policies are developed and revised oxer time. Similarly, the California state
directive to evaluate the pros and cons of a CO2 reduction target, although it has not actually produced a
formal quantitative target, has prompted important analysis of how existing and potential new state policies
max affect projected greenhouse gas emissions.
Goals based on prescriptive emissions targets versus goals based on perceived emission reduction
capabilities
Policy-makers max decide to set goals based on technical or scientific prescription of emission
levels necessary for climate change mitigation (e.g.. stabilization at 1990 levels), on actual emissions or
technological projections (i.e.. implement measures that will achieve the maximum amount of emissions
reductions possible given the current and projected state of technology), on state administrative and
analytical capacity for implementing and supporting certain types of programs (e.g.. base emissions
reductions targets on the number of climate change projects/programs state agencies can realistically
manage over the period being considered), or on a range of other emissions reduction criteria. This choice
w ill often determine how aggressive or conservative program development and policy selection are. and it
will also affect the types of demands programs place on state resources.
Broad versus narrow substantive goals
Goals can cover all greenhouse gas emissions or they can emphasize specific greenhouse gases or
particular economic sectors. This again w ill hinge on each state's motivations and institutional structures
and w ill probably vary significantly with greenhouse gas emissions characteristics in different geographic
regions. Manx domestic and international efforts focus explicitly on carbon dioxide or on fossil fuel
consumption in transportation and electricity generation, for example, since these source categories account
for the majority of anthropogenic greenhouse gas emissions. Similarly. some areas choose to focus on
stationary source emissions rather than mobile source emissions, since stationary sources are often easier to
monitor.
4.2.2 Complications that Affect Goal Setting
Distinct economic, environmental, and political circumstances in each state w ill probably determine
the relative importance of the above four issues for the policy formulation process. This section elaborates
on specific issues that complicate the analy sis of the four aspects of goal setting discussed above including:
the scientific uncertainty associated with greenhouse gas emissions estimation and climate change-related
impacts; the actual impact of mitigation measures on emissions and on climate change; and questions of
4-4
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measurability. Chapter 7 examines how states
might structure programs to take full account of
these issues in all aspects of program design.
Exhibits 4-4. 4-5. 4-6. and 4-7 present
examples of how states have dealt w ith these
complications in setting emissions reductions
goals and targets.
Scientific antI Technical Uncertainties
Achieving permanent stabilization
could require carbon dioxide emission
reductions of fifty to eighty percent from
currently projected levels, as well as significant
reductions in the other greenhouse gases. This
stabilization goal would be extremely difficult
to achieve at the present time, and few analysts
seem sure about w hat levels of emissions
reductions are actually feasible. Scientific
uncertainties underlie many aspects of our
understanding of climate change processes, such
as the uptake of CO2 by forests and the oceans.
Further, uncertainties exist in estimating
emissions from various source categories and in
assessing the potential greenhouse gas and
associated impacts of specific control
technologies. Given these uncertainties, the idea
of an optimal emission reduction target is
subject to considerable controversy and often
becomes defined by other criteria.
I ncertain Impacts and Interactions of Policy
. Ipproaches
Sonic policies may be effective in the short-
term. while others will take longer to produce
desired results. Also, some options have benefits
other than those related to greenhouse gases, such as
increased energy security or decreased soil erosion.
At the same time, however, these options may prove
to be politically unpopular and thus perhaps not
feasible, as a result of potentially significant sectoral
economic impacts or required changes in behavior.
As one illustration of these issues, policy measures
such as taxes and other economic incentives can be
the most effective in modifying consumer behavior,
but they also frequently generate the highest levels
of political resistance.
Exhibit 4-5: Goal Setting in Missouri
Missouri's 85th General Assembly adopted a
resolution in 1989 that created the Missouri
Commission 011 Global Climate Change and Ozone
Depletion. The commission consisted of 14
members with various backgrounds and was charged
with assessing Missouri's contribution to these global
environmental and social problems, and to offer
possible policy alternatives. The Commission's
report was presented to the Missouri General
Assembly, in 1990. This report was well received
and has served as a catalyst for discussion
throughout the state. As a result of the
Commission's recommendation. Missouri's
Environmental Improvement and Energy Resources
Authority and the Division of Energy of the
Department of Natural Resources have initiated a
comprehensive state energy study. Furthermore, the
Commission's charge was extended in order to study
and fully develop options for preparation and
mitigation of effects associated with global climate
change and ozone depletion. In addition. Missouri
established a non-binding goal of reducing
greenhouse gas emissions by twenty percent. This
goal has apparently provided a valuable focal point
and source of motivation for the state legislature,
state agencies and other organizations.
Exhibit 4-6: Goal Setting in Vermont
In October 1989. Vermont's governor signed
an executive order calling for a comprehensive review
of all forms of energy used in the state and for the
development of a plan to modify energy usage in order
to achieve specific goals relating to environment
quality, affordability. and rcncwability. Goals include
a reduction in pcr-capita non-renewable energy use of
twenty percent and a reduction in emissions of
greenhouse gases and acid rain precursors by fifteen
percent, both by the year 2000. To meet this charge,
the Vermont Comprehensive Energy Plan was
developed cooperatively by the Vermont Department of
Public Sen ice. the Agency of Natural Resources, the
Agency of Transportation, and many of Vermont's
leading authorities 011 energy usage. The Plan showed
that through actions to modify and adapt the state's
energy usage to meet the goals laid out in the executive
order. Vermont can reduce greenhouse gases by twelve
percent, acid rain precursors by eighteen percent, and
the pcr-capita use of non-renewable energy by twenty-
seven percent.
4-5
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Similarly, broader and more qualitative goals max be effective in addressing these issues, but
complications surround them as well. For example. Massachusetts' explicit goal of providing electricity at
the low est possible financial, social, and environmental cost accounts for the social effects of carbon
dioxide from energy production in addition to addressing the environmental impacts of energy production.
The energy goal thus incorporates a variety of social objectives and max serve as a model for addressing
the impacts of greenhouse gas emissions from many sources, including utilities, industries, commercial and
residential buildings, and transportation. This approach max be especially valuable in situations where
different sectors could be unevenly affected by emission reduction policies if clear groundw ork is not laid in
advance. However, this broad, qualitative goal max complicate the projections of emission reductions
resulting from the policies, and create political controversy over methods and procedures adopted for
quantifying benefits.
Measuring Results
The direct effects of important climate change-related policy actions are often extremely difficult to
measure or forecast. For example, quantitative goals, while often politically and analytically difficult to set
and agree upon, are frequently much easier to assess and communicate than qualitative goals. On the other
hand, many qualitative and inherently difficult-to-measure actions, like broad public education on climate
change and energy-efficiency issues, max offer some very good opportunities for achieving long-term
climate stabilization.
Similarly, the emission impacts of short-
term actions are frequently easier to measure than
those of longer-term policies, largely because the
longer-term actions (especially those w ith twenty
year or longer time horizons) are subject to
complications and interactions from mam-
unforeseeable economic, physical, and
environmental developments. To address this
issue, states can set detailed near-term targets
within the context of broader mid- or long-term
qualitative or quantitative goals. This structure,
elaborated in Chapter 7. provides a w ax of
focusing measurable or monitorable policy
formulation in the short-term and fostering
momentum for future program development. It
also provides a mechanism to ensure that
emphasis on the most promising short term
policies does not override or exclude
consideration of critically important long-term
actions.
4.3 ESTABLISHING CRITERIA FOR
EVALUATING POLICIES
Clear and consistent policy evaluation
criteria can provide a strong base for ensuring
that all policies support fundamental program
Exhibit 4-7: Goal Setting in Iowa
The Iowa Department of Natural Resources
delivered the state's first Energy Plan to the
General Assembly in 1990. The plan "pointed out
the way to a future of wise energy use. economic
stability, and environmental quality." With the
plan, updated in 1992. Iowa aims to achieve two
long term qualitative goals: 1) to meet all new
energy demand with efficiency rather than new
supplies of fossil fuels, and 2) to effectively
double, then double again the share of renewable,
"homegrown" resources in the state's energy mix.
The plan also sets the objective of continuing to
explore how to meet these goals. Towards this
end. the state has taken and continues to take steps
to create innovative utility energy efficiency
efforts, to encourage efficient homes through
building ratings, to stimulate alternative energy
industries, and to promote research and
development through university centers.
The DNR is currently conducting a study that
looks at the direct, indirect, and induced effects of
increased investment in energy efficiency and
rcncwablcs. The study is focusscd more on the
economic rather than environmental analy sis of
options, since utilities and consumers typically
focus on the cost-cffcctivcncss of options rather
than the direct environmental benefits.
4-6
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goals. The criteria should not only recognize that some goals max be competing, but should also account
for substantive, administrative, and political factors. As opposed to creating strict guidelines to which all
policies must adhere, carefully developed criteria establish a framew ork with w hich to compare the
implications of different policy options. Compiling these criteria carefully at the outset will help ensure
that important issues are not overlooked at any time during program and policy development.
Each of the criteria delineated below represents factors that are potentially important to state
policy-makers and that, if adopted by an individual state, could be applied to every policy consideration.
These should not necessarily serve as constraints that must be met. but rather as guidelines to ensure
comprehensive and consistent consideration of all relevant factors during policy selection. At the same
time, to evaluate and compare policies effectively, states w ill probably prioritize among the criteria they
adopt. The criteria presented here are drawn from various state experiences and max not be appropriate for
all new programs. Each state should develop a set of clear and distinct criteria that reflects their individual
priorities and circumstances.
As with the development of quantitative or qualitative program goals, application of specific policy
evaluation criteria max vary across time frames. In the immediate-term, for example, existing institutional
structures and politics max dominate policy selection. For the mid- or long term, however, policy
flexibility and overall economic efficiency max be more important for some states. Some criteria w ill
certainly apply in all time periods. Urban tree planting programs, for example, illustrate these points.
While the carbon sequestration value of urban tree planting max be small, this project focuses public
attention on the global climate change issue in the near-term, potentially builds political support, and helps
alleviate the "urban heat island" phenomenon in the long term. Similarly, some far-reaching and potentially
expensive policies max not seem justified if their benefits within the near-, mid-, and long-terms are not all
acknowledged. This is especially relevant w ith regards to climate change, where the impacts and direct
mitigation benefits of some actions w ill probably not be felt for decades.
Effectiveness in Reducing Greenhouse Gets Emissions. This is a key criterion for climate change
mitigation policies. Every policy should help reduce current or future greenhouse gas emissions.
However, several issues could confound a policy-makers' perceptions of the effectiveness of alternative
policy options. These issues include the timing of a policy's effects, the certainty of results from
different types of government actions, the degree of control that the public sector seeks to retain, the
continuing effectiveness of a policy in the face of economic fluctuations and growth, the responsiveness
to technological change, and the degree and impact of interaction among various concurrent policies.
Private Sector ('osts antI Savings. Most policies w ill alter the costs recognized by the private sector,
including industry and consumers. Policies regulating technology use. industry reporting, or emissions
taxes, for example, will impose costs on the private sector and ultimately on the consumers of affected
products. At the same time, these or other measures max promote cost savings through energy-
efficiency and similar mechanisms. The timing, distribution between affected actors, and magnitudes
of costs max all be important to consider.
Public Sector Costs. New policies frequently require implementation, administration, and enforcement
support from state agencies. This support costs the agencies, and thus the state government, additional
resources in terms of direct financial expenditures, staffing, equipment, and building space. These
costs are especially relevant in terms of administering and coordinating programs and maintaining
adequate records. For example, all policies w ill probably require some level of staffing for general
administration, and certain non-voluntary emission reduction goals and directives max require
additional administrative and field resources for ensuring compliance.
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Institutional Capacity. In addition to general public sector resource expenditures for program
administration, as noted above, certain types of policies may require distinct institutional capabilities,
like the ability to perform specific types of scientific or economic analysis. Similarly, policies may
require substantial levels of interagency or public- and private-sector cooperation. An important
criterion may be w hether states have the existing or foreseeable capacity to meet these types of policy
implementation requirements.
Enforceability. In addition to imposing direct enforcement costs, some policies may require new legal
pow ers for state agencies to administer, while some policies may simply be difficult to enforce. This is
especially relevant given complications in measuring some greenhouse gas emissions and in measuring
the effectiveness of certain policy options. Similarly. regulatory approaches that target large numbers
of decentralized emission sources, such as individual consumers w ho use polluting products or
services, may pose especially difficult enforcement problems. For these reasons, the general
enforceability of policy options may be an important criterion.
Economic Efficiency. Although many policies can reduce greenhouse gas emissions, policy -makers
may want to emphasize options that use resources most efficiently i.e.. achieve emissions reductions
using the least amount of private and public resources. Policies that focus first on sources that can
provide the lowest cost reductions usually promote these objectives. From a national perspective,
cooperation between states and regions may promote least-cost emission reductions.
Social Equity. Both costs and other impacts may be distributed unevenly across certain geographic
locations, income groups, or economic sectors. Policies that affect prices of basic consumer goods,
such as home heating costs, may have a disproportionate impact on low income individuals. Similarly.
some policies may adversely affect one economic sector more than others. For example, policies
targeted at nitrous oxide emissions may affect agriculture more than they will affect manufacturing.
Additionally. since the impacts and costs relating to climate change extend far into the future, policy -
makers may need to grapple with intertemporal inequity between generations.
Political Impact and feasibility. Public or political acceptability is an essential element of a
successful emission control program. Some recommended measures, such as taxes and other economic
incentives, for increasing economic efficiency or changing consumer and producer behavior, can
generate significant popular resistance. Near- term policies or actions that include public education or
that encourage public input and involvement in the climate change decision making process may help
build public support.
Legal Constraints. The introduction of some emission reduction policies and goals may be constrained
by existing legal barriers. For example, setting land aside for tree planting, requiring utilities to
undertake least-cost planning, or addressing environmental "externalities" may all require new or
revised law s. Some additional technical approaches for emissions reduction, such as methane recovery
from landfills and coal mines, have not been actively pursued before, in part because of legal
complications arising from public safety or other concerns.2 Frequently. these legal constraints can be
: As part of the CCAP. methane recovery from landfills and coal mining is being aggressively pursued. These
programs focus on recovering methane for use as an energy source. These programs, the l.and/ill Methane
Outreach Program and the Coal Bed Methane Outreach Program, arc federally-sponsored voluntary programs
committed to working with state regulators and industry representatives to maintain public safety, revise current
state and local regulations and industry standards, and promote a cost-cffcctivc alternative to flaring.
4-8
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overcome by modifying or broadening regulatory guidelines to permit new activities that still promote
initial regulatory objectives, such as public safety, without excluding certain approaches to reducing
greenhouse gas emissions. For example, changing landfill methane emission laws to permit recovery
and sale of methane, as being pursued in the CCAP. rather than requiring methane flaring as the only
safe control measure, illustrates this point.
Ancillary Benefits and Costs. Some climate change mitigation actions could affect other state
programs and priorities, either by design or unintentionally. Various potential emission reduction
policies produce ancillary benefits by enhancing environmental quality, promoting the sustainable use
of resources, enhancing social w elfare, enhancing food security, or generating revenue for the
government. For example, increasing the use of renew able fuels generated within a particular state
could reduce emissions of pollutants from fossil fuel combustion, increase energy independence, low er
the balance of trade, and contribute to a state's economic w ell being. Alternatively, ancillary costs can
occur w hen any policy indirectly w orks against the factors described above. For example, tree planting
programs that sequester carbon, halt erosion, and improve air and w ater quality may also require large
tracts of land to implement, potentially increasing land prices in agricultural areas and thereby
increasing prices for agricultural commodities.
In addition to the substantive criteria listed above, state policy-makers experienced with climate change
programs have recommended tw o additional process-oriented criteria that may help provide focus for
evaluating policy options.
Measurability. Policy-makers in the climate change field repeatedly emphasize the benefits of being
able to measure policy effects. These benefits include accurate emissions forecasting, a sound basis for
policy comparison now and for future program analysis and modification, and increased political
legitimization of certain options based on their measurable impacts. In addition to the complications
surrounding measurability described above, however, some powerful long term and qualitative policies
are inherently difficult to assess. For example, it is difficult to quantify- the impacts of public and
consumer education and of long range land use and urban planning changes. States should be careful
not to eliminate these policies from consideration because they are difficult to measure, but rather
should anticipate that such policies have different implications for analytic, administrative, and
political processes during program planning.
I'lexibility. Programs and policies w ill need to change and adapt over time as more is learned about
actual climate change impacts and about the effectiveness of various options for mitigating those
impacts. Similarly, flexible state programs may channel their internal and external resources to the
most effective applications. This underscores the importance of considering the appropriate time frame
in initial program development and is also one of the primary reasons w hy states may benefit from
initiating climate change mitigation programs on their ow n terms now rather than waiting for less
flexible national or international standards. This may have direct implications for policy choice.
4-9
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PART II
TECHNICAL APPROACHES AND POLICY OPTIONS
FOR REDUCING GREENHOUSE GAS EMISSIONS
The following two chapters provide an overview of specific steps states might take to reduce
greenhouse gas emissions.
Chapter 5. Technical Approaches and Source-Specific Policy Options, is broken into twelve
sections, each corresponding to a single emissions source. It provides background technical
information and offers policy options for addressing each source.
Chapter 6. Cross-Cutting Themes and Program Development, discusses policy options and issues
that are relevant to more than one emissions source and indicates areas with the greatest potential for
comprehensive emission reduction measures.
These chapters are designed to be used as reference materials, providing self-contained information
on each emissions source. Each section provides references to other sections where appropriate. These
chapters are not necessarily intended to be read through in a comprehensive way.
These chapters present policy suggestions that generally follow the structure described in Chapter
2 for addressing specific barriers to greenhouse gas emission reductions. In this context, the policy options
here fit generally into four categories: education and information provision, restructuring of institutional
and legal barriers, development of financial incentives, and direct regulation.
Greenhouse Gas Sources Not Elaborated in this Document
This document does not elaborate on several sources of greenhouse gases, such as methane
emissions from wastewater treatment and wetland drainage and carbon loss from soils. These sources are
difficult to address for various reasons. In some cases, the current scientific understanding of the emission
source is insufficient to warrant thorough discussion. Similarly, the scientific uncertainties surrounding the
emission reduction options for these sources are often too great to consider such measures as viable
alternatives. For other emission sources, there are no viable technical approaches to reduce emissions
effectively.
Rather than to address these tangential sources, this document emphasizes areas w here states can
focus their efforts and resources to mitigate significantly the threat of future climate change. States should,
however, still include these sources as part of a complete greenhouse gas emissions inventory since they are
a part of a state's overall contribution to global w anning. The most significant sources not elaborated in
detail in Chapters 5 and 6 are summarized below.
Wetlands Drainage: This document does not contain emission reduction measures for w etland
drainage because of the potentially offsetting effects of this activity on climate change. That is.
w etland drainage may decrease emissions of one greenhouse gas. methane, w hile increasing emissions
of another, carbon dioxide. Wetlands drainage results in a reduction of methane uptake and an increase
in carbon dioxide emissions as the soils change from an anaerobic to an aerobic state. However,
depending on the fate of the drained w etlands, these soils may also become a net sink of methane. It is
-------
difficult, therefore, to quantify the net effect of any reduction measures. Furthermore, w hile net
emissions of nitrous oxide and carbon monoxide max be affected by this activity, the direction and the
magnitude of the effects on these gases are highly uncertain. It max be more useful for states to
implement policy measures that have a clearer mitigative impact.
Conversion of Grasslands to Cultivated Lands: This document does not address conversion of natural
grasslands to managed grasslands and to cultivated lands because of the scientific uncertainties
associated with this emissions source. Conversion of natural grasslands to managed grasslands and to
cultivated lands max affect net carbon dioxide, methane, nitrous oxide, and carbon monoxide
emissions. Conversion of natural grasslands to cultivated lands max result in carbon dioxide emissions
due to a reduction in both biomass carbon and soil carbon. Such a land use change has been found (at
least in the semi-arid temperate zone) to also decrease carbon dioxide uptake by the soils. The effects
on nitrous oxide and carbon monoxide fluxes are highly uncertain.
Greenhouse Gases from Production Processes: Direct greenhouse gas emissions from the industrial
sector result from a variety of chemical, thermal, and mechanical processes that are employed to
extract, refine, and process raw materials and produce a variety of end-products. For example, aside
from the emissions resulting from on site pow er generation and heating, a significant amount of carbon
dioxide is released during cement production. Similarly, nylon production results in the release of
nitrous oxide. Section D in the Phase I document contains a list of additional industrial processes that
produce greenhouse gas emissions. Because there are few additional reduction measures currently
available, this document does not address other greenhouse gas emissions reductions from this source
category. The most effective emissions reduction method for the industrial sector usually is to improve
energy efficiency, which is discussed in Section 5.1.5.
Methane from Wastewater Treatment Facilities: Anaerobic treatment of wastes produces methane.
This is generally considered to be a bigger problem in many developing countries than in the United
States, since most U.S. facilities treat waste aerobicallx. In addition, many municipal waste water
treatment facilities in the U.S. already capture the methane they do produce and use it during on-site
energy production. While not addressed further in this chapter or the Phase I States Workbook, policy-
makers should consider this issue as it applies to their local circumstances.
Emissions of Ozone-Depleting Substances: This document does not address emissions of CFCs and
other Ozone-Depleting Substances (ODSs) that, in addition to depleting stratospheric ozone, also
function as greenhouse gases. This document also does not address the greenhouse effect of many of
non-ozone depleting chemical replacements for the ODSs. such as hx drofluorocarbons (HFCs). ODSs
and HFCs are emitted as a result of a variety of processes, including refrigeration, air conditioning,
solvent cleaning, foam production, and aluminum production. Emissions of ODSs. except for those
stemming from aluminum production, are already rapidly declining. They are being phased out under
the Clean Air Act Amendments of 1990 in coordination w ith U.S. obligations as a signatory to the
Montreal Protocol on Substances that Deplete the Ozone Layer. CFC replacements such as HFCs.
on the other hand, are controlled under EPA's Safe New Alternatives Program (SNAP) and are targeted
for certain actions under the ('limate ("hange Action Plan.
Additional Information on Policies and Actions to Reduce Greenhouse Gas Emissions
The CCAP presents a variety of programs and actions the federal government will be undertaking
to reduce greenhouse gas emissions. Exhibit II-1 lists the specific actions highlighted in the CCAP. Manx
of these max supplement the policy ideas elaborated in Chapters 5 and 6. A copy of the CCAP can be
obtained from EPA.
II -2
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Exhibit II-l: Actions Specified in the U.S. Climate Change Action Plan
Foundation Actions
Launch the Climate Challenge to encourage
electric utilities and other eligible firms to submit
voluntary greenhouse gas reduction portfolios
Launch Climate-Wise Companies to encourage
U.S. industry to take advantage of the
environmental and economic benefits associated
with enrrgy efficiency improvements and
greenhouse gas emission reductions
Commercial Enerav Efficiency Actions
Coordinate I)()!¦'. Rebuild. Imerica and KP. I
I'jiergy Star /biddings
Expand EPA's Green Lights Program
Establish State Revolving Fund for Public
Buildings
Expand Cost-Shared Demonstrations of Emerging
Technologies
Establish Energy Efficiency and Renewable
Energy Information and Training Programs
Residential Enerav Efficiency Actions
Form Golden Carrot Market-Pull Partnerships
Enhance Residential Appliance Standards
Promote Home Energy Rating Systems and
Energy-Efficient Mortgages
Expand ('<><>/ ('(immunities Program in Cities and
Federal Facilities
Upgrade Residential Building Standards
Create Residential Energy Efficiency Programs
and Housing Technology Centers
Industrial Encrav Efficiency Actions
Create a Motor Challenge Program
Establish Golden Carrot Programs for Industrial
Air Compressors. Pumps. Fans and Drives
Accelerate the Adoption of Energy-Efficient
Process Technologies Including the Creation of
Onc-Stop-Shops
Expand and Enhance Energy and Diagnostic
Centers
Accelerate Source Reduction. Pollution
Prevention, and Recycling
Improve Efficiency of Fertilizer Nitrogen Use
Reduce Pesticide Use
Transportation Actions
Reform the Federal Tax Subsidy for Employer-
Provided Parking
Adopt a Transportation System Efficiency
Strategy
Promote Greater Use of Telecommuting
Develop Fuel Economy Labels for Tires
Enerav Supply Actions
Increase Natural Gas Share of Energy Use
Through Federal Regulatory Reform
Promote Seasonal Gas Use for Control of Nitrogen
Oxides (Nox)
Commercialize High Efficiency Gas Technologies
Form Renewable Energy Market Mobilization
Collaborative and Technology Demonstrations
Promote Integrated Resource Planning
Retain and Improve Hydroelectric Generation at
Existing Dams
Accelerate the Development of Efficiency
Standards for Electric Transformers
Launch EPA I'jiergy Star Transformers
Reduce Electric Generation Losses Through
Transmission Pricing Reform
Methane Reduction and Recovery Actions
Expand Xatural (ias Star
Increase Stringency of Landfill Rules
Expand Landfill Outreach Program
Launch Coalbcd Methane Outreach Program
Expand RD&D for Methane Recover*' from Coal
Mining
Expand RD&D for Mctlianc Rccoveiy from
Landfills
Expand. IgStar Partnership Program with
Livestock Producers
Improve Ruminant Productivity and Product
Marketing
HFC. PFC and Nitrous Oxide Reduction Actions
Narrow Use of High GWP Chemicals Using the
Clean Air Act and Product Stewardship to Reduce
Emissions
Create Partnerships with Manufacturers of HCFC-
22 to Eliminate HFC-23 Emissions
Launch Partnership with Aluminum Producers to
Reduce Emissions From Manufacturing Processes
Improve Efficiency of Fertilizer Nitrogen Use
Forestry Actions
Reduce The Depletion of Nonindustrial Private
Forests
Accelerate Tree Planting in Nonindustrial Private
Forests
Accelerate Source Reduction. Pollution Prevention
and Recycling
Expand ('<><>/ (Communities Program in Cities and
Federal Facilities
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CHAPTER 5
TECHNICAL APPROACHES AND SOURCE-SPECIFIC POLICY
OPTIONS
This chapter describes opportunities for state policy-makers to control greenhouse gas emissions
from specific sources. To facilitate presentation, these opportunities have been divided into technical
approaches and policy options. "Technical approaches" refer to technical or engineering methods w hich,
when implemented, will reduce emissions from the source category. "Policy options" are instalments
through which one or more technical approaches are promoted. Exhibit 5-1 illustrates how these terms are
used in this chapter.
Exhibit 5-1
Examples of Terminology Used in Chapter 5
Source Category
Technical Approach
Policy Option
Greenhouse Gases from
the Transportation Sector
Reduce Vehicle Miles Traveled
Improve Mass Transit Systems
Provide Incentives to Employees to
Establish Van Pools
Develop Tele-Commuting
Programs
Methane from Landfills
Recover and Use Mctlianc Gas
Sponsor Technology Demonstration
Projects
Develop Tax Credits for Methane
Recovery Projects
Initiate Regulatory Requirements to
Capture Gas
Information regarding emissions, and approaches to reducing emissions, are not always easily
categorized for policy analysis. The emissions sources or grouping of gases to prepare emissions
inventories are often scientifically based and do not necessarily support effective policy analysis and
development. This part of the document is generally organized around the emissions source categories
from the Stales Workbook, but adjusts those categories where appropriate to facilitate policy development.
Exhibit 5-2 shows the relationship between the emissions sources defined in the Stales Workbook and
categories used to organize this chapter.
Within each source category information is presented in the follow ing format:
An introduction to the source category summarizes how specific greenhouse gases are generated
and emitted by the source and discusses federal, state, and local policy objectives that max be
relevant to emission reductions.
-------
Exhibit 5-2
Emissions Source Category As Defined
in Phase I Workbook
Source Categories Described in
Chapter 5 of This Document
Greenhouse Gases from the Residential Sector
>
Greenhouse Gases from the Commercial Sector
>
Greenhouse Gases from Energy Consumption:
Demand-side Measures
Greenhouse Gases from the Industrial Sector
>
Greenhouse Gases from the Electric Utility Sector
>
Greenhouse Gases from Electricity Generation:
Supply Side Measures
Greenhouse Gases from the Transportation Sector
>
Greenhouse Gases from the Transportation Sector
Greenhouse Gases from Production Processes
>
Not addressed in Chapter 5
Methane from Oil & Natural Gas Systems
>
Methane from Oil & Natural Gas Systems
Methane from Coal Mining
>
Methane from Coal Mining
Methane from Landfills
>
Methane from Landfills
Methane from Domesticated Animals
>
Methane from Domesticated Animals
Methane from Manure Management
>
Methane from Animal Manure
Methane from Flooded Rice Fields
>
Methane from Flooded Rice Fields
Nitrous Oxide from Fertilizer Use
>
Nitrous Oxide from Fertilizer Use
Greenhouse Gases Due to Changes in Forests and
Woody Biomass Stocks
>
Emissions Associated with Forested Lands
Greenhouse Gas Reductions/Sequestration from
Forestry Projects
>
Greenhouse Gases Due to Conversion of
Grasslands to Cultivated Lands
>
Not addressed in Chapter 5
Greenhouse Gas Emissions from the Abandonment
of Managed Lands
>
Not addressed in Chapter 5
Methane Emissions from Wastewater Treatment
>
Not addressed in Chapter 5
Greenhouse Gases from Burning of Agricultural
Wastes
>
Greenhouse Gases from Burning of Agricultural
Wastes
Each technical approach to emissions reduction is presented, including a general description of the
approach along with associated administrative and implementation considerations, such as
emission reductions, cost, time frame, key draw backs or limitations, possible ancillary effects, and
related examples.
Policy options for each technical approach suggest ways state governments might be able to
promote and implement that approach, drawing from a wide variety of perspectives and examples.
As the introduction to Part II of this document explains, "cross-cutting" issues or policy options
that potentially affect more than one source category in this chapter are elaborated in Chapter 6. One
important cross-cutting issue of w hich policy-makers should be aw are, and that affects or is affected by all
5-2
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source categories, is that greenhouse gases are linked to energy consumption in all sectors. While Section
5.1 examines this issue, it is important to note that energy consumption in all sectors of society result in
greenhouse gas production. This encompasses, for example, agricultural, forestry, industrial, and
residential concerns. This issue is too broad to examine exclusively and concisely without considering its
relevance in the context of all other emission sources. Accordingly, the rest of this document makes
specific reference to energy consumption issues where appropriate.
The information summarized in this chapter is designed to be used selectively, allowing policy-
makers to focus on the specific sources in which they are most interested. This document does not
advocate particular approaches or options.
5.1 GREENHOUSE GASES FROM ENERGY CONSUMPTION: DEMAND-SIDE
MEASURES
Carbon dioxide is emitted through combustion of fossil- and biomass-based fuels to produce direct
heat and steam, and to generate electricity, either at utility plants or directly on-site where the energy w ill
be consumed. The amount of carbon dioxide released to the atmosphere is directly proportional to the
carbon content of the fuel used. Coal is the most widely used of all fossil fuels for electricity generation
and has the highest carbon content, natural gas is second in electricity generation use while third in carbon
content, and oil is third for electricity generation but second in carbon content. In the U.S.. electricity use
by the residential, commercial, and industrial sectors each accounts for about one-third of total carbon
dioxide emissions.
Several perspectives max help policy-makers identify measures to decrease energy sector carbon
dioxide emissions:
First, emissions reductions can be achieved through actions taken either to reduce energy
consumption or to alter energy supply .
Second, these actions can reduce emissions either by reducing energy consumption or by
improving the efficiency with w hich energy is used. Decreasing the number of processes used,
commonly called energy conservation, requires a reorientation of business practices and lifestyles,
such as utilizing different transportation networks or following non-typical work schedules.
Energy -efficiency options, on the other hand, achieve the same level of output or activity while
using less energy. often through improved technology. A more efficient furnace, for example, may
allow a household to maintain the same or even higher indoor temperature w hile using less fuel.
Third, either energy conservation or energy -efficiency options on the consumption- or supply -side
can be exercised using a variety of policy levers. At the state level this usually means either
undertaking direct energy planning and programmatic initiatives through state energy , natural
resources, and economic development offices (as many states have since the mid-to-late-1970s), or
using utility regulatory authority to encourage or mandate utility involvement in energy
The burning of biomass-bascd fuels (wood, agricultural refuse, etc.) also releases carbon dioxide. However,
biomass burning releases carbon that was sequestered from the atmosphere to begin with, rather than releasing
carbon that was previously stored deep in the earth as is the case with fossil fuels. In this context, combustion of
biomass fuels that arc sustainably grown (meaning each time biomass crops arc harvested they arc replaced with
new plants and trees) docs not significantly affect the atmospheric carbon balance while burning fossil fuels docs.
5-3
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conservation, energy efficiency, and load management programs (as has been done increasingly
since the 1980s).
The remainder of Section 5.1 addresses energy consumption. It identifies technical approaches for
improving energy efficiency and briefly outlines both direct state actions and regulator} agency-driven
utility actions to implement those approaches. Section 5.2 presents energy production issues. Chapter 6
discusses specific policy options for reducing energy demand and increasing supply of low-carbon or no-
carbon energy.
While separated here for descriptive clarity. these three sections are linked and should be
considered together during policy analysis and development. Each section, for example, highlights how
both the consumers and the producers of electricity can take actions to affect energy demand and supply.
and each section also points out how . in many circumstances, certain facilities can simultaneously act as
energy consumers and producers. Because of w ide variations among the states, the information provided
here should be considered as background to be investigated and clarified further as it applies to distinct
state circumstances.
Introduction To Consumption-Sick Issues antI Demand-Sick Management
Between 1973 and 1986. conservation and efficiency measures, combined w ith strategic energy
planning and increased use of renew able energy sources, helped keep U.S. energy consumption at nearly
constant levels while the country's gross national product grew by thirty-five percent. This demonstrates
the significant potential for reducing the economy's energy intensity. Enormous opportunities for further
demand reduction are still available using existing and newly developed conservation and efficiency
measures.
Demand-side management (DSM) is the term for programs that focus on getting end-users to
consume less energy. These programs are administered by a w ide range of entities, ranging from utilities to
state agencies, local governments, community action agencies, and not-for-profit organizations. Basic
types of demand-side management programs include:
Building or business audits to identify potential energy savings:
Performance based rebates paid on a per-kilowatt or per-kilowatt conserved basis:
Technology based rebates for specific energy -efficiency measures such as compact fluorescent
lights and occupant sensing light switches:
Reduced interest financing for energy -efficiency investments:
Direct installation of energy -efficient equipment:
Energy load management programs designed to shift consumption of energy to different times of
the day. including time-of-day pricing and peak-load pricing, imposition of demand charges, and
voluntary load shifting agreements w ith particular commercial and industrial customers:
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Educational and advertising campaigns
targeted either at the general public or at
specific commercial or industrial sectors;
and
End-use fuel substitution.
A large array of federal, state, and local
policies affect the energy sector and influence
demand-side issues. The Federal Energy
Regulatory Commission (FERC). for example,
has jurisdiction over wholesale (inter-utility)
power transactions and natural gas transportation,
while states have traditionally regulated utilities
through public utility commissions (PUCs). which
oversee rate setting and approve energy supply
expansion and power plant construction.
Additionally, pollutant discharges from utilities
are regulated by an intertw ined netw ork of
federal, state, and local environmental statutes.
Federal laws that directly affect energy-related
emissions and the operation of utility companies
include the Clean Air Act (CAA). the Public
Utilities Holding Company Act (PUHCA). the
Public Utilities Regulatory Policies Act (PURPA).
the Federal Power Act. the Natural Gas Policy
Act. and the Energy Policy Act of 1992 (EPAct).
Additionally, the federal government administers
several programs to encourage energy efficiency
and demand-side management. These include, for
example. EPA's "Green Lights" program, which
provides information, education, and technical
assistance to businesses and state and local
governments to encourage use of energy-efficient
lighting. EPA has expanded this voluntary program to include other energy uses such as heating and
cooling, industrial motors, and computer equipment in its Energy Star program. In addition, the
Department of Energy (DOE) sets minimum energy-efficiency standards, under the National Appliance
Energy Conservation Act (NAECA). for certain appliances. DOE also administers many programs to
research and promote energy efficiency, including public information initiatives requiring disclosure of
efficiency ratings for competing appliances and programs that target research on energy use in buildings.
Exhibit 5-3: EPA's Energy Star Buildings
and Green Lights Program
EPA's Energy Star Buildings and Green
Lights Program is designed to reduce pollution,
promote public-private partnerships, use market
forces, and recognize environmental leadership.
Participants in the Program sign a Memorandum
of Understanding committing them to perform
upgrades where profitable Green Lights
participants upgrade lighting within 5 years, and
Energy Star Buildings participants fulfill Green
Lights commitments and perform whole-building
upgrades within 7 years. In return. EPA
provides technical support targeted to overcome
barriers, such as state-of-the-art softw are to
support decision-making, technical information
on building systems, reports on lighting products,
and networking with equipment manufacturers.
EPA also provides opportunities for public
recognition.
As of August 3 1. 1997. there w ere 2.487
participants, whose combined commitment to
perform lighting upgrades exceeded 5.5 billion
square feet. The annual emissions avoided by
the program is estimated at over 3 million tons of
CO;. 25.000 tons of SO;, and 1 1.000 tons of
NOx. In terms of energy, over 4.5 billion kWh.
or $335 million, has been saved. For more
information, contact the Energy Star & Green
State and local governments have enormous opportunity to supplement federal actions because they
retain jurisdiction in policy areas, including utility rate reform, city and regional planning, and establishing
building codes (see Chapter 6). In addition, proximity to local energy use allow s states to promote policies
that considers their unique opportunities and constraints.
Through greenhouse-gas reducing actions in the energy sector, state and local governments also
support other policy objectives. Foremost, policies that affect energy consumption and production can
5-5
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reduce emission of air and w ater pollutants and support local economic development. For example, some
states are promoting and supporting energy efficiency as a way of low ering industry costs in order to
attract investments and increase their state's economic productivity and competitiveness.
However, demand-side management programs around the country have often been slow to take
hold as an effective mechanism for helping regions meet their energy needs. While the technologies to
support large-scale energy efficiency have existed for several years, those technologies in most cases have
not substantially penetrated the residential, commercial, or industrial sectors. This problem is rooted in a
set of common institutional and political barriers, summarized below , that either prevent development of
more energy-efficient practices or actually promote wasteful actions:
Perceived High Initial Cost and Delayed Return on Investment in Energy Efficient Technology'.
Many energy efficient technologies have higher up-front costs than the standard technologies they
could replace. Compact fluorescent light bulbs, for example, can cost up to fifteen times as much
as standard incandescent bulbs; the value of the electricity savings, however, significantly
outweighs these costs but may not be realized for some period of time. Consumers and firms may
accordingly choose not to make the investment. Additionally, new technologies can require extra
time and effort to install and potential consumers often view installation as contributing to initial
costs."
Lack of Information. Consumers and firms are often uninformed about the cost, performance, and
reliability of efficient technologies. Furthermore, preconceptions of problematic early energy-
efficiency technologies persist, and may dissuade consumers from choosing energy efficient
products and processes. In general, people are also unaw are of the connection between energy
usage and environmental degradation.
Low Priority Given to Energy Consumption. Energy costs typically represent a small fraction of a
firm's overall budget; businesses focused on producing quality products for customers often
overlook opportunities for savings through energy efficiency.
Low Energy Costs. Low energy costs have the dual effect of reducing the need for energy
efficiency in consumers' minds and reducing the return of investments in energy-efficient
technology.
Limited Availability. Energy-efficiency technologies in the residential, commercial, and industrial
sectors are generally available only in selected geographic areas, often w here they are targeted by
government or utility programs, or w here there exists substantial customer demand.
Correspondingly, retailers in rural areas are less likely to stock unknow n or risky products.
Popular Attitude and ( \msumer Habits. The use of unconventional technologies, such as wind
generators, solar electric, solar thermal, or waste-to-energy plants may encounter resistance due to
the "not-in-my-back-yard" syndrome, w here communities reject the construction of some facilities
in their neighborhoods because of aesthetic, health, or other concerns. Similarly, technologies or
processes that require changes in established business or personal routines can encounter
resistance.
" While sonic energy-efficient technologies cost more than their less efficient counterparts, the use of integrated
approaches to improving building energy efficiency can lead to lower up front costs through downsizing of heating,
ventilation, and air conditioning (HVAC) system components.
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Inaccurate Price Signals. The prices set for electricity and gas max not accurately reflect the
actual costs of supplying energy at different times of the day and year. By not facing the actual
costs of energy sen ice. consumers choose levels of consumption that are suboptimal from society's
perspective.
Reducing these barriers is the objective of direct state and PUC-driven DSM policies and
programs. The barriers' complex and varied nature means that a successful state strategy for reducing
them must itself be multi-faceted and comprehensive. The next section describes briefly the types of
technical approaches available for reducing energy consumption in the residential, commercial, and
industrial sectors. Sections 5.1.2 and 5.1.3 then outline the types of state policy actions that can be taken
to encourage adoption of these technical approaches. Sections 5.1.4 and 5.1.5 provide additional details on
approaches for reducing energy consumption in the agricultural sector and in urban areas through the use
of tree-planting.
5.1.1 Technical Approaches for Improving Energy Efficiency and Reducing Energy Use
DESCRIPTION
Aggregate energy consumption is the product of millions of individual decisions on the type and
level of energy sen ice desired, the types of equipment and fuel to use to provide the desired sen ice. the
types of buildings in which we live and work, and the kinds of commercial sen ices and manufactured
products we buy. This includes, for example, the amount of energy used to produce heat, light, hot water,
or manufactured products. Technical approaches for reducing greenhouse gas emissions represent energy
consumers' alternatives for reducing the amount of. or altering the source of energy used to produce a
desired level of energy sen ices.
These approaches fall into three general categories: improving energy efficiency; shifting energy
consumption patterns (i.e.. load shifting); and fuel switching. Energy-efficiency improvements can be
further divided along three lines: building measures (e.g.. building shell measures to reduce heating/cooling
requirements); equipment improvements: and process changes. These are the exact technical approaches,
elaborated in more detail below. that the policies outlined in the remaining parts of this section (5.1.2
through 5.1.5) aim to promote. These measures offer significant opportunities for reducing greenhouse gas
emissions. Significant energy improvements are available for addressing each of these factors.
Building Shell Measures. Approaches to improve the efficiency of building shells include a w ide range
of building design, constaiction. landscaping, and retrofit actions. Major decreases in energy use
can be achieved by increasing insulation levels, installing improved window technologies, orienting
the building to take advantage of the sun for heating, using thermal mass for storing solar energy,
and minimizing north-facing window area. Interior design can emphasize minimizing of ventilation
energy requirements. While many building shell approaches are practical only during the design
and constaiction of buildings, significant energy savings are available through shell retrofit
measures designed to reduce infiltration and heat loss.
In existing residential and commercial buildings, energy use for heating and cooling accounts for around 57
percent of carbon dioxide emissions, appliances account for around 20 percent, lighting for about 14 percent, and
hot water for around 9 percent (OTA. 1991).
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Device or Equipment Measures. These measures replace existing energy-using equipment w ith
more efficient technologies, and are available for every energy end use at efficiencies substantially
above current levels. The applicability of energy efficient equipment in any given case, however,
can be limited by technical, operational or economic barriers.
Process Measures. Substantial energy-efficiency gains can be achieved through changes in the
processes used to produce goods and services. Processes can range from substituting an energy-
efficient fax machine or electronic-mail system for air couriers to the adoption of electric arc
furnaces and installation of cogeneration
systems to make use of w aste heat in
industrial and other facilities.
Load Shifting. Load shifting changes
energy consumption patterns to different
times of the day to reduce excess energy
demand at peak hours. Load shifting
does not directly increase energy
consumption efficiency, but it can lead to
more efficient operation and reduced
emissions by energy suppliers. Electric
utilities make significant use of programs
to electronically cycle air conditioners
during peak periods, and peak load
pricing programs to shift consumption to
off-peak hours, to increase the efficiency
and low er the costs of power generation.
The potential for emission reductions
from load shifting depends on the specific
fuel mix and operating characteristics of
each utility.
Euei Switching. The substitution of one
energy source for another often is an
effective way to reduce greenhouse gas
emissions. This can occur at sites that
provide power, such as large electricity
generating stations, or on a much smaller
scale such as in the home. Substituting
gas for electricity to heat water, for
example, can lead to a reduction in power plant fuel consumption and emissions. Alternatively,
replacing current gas technologies with very efficient electrotechnologies can produce net system
reductions in energy use and emissions, even after accounting for the losses in the generation and
transmission of electricity. As with load shifting, the energy and emissions reductions realized by
fuel switching depend heavily on the specific situation.
Exhibit 5-5: Energy Efficient Library in
North Carolina
In 1982. the tow n commissioners of Mt.
Airy. North Carolina, planned construction of a
library that consumes 70 percent less energy than
a conventional building. By using clerestories
(sky lights where the glass is mounted
perpendicular to the roof) across the top of the
library. the building provides glare-free, diffuse
light to all comers of the library without directly
illuminating the stacks, thereby eliminating
unwanted heat and glare as well as minimizing
damage to the books from sunlight. As a result,
the electricity used for lighting was reduced to
only one-eighth of the total energy consumption
for the building, as compared to the national
average of about one-fourth. The building design
also incorporates insulation and a zoned system
of heat pumps. Although the construction cost
was $88 dollars per square foot (as compared to
$79 per square foot for a conventional building),
the library was found to use 53 percent less
energy than a conventional design. Furthermore,
the library uses 90 percent less energy than the
Mt. Airy City Hall, a building of comparable
size.
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CONSIDERATIONS
Two general factors influence
whether any given technical approach is
feasible. The first concerns whether an
approach can be implemented in new .
retrofit, and/or replacement situations. Some
approaches are feasible only when a building
is being constaicted since they are key
elements of the structure's design. Other
measures are feasible whenever existing
equipment is replaced due to failure, while
still other options can be retrofitted at any
time. Energy used for heating buildings, for
example, is determined in large part by the
type of building, the quality of its
construction, and level of thermal integrity.
Although building thermal integrity can be
improved by retrofitting it with better
insulation, once built, the building's basic
heating and cooling requirement can seldom
be changed and therefore applies for its
remaining life, measured in decades.
The second factor affecting the
feasibility of the technical approaches listed
above is that some energy-efficiency options
are not compatible with existing equipment
or energy sen ice needs. Replacing electric
resistance heating in a home with an efficient
heat pump, for example, may be impractical
if the home does not contain any duct w ork.
Certain commercial HVAC systems are
suited only to certain applications and/or climate zones, or the lighting needs of a retail store may not be
compatible w ith the most efficient type of lighting sy stems available. The key to successful implementation
of energy-efficiency options, therefore, is to target the selected approaches to those segments of the market
in which the specific approaches are practical, feasible, and economic.
As stated above, the follow ing sections outline policy options for instituting these technical
approaches to reducing greenhouse gas emissions.
5.1.2 Direct State Actions to Promote Energy Efficiency
DESCRIPTION
Direct state actions to encourage adoption of the technical approaches described above usually fit
within five categories:
5-9
Exhibit 5-6: Home Energy Rating System in
Indiana
The Indiana Department of Commerce. Office of
Energy Policy is coordinating the design and
implementation of a Home Energy Rating System/
Energy Efficient Mortgage (HERS/EEM) program.
The HERS/EEM mechanism will have two
components. The first is a rating system that will
classify new and existing homes according to their
energy efficiency. This efficiency rating will provide
estimates of utility costs and may include
recommendations for specific energy improvements.
The second component allows mortgage lenders to
incorporate the lower energy bill expected in a more
energy -efficient house when evaluating mortgage
applications. The goal of the program is to improve
the energy efficiency of Indiana homes and to allow
home buyers to make better informed decisions
regarding the costs of operating a home. Contract
negotiations have begun with Energy Rated Homes of
America to provide the rating system for this
program. Once the rating tool is customized for
Indiana's needs, a pilot program will be initiated in
Lake and Porter Counties. Significant progress is
being made in this effort because of the dedicated
cooperation of Indiana's builders, lenders, real estate
professionals, and utilities.
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direct actions to apply these approaches in state-controlled facilities;
technical assistance and similar efforts to support household, business, and local government efforts to
reduce energy consumption;
financial incentive or direct assistance programs, including tax credits, loans, and grants for energy-
efficiency investments;
energy-efficiency research, development, and demonstration projects; and
enactment and enforcement of building codes and energy use standards.
CONSIDERATIONS
States historically have played an active role in promoting energy efficiency. Beginning in the mid-
1970s. most states took advantage of federal funding to create energy offices to develop and implement
federally-initiated programs. The federal programs generally allowed states substantial discretion in the
design and implementation of programs, leading to a diversity of creative approaches to energy efficiency.
However, direct federal support for state activities dropped off substantially in the 1980s, leading
to a reduction in state activity. During this time the availability of monies from petroleum violation funds,
combined with a number of individual state initiatives, allow ed many states to continue promotion of
energy-efficiency investments.
Although the availability of funding for direct state actions max continue to be constrained, state
and local governments possess a wide array of policy options to assist households and businesses to reduce
energy consumption. Innovative use of these options can produce substantial energy, economic, and
environmental benefits.
A critical role in this process for state and local governments is the adoption of broad energy use or
energy-efficiency standards that guide building construction, often through mandator) state or local
building codes. One set of standards that is often used by states as w ell as the federal government is that
produced by the American Society of Heating. Refrigerating and Air-Conditioning Engineers (ASHRAE).
ASHRAE is a voluntary body of professional engineers w ho are familiar w ith the technical and economic
issues surrounding energy efficiency. Additionally, a series of model building codes produced periodically
by the Council of American Building Officials provides guidance for state and local governments on
energy-efficiency measures.
In most areas of the country, however, states and localities consider new standards and codes only
as they go through a normal building standards review cycle. This can create a lag of several years
betw een the time a new set of standards or model codes are produced and the time states and localities
adopt them or integrate their recommendations, frequently delaying use of the most modem (and sometimes
the most profitable, because of related energy savings) building measures. Adoption of these standards and
codes is also frequently subject to high levels of political controversy due to their impact on different
private and public sector stakeholders and their varying geographical applicability. To remedy the problem
of states not upgrading their standards to the most energy efficient measures. EPAct strongly encourages
states to adopt energy-efficiency provisions that are at least equivalent to the ASHRAE standards for
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commercial buildings and to the 1992 Model Energy Code for residential buildings. States including
Florida. Iowa. Indiana. New York. Washington and California have been particularly aggressive in
adopting and implementing energy-efficiency standards.
Promoting energy efficiency in
existing buildings (as opposed to in new
staictures) is complicated for several
additional reasons. Foremost, there have
traditionally been few efficiency standards for
existing buildings. ASHRAE produced the
first of such standards to complement their
established new building standards. In
addition, some areas currently require
efficiency upgrades when buildings are
renovated. One Florida standard, for
example, now advises that existing staictures
being renovated at a cost of more than fifty
percent of their value must be brought into
compliance with energy-efficiency codes.
Besides the general need for building
standards and codes, the barriers discussed
earlier in this section also affect consumer
willingness to improve energy efficiency in
existing buildings. Overall, the residential or
commercial landowners, managers, and
renters who max decide whether to improve
energy efficiency in buildings frequently are
not aw are of the benefits, believe it w ill be
costly, or think it w ill interfere with their
schedules and operations.
Usually, the basic incentive to
upgrade the level of energy efficiency in a
building is to save money. However, two distinct types of disincentives often inhibit these types of
upgrades from occurring. First, tenants max feel that they will inhabit their building for short or uncertain
periods of time and therefore hesitate to make investments for which they max not capture the long term
benefits. Second, potential investors in energy efficiency often do not pax the electric bills and therefore do
not realize the benefits. For example, a landlord is rarely concerned about his/her tenants" future electricity
bills and therefore has no incentive to upgrade energy-efficiency.
Another distinct factor inhibiting efficiency upgrades in existing buildings is the slow replacement
rate of existing equipment. In the residential sector, for example, most homes in the U.S. already have
w ater heaters, refrigerators, electric lights, and central heating and/or air conditioning. The replacement
rate of these items with more efficient ones generally depends on the installed appliances' expected
lifetimes, which can range from five to twenty years or more.
5-11
Exhibit 5-7: Light-Colored Roofing in Arizona
To help offset the urban "heat island" effect,
w here asphalt and lack of trees raise temperatures in
city areas, the city of Mesa. Arizona replaced or re-
coated the roofs of four buildings with light-colored
insulation board and spray styrofoam as part of an
energy retrofit. Because light-colored surfaces
reduce the amount of heat that a city absorbs, they
can improve the energy efficiency of individual
buildings. Prior to the retrofit, each of the buildings
had a dark green or black roof and no insulation.
The new light-colored roof w ill remain cooler on
sunny days than a darker roof, reducing the cooling
load in the upper floors of the building. Additionally,
light surfaces radiate heat as effectively as dark
surfaces and will radiate heat into a building. As a
result, the new roofs are expected to reduce the
heating and cooling load attributed to the roof by 20
to 30 percent. The estimated pax back for this
measure is quite long, about 20 years. However, this
project w as completed as part of a retrofit that
included the installation of energy efficient lighting
and heating, and improvements in ventilating and air
conditioning (HVAC) systems, which all have much
shorter pax backs. Thus, most of the savings from the
entire retrofit w ill be realized sooner.
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POLICY OPTIONS
Develop Institutional Planning and Support Structures. States without existing agencies to deal
with energy issues may consider developing them as a means for conducting planning and analysis,
administering programs, and providing support for utilities, industry , and consumers. In many
states these agencies have been instrumental in facilitating energy-efficiency measures.
Institute Long-Range Planning. Many states, including Iowa. Illinois. New York. Vermont, and
Washington mandate energy agencies to provide assessments of state energy consumption as w ell
as potential ways to increase efficiency, reduce energy dependence, and increase use of renew able
energy resources. These plans provide valuable focal points for policy development through time
and across the economic sectors that affect a state's energy consumption.
Facilitate Interaction Between DSM Program Sponsors and Potential Customers. States are in a
unique position to facilitate interactions between a variety of important participants and
stakeholders in the energy-efficiency field. For example, states may act as the liaison betw een
federal energy-efficiency programs and local industries and governments, or between utilities and
potential commercial or industrial energy-efficiency clients. The "Super Good Cents" program in
the Pacific Northw est, for example, is a state-utility partnership that involves providing technical
information and training, as w ell as rebates to consumers for energy-efficiency investments in their
homes.
In addition, state governments can lead collaborative efforts involving government agencies,
utilities, energy service companies, customers, and advocacy groups to develop consensus
approaches to energy-efficiency policies and programs.
Rationalize State Tax Policy. Although practice varies from state to state, tax policies often favor
energy consumption over energy efficiency. In some states, purchases of gas and electricity are
exempted from states taxes, while energy-efficiency investments (more efficient equipment,
insulation, etc.) are not. At a minimum, tax policy may cease to favor consumption over
efficiency, but may further serve to discourage inefficient consumption.
Provide Information and Education. States can gather and disseminate information (often
w orking with utilities) on the energy and financial implications of energy-efficiency projects in
certain types of buildings and facilities and promote research, development, and demonstration
projects. Through their university systems states may also promote energy-efficiency training in
professional planning and urban design programs.
Take Direct Action to Reduce Energy Consumption in State Eacilities. States can reduce energy
consumption on their own properties, including schools and low -income housing projects. Iow a,
for example, undertook an energy-efficiency improvement program designed to make all of its
public school buildings energy efficient by 1995. Such programs may involve retrofitting existing
state facilities, changing state building and procurement practices to require energy-efficiency
investments, and modifying state building design requirements. For example. Florida has initiated
a broad effort to reduce energy consumption in state facilities by 30 percent w ithin three years.
The state also plans to use this effort as a model for local governments and the private sector.
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Establish and Enforce Efficiency Standards and Codes. States max w ish to encourage more
integrated and aggressive approaches to promoting energy efficiency in buildings by supporting
and strengthening disparate and outdated building codes. In addition, states should develop
mechanisms for agencies to enforce the codes they adopt. An initiative in Florida, for example,
requires construction agencies to disclose the material content of their buildings to building
inspectors and to the buyer; this establishes a stronger feedback loop and trail of liability, if
buildings are not built to energy-efficiency specifications, providing incentives for contractors to
adhere strictly to the codes. EPAct encourages states to adopt energy-efficiency provisions at least
equal to ASHRAE standards for commercial buildings and the 1992 model Energy Code from the
Council of American Building Officials for residential structures.
Demonstrate Building Efficiency Measures and facilitate Energy-Efficiency Programs. States
are uniquely situated to initiate energy-efficiency demonstration projects in buildings (often using
their ow n facilities) and to publicize resulting information on energy and cost savings. Similarly,
states are often well-situated to coordinate interactions between landlords and tenants, especially in
the commercial sector, in order to facilitate efficiency improvements in existing buildings.
Programs to achieve these goals can include innovative approaches such as setting minimum
efficiency standards for rental properties or developing shared savings programs w here landlords
and tenants both benefit from energy-efficiency investments.
Provide financial Incentives for Efficiency Improvements. States can provide financial incentives
for accelerating equipment replacement rates through tax credits or low interest loans on efficiency
improvements, by taxing inefficient appliances and equipment, or by w orking with utilities to
sponsor rebate programs that induce consumers to purchase efficient products. Hundreds of these
types of programs exist throughout the country. For example, the State of Oregon offers a 35
percent Business Energy Tax Credit and a Small Scale Energy Loan Program. Similar programs
are supported by the Indiana State Energy Office through innovative public and private
partnerships.
5.1.3 Policies to Promote Energy Efficiency, Renewable Energy, and Carbon Offsets
DESCRIPTION
In the recent past, state energy officials and utility regulators have promoted measures to increase
energy efficiency, in order to reduce the energy costs borne by state residents. State officials have worked
with electric and gas utilities to promote energy efficiency in programs termed either demand-side
management (DSM) or integrated resource planning (IRP).
With deregulation of the electric utility sector, the opportunities available to state officials to
promote energy efficiency are changing. Once electricity generation is deregulated in a state, prices w ill be
set by market forces. State officials will no longer regulate electricity prices, and thus will not have the
opportunity to ensure that utilities employ conservation measures where these are less costly than new
generation. Nor w ill state officials have much direct influence over new suppliers of electricity that enter
the market after deregulation.
At the same time, however, deregulation w ill provide opportunities for states to indirectly influence
the markets for energy and energy conservation. These opportunities can be used to promote energy-
efficiency and fuels with relatively low GHG emissions.
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CONSIDERATIONS
Electric and natural gas service reaches virtually every household, and these energy sources supply
the majority of energy used by households and businesses. Policies that serve to reduce emissions from the
use of electricity and natural gas can have a major influence on a state's level of greenhouse gas emissions.
POLICY OPTIONS
Chapter 6 discusses five policy options for reducing GHG emissions through energy conservation,
renewable energy, and carbon offsets in the electric utility sector. The follow ing options are described in
Section 6.1:
Ensure Infrastructure Access for Small Power Producers, and Promote Purchase of "Green
Power"
Institute a "Social Benefits " Charge or a Carbon Tax on Electricity Generation
Promote Voluntary Adoption of Energy-Saving Technologies
Establish or Support ("arbon Offset Programs
Support Emission Trading Programs
As utility deregulation proceeds, states may consider one or more of these policy options to reduce
greenhouse gases in the energy sector; many of these options can reduce energy costs for state residents.
5.1.4 Conserve Energy Through Improved Industrial, Agricultural, and Municipal Waste
Management Processes
The preceding subsections have outlined technical approaches for improving energy efficiency, and
described general policy approaches Direct State Action and PUC Policies for encouraging these
actions. Most of the technical approaches and policy options apply equally to the residential, commercial,
and industrial sectors. However, the industrial sector presents a challenge to policy-makers because of its
diversity, the relative magnitudes of the savings available from individual industrial facilities, and the
investment costs required to achieve these savings. The agricultural sector presents challenges as well
because many of the policy options exercised in other sectors are not applicable to agriculture. Perhaps
more important. PUC-directed utility DSM programs may not be available to rural customers who are
served by rural electric cooperatives. In the municipal solid waste management sector, decisions are
typically made at the local government level. For these reasons, industrial, agricultural, and municipal
waste management policy options are considered apart from the previous discussion.
These sectors use large amounts of energy to produce goods, including heavy industrial products,
consumer products (w hich may result in generation of MSW). and food. Many industrial and
manufacturing technologies for extracting, refining, and processing raw materials and for building a variety
of finished goods are extremely energy-intensive. Similarly, modern farms grow , harvest, and refine crops,
maintain livestock, and process meat and dairy products using machinery and equipment that draw large
amounts of energy. There is enormous potential for conserving energy in these sectors by utilizing energy
efficient machinery and processes, and by increasing source reduction and recycling (because typically less
energy is used w hen recycled inputs are used in place of virgin inputs). Actions to reduce energy use may
also bring significant ancillary benefits, like reduced costs and improved productivity, and therefore general
economic stimulation in the regions where the industries and farms are located.
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Because they span most types of industries, manufacturers, and farms, the range of approaches for
reducing energy consumption in these sectors is too situation-specific to present here. The general energy
conservation principle is that these energy consumers can either improve their machinery and technologies
to utilize less energy, or they can use the by-products (sometimes just heat) from their operations to
produce energy on-site. The latter process often utilizes formerly w asted resources and supplants the need
to draw so much pow er from traditional sources. Section 5.2 elaborates on these types of renew able energy
production processes.
Examples of the first category of energy efficient processes include use of variable speed motors
that adjust continuously to meet work load demand, thus saving energy when work loads are light, and the
use of infrared rather than more energy-intensive thermal processes for drying grain or for drying fresh
paint on consumer products.
Several specific constraints, however, max inhibit efforts to improve energy efficiency. For
example, besides the general barriers that apply to adoption of all energy efficient technologies, w hich the
beginning of this section discusses, a relatively long time period is usually required for the replacement of
industrial equipment. Most energy-intensive industrial processes are capital-intensive and the rate of
equipment turnover is often measured in decades. Additionally, the diversity of technologies and operations
utilized in these sectors can sometimes make it difficult to apply one type of efficient technology in distinct
settings.
POLICY OPTIONS
Programs to encourage energy efficiency and conservation through improved industrial,
agricultural, and municipal solid waste management processes can be designed in two ways. First, they
can concentrate on specific categories of businesses, like steel producers, small engine manufacturers, or
dair\ farms. Doing so requires understanding the economic and technical environment surrounding the
particular sector being addressed, including how that sector uses energy, available energy-efficiency
technologies in that sector, and how these technologies w ill affect product quality and production. By
addressing the distinct needs of each type of business being targeted, states can enhance the prospects for
success in reducing energy consumption. States including North Carolina. Louisiana, and New York have
developed effective programs of this type.
The second approach is to promote energy efficiency across all categories of industries or farms, or
in the cross-cutting area of municipal w aste management, providing broad education or incentives to
encourage innovation and energy efficiency in as many areas as possible. Specific policy options are listed
below.
Support Research antI Provide Direct Assistance Targeted at Specific Businesses or Sectors.
States, often through energy agencies, can select particular energy-intensive industries to assist
with research, financial support, and technical assistance. For example, the Louisiana State
Energy Office works with the state's aquaculture industry to develop innovative engineering
approaches for increasing that industry's energy efficiency and simultaneously enhancing their
economic productivity.
Sponsor Technologr Demonstration Projects. States, often working with leading firms in a
targeted industry, max demonstrate the potential for using new energy-efficiency technologies to
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everyone in that industry. The demonstrations can both provide good public relations and prove
the technology's success with an industry leader.
Provide Broad Incentives for Energy-Efficiency Research and Development. Broad programs to
solicit innovative ideas on energy efficiency from all sectors can provide incentives for research
and development in areas that state programs will never directly address. These incentives may be
research grants, energy-efficiency loans, or direct financial or publicity rew ards for independent
innovation.
Provide Direct Financial Incentives for Energy-Efficiency Investments. Similar to subsidizing
energy efficiency in buildings and in other sectors, financial assistance, low interest loans, and
rebate programs targeted at specific energy-efficiency investments can promote technological
conversions. For example, the Bonneville Power Administration in the Pacific Northwest is
currently working with its industrial customers to encourage energy conservation through
equipment rebate programs (Washington. 1993). Current program savings have consistently met
or exceeded the Power Administration's goals. These rebates are often customized to meet the
distinct needs of particular customers and situations, in contrast to standardized technology-based
rebates that apply in other sectors.
5.1.5 Promote Urban Tree Planting
Another mechanism for reducing demand for energy is through strategic planting of trees and
shrubbery in urban areas. This type of program, though potentially significant, is often not considered in
traditional demand-side management programs.
Landscaping offers the potential to reduce energy needs related to heating and cooling in two ways.
First, by providing shade and lowering wind speeds, vegetation, such as trees, shrubs, and vines, can
protect individual homes and commercial buildings from the sun's heat in the summer and cold winds in the
winter. Second, collective tree planting provides indirect carbon reduction benefits; evapotranspiration (the
process by w hich plants release w ater vapor into warm air) from trees and shrubs can reduce ambient
temperatures and energy use for entire neighborhoods during hot summer months. Urban tree planting can
also generate direct carbon benefits. Because half the dry w eight of w ood is carbon, as trees add mass to
trunks, limbs, and roots, carbon is stored in relatively long-lived structures instead of being released to the
atmosphere. Thus, programs to support urban tree planting can help reduce greenhouse gas emissions in a
variety of ways.
Urban tree planting also provides a number of non-carbon benefits, such as improving air quality,
improving aesthetics, providing w ildlife habitat, improving property values, and reducing noise. Trees may
also reduce runoff, prevent soil erosion, and slow the buildup of peak water flows during an intensive
rainfall. Residential planting can also promote aw areness of the potential contribution that the general
public may make to reducing U.S. emissions of carbon dioxide. Available data indicate that over half of
the available tree spaces in American cities are empty. At the same time, a variety of constraints can
inhibit tree planting programs. These commonly include w ater restrictions in some areas and the fact that
compacted soil and urban irritants such as salt can inhibit a tree's natural grow th. Additionally, improperly
placed trees can reduce solar heat in the winter.
With careful planning, however, tree planting programs can be highly successful. In Minnesota,
for example, the Twin Cities Trees Trust has blended the goal of employing disadvantaged adults with
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environmental improvement in the form of urban tree planting and landscape constaiction (Minnesota.
1991).' The Sacramento Municipal Utility District in California has contributed over a million dollars
annually to the Sacramento Tree Foundation for tree planting activities. Grants from the County and City
of Sacramento, together w ith an Urban Forestry Grant from the California Department of Forestry , also
support Trees for Public Places, a community tree planting program. At the national level. Cool
Communities, sponsored by DOE. encourages the planting of shade trees to improve energy efficiency,
while simultaneously sequestering carbon. The Cool Communities program has been tested, and found
effective, in Tucson. AZ; Dade County. FL; Atlanta. GA; Springfield IL; Frederick. MD; Tulsa. OK;
Austin. TX; and Davis-Monatham Air Force Base. AZ. It is currentlv being further expanded under the
CCAP.
POLICY OPTIONS
State programs to support urban tree planting often involve providing technical assistance, grants,
and educational services to local communities and private organizations. More direct programs may target
residences and business. Specific policy options include:
Provide Institutional Support to Communities. Technical assistance can aid communities and
utilities in designing residential tree planting programs and assessing their energy and carbon
benefits. This is especially helpful in areas where localities do not have access to the technical
know ledge and resources necessary to coordinate programs.
Provide T'inctncial Incentives to Organizations and Individuals. States can encourage private and
local tree planting programs through cost-sharing or direct payments to homeow ners or utilities or
through direct program financing for local organizations. Direct or guaranteed loans to encourage
tree planting may also be successful. Utility demand-side management programs in California
directly subsidize residential and commercial tree planting activities.
Support Research on the Effects of Tree Planting. Support for research and development or pilot
testing, in the form of direct technical assistance, grants, tax incentives, or loans, can help answer
some of the outstanding questions in this area pertaining to the potential benefits and feasibility of
tree planting programs in different regions. For example, state grants may encourage non-profit
organizations or university groups to investigate the strategic placement of trees in cities or
neighborhoods to maximize year-round energy savings.
Regulate Tree Planting. Typically the purview of localities, landscape ordinances requiring tree
plantings with new constaiction have been used in many cities.
5.2 GREENHOUSE GASES FROM ENERGY PRODUCTION: SUPPLY SIDE MEASURES
As described in Section 5.1. measures to decrease carbon dioxide emissions from the energy sector
may focus on either reducing energy consumption or reducing emissions during electricity production. This
section addresses the electricity production category , highlighting the critical role of utilities and
independent power producers. Section 5.1 addressed the consumption category while Chapter 6 combines
these issues in a discussion of the economic framew ork that shapes the energy market in the U.S. While
Minnesota has researched and produced a document entitled Carbon Dioxide Budgets in Minnesota and
Recommendations on Reducing Yor Emissions with Trees that specifically addresses reducing carbon dioxide
emissions and energy demand through tree planting.
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treated separately for ease of presentation, these three sections of the document are closely connected and
should be considered together.
Several federal statutes affect the level of greenhouse gas emissions from electricity production
including the Public Utilities Regulatory Policy Act (PURPA). the Public Utilities Holding Company Act
(PUHCA). and the EPAct. Under PURPA. the federal government and state governments can encourage
efficiency among power producers and can encourage transitions to modes of pow er production that result
in low er greenhouse gas emissions, including use of renew able fuel sources. States can also affect
greenhouse gas emissions in the power supply sector through their jurisdiction pertaining to environmental
protection, as well as through regulation of powerplant siting and certification. States have some
jurisdiction in controlling natural resource use. for example, upon w hich the power supply sector relies
heavily, and in protecting wildlife and w ildlands. which some utility emissions or power development
programs max threaten.
This section discusses approaches to reducing emissions from three types of energy producers:
utilities, independent power producers that sell the energy they produce (mostly to utilities), and industrial
and agricultural facilities that use their energy on-site to support their own operations. Although many
policies to promote emission reductions w ill affect all three of these producer categories, resulting in some
overlap in the information presented below, the distinction between the three remains useful because the
size and scale of their operations varies significantly and each faces a distinct set of potential motivations
for reducing emissions.
There are three primary actions each of the three types of producers can pursue for reducing
emissions, depending on the nature of their current operations:
Transition Awav from High Carbon Generating Technologies and fuels. In a greenhouse gas
context, this frequently means utilizing natural gas. hydroelectric, or nuclear energy instead of coal
or oil. Universal constraints to switching to natural gas include the need for producers to have
access to this fuel, which max be limited by infrastructural or legal constraints in some regions, the
relative price volatility of gas. and questions regarding deliverability. Other constraints inhibit the
large-scale non-carbon alternatives. Hydroelectric power development, for example, is often
limited by environmental concerns such as ecosystem damage through flooding and disruption of
water supplies, and nuclear power production is constrained by public safety and environmental
concerns, as well as the cost of nuclear units and perceived financial risks. No new nuclear plants
have been commissioned in the United States for several years.
Use Renewable and Alternative Energy Sources. Alternative energy sources consist of non-fossil
fuel based power generating technologies and processes, including biomass. w aste heat used for on-
site cogeneration. methane from non-traditional sources, wind, geothennal heat and pressure, solar
thermal and solar photovoltaic processes, and tidal currents. Initial installation costs can create
constraints and vary significantly among sources; in many cases these costs limit the ability to
compete with fossil fuels. Research and development on technologies to utilize many of these
sources is gradually enhancing their cost-effectiveness.
Reduce Emissions Regardless ofEuel Type Through Technology and Process Upgrades. Using
the most efficient electricity generating technologies and processes can minimize the average
Chapter 6 examines biomass energy programs in more detail, describing how agricultural and forest crops can be
used to generate power or to produce liquid, gaseous, and solid fuels for other purposes.
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quantity of greenhouse gases emitted per unit of electricity produced. This can be achieved either
by operating existing equipment at optimal rates of generating efficiency (w hich means attaining
the highest feasible energy output per unit of fuel input), or by installing new technologies that
offer higher levels of power generating efficiency than are currently available. The most frequent
constraints on these processes are equipment investment costs and fluctuations in energy demand
that make it difficult to maintain optimal generating efficiency. In addition, significant savings
may become available through reductions in transmission and distribution losses as new
technologies are adopted, as well as through use of cogeneration and district heating.
The sections below discuss each of these three mechanisms as they apply to the electricity
generation sector, and to on-site energy producers/consumers.
Alternative policies to promote emission reductions may affect not only the different types of
pow er producers but also the time frames within which certain approaches are implemented and their
greenhouse gas reduction benefits accrue. Some approaches are feasible and offer emission reductions
immediately, like capturing and utilizing methane at coal mines and landfill sites, while others may take
many years to implement, as with certain renewables. whose costs must come down before they are
economical. While long term projects in the energy supply sector often require large-scale capital
conversion, technological innovation, and infrastructure development, they also offer the highest potential
magnitude of emission reductions of all greenhouse gas sources.
Common constraints or barriers can inhibit approaches to reducing emissions during power
generation across all types of producers. These include high initial capital costs for new technologies,
lengthy government permitting processes for new or modified pow er production, and regulatory limitations
on the size or extent of pow er producing activities. Other barriers include limited access to transmission
lines for remote energy sources (for example, w ind orgeothennal) and financial risks w hich require rates of
return higher than for traditional power sources. Finally, tradeoffs with other state policy objectives (for
example, promoting economic stability by supporting utilities or promoting aesthetic interests where
extensive solar or w ind pow er generating facilities are feasible) may also impede emission reductions. The
policy options outlined under the follow ing technical approaches address these barriers.
5.2.1 Reduce Greenhouse Gas Emissions from Electricity Generation
DESCRIPTION
The electricity generating sector can help reduce greenhouse gas emissions by improving the
efficiency of electricity generation or by generating pow er using low -emission or no-emission technologies.
As mentioned above, because the electricity generating sector uses substantial amounts of fossil fuel, there
are opportunities for significant GHG reductions in this sector.
CONSIDERATIONS
Improving processes directly at electricity generating plants can include tw o types of actions:
Switching to low-emission fitels and generating technologies. In the near term, the greatest
opportunities for reducing emissions are likely to involve utilizing natural gas. the fossil fuel with
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the low est carbon content per unit of energy." Natural gas can be converted to electricity at high
efficiency, using new combined cycle gas turbines. (Extensive literature is available on fuel-
switching and efficient technologies for electricity generation.) Under utility deregulation, market
forces w ill determine the extent to which such low-carbon technologies w ill substitute for coal- or
oil-burning generators. Section 6.1 discusses potential policies that states could implement to favor
such technologies.
Switching to zero-emission technologies. When renewable energy sources (including
photovoltaics. biomass fuels, and wind) are used for electricity generation, no greenhouse gases are
emitted. (The carbon dioxide from biomass fuels is not counted because it is biogenic.) Although
costs of generating electricity from renew able sources is currently higher than costs for fossil fuels,
the costs of photovoltaics and other renew ables are declining. Section 6.1 discusses potential
policies that states could implement to favor renew ables.
Improving the efficiency with which energy is produced using existing equipment and facilities.
Technological innovations may offer the opportunity to improve generating efficiency bey ond
commonly attained levels.
A state may wish to examine the greenhouse gas emissions (and perhaps other pollution) associated
with producing electricity. and reflect these "externality" costs in the price of electricity. Section 6.1
discusses two possible approaches a "societal benefits" charge or a carbon tax on electricity generation.
Policies designed to reduce emissions from electricity generation should account for several
additional issues. Foremost, the actions discussed above to reduce greenhouse gas emissions generally
support other environmental objectives as well, such as producing less particulate air pollutants per unit of
energy produced. However, switching away from high carbon fuels, especially coal, w ill also have
significant impacts on economies in certain regions of the country that are rich in these resources.
Additionally. limited infrastructure for supplying fuels like natural gas in some areas may inhibit the use of
these fuels for large scale pow er generation.
POLICY OPTIONS
Policies to reduce greenhouse gas emissions from electricity generation w ill ideally (1) promote
demand-side management to mitigate the need for new power sources; (2) support alternative low-carbon
energy sources to meet new power needs whenever possible; and (3) encourage the transition from existing
high-emission fuels and technologies to low-carbon options. Specific options for pursuing these objectives,
which are discussed in Section 6.1. include:
Ensure Infrastructure Access for Small Power Producers, and Promote Purchase of "Green
Power"
Institute a "Social Benefits " Charge or a Carbon Tax on Electricity Generation
Promote Voluntary Adoption of Energy-Saving 'Technologies
Establish or Support ("arbon Offset Programs
Support Emission 'Trading Programs
While natural gas offers the lowest carbon emission rates of the various fossil fuels used for producing electricity,
switching to any source with lower carbon content thin the fuels currently used will yield greenhouse gas benefits.
In some situations, for example, this could suggest switching from coal to oil rather than converting to natural gas.
although this choice may not be desirable for other reasons, such as national security and trade balance concerns.
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In addition, states max wish to consider providing subsidies and marketing support for renewable
energy:
Provide Direct Incentives for Alternative Energy Development. States can promote renewable
energy development through investment tax credits, equipment subsidies, low-interest loans,
copayments with utilities on energy produced from alternative sources, and other incentive
programs.
Provide Information. Education, and Technical Assistance to Support Alternative Energy
Development. States can conduct demonstration projects, do financial analyses, and provide
information about alternative processes to the potential investment community. For particular
projects, states max also be able to provide direct services such as financial assessment or
technology upgrade audits.
5.2.2 Reduce Emissions Through On-Site Power Production
Various industrial and agricultural facilities can help reduce net greenhouse gas emissions and save
money by utilizing on-site resources to meet their energy needs. Coal mines can capture methane and use it
to generate electricity for their own use. for example, and dairy farms max use methane from livestock
w astes as an energy source. In essence, pow er consumers in these situations become small scale power
producers. They reduce greenhouse gas emissions by meeting part of their energy needs that w ould
traditionally have been met by utilities and. in many circumstances, by utilizing excess methane that would
otherwise have contributed directly to greenhouse gas emissions.
Two types of energy max be generated through on-site processes: thermal heat and electricity.
Where a site requires thermal energy, cogeneration of both thermal energy and electricity should be
considered, because cogeneration is a highly efficient process.
CONSIDERATIONS
These actions can be considered as either production side emission reduction measures or
consumption side energy-efficiency measures. They reflect distinct characteristics of each, including
demand-side barriers to energy efficiency and supply side constraints for renewable energy.
Additional information on specific opportunities for using methane for on-site energy production is
presented in Sections 5.5 through 5.9. Policy-makers should investigate the opportunity for promoting these
processes at both existing and new facilities, because the incentive and support structures for retrofitting
existing facilities max vary from those for initial investment.
POLICY OPTIONS
Manx of the same policies listed in Section 5.2.1 will apply to on-site power producers. In
addition, states can:
Methane is an important greenhouse gas. Biomass wastes contribute to methane and/or carbon dioxide emissions
when they arc burned for disposal, left to decompose, or placed in landfills.
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Provide Direct Assistance for Equipment and l'acility ( \>nversion. States max conduct
technological and financial analyses for specific industrial facilities in order to demonstrate the
value of cogeneration and similar practices. States max also be able to provide ongoing technical
support to enhance industry confidence in new processes, and can initiate the type of financial
support through taxes and subsidies listed in the previous section.
Establish Programs and Regulations to Reduce Risk to Firms. States max guarantee financial
support if new processes do not function as expected and max require utilities to provide backup
pow er to industrial facilities, like coal mines, if those facilities' on-site sources do not meet their
energy needs. Without these provisions utilities max have incentives to distort prices or restrict
power access to customers who are considering producing their own energy.
5.3 GREENHOUSE GASES FROM THE TRANSPORTATION SECTOR
Carbon dioxide (CO2) is the main byproduct resulting from combustion of gasoline and other
petroleum-based fuels used by the transportation sector. Carbon dioxide emissions are directly
proportional to the quantity of fuel consumed: burning a gallon of gasoline releases approximately 20
pounds of carbon dioxide into the air (OTA. 1991). In addition, the extraction, processing, transfer, and
combustion of fossil fuels produce other greenhouse gases, lead, and other pollutants, and contribute to
acid rain and urban ozone precursors."
The transportation sector consists of highway and off-highway vehicles, marine vessels,
locomotives, and aircraft. Highway vehicles include automobiles and light-duty vans and taicks up to
6.000 pounds in weight, light-duty taicks between 6.000 and 8.500 pounds in weight, heavy-duty taicks
and buses, and motorcycles. Off-highway vehicles include farm tractors and machinery, constaiction
equipment, snow mobiles, and motorcycles. This section focuses on options to reduce emissions from the
highway vehicles fleet.
Activity to the transportation sector from all these vehicle categories is fundamentally a product of
the demand for mobility of either people or goods and services in our society. Traditionally, as this demand
for mobility increases, so do related emissions of carbon dioxide and other pollutants. Policies to reduce
emissions in this sector, therefore, can be targeted either at reducing the demand for mobility in general, or
reducing emissions at current or increasing levels of transportation activity. Both of these approaches are
referenced throughout this section. In addition. Chapter 6 discusses the potential for reducing emission
from the transportation sector through land use change and citx and airal planning measures (see section
6.5).
It is important to note that this section provides only a brief introduction to transportation policy.'
In this complex field, in general, carbon dioxide emissions from the transportation sector are currently not
s These other pollutants include: methane, carbon monoxide, nitrous oxide, non-mctlianc hydrocarbons, oxides of
nitrogen and sulfur, and particulate matter. Nationwide, transportation is responsible for 70 percent of carbon
monoxide. 40 percent of volatile organic compounds. 40 percent of nitrogen oxides, and 35 percent of lead,
particulates, and nitrous oxide. While these other gases from the transportation sector arc also considered to be
greenhouse gases, they arc not thought to be major contributors relative to the carbon dioxide emissions: and.
unlike carbon dioxide, some can be partially mitigated through the application of emission controls (NAS. 1991).
For a more comprehensive overview of the environmental implications of transportation measures, sec Kcsslcr
and Schroccr. 1993 and OTA. 1994. (Note: OTA gives an overview of the U.S. transportation system and options
to increase energy-efficiency within this sector.)
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regulated, while regulation of other transportation-related emissions and fuel consumption standards have
traditionally fallen under federal jurisdiction. Criteria pollutant emissions are controlled through the Clean
Air Act (which is implemented at the state level through State Implementation Plans), while light-duty
vehicle fuel efficiency is regulated through Corporate Average Fuel Economy (CAFE) standards as
established in the 1975 Energy Policy and Conservation Act. Some states, notably California and those in
the New England region, have sought additional improvements in their urban air quality through various
measures to limit vehicle emissions (South Coast. 1991; New England. 1990). These measures include
transportation control and air emissions standards that supersede existing federal standards. The South
Coast Air Quality Management District's Air Quality Management Plan for the Los Angeles Basin,
discussed in Chapter 2. represents an example of such a comprehensive plan for regional emission
reductions.
Technical approaches for reducing greenhouse gas emissions from the transportation sector include
reducing vehicle miles traveled, reducing emissions per mile traveled, and using alternative fuels. The
remainder of this section discusses these three approaches.
5.3.1 Reduce Vehicle Miles Traveled (VIMT)
DESCRIPTION
Reducing total vehicle miles traveled involves decreasing the overall need or desire for driving,
replacing single-occupancy driving with alternatives such as mass transit or car pools, or shortening the
time and/or the distance required for each trip. Collectively, these are known as transportation control
measures (TCM). Reducing vehicle miles traveled in other transportation categories, such as heavy
vehicles transport and trains, also involves switching to alternative modes of transportation or combining
modes, increasing load factors (for example, reducing empty or partial-load trips for busses and shipping of
products), reducing travel needs, and shortening of travel time and/or travel distances.
CONSIDERATIONS
The issues associated with VMT reduction measures that influence how effective these measures
w ill be in attaining emissions reductions include:
Infrastructure Issues. Many regions, especially in the west and south, have less developed mass
transit systems. Additionally, transportation control measures might not be feasible for states that
are predominantly rural.
Financial Issues. Many cities and states currently do not have the financial means to implement
extensive transportation control measures, urban light rail systems, or intercity high speed rail.
While some measures can be cost-effective by reducing the time workers spend in traffic, or
reducing the energy consumed per-passenger. implementing a transportation control measures
package requires significant advance planning and preparation, and may also require extensive
commitment from governments with limited resources.
1 For example, the City of Denver. CO was able to reduce up to 40 percent of commuters' commuting time by
instituting high occupancy vehicle lanes and other transportation control measures.
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Institutional Issues. Manx Americans simply prefer driving over any other form of transportation
or prefer goods which must be shipped long distances. Switching to alternative transportation
modes or reducing VMT in other ways max require lifestyle adjustments.
Experience from existing transportation control programs to reduce air pollution in various cities
offers insights into some ways these constraints can be addressed. These general insights should be
considered during the implementation of all types of policies. Foremost:
Transportation control measures are often most effective when multiple complementary measures
are implemented simultaneously as a single package. This max include, for example,
development of employee ride-share incentives, construction of high-occupancy vehicle lanes
(carpool lanes), and increases in rates charged for parking.
Transportation control programs achieve larger emission reductions when they are coordinated
throughout a region and over an extended period of time.
Transportation control programs finction best if implemented locally, so that measures can he
tailored to traffic patterns, infrastructure, and zoning ordinances in each individual area. In all
situations, critical characteristics that transportation control programs need to consider prior to
new program implementation include factors such as population and employment groupings,
highway capacities and congestion levels, and major transportation routes and alternatives (OTA.
1991). Chapter 6 presents information on additional land use and city and regional planning
considerations as they affect transportation control measures to reduce VMT.
An additional analy tic consideration relating to transportation control efforts is that in many areas
there is latent demand for access to primary transportation corridors. This implies that as congestion
decreases because of the transportation control measures, some people w ho w ere discouraged from driving
before due to congestion may begin to use their cars as single-occupants, thus negatively impacting
emissions reduction efforts.
POLICY OPTIONS
Options for reducing transportation demand, especially for reducing single-occupancy driving.
include:
Information and education programs. States max implement programs to encourage alternatives
to driving, including public education campaigns and various types of demonstration or pilot
projects. For example, many states support campaigns to promote the benefits of high-occupancy
vehicles lanes, ride sharing, and mass transit. In addition, states can work directly with employers
to develop new VMT reducing programs. Demonstrating to employers the multiple benefits of
offering employees a choice of cash rather than subsidized parking spaces, for example, can lead to
decreased employ ee driving, increased use of mass transit, and therefore reduced carbon dioxide
emissions. California has enacted legislation requiring some businesses to pursue this ty pe of
program (South Coast. 1991).
Institutional support programs. States max also improve mass transit systems, high occupancy
vehicle lanes (HOV). mass transit lanes, and enhanced traffic management systems such as
synchronization of traffic signals. Virginia, for example, has instituted HOV lanes on much of its
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highway system in Northern Virginia as part of its traffic control effort. Similarly, the Connecticut
Department of Transportation has helped to establish nearly 12.000 car pools and 180 van pools
since 1980. saving an estimated nine million gallons of gasoline yearly.
Incentives to businesses antI employers. These include financial incentives (tax breaks or low
interest loans) for businesses to initiate car and van pools and encouragement to alter or stagger
w ork schedules and w ork modes. This may include establishing four-day work weeks or tele-
commuting where employees work from their homes or other non-centralized locations, thus
mitigating the need for travel to work. A pilot tele-commuting program involving 134 Arizona
state employees, for example, reduced an estimated 97.078 commuting miles and saved over
$10,000 in gasoline and other costs in a six-month period, and is being recommended for expansion
(NGA. 1991).
Incentives to transportation consumers. These include incentives to use mass transit and bicycling
or w alking, parking management (higher parking fees and/or elimination of subsidized parking),
congestion pricing (tolls on heavily traveled roads during peak periods), auto use restriction (higher
registration and license fees), and increased gasoline and road taxes. One example is the Federal
government's monthly cash allow ance for its employees within the District of Columbia
metropolitan area who use public transportation.
Direct state action. States and cities may alter local institutional guidelines and regulations that
affect transportation. One of the primary opportunities in this area is to zone urban or central
areas to exclude expansive development of areas for parking, so that commuters have additional
incentive to car-pool or use mass transit. This approach, of course, depends on the ready
availability of the low -emission transportation alternatives to single-occupancy vehicles. In a
related measure, many state and city laws restrict private transportation system development to taxi
cab sen ices. Loosening these restrictions, if in conjunction with other complementary actions,
may result in the development of alternative transport systems such as the van services that are
allow ed for commuting between many urban centers and nearby airports.
Exhibit 5-8: Automated Traffic Signal Controls in Missouri
To move traffic more efficiently in tw o of the state's major metropolitan areas, the Missouri
Department of Natural Resources' Division of Energy granted $560,000 to the Missouri Highway and
Transportation Department to install automated traffic signals. The signal control system continually
monitors traffic and automatically adjusts signal timing for optimum operation and traffic flow. greatly
reducing fuel consumption and travel time for motorists. Each control system is located along a main
corridor to allow the bulk of motorists to move efficiently. One system w as installed in Kansas City;
the other near St. Louis.
In Kansas City, the automated traffic signals have reduced fuel consumption by 87.000 gallons
per year, reduced the number of stops by vehicles by 16 million per year, and increased average traffic
speeds such that annual motorist travel time was reduced by 120.000 hours. Similarly, in St. Louis fuel
consumption has been reduced by 353.000 gallons per year, the annual number of stops has been
reduced by almost 33 million, and average traffic speeds have increased to reduce annual travel time for
motorists bv 336.000 hours. All of these factors reduce carbon dioxide emissions.
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Other policy options. Additional options to reduce vehicle miles traveled include instituting auto
insurance reforms to reflect the costs of driving (pay-as-you-drive auto insurance, for example) and
promoting freight transportation system least-cost planning and/or imposing a load-weight-distance
tax on heavy taicks to make trucking more expensive and encourage other less energy intensive
modes of freight transport, such as rail. Longer term measures for VMT reduction include urban
light rail development, intercity high-speed rail, and integrated and inter-modal transport systems.
As mentioned above, most of these transportation control measures function best w hen
implemented in packages so that they support and reinforce each other.
5.3.2 Reduce Emissions per Mile Traveled
DESCRIPTION
Low ering emissions per vehicle per mile involves either improving the fuel efficiency of one mode
of transportation (such as automobiles or freight taicks) or substituting with a more efficient mode (such as
using trains rather than trucks). Carbon dioxide emissions are linked directly to fuel efficiency. While
vehicle fuel efficiency standards historically fall under the federal government's purview, states can play a
role in maintaining or improving the efficiency of the existing fleet by accelerating the replacement of less
efficient vehicles with less polluting and more efficient ones. Poor system integration between
transportation modes is often the cause for higher energy consumption as well as lengthy delivery times for
freight transport. Therefore, encouraging the inter-modal substitution of transportation mechanisms, such
as using trains or ships for long distance freight and taicks for local distribution, can also act to promote
efficiency.
CONSIDERATIONS
Emission reductions from gains in fleet efficiency can take longer to realize than the gains
achievable through transportation control measures described in the previous section. Improving fleet
efficiency is dependent on the vehicle replacement rate. The most promising programs, therefore, might
specifically target high emitting vehicles, such as light duty taicks or older, less fuel efficient automobiles.
Various institutional issues also affect efforts to increase efficiency. A primary one is behavioral:
people maintain w ell-established habits and preferences. Customers prefer vehicles with amenities and
pow erful acceleration, for example, while vehicles with higher efficiency often are associated with a lack of
amenities, slow acceleration, or certain safety concerns.
The tw o most significant technological baaiers to the propagation of fuel efficient technologies in
vehicle engines are reliability and availability. Generally. technologies to increase fuel efficiency also
increase the degree of technological complexity and often require a higher level of maintenance and
support. As with any newly introduced technology. qualified technicians and/or replacement components
may not be widely available, especially in airal areas. Additionally. policy -makers should consider that
current and future mandated safety and smog control devices often counteract fuel efficiency gains,
impeding carbon dioxide emission reductions. Decisions on efficiency w ill have to balance these alternative
benefits.
POLICY OPTIONS
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Public information programs. States max w ork w ith industry and other groups to educate
consumers on the multiple benefits of fuel efficiency. This max include campaigns to stimulate
demand for more fuel efficient vehicles and educate people on optimal driving practices. For
example, states max consider expanding the EPA's current mileage rating system for new cars to
apply to used vehicles as well and to include additional information such as estimated yearly fuel
cost.
Incentives to vehicle users. These include fuel efficiency purchase incentives ("feebates" or "gas
guzzler" taxes, for example) and registration fees pegged to vehicle fuel efficiency, gross w eight,
engine horsepower, or emissions control equipment. Other innovative measures, such as programs
to retire older automobiles in some areas, including Southern California and Northern Virginia,
have proven to be economic on the basis of air quality improvements alone.
Wide-scale transportation planning. States can support wide-scale transportation planning,
including supporting on-going research on transportation efficiency and participating in federal and
regional dialogues on fuel economy requirements. Connecticut, for example, has recognized and
addressed the potential for traffic congestion and pollution from population grow th and increased
vehicle traffic through innovative pubic and private research partnerships since 1980. This type of
planning most often results in regional development of new transportation modes.
Efficiency regulation. States max choose to establish efficiency standards for vehicles. Because
of political sensitivities surrounding this issue, the most successful programs of this type often
target distinct sectors, such as establishing fleet fuel efficiency standards for fleets or emission
limits for fleets. This max include fleet-specific promotion and use of electric and alternative fuel
pow ered vehicles, although the benefits of these vehicles max vary between regions for a variety of
reasons.
Support ant! sponsorship of institutional development. This max include establishing incentives
for shifting between modes of freight transport, supporting regional efforts for rail electrification in
areas where electricity is produced w ith little greenhouse gas emissions, and working with industry
and other organizations to promote efficiency and support other innovative measures.
1'uel efficiency regulation and enforcement. This includes establishing and enforcing speed limits,
establishing and enforcing state emission and inspection/maintenance standards, and instituting
used car efficiency standards.
5.3.3 Use Alternative Fuels
DESCRIPTION
In the long run. alternative transport fuels fuels with lower carbon emissions offer
opportunities to reduce greenhouse gas emissions per unit of travel. The National Academy of Sciences'
Mitigation Panel divided alternative fuels into three categories (NAS. 1991):
" Emissions from fuel production, such as the extraction and processing of fossil fuels, mining and processing of
uranium for electricity generation (and reactor waste), as well as emissions from the cultivation, harvesting, and
processing of energy crops forcthanol fuels arc factors to consider while estimating long-term emissions from
gasoline and alternative fuels.
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1) Those that could (a) result in increased greenhouse emissions relative to gasoline,
including: methanol from coal, electricity from coal-fired power plants, and ethanol from
biomass but (b) are produced and transported using fossil fuels.
2) Those that will reduce emissions less than 25 percent, relative to gasoline, including:
diesel. natural gas in any form, methanol from natural gas. clean/reformulated gasoline
with up to 25 percent biomass-derived additives, electricity from gas-fired power plants,
and electricity from current power plant fuel mix.
3) Those that eliminate or nearly eliminate greenhouse gas emissions, including: methanol and
ethanol from wood biomass using biomass fuel to produce and transport, hydrogen from
non-fossil fuel-generated electricity, and electricity from non-fossil fuels.
Conversion to alternative fuels may be controversial because it requires long-term planning,
additional capital investment, infrastructure changes, and high levels of political commitment.
CONSIDERATIONS
General consensus indicates that, of the alternative fuels that are under development, those that are
most ready for the marketplace w ill not reduce substantially greenhouse gas emissions from the
transportation sector. Those that offer the largest potential reduction in emissions are the furthest from
large-scale technical viability, and present the most challenges to w ide-scale distribution. Additionally. the
successful implementation of any of the available alternative fuels could limit prospects for others in the
future, since the delivery systems or required
infrastructure may not be compatible. The
alternative fuels under consideration also offer
shorter operating distances, w hich may require
more extensive supply/filling station networks.
Also, at current oil prices, no single
fuel listed above can compete in the
marketplace against gasoline. In order for any
fuel to displace or even supplement gasoline,
investments must be made in the scale of the
manufacturing process, in the distribution
networks, and in fleet conversions.
Environmental or toxicity characteristics may
be associated with the new fuel.
Institutional resistance to alternative
fuels could be significant: converting to any of
the alternative fuels at this point does not offer
additional, tangible, and recognized benefits to
vehicle operators. Without the certainty of a
customer base, few suppliers would venture
into the alternative fuels arena. Alternative
fuels policies may. therefore, need to address
both supplier and customer concerns to ensure
program success. An example of a federally -
Exhibit 5-9. Clean Cities
Clean Cities is a voluntary program
sponsored by the U.S. Department of Energy. It is
designed to accelerate and expand the use of
alternative fuel vehicles (AFVs) in urban
communities and to provide refueling and
maintenance facilities for their operation. Under the
Clean Cities program, local governments are
encouraged to form a partnership with public and
private stakeholders, such as utilities, fuel suppliers,
environmental groups, fleet managers, vehicle
manufacturers, consumers, and federal, state, and
local government agencies. Stakeholders
cooperatively draft an implementation plan that
quantifies program goals and outlines measures to
achieve these goals. DOE provides assistance by
operating two national hotlines (Clean Cities Hotline
and Alternative Fuels Hotline) and maintaining ten
regional support offices throughout the U.S.
Additionally. fleet operators interested in acquiring
AFVs can coordinate their purchases w ith the federal
acquisition program under the Federal Vehicle
Replacement Program. As of September 1997. there
w ere 58 designated Clean Cities. Atlanta w as the
first of these and has established a goal of having
25.000 AFVs in operation by 1996. Interested parties
stolid contact the Clean Cities Hotline at 1-800-
CCITIES for more information.
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sponsored program designed to address concerns of all stakeholders is Clean Cities (see box 5-9 for a
description).
POLICY OPTIONS
Policy options for promoting use of alternative fuels vary depending on time horizons, government
commitment levels, and emission reduction goals. Options include:
Target programs to utilize local alternative fuel sources. The Com Belt states currently subsidize
and publicize fuels made from com. such as ethanol; other states could similarly promote and
develop local resources. These programs max provide experience and know ledge needed for the
implementation of larger programs.
Convert state or city-owned fleets to alternative fuels. Governments max directly reduce
emissions and demonstrate alternative fuel feasibility by converting their own state vehicles and
mass-transit vehicles to use alternative fuels. For example. Burlington. Vermont, and Portland.
Oregon, are converting their fleets.
Support research and development programs, including research of non-fossil fuels, research of
promising "transition" strategies, and research and incentives for electric/hybrid design and
development. Despite the barriers associated with alternative fuels, states could consider
sponsoring pilot programs for demonstration and feasibility study purposes.
Provide incentives to support institutional development, including incentives for vehicle
conversion, filling station/distributor conversion, alternative fuel vehicle purchase, alternative fuel
use in private and government fleet vehicles, and innovative programs to replace gasoline.
5.4 METHANE FROM NATURAL GAS AND OIL SYSTEMS
Methane is the principal component of natural gas. Any leakage during the production, processing,
transmission, and distribution of natural gas w ill therefore contribute to methane emissions. Natural gas is
often found in conjunction with oil. and thus gas leakage during oil production and transportation is another
source of methane, though minor in the United States. Therefore, options for reducing methane emissions
from oil production and transportation are not addressed here.
The U.S. natural gas system is subject to both state and federal regulations controlling leakage,
primarily out of public safety concerns. As a result, the U.S. natural gas industry is one of the most
efficient systems in the w orld, in terms of methane emitted per quantity of gas produced. More recently.
stringent regional air quality regulations (e.g.. controlling VOCs and NOx emissions) impact the operation
of natural gas systems, and compliance with these regulations w ill undoubtedly affect emissions of methane
from various stages of the gas system. The rate regulation of the U.S. gas industry by FERC and state
PUCs can also help determine the economic feasibility of actions taken by gas companies. State policies
designed to reduce emissions from natural gas systems w ill need to consider the influences of existing
economic and safety regulations.
A number of technical approaches exist to reduce methane emissions from natural gas systems.
Many of these approaches can be cost-effective for firms in the natural gas industry and ultimately
beneficial to natural gas consumers. In fact, many of the approaches discussed here are already in use by
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companies in the U.S. natural gas industry. State programs addressing informational and institutional
barriers to the continued implementation of these technologies could reduce methane emissions in the short
term.
DESCRIPTION
The natural gas system includes production sites, processing and storage facilities, and
transmission and distribution netw orks. Methane is emitted from a wide variety of components, processes,
and activities in each of these stages. Because the majority of emissions occur in the production,
processing, transmission, and distribution stages, options for storage facilities are not considered here.
This section focuses on emission reduction options w ith the highest potential impact, in terms of both the
technical and economic feasibility of reducing methane emissions.
The production and processing of natural gas accounts for about 40 percent of methane emissions
from U.S. natural gas systems: transmission of gas to distribution facilities accounts for another 35
percent: the distribution of gas to end users through smaller, lower pressure pipes accounts for around 10
percent: and compressor engine exhaust accounts for about 15 percent. The majority of these emissions
result from leaks (fugitive emissions), venting from equipment such as pneumatic devices and gas
dehydrators. venting during routine maintenance, and compressor engine exhaust (U.S. EPA. 1993a).
Options are available for reducing emissions from all of these sources.
Pneumatic devices are gas-powered devices used on heaters, separators, gas dehydrators. and
gathering pipelines which control the flow of gas through the facility. Manx designs vent (or
"bleed") the gas which is used to operate these devices. Options to reduce emissions from these
devices include replacing high-bleed pneumatics (devices w ith high emissions) at the end of their
useful life with low - or no-bleed designs w here technically appropriate throughout the production
stage.
I'ugitive emissions are unintentional and usually continuous releases associated with leaks caused
by the failure of the integrity of the system, such as a damaged seal, a corrosion pit resulting in a
pinhole leak in a pipeline, or inadequately sealed valves, fittings, and assemblies. The primary
option for reducing fugitive emissions is the implementation of directed inspection and maintenance
programs.
Gas dehydrators. w hich use a desiccant such as glycol to remove moisture from produced gas.
emit methane when the saturated desiccant is regenerated. Options for reducing these emissions
include installing flash tank separators before the regenerating unit, and recovering and using the
separated methane for boiler fuel (in the regenerating unit).
Reciprocating engines are used throughout the industry to drive compressors that transport gas.
These engines emit considerable quantities of methane in their exhaust due to incomplete
combustion. The primary option to reduce these emissions is to use turbine engines, which emit
significantly less methane, as new transmission lines are constructed and old reciprocators are
replaced. This determination needs to be made on a site-specific basis.
Venting during routine maintenance of pipelines occurs w hen the natural gas must be removed
from a section of pipe for safety reasons during repairs. Options for reducing these emissions
include using portable evacuation compressors to pump the gas from the section of pipe to be
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repaired to an adjoining section, rather than venting the gas to the atmosphere. With current gas
prices, however, this technology may not be cost-effective in the United States.
In addition to these near-term options for reducing emissions, a variety of technologies and
practices that are currently under development may become available commercially over the next decade.
These options include: (1) metallic coated seals w ould be used in place of the rubber seals currently used
on moving shafts such as shafts in production wells and compressors; (2) "smart regulators" which
adjust the pipeline pressure to better accommodate demand at a given time; (3) clock spring composite
wraps which can be used to repair leaks on major pipelines without venting the gas; and (4) catalytic
converters, which would oxidize the methane released from reciprocating engines. Catalytic converters are
increasingly required to comply with air emission regulations for NOx and hydrocarbon emissions.
CONSIDERATIONS
The implementation of options to reduce methane emissions from natural gas systems should focus
on high impact applications, such as those discussed above. Because these options can usually be
implemented in a short period of time, they w ill have an immediate impact on reducing emissions. The
experience of gas companies in the U.S. shows that many of these options can be cost-effective. Moreover,
the economic feasibility of these options w ill likely improve with the anticipated increases in gas prices over
the next decades.
The benefits of the options discussed are not solely related to reduced methane emissions. In
addition to being profitable in their own right, these options improve operational efficiency and further
reduce safety risks associated w ith gas leaks. Options to reduce engine exhaust w ill also reduce the
emissions of local air pollutants that form low-level ozone NOx and VOCs.
POLICY OPTIONS
Provide Information. A significant barrier to reducing methane emissions from natural gas systems
is that information on the economic benefits of emission reduction techniques has not been
disseminated widely throughout industry. The other benefits associated with these options have
also not been disseminated. States could develop information campaigns to advertise successful
programs to industry, regulatory institutions, and other relevant organizations.
Address Institutional Barriers. In many cases, public utility rate structures provide little incentive
for reducing methane emissions to the atmosphere. Allowing most of the cost of unaccounted-for-
gas to be passed through to consumers, for example, provides little incentive for a company to
exceed existing safety standards. State regulatory agencies could develop incentives and remove
disincentives to applying technologies and practices that reduce methane emissions. For example,
a state public utility commission could adopt regulations that would allow a distribution company
that has demonstrated methane emissions reductions to receive a higher rate-of-return on
investment so that the value of the gas saved could be allocated to shareholders rather than
consumers.
Support Research and Development. States could fund targeted research to reduce costs and to
develop improved technologies and practices.
5.5
METHANE FROM COAL MINING
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Methane and coal are formed together during coalification. a process in w hich biomass is converted
by biological and geological forces into coal. Methane is stored within coal seams and also w ithin the rock
strata surrounding the seams. Deep coal seams have a substantially higher methane content than shallow
coal seams, because geological pressure intensifies with depth and prevents increasingly larger amounts of
methane from escaping. Methane is released when pressure within a coalbed is reduced, either through
natural erosion or faulting or through mining.
State and federal regulations concerning
the release of coal mine methane have been
developed as a result of safety, rather than
environmental, concerns; methane is explosive in
low concentrations and hazardous in
underground mines. State mine inspectors and
the federal Mine Safety and Health
Administration (MSHA) share responsibility for
monitoring methane levels in underground
mines.
For both safety and environmental
reasons, other aspects of coal mining are heavily
regulated. Federal and state energy,
environmental, labor, land management, and
other agencies regulate different aspects of the
coal mining industry. Significant federal controls include the Coal Mine Health and Safety Act. which
regulates virtually all aspects of mining methods and equipment design in order to reduce the dangers of
roof falls, explosions, exposure to respirable coal dust, and mechanical accidents. Environmental impacts
associated with coal mining including geological and hydrological disturbances, blasting, coal
preparation, and waste disposal are subject to regulation under the Surface Mine Reclamation and
Control Act (SMCRA) and state law s and regulations. Additionally, regulations targeting emissions from
coal combustion for electricity production significantly impact the coal mining industry. State policies
designed to reduce methane emissions from coal mining w ill need to be coordinated with existing federal
and state safety and environmental regulations.
There are two technical approaches for reducing methane emissions from coal mining. The first
approach is to recover methane before, during, or after mining and to use it as an energy source. The
second approach is to reduce coal-fired energy consumption, w hich w ould reduce the amount of coal
produced and. accordingly, the amount of methane released from coal mining.
5.5.1 Methane Recovery and Use
DESCRIPTION
Depending on the portion of coal that is produced by large and gassy mines in a state, encouraging
utilization of coal mine methane can significantly reduce methane emissions. Methane released from
underground mines can be recovered and sold to pipeline companies or used as a feed stock fuel to generate
electricity for on-site use or for sale to off-site utilities. For pipeline sales, a coal mine would need to install
gathering lines to transport the methane to a commercial pipeline. For pow er generation, a mine w ould
need to install either an internal combustion engine or gas turbine, both of which can be adapted to generate
Exhibit 5-10. Jim Walter Resources: Methane
Recovery Projects
Since the early 1980s. Jim Walter Resources
(JWR) has recovered methane from four coal mines
in Alabama. Each year, about 13 Bcf of high-quality
methane is produced from a variety of mine
degasification approaches sold at a nearby pipeline.
JWR estimates that this program has reduced mining
costs by more than S1 /ton and enabled the continued
economic operation of these coal mines. In addition,
the company is preventing a significant amount of
methane from being emitted each year.
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electricity from coal mine methane. Most methane recovery and utilization technologies can be installed
within a year.
Coal mine methane is recovered in a range of purities. Pipeline sales require nearly pure methane,
while power generation is a technically viable option for methane concentrations as low as 30 percent (U.S.
EPA. 1993b). Techniques for recovery include drilling wells before, during, or after mining. Wells drilled
several years in advance of mining will generally be the most expensive, but will recover large amounts of
nearly pure methane (up to 70 percent of the methane that w ould be otherwise emitted). Wells drilled
during or after mining can also recover substantial quantities of methane (up to 50 percent of emissions),
but the methane may be contaminated with mine ventilation air (U.S. EPA. 1993b). While such a
methane/air mixture is normally suitable for power generation, injection into pipelines w ould require
enrichment of the gas. w hich may not be economically feasible.
Established techniques exist for recovering methane. In fact, over 30 U.S. mines already use
recovery wells as a supplement to their ventilation systems to ensure that methane concentrations remain
below acceptable levels (U.S. EPA. 1993a). However, this recovered methane is normally released to the
atmosphere.
In addition to the highly concentrated methane produced by recovery wells, methane that is emitted
in low concentrations in ventilation air also could be utilized. Ventilation air may be used as the
combustion air in an on-site turbine or coal fired boiler. However, at the current time, utilization of
ventilation air has not been technically demonstrated.
In cases where it is not possible to utilize the recovered methane as an energy source, the gas could
potentially be flared, which involves burning the methane so that primarily carbon dioxide, rather than
methane, is emitted. However, flaring is not currently considered to be a feasible option for coal mines due
to safety considerations, although research is being conducted on this topic. For example, the Energy
Policy Act of 1992 includes a provision for further study of this technical approach.
CONSIDERATIONS
Implementation of methane recovery systems should focus on large and gassy mines; in general,
recovery and use w ill be economic only for mines with high coal production and high methane emissions
per ton of coal mined. A majority of these mines are located in the Central and Northern Appalachian
basins (primarily Pennsylvania. Virginia. West Virginia, and eastern Kentucky), the Warrior basin
(Alabama), and a few southwestern states. However, other states may also have mines for which methane
recovery and use may be economic.
A few large and gassy mines can account for a very large portion of total state coal mining
emissions, and encouraging their use of coal mine methane can significantly reduce emissions.
Furthermore, developing methane recovery and utilization projects w ill have an immediate impact on
reducing greenhouse gas emissions. Recovery wells and utilization equipment can usually be installed
within a year.
Implementation of programs to encourage recovery and use of methane is facilitated by the fact
that such projects can be profitable for coal mines. Currently, ten mines located in Alabama. Virginia, and
Utah are making a profit by selling recovered methane to pipelines (See Exhibit 5-10). In 1993. these ten
mines recovered for sales to pipelines about 25 bef of methane that w ould other wise have been emitted to
the atmosphere (U.S. EPA. 1994b). On-site power generation may also be profitable for coal mines.
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Given their large electricity requirements, coal mines may realize significant economic savings by
generating pow er from recovered methane. Nearly every piece of equipment in a mine operates on
electricity, including mining machines, conveyor belts, ventilation fans, and elevators for workers.
Furthermore, the gassiest mines may be able to generate pow er in excess of their ow n on-site needs; this
excess power could be sold to a utility.
Finally, the benefits of methane recovery and use are not limited to reducing emissions. Recovery
and use of methane reduces the risk of explosion in mines, reduces costs for mine ventilation, contributes to
energy efficiency by utilizing an otherwise wasted resource, and may create additional financial revenues
for coal mines and additional jobs in methane production.
POLICY OPTIONS
Policy options described here focus on programs that could either best be developed at the state
level or that could augment federal programs that are planned or already in progress."
Provide Information. The utilization of recovered methane is still a relatively new concept in the
coal mining industry. States can disseminate information on methane recovery options and
highlight instances of successful methane recovery projects. State agencies may also find a role in
identifying and attracting investors in coal mine methane projects and facilitating linkages between
local coal companies and potential partners.
Support Research and Development. Several technologies that might help reduce coal mine
methane emissions such as gas enrichment processes and utilization of mine ventilation air as
combustion air lack technical demonstration. Additional research is also needed on flaring.
States may be able to support research on the potential application of such technologies at coal
mines within their jurisdictions.
Address Legal Barriers. Unresolved legal issues concerning the ow nership of coal mine methane
resources constitute one of the most significant barriers to coal mine methane recovery. For
example, ambiguity regarding who may demand compensation for resource development provides a
disincentive for investment in coal mine methane projects. Potentially, entitlement could rest w ith
the holder of the coal rights, the ow ner of the oil and gas rights, the surface ow ner, or a
combination of the three. As part of the Energy Policy Act of 1992. states w ill be required to
develop a mechanism to address ownership issues. ' One option, enacted by Virginia, is to force
pooling of all potential interests in the resource. Under forced pooling, until such time as
ow nership is decided, payment of costs or proceeds attributable to the conflicting interests are paid
into an escrow account. This legislative effort resulted in the rapid development of coal mine
methane projects in Virginia (U.S. EPA. 1993b).
Under the National Energy Policy Act of 1992. the Secretary of Energy, in consultation with the EPA and the
Department of Interior, is instructed to study the technical, economic, financial, legal, regulatory, institutional and
other barriers to coalbcd methane recovery. This study is to be submitted to Congress in October 1994.
States should be aware that the Energy Policy Act of 1992 mandates the establishment of a federal demonstration
and commercial application program for advanced coalbcd methane utilization technologies.
As part of the Energy Policy Act of 1992. those states determined by the Secretary of Interior as not having
statutory or regulatory procedures for addressing ownership concerns will have three years to enact such a
program. If the state docs not act. the Secretary of Interior will impose a forced pooling mechanism similar to that
enacted in Virginia.
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Address Institutional Barriers. Pipeline capacity is severely limited in many coal producing
regions, which can make it difficult for coal mine methane producers to gain reliable access to
pipelines or may necessitate the construction of extensive gathering systems. Accordingly, states
with limited pipeline capacity may wish to encourage or expedite new pipeline construction.
Similarly, electric utilities in many coal producing regions have excess capacity and low generating
costs. Accordingly, utilities may have low "buy-back" rates for power generated from coal mine
methane. Furthermore, due to concern over losing a large customer, utilities may discourage coal
mines from generating pow er for their own use. States could consider adopting provisions to
encourage pow er generation from environmentally preferred pow er producers, such as coal mine
methane projects. States may also evaluate the need for actions to ensure that utilities do not
inappropriately discourage power generation for on-site use. Section 5.2 of this document, which
addresses "supply-side" measures for reducing greenhouse gas emissions from the electric utility
sector, discusses these policy options in greater detail.
Provide Financial Incentives. Though methane recovery and use may be immediately profitable
for some mines, others may find these projects economically feasible only if given appropriate
financial incentives. For example, low interest loans for investment in recovery and utilization
projects could encourage recovery methods that w ould capture the greatest amount of methane. A
state-issued production tax credit could also encourage methane recovery (e.g. a $/mcf of gas or
cents/kw h of electricity produced credit against state tax liability).
Ensure Appropriate Operating Standards. Coal mine methane wells, although similar to
conventional natural gas wells, have important technical differences that may necessitate the
development of state regulations specifically addressing this type of production. These regulations
may be related to w ell spacing, coal mine safety, and produced w ater treatment and disposal.
States without an existing coal mine methane industry may need to investigate the adequacy and
applicability of existing regulations and modify- them as appropriate to ensure the safe,
environmentally beneficial, and effective production of coal mine methane. The coalbed methane
industry has cooperated with regulators in states like Alabama and New Mexico to facilitate the
rapid development of appropriate regulatory framew orks. Such regulations may serve as a model
for state initiatives to expedite coal mine methane development.
Require Methane Recovery and Use. States could directly require underground mines to recover
and use methane. However, this may not be a viable policy option for several reasons, including:
(1) methane recovery and use is most economic for mines w ith high methane emissions; and (2)
recovery and use could not be mandated unless there w ere guaranteed gas or electricity markets for
the recovered methane.
5.5.2 Reduce Coal-Fired Energy Consumption
A second technical approach to controlling coal mine methane emissions is to reduce coal-fired
energy consumption. This approach w ould reduce the demand for coal and thus reduce the level of mining
activities and the resulting methane emissions. Importantly, this approach could be adopted by most states.
1 In 1979. the U.S. Congress enacted the "Section 29" tax credit in order to encourage the development of
unconventional gas resources. The eligibility of coalbcd methane production under the Section 29 tax credit has
expired as of the end of 1992 and gas produced from coalbcd methane wells will only be eligible for the credit if
they arc drilled prior to the expiration date.
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regardless of the amount of coal they produce because nearly all states consume electricity from coal-fired
power plants. Reducing coal-fired energy consumption could be achieved by encouraging energy efficiency
and/or by encouraging fuel sw itching from coal-fired electricity production to less polluting energy sources.
Programs designed to reduce coal-fired energy consumption would likely be implemented in conjunction
with general policies targeted to encourage energy efficiency and fuel-switching. See Sections 5.1 and 5.2
for more information on energy consumption and production.
5.6 METHANE FROM LANDFILLS
Landfills are the largest single anthropogenic source of methane emissions in the United States.
Municipal solid waste (MSW) landfills account for over 95 percent of landfill methane emissions, w ith
industrial landfills accounting for the remainder (U.S. EPA. 1993a). Methane is produced during the
bacterial decomposition of organic material in an anaerobic (i.e.. oxygen deprived) environment. The rate
of landfill methane production depends on the moisture content of the landfill, the concentration of nutrients
and bacteria, temperature. pH. the age and volume of degrading material, and the presence or absence of
sewage sludge. Once produced, methane migrates through the landfill until a vertical opening is reached
and the gas escapes into the atmosphere.
There are two basic approaches for reducing methane emissions from landfills. The first approach
is to recover the methane and to either flare the gas or use it as an energy source. The second approach
involves reducing the quantity of degradable organic waste produced and deposited in landfills. In addition,
these approaches support other state environmental and public health priorities, such as protecting air.
surface w ater and ground w ater resources.
5.6.1 Methane Gas Recovery
DESCRIPTION
Landfill gas produced in a sealed landfill can easily be captured by installing a gas recovery
system. Landfill gas is typically 50 percent methane (along w ith 45 percent carbon dioxide and 5 percent
other gases including hydrogen sulfides and volatile organic compounds (VOCs)). and is therefore a
medium quality gas that can be: (1) recovered, purified, and used to generate electricity; (2) used as a
source of natural gas for residential, commercial, or industrial heating needs; or (3) combusted in a flare.
In addition, there are several emerging utilization technologies that max be commercially available in the
near term, including using landfill gas as a vehicle fuel and/or in fuel cell applications. Gas recovery
essentially involves "mining" the trapped methane. This process consists of drilling wells into the landfill,
withdrawing the gas under negative pressure, and gathering the recovered gas at a central processing
center. Unlike strategies concentrated on reducing the amount of degradable w aste landfillcd (w hich curb
future methane emissions), methane gas recovery reduces current methane emissions. Recovering methane
has other environmental and safety benefits as w ell, such as reducing the risk of explosions, reducing odor,
and reducing emissions of air toxics and non-methane volatile organic compounds.
Methane gas recovery and utilization technologies are widely available, and projects have costs
similar to other relatively small renewable energy technologies. The profitability of landfill gas energy
recovery projects depends on a range of factors, including the volume of recovered methane, the price
" Costs for methane recovery range from $5,000 to $10,000 per acre for installation. Combustors for flaring range
from $15,000 to $90,000. To purify the gas for use in internal combustion engines costs from $50,000 to $300,000
for purification (IPCC. 1992b).
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obtained for electricity (or gas) sales, and the availability of tax incentives. Currently, there are more than
150 fully operational landfill gas recovery and utilization projects in the United States, recovering about
1.3 teragrams. or 66 billion cubic feet, of methane gas per year. Nearly 100 additional gas recovery
projects are underway around the country. EPA estimates that there max be an additional 500 profitable
landfill gas energy recovery projects that could be developed in the U.S.. but are constrained by
informational, regulatory, and other barriers. Methane can also be flared, w hich almost completely
eliminates the methane contained in the gas. but w astes the energy value of the gas.
Before recovered landfill gas can be used as a fuel source, it must be processed to remove water,
particulates, and corrosive compounds. Processed landfill gas can be used to power an electric generator,
such as a gas turbine or an internal combustion engine. Thermal energy from combustion can also be used
to drive a steam turbine to increase electricity production. Alternatively, landfill gas can either be used
directly for industrial, commercial or domestic energy purposes, or upgraded to a high-Btu fuel suitable for
supplying a natural gas pipeline.
CONSIDERATIONS
Implementation of landfill gas recovery and utilization projects should focus on large landfills (over
1 million tons of waste-in-place). which will most likely have a high enough gas flow to support a
profitable project. While landfill gas recovery will be particularly relevant for states with large urban
centers, and their associated large municipal solid waste landfills, all states w ill have several landfills at
which landfill gas recovery max be a viable option.
Landfill gas projects can provide many important environmental and economic benefits. They
improve the global environment by reducing methane emissions, and the local environment by reducing
emissions of volatile organic compounds (VOC). while simultaneously displacing emissions associated with
fossil fuel use. They also provide a secure, low -cost energy supply that can reduce dependence on non-
local energy. They also reduce the w aste of valuable natural gas by preventing it from being emitted to the
atmosphere. In addition, these projects can provide economic benefits, such as creating jobs and generating
revenues.
Traditionally, landfill methane has been viewed as a safety hazard and a general nuisance.
However, there is an increasing aw areness on the part of state and local governments, landfill ow ners and
operators, utilities, and industry, of the environmental, energy, and economic benefits that can result from
recovering, rather then emitting or flaring, this gas. For example, utilities, which are a major market for
electricity generated at landfills, can play an important role in encouraging economically attractive projects.
The benefits of these projects to utilities include: promoting a diversified fuel mix; obtaining additional
17
Acid Rain Credits; and fulfilling Climate Challenge commitments. Utilities can also market power
generated from landfill gas as "green power." thereby appealing to consumers" increasing interest in
environmentally benign products. Landfill owners and operators can benefit by reducing regulator} costs
and improving landfill safety. EPA's New Source Performance Standards and Emission Guidelines.
promulgated on March 12. 1996. require many landfill owners and operators to collect and. at the very
least, flare their landfill gas. Utilizing the collected gas for an energy recovery project max offer owners
1 Climate Challenge, sponsored by DOE. is a CCAP initiative targeted at electric utilities. This action encourages
electric utilities and other eligible firms to submit voluntary greenhouse gas reduction portfolios to DOE for
inclusion in the Energy Information Administration's database. Through Climate Challenge. DOE is also
attempting to stimulate the development and application of clean, sustainable energy technologies, strengthen the
U.S. position in the global environmental technology marketplace, and contribute to overall environmental quality.
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and operators an opportunity to offset regulatory costs or even generate a profit. Local industries can also
benefit from encouraging or participating in landfill gas energy recovery projects by obtaining an
inexpensive source of medium quality fuel (or steam, if the project is generating electricity).
POLICY OPTIONS
Provide Information. States can provide landfill ow ners, project developers, and other interested
parties with information on landfills that are candidates for methane recovery projects, on potential
electricity purchasers (i.e.. utilities and industrial end-users), and on relevant regulatory policy and
permitting issues w ithin their state. EPA's Landfill Methane Outreach Program (LMOP) works
cooperatively with states to encourage landfill gas energy recovery projects by developing and
disseminating these types of information. For this purpose, the LMOP has developed many
publications and tools.s including:
* P-PLUSdecision support software: assists landfill owners and operators in evaluating the
costs of landfill gas collection and use.
* End-user locator software (currently under development): helps landfill owners and operators
and project developers find buyers for the energy they produce by identifying potential end-
users. including schools, prisons, industries, and others.
* State Primers: developed for every state that becomes an ally to the program. Primers
facilitate communication and cooperation between states and project developers by identifying
project opportunities, detailing pertinent regulations, and providing contact information for
individuals at relevant state agencies.
* Landfill Profiles database: lists all landfills that are candidates for gas utilization projects in
selected states. The database includes many factors relevant to the development of projects,
including landfill name, location, size, gas generation capacity, regional electricity prices, and
w hether or not the landfill has a gas collection system in place.
* Guidance Documents and periodic reports: can be provided by states to project developers
and interested landfill owners. These documents include a guide to understanding the Landfill
Rule, the Ally Report and the Ally Update (periodic reports providing information on issues
affecting development of landfill gas energy recovery projects), project financing guidance
documents and brochures, and "Turning a Liability into an Asset: a Project Development
Handbook".
LMOP representatives also meet with state agencies throughout the country to discuss ways that
states can support and encourage development of landfill gas-to-energy projects.
Address Institutional Barriers. Electricity pricing and transmission line access and capacity may
confound the development of landfill gas recovery projects. States w ith limited pipeline capacity
may w ish to encourage or expedite new pipeline construction or grant environmentally beneficial
producers preferential access to existing electric power lines. States could consider adopting
18
LMOP products, including E-PLUS. state primers, and other guidance documents, can be ordered by calling the
LMOP Hotline at l-888-STAR-YES (782-7937).
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provisions to encourage power production from landfills and evaluate the need for actions to ensure
that utilities do not inappropriately discourage power generation for on-site use or for sale to the
utilities (see also Sections 5.1 and 5.2).
State regulatory policy and permitting procedures can also present barriers to landfill gas projects.
For example, the siting of the electricity generation equipment associated with a project can be
extremely difficult in some regions, even though these projects have positive impacts on local air
quality. In general, the permitting process for small unconventional power projects can hinder the
implementation of these projects. In some cases, regulations concerning the placement and
operation of collection w ells, developed for gas migration control, can interfere w ith optimal w ell
placement for gas recovery and utilization. States can review their policies and procedures in order
to reduce unnecessary barriers to these types of projects. EPA's Landfill Methane Outreach
Program is w orking cooperatively with state allies to conduct interagency reviews of state
regulations and permitting procedures.
Provide I'inancictl Incentives. Methane recovery projects can be encouraged through tax credits,
loans or grants for capital investment in methane collection equipment, and state and private
investment in research and development of landfill gas recovery technology. States can provide
production tax credits to landfill operators that initiate methane recovery for power production or
offer consumption tax credits to utilities that purchase methane from landfill projects. States may
also subsidize electric transmission line upgrades, pipeline upgrades, and offer other incentives to
extend gathering lines to allow for transport of additional capacity. Additionally, states could
impose an emissions tax on methane released to the atmosphere or diversion credits for emissions
avoided through methane recovery.
5.6.2 Keeping the Organic Fraction of Municipal Solid Waste Out of Landfills
DESCRIPTION
When organic materials are landfilled. some of the carbon is converted by methanogenic bacteria to
methane, carbon dioxide, and other gases, and some of the carbon is sequestered. Organic materials that
produce significant amounts of methane include paper, yard trimmings, and food scraps. Preliminary
research by EPA indicates that w hen office paper, corrugated cardboard, food scraps, or grass clippings
are landfilled. the GHG emissions from methane generation outweigh the GHG sink due to carbon
sequestration (EPA. 1997). By keeping these materials out of landfills (through recycling or composting),
states can reduce net GHG emissions from the waste management sector.
There are several approaches to reduce the amount of these organic materials landfilled. These
include source reduction, recycling, composting, and combustion. Source reduction and recycling also
generally reduce the use of fossil fuels in manufacturing, further reducing GHG emissions. This section
focuses on keeping the organic fraction of municipal w aste out of landfills. Further information on methods
to reduce GHGs from municipal w aste management (including a more comprehensive discussion of the
opportunities for source reduction and recycling) may be found in Section 6.2.
CONSIDERATIONS
The simplest method of managing yard trimmings is "grasscycling." or leaving grass clippings in
place on the law n to decompose. Some homeowners prefer to use a "mulching mow er" for this purpose. In
a state with a population of 5 million, and the national average rate of generation of grass clippings.
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grasscx cling will reduce GHG emissions by 10.000 metric tons of carbon equivalent (MTCE) per year,
compared to landfilling the grass clippings.
Yard trimmings max also be composted, either in a backyard compost pile or bin. or in a
centralized composting operation. Backyard composting eliminates GHG emissions from waste
transportation. Centralized composting by a municipality requires land, labor, and a distribution system for
the finished compost. Much of the compost max be used for municipal landscaping or highway projects.
Alternatively, centralized composting max be done by fanners. In such cases, the municipality typically
transports yard trimmings to a farm, where the fanner accepts them at no cost to the municipality. The
fanner then makes compost from the yard trimmings, and uses the compost on the farm.
Food scraps max . similarly, be composted either in backyards or in a centralized operation.
Commercial composting of food scraps is becoming more common.
Paper max be kept out of landfills through recycling. Prices for recovered office paper and
corrugated boxes, in particular, have been consistently good, suggesting that it is particularly cost-effective
to recycle these types of paper. An added advantage for recycling office paper and coraigated boxes is that
they are generated by commercial sources, so that collection efforts yield high quantities.
Alternatively, paper, food scraps, and yard trimmings max be combusted. Particularly when the
combustor incorporates energy recovery, this w aste management method generally results in lower GHG
emissions than landfilling.
POLICY OPTIONS
States have a number of policy options for keeping organic materials out of landfills. The most
popular policy among states to date is a ban on landfilling of yard trimmings; by early 1997 23 states had
instituted such bans. Yard trimmings in these states are either composted, combusted, or left on the ground
to decay naturally.
States max also promote or require recycling of paper and other materials. To promote recycling.
Oregon requires haulers to collect recyclable materials from businesses, and requires that collection serx ice
be provided at a cost that does not exceed refuse collection costs.
Composting of food scraps is a significant area of opportunity for further reducing the amount of
organic w aste going to landfills. Some communities offer households free recycling bins for this purpose.
An educational campaign can be instituted to promote any of the options discussed above. A
relatively low-cost policy option would be an educational campaign to promote grasscycling. as well as
backyard composting of yard trimmings and food scraps. Minnesota and Pennsylvania are tw o states that
have extensive educational campaigns to promote recycling and composting.
5.7 METHANE EMISSIONS FROM DOMESTICATED LIVESTOCK
Methane is produced as part of the normal digestive processes of animals; this process is referred
to as "enteric fermentation." Of domesticated animals, ruminant animals including cattle, buffalo, sheep,
goats, and camels are the major source of methane emissions. Ruminant animals are characterized by a
large "fore-stomach" or rumen. Microbial fermentation in the rumen enables these animals to digest coarse
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plant material that monogastric animals, including humans, cannot digest. Methane is a byproduct of this
microbial fermentation.
In the U.S.. cattle account for nearly all methane emissions from enteric fermentation. Factors
affecting methane production from individual animals include: the physical and chemical characteristics of
the feed, the feeding level and schedule, the activity and health of the animal, and possibly genetic traits
(U.S. EPA. 1993a). Of these factors, the feed characteristics and feed level most influence the amount of
methane produced.
In general, methane production by livestock represents an inefficiency because the feed energy
converted to methane is not used by the animal for maintenance, grow th, production, or reproduction.
While efforts to improve efficiency by reducing methane formation in the rumen directly have been of
limited success, it is recognized that improvements in overall production efficiency will reduce methane
emissions per unit of product produced. A wide variety of techniques and management practices are
currently implemented to various degrees among the U.S. livestock producers which improve production
efficiency and reduce methane emissions per unit of product produced. More w idespread use of these
techniques, as w ell as the implementation of new techniques, w ill enable methane emissions from livestock
to be reduced.
No existing federal or state regulations specifically focus on reducing methane emissions from
domesticated livestock. However, government and industry efforts designed to promote animal production
efficiency w ill also indirectly reduce methane emissions. Several techniques including genetic
improvements and the use of productivity-enhancing agents as w ell as changes to the marketing system for
milk and meat products, including the milk pricing system and the beef grading system could potentially
reduce methane emissions from livestock (EPA. 1993b).
5.7.1 Improve Production Efficiency Per Animal
DESCRIPTION AND CONSIDERATIONS
Improving livestock production efficiency so that less methane is emitted per unit of product is the
most promising and cost effective technique for reducing emissions in the U.S. While U.S. livestock
production is among the most productive in the world, opportunities for improvement exist for all sectors of
the cattle industry that can reduce methane emissions substantially. In many cases these options can be
profitable because they reduce costs per unit of product produced.
Specific strategies for reducing methane emissions per unit product have been identified and
evaluated for each sector of the beef and dairy cattle industry. Throughout the industry, proper veterinary
care, sanitation, ventilation (for enclosed animals), nutrition, and animal comfort provide the foundation for
improving livestock production efficiency. For many producers, focusing on these basics provides the best
opportunity for improving production efficiency. Within this context, a variety of techniques can help
improve animal productivity and reduce methane emissions per unit of product.
Dairy Industry. Significant improvements in milk production per cow are anticipated in the dairy
industry as the result of continued improvements in management and genetics. Additionally,
production-enhancing technologies, such as bST. are being deployed that accelerate the rate of
productivity improvement. By increasing milk production per cow. methane emissions per unit of
milk produced declines (EPA. 1993b).
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BeefIndustry. Improving productivity within the cow -calf sector of the beef industry requires
additional education and training. The importance and value of better nutritional management and
supplementation must be communicated. Energy, protein, and mineral supplementation programs
tailored for specific regions and conditions need to be developed to improve the implementation of
these techniques. The special needs of small producers must also be identified and addressed
(EPA. 1993b).
In addition to these near term reduction strategies, several very long term options may become
available as the result of ongoing research, including: the transfer of desirable genetic traits among species
(transgenic manipulation), the production of healthy twins from cattle (tw inning); and the bioengineering of
rumen microbes that can utilize feed more efficiently.
POLICY OPTIONS
Though significant efforts by the dairy and beef industries and the U.S. Department of Agriculture
are already underway to research and/or promote adoption of practices that w ill improve animal efficiency
and reduce methane emissions per unit product, states can also implement policies designed to reduce
methane emissions from ruminant livestock.
Provide Information. Through the USDA Cooperative Extension Sen ice. states may be able to
develop information campaigns to encourage the use of techniques that improve production
efficiency and reduce methane emissions per unit product. States could develop and make
information available on the best management practices for different regions of the state, provide
feed analysis sen ices to determine actual protein and dry matter content of feeds, and provide
information about and access to feed balancing computer programs.
Support Research and Development. States could promote further research on genetic
improvement in beef cattle, on identifying critical nutritional deficiencies that could be corrected
through mineral or protein supplementation, and on determining the nutrient content of feeds.
States may be able to work with industry on these efforts.
Provide Incentives. Generally, the most profitable livestock management practices do not yield
maximum biological productivity from the animals (t'.&.. maximum milk per cow or maximum
w eaned calf w eight per cow). Targeted financial incentives (fees and rebates) tied to verifiable
productivity measures could be used to encourage producers to improve productivity, which would
then reduce emissions per unit product produced. Significant research remains to design such an
incentive system, including: choosing appropriate and verifiable measures of productivity;
developing funding and fee collection mechanisms; and selecting appropriate levels for the
incentives.
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5.7.2 Improve Overall Production Efficiency of Animal Products by Matching Animal
Products to Customer Preferences
DESCRIPTION AND CONSIDERATIONS
The existing systems for marketing milk and meat products in the U.S. have important influences
on production efficiency, and hence methane emissions. Refinements to the existing marketing systems
hold the promise of improving the link between consumer preferences and production decisions, thereby
reducing waste and improving efficiency. Proposed approaches include the follow ing:
Dairy Industry. Dairy industry emissions can also be reduced by refinements in the milk pricing
system. By eliminating reliance on fat as the method of pricing milk, and moving tow ard a more
balanced pricing system that includes the protein or other non-fat solids components of milk,
methane emissions can be reduced as the result of changes in dairy cow rations and genetics.
There is already a trend to reduce reliance on fat in the pricing of milk (EPA. 1993b). To realize
methane emissions reductions from this trend, the effectiveness of alternative ration formulations
on protein synthesis must be better characterized.
BeefIndustry. Refinements to the beef marketing system are needed to promote efficiency and
shift production toward less methane emissions intensive methods. To be successful, the
refinements to the marketing system require that the information flow w ithin the beef industry be
improved substantially. Techniques are required to relate beef quality to objective carcass charac-
teristics. Additionally, the carcass data must be collected and used as a basis for purchasing cattle
so that proper price incentives are given to improve cattle quality and reduce unnecessary fat accre-
tion.
The beef industry has several programs under way to achieve these objectives. Carcass data
collection programs have been initiated that provide detailed data on carcass quality to partici-
pating producers. Also, a major initiative is ongoing to educate retailers regarding the cost-
effectiveness of purchasing more closely trimmed beef (less trimmable fat). As these programs
become more widely adopted, the information needed to provide the necessary price incentives to
producers w ill become available.
POLICY OPTIONS
The beef and milk marketing systems are principally regulated through existing federal programs.
States have few opportunities to influence these systems through regulator} mechanisms. However, as
significant purchasers of milk and meat products. States and related State-influenced institutions (such as
schools and hospitals) have an opportunity to purchase milk and meat products in a manner that provides
the price signals that lead to improved production efficiency. Significant research remains to be done to
fashion an appropriate State-level policy in this regard, but there is substantial potential to influence
production practices through the use of specifications in purchase contracts. Alternatives for specifying
product characteristics should be explored and opportunities for leveraging purchasing decisions need to be
identified.
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5.8
METHANE FROM MANURE MANAGEMENT
When livestock manure is handled under anaerobic conditions (in an oxygen free environment),
microbial fermentation of the w aste produces methane. Liquid and slurry w aste management systems are
especially conducive to anaerobic fermentation and to methane production. Because confined livestock
operations such as dairy and hog farms rely on liquid and/or slurry systems to manage a large portion of
their manure, they account for a majority of all animal manure methane emissions in the U.S. Emissions
depend on farm characteristics (including number and type of animals, manure management practices, and
animal diet) and climatic conditions (including temperature and relative humidity).
In addition to methane emissions, livestock manure can cause surface and ground water pollution,
air pollution (e.g.. ammonia and strong odors), and human health risks. State and federal regulations
require proper manure management practices to avoid these potentially adverse environmental problems.
In particular, under Section 319 of the Federal Clean Water Act (CWA). confined livestock operations are
regulated as potential point sources of w ater pollution and are required to control rainfall run-off and to
apply manure prudently. This section of the CWA is enforced by individual states through a permit
process designed under the National Pollution Discharge Elimination System (NPDES) program.
In order to comply with these federal and state regulations, many confined livestock operations
(i.e.. non-grazing operations) are utilizing anaerobic lagoons or pits to contain runoff and to manage their
manure. These systems are simple, cost-effective, and relatively safe. However, because anaerobic
systems produce more methane than aerobic systems, their increased use could significantly increase
methane emissions from livestock manure.
5.8.1 Methane Recovery and Use
DESCRIPTION
Feasible and cost-effective technologies exist to recover methane produced from the liquid manure
management systems used at dairy and swine operations. Methane can be captured, for example, by
placing a cover over an anaerobic lagoon. A collection device is placed under the cover and methane is
removed by a vacuum. Alternatively, methane can be recovered from mixed tank or plug flow digesters
that produce methane. These and other technologies can be used on individual farms or at centrally located
facilities.
Because methane is a fuel, methane gas recovered by any of the available methods provides a
renew able energy source. The methane can be used in a variety of equipment:
Internal Combustion (l(') Engines. IC engines are reliable, available in a variety of sizes, and can
be operated easily. Electricity generated can be used to replace energy purchased from a local
utility or can be sold to the local electricity supply system. Additionally. waste heat from these
engines can provide heating or warm water for farm use or for recycling into the recovery system.
Boilers and Space Heaters. Boilers and space heaters fired w ith methane can produce heat for use
in livestock operations. Although this is an efficient use of the gas. it is generally not as versatile
as electricity generation and most farms do not require the amount of heating that can be generated.
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Chillers. Gas-fired chillers arc commercially
available and can be used for milk refrigeration
on dairy operations. Because dairy farms use
considerable amounts of energy for
refrigerating milk, chillers max provide a
profitable opportunity for on-fann methane
utilization.
Pipeline Sales. Available methane can be sold
to pipelines for distribution through the existing
natural gas pipeline network. However, gas
produced from livestock manure is typically
composed of about 40 to 50 percent carbon
dioxide (CO2) and trace quantities of other
gases such as hydrogen sulfide (H2S). which
need to be removed before the gas can be
injected into a pipeline. The cost of upgrading
the gas to pipeline quality makes this option
uneconomical at the current time.
Methane must be processed before it can be
used in most equipment. The amount of processing
necessary depends on the specifications of the
equipment and the characteristics of the gas.
Depending on the number of large dairy and
sw ine operations in a state, utilization of livestock
methane can significantly reduce methane emissions. These systems can reduce emissions at individual
farms by up to 80 percent (U.S. EPA. 1993b). Furthermore, developing methane recovery and utilization
projects w ill have an immediate impact on reducing emissions since these systems can be installed within
one year.
It should be noted that policies regarding methane recovery systems max be compatible with
policies encouraging the use of manure instead of commercial fertilizer. Methane recovery systems could
be employed during the storage period before application to fields.
CONSIDERATIONS
Recent trends in manure management, such as using anaerobic lagoons to meet requirements of the
Clean Water Act. have prompted interest in developing and installing on-fann methane recovery systems.
Manx of the operational problems initially experienced w ith methane recovery systems in the early 1970s
have been overcome during the past two decades through advances in the methane recovery industry,
EPA"s AgStar program focuses on providing support to farms considering implementing methane recovery
systems. As of late 1997 there w ere 40 farm operations participating as AgStar partners.
Implementation of recovery systems usually focuses on large dairy or hog farms (for example,
farms with ox er 500 milking cows or ox er 1.500 hogs) that use liquid or slurry manure management
systems which are especially conducive to methane production. The current trend in livestock production is
Exhibit 5-11: Methane Recovery in North
Carolina
The Southeast Regional Biomass
Energy Program (SERBEP) recently
supported a successful demonstration project
on methane recovery at a dairy farm near
Raleigh. North Carolina. Methane captured
from animal waste is a biomass fuel that can
be used as a substitute for natural gas or
propane. The demonstration project used a
methane recovery technique called lagoon
digestion, w hich involves the construction of a
deep earthen lagoon in which animal waste is
collected. A sealed cover is placed over the
lagoon to allow for the collection of methane
from the normal digestion of the w aste by
bacteria. The benefit of the digestion
approach is that it does not require elevated
temperatures. Furthermore, this technology
displayed low operating costs. On average,
the project produced 5000 cubic feet of gas
per day. with a methane content of 69 percent,
w hich w as used to fuel a boiler that provides
hot water for the farm's milking parlor.
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away from the small family farm (less than 200 cow s) with limited manure storage capabilities toward
large production farms (over 500 cows) that use manure storage systems as a matter of routine. This trend
may mean that an increasing number of farms w ill find it economic to capture methane. Additionally,
methane recovery and use may be more economical for farms located in a relatively warm climate.
POLICY OPTIONS
Policy options described here focus on programs that could either best be developed at the state
level or that could augment federal programs planned or already in progress.
Provide Information. One of the most significant barriers to the development of methane recovery
projects is lack of information. Current recovery systems must be demonstrated to show that the
problems that plagued the earlier systems have been resolved. States can potentially disseminate
information on successful methane recovery projects and provide training in the design,
construction, and operation of methane recovery systems. For example, states could distribute the
AgStar FarmWare software to fanners; this software estimates the net present value of a fanner's
investment in a project to capture methane from manure, and use the methane to produce
electricity.
Support Research and Development. As recovery technology improves, more farms may find it
cost-effcctive to recover and utilize methane produced from livestock manure. States may further
the advancement of these technologies by supporting research and development projects.
Address Institutional Barriers. Several economic barriers that limit the adoption of methane
recovery systems are common to other small pow er producers, cogenerators. or other independent
power producers. One problem is low utility "buy back" rates, which limit the value of the energy
produced. In the case of methane recovery from livestock manure, low buy back rates may be less
significant because usually the energy produced can be used to displace the energy purchased by
the fanner from the utility. However, if utilities were to lower their electricity rates in order to
compete with these recovery projects, the profitability of these projects w ould be reduced;
profitability is extremely sensitive to electricity rates. States could evaluate the need for actions to
ensure that utilities do not inappropriately discourage pow er generation for on-site use.
Evaluate Existing Regulations. Some existing regulations may hinder the development of recovery
systems. In some states, equipment used at livestock operations located near large metropolitan
areas must meet air emissions standards that reduce the profitability of the projects. These air
emission standards may not consider that these systems are being used to mitigate other harmful
emissions. Further, adding a methane recovery system to an existing manure management system
may require permit modifications. The cost of applying for and obtaining changes in operating
permits reduces the profitability of developing a recovery system. States could evaluate the need
for modifying existing regulations that may constrain the wider development of recovery projects.
Provide Einancial Incentives. Though methane recovery and use may be immediately profitable
for some farms, other farms could find projects to be economically feasible if given appropriate
financial incentives. For example, inadequate capital financing may limit the ability of fanners to
purchase a recovery and utilization system; this barrier could be addressed through the provision of
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low interest loans. A state-issued production tax credit w ould improve the economics of recovery
projects and could encourage more fanners to develop projects.
Require Methane Recovery and Use. States could require confined livestock operations to recover
and use methane. However, numerous factors such as climate, farm layout, current electricity
rates may impact whether projects will be economical. When conditions are not conducive to the
profitable recovery and use of methane, a recovery requirement could impose a substantial
economic burden on some farms, particularly those w ith the lowest emissions.
5.8.2 Increase Aerobic Treatment of Livestock Manure
DESCRIPTION AND CONSIDERATIONS
A second technical approach for reducing methane emissions from livestock manure is to
encourage aerobic treatment of livestock manure at confined livestock operations. Normally, the manure
produced from these operations is eventually spread on land which is part of the livestock operation. Land
application rates must be matched to the carrying capacity of the soil, w hich is influenced, for example, by
crop needs and the seasonal schedule of the producer. Although manure is produced throughout the year,
in most cases it cannot be applied to land at all times of the year, such as when the land is wet or frozen or
during the crop growing season. During these times, the manure must be stored until it can be applied to
land, which results in anaerobic conditions and methane formation. Alternatively, livestock manure can be
composted before it is applied or sold as an organic fertilizer. In most cases, however, the amount of
compost that can be produced greatly exceeds the current demand.
Increasing aerobic treatment (e.g.. composting) of livestock manure, therefore, could be achieved
either by: 1) encouraging aerobic treatment of manure while it is being stored: 2) finding alternative uses
for the manure when local application is not possible: or 3) expanding the market for composted manure as
a fertilizer. The first option encouraging aerobic treatment of the w aste may not be viable in many
areas because it would be in conflict with regulations that encourage confined livestock operations to treat
manure anaerobically in order to prevent both air pollution and surface and ground water pollution. For
some states, the second and third options may be worth consideration if a sufficiently large market for the
manure can be identified.
POLICY OPTIONS
Provide Information. Through the Cooperative Extension Service, states may be able to develop
information campaigns to encourage the use of aerobic manure treatment. In addition, states could
provide manure nutrient analysis services to fanners to determine the nitrogen, phosphorous, and
potassium content of the manure produced on an individual farm and. therefore, maximize manure
fertilizer use.
Support Research and Development. States could investigate the potential for alternatives to
livestock manure storage and the most efficient methods of composting manure. Further
information on the nutrient content of composted manure could assist in evaluating its potential as
a complete replacement to inorganic nitrogen fertilizers and encourage its use by non-livestock
1 The Energy Policy Act of 1992 includes a renewable energy production incentive. Qualified renewable energy
facilities, which would include facilities producing electricity from livestock manure, will be eligible to receive a
subsidy of 1.5 cents per Kwh of electricity produced.
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producers. This could expand the market for composted manure and decrease the amount stored
anaerobicallx.
Provide Financial Incentives. Aerobic treatment of manure and the transport of manure to other
areas max not be economical for small farms that currently spread manure on a daily basis.
Financial incentives max be necessary to encourage the use of aerobic treatment and to assist in
expanding the market for composted manure fertilizer.
5.9 METHANE FROM RICE CULTIVATION
DESCRIPTION
Methane is produced in flooded rice fields during the bacterial decomposition of organic material.
Non-flooded rice fields and deepwater floating rice fields (i.e.. greater than 1 meter floodwater depth) are
not believed to produce significant quantities of methane. Rice paddy methane production depends on
several factors in addition to w ater depth, including the concentration of nutrients and bacteria, soil
temperature and pH. and the oxidation reduction potential." These factors are strongly influenced by
agricultural management practices, such as the application of organic matter w hich can alter the nutrient
content of the soil and increase the soil temperature during its decomposition. Once produced, methane can
escape by plant-mediated transport or diffusion or bubbling through the water column. In general, rice
cultivation is not as large a contributor to methane emissions in the United States as in other parts of the
world, due to differences in climate and fanning practices.
CONSIDERATIONS
No federal standards exist to limit emissions of methane from rice cultivation. The Department of
Agriculture, however, recommends certain agricultural management strategies that affect rice cultivation
practices, including (under certain circumstances and particular production areas), shortened rice field
flooding periods, which can reduce methane production. Of the six U.S. states that produce significant
quantities of rice, including Arkansas. California. Louisiana. Mississippi. Missouri, and Texas, none have
implemented direct regulations to reduce methane emissions from rice fields. However, some state
regulations restrict water use in agriculture, which max in turn reduce methane production and emissions.
These regulations also serve to protect surface water and ground water from pollution.
Scientific uncertainty surrounds the potential to reduce methane emissions from rice production.
Several technical approaches including the selection of cultivars (i.e.. plant variety or strain), nutrient
management, and water regime management have been identified as potential methods to decrease methane
emissions from rice cultivation. However, the ability of these methods to decrease emissions is based
mainly on experimental data, which often conflict.
Cultivar Selection
The development of rice strains that produce few er root exudates max help to limit methane
production, although researchers are uncertain about the magnitude of this effect. In addition, modem
short-stemmed rice varieties have a grain-to-straw ratio that is about 50 percent higher than traditional
20
Oxidation reduction potential in this instance refers to the electrical potential of the watcr-scdimcnt
environment. In reducing conditions, not enough oxygen is available to sustain aerobic bacteria, and anaerobic
bacteria populations prevail.
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varieties, and therefore, produce less "wasted" organic material (i.e.. rice straw that cannot be harvested).
These varieties may potentially reduce greenhouse gas emissions, because they decrease the amount of
organic material available to decompose in the soil. Different cultivars. however, may adversely affect the
ecology of rice fields and may be more costly than existing strains. Even if the cost of methane-reducing
cultivars does not significantly differ from existing strains, rice farmers may be unwilling to accept the
costs of conversion or the risks associated with cultivating a different strain, such as potentially reduced
yields or poorer quality or taste.
Nutrient Management
Nutrient inputs to rice fields affect methane emissions by altering the methane production rate.
Application of nitrogen-based fertilizers, ammonium sulfate, and urea generally reduce methane emissions
compared to application of non-commercial fertilizers. Conversely, application of organic fertilizers, such
as rice straw and animal wastes, has been found to increase methane emissions.
Many rice growers in the U.S. practice multi-year cropping that involves plow ing the crop residue
(i.e.. rice straw ) into the soil before planting a different crop. This management practice, which increases
methane emissions, is fairly typical in Texas. The alternative reducing organic nutrient input to rice
fields may reduce methane emissions, but may also decrease rice yields. In addition, rice straw or other
organic matter that is not used to fertilize the rice field may either be combusted, composted, or landfilled.
all of w hich produce greenhouse gas emissions. Unlike organic fertilizers, mineral fertilizers (such as
nitrogen fertilizers) reduce methane emissions to the atmosphere. However, they contribute nitrous oxide, a
greenhouse gas. to the atmosphere and cost considerably more than composted rice straw and other readily
available organic waste. Section 5.10 specifically addresses nitrous oxide emissions from fertilizer
application.
Water Management
Only through continuous flooding do rice paddies remain sufficiently reduced (lacking in oxygen)
for methane production to occur. As water is drained from rice fields, the oxidation reduction potential
increases and methane emissions decrease. For example, rice cultivated under dry upland conditions does
not produce methane emissions; however, production levels may decrease using this production method.
Thus, floodw ater depth and the length of the flooding period are factors that affect methane production.
The typical practice in the U.S. is to cultivate rice on flooded fields. These fields are flooded at
depths of approximately 5 to 10 cm. However, these fields are not flooded for the entire grow ing season.
Usually, seeds are placed into dry land with limited irrigation for approximately 30 days. The land is then
flooded for the remaining grow ing period. This helps to reduce total seasonal methane emissions." Federal
and state w ater management regulations may limit the amount of w ater that can be used for agriculture,
indirectly limiting methane emissions.
POLICY OPTIONS
Because the potential to reduce methane emissions in rice production is limited and scientific
uncertainty surrounds the data on the effectiveness of different methods in reducing methane emissions,
more research may be needed before policy changes are implemented.
Methane emissions increase with increased water levels over the range of flooding levels typically used in rice
cultivation in the U.S.
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Provide Information cintl Technical Assistance. State agricultural agencies and the Cooperative
Extension Sen ice may be able to provide information to rice grow ers on the benefits of different
cultivars. provide on-site technical assistance, develop demonstration programs on cultivar use and
optimal nutrient applications, and on water management regimes.
Support Research and Development. States can support research at universities, non-profit
organizations, or directly with farmers to conduct studies that better define the impacts of different
cultivars. nutrient, and water management practices on methane emissions.
Provide T'inancial Incentives. Although states do not typically get involved in rice programs,
states encourage the use of short-stemmed rice varieties and management practices that contribute
most to reducing methane emissions through tax credits, direct payments, grants, or loans.
Increased production of rice in dryland conditions can be promoted directly through subsidies.
Regulate Water Use. States can restrict the amount of w ater allow ed to be used in rice production,
thus decreasing the amount of methane produced. However, requiring the use of dry upland
methods or limiting water use may decrease rice yields. This policy option may be compatible with
current state regulations that serve to protect surface w ater and ground w ater.
5.10 NITROUS OXIDE AND OTHER GREENHOUSE GASES FROM FERTILIZER USE
Fertilizers, whether industrially synthesized or organic (like animal manure and leguminous plant
residue), add nitrogen to soils. Any nitrogen not fully utilized by agricultural crops grown in these soils
undergoes natural chemical and biological transformations that can produce nitrous oxide (N2O). a
greenhouse gas.
Scientific know ledge regarding the precise nature and extent of nitrous oxide production and
emissions from soils is limited. Significant uncertainties exist regarding the agricultural practices, soil
properties, climatic conditions, and biogenic processes that determine how much nitrogen various crops
absorb, how much remains in soils after fertilizer application, and in what ways that remaining nitrogen
evolves into nitrous oxide emissions. Amid these uncertainties, the policy challenge for reducing
greenhouse gases is to determine how to manipulate the nitrogen fertilizers and the time and manner in
w hich these fertilizers are applied in order to minimize nitrous oxide emissions.
In addition to helping mitigate climate change, the policies that promote reduction of nitrous oxide
emissions frequently support other state environmental and public health priorities. For example, in many
cropping systems between 5% and 30% of the nitrogen applied can escape soils through leaching and w ater
runoff, in addition to producing nitrous oxide. This fugitive nitrogen often pollutes ground water and
surface water supplies. In this context, climate change mitigation policies aimed at reducing nitrogen losses
to water coincide with many existing and proposed state initiatives to use fertilizers more efficiently and to
reduce fertilizer use in order to protect water quality. The Iowa Agricultural Energy Management Initiative
(described in Chapter 7). which was developed from the Iowa Consortium on Agriculture and Water
Quality, is an example of a program that addresses improvements in nitrogen fertilizer use to enhance
groundw ater quality and save money in the agricultural sector, and that also decreases nitrous oxide
emissions.
Technical approaches for reducing nitrous oxide emissions from fertilizers include improving
nitrogen-use efficiency in fertilizer applications. Improvements mean reducing excess fertilizer application
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by applying only the amount crops w ill use. and replacing industrially-fixed nitrogen fertilizers with
renewable nitrogen source fertilizers.
5.10.1 Improve Nitrogen-Use Efficiency in Fertilizer Applications
DESCRIPTION
At many sites, more fertilizer is applied than can be effectively used by crops. Further, poor
fertilization timing or placement often leads to additional nitrogen loss or unavailability to the plant. One
major reason for the application of excess nitrogen in the fields is the lack of simple field testing for
nitrogen. Also, many fanners believe that some "excess" max be necessary to ensure peak production.
This is because precise crop needs are not always know n, and w eather and climatic conditions that affect
crop grow th and nitrogen requirements are unpredictable. For these reasons, many fanners apply
additional fertilizer to ensure crops have the nutrients they need.
Matching fertilizer formulation and application more precisely to the uptake needs and capacity of
crops can improve nitrogen-use efficiency. Thus, matching can reduce nitrous oxide emissions by
decreasing overall fertilizer consumption and by minimizing the quantity of nitrogen left in soils or
sacrificed to water leaching and runoff While the direct relationship between fertilizer application rates
and nitrous oxide emissions is not well understood, current estimates suggest that better fertilization
practices could reduce nitrogen fertilizer use by as much as 20 percent with low risk of yield penalty and
with possible input-cost savings to fanners. However, these estimates assume an ability to project field-by-
field and crop-by-crop nitrogen needs that probably exceeds existing extension, testing, and management
capabilities. This highlights the primary need for further research and institutional development in this
area.
CONSIDERATIONS
Seven fertilization management approaches and three specific fertilizer technologies offer
opportunities for enhancing nitrogen-use efficiency. Several max be integrated into alternative agricultural
systems that incorporate lower fertilizer usage and also achieve energy savings by reducing the need for
plowing and other energy intensive practices.
Management approaches
Improve fertilizer application rate. Matching fertilizer application with specific crop requirements
would reduce excess fertilization, thus producing immediate greenhouse gas reduction benefits.
Typical fertilizer application rates vary depending upon crop type, soil conditions, fertilizer
pricing, and environmental policies. Better record-keeping to assess actual yields on a field by
field basis can help to fine-tune fertilizer rates that are both economically and environmentally
sound. Soil testing, visual inspection, or plant tissue testing could allow fanners to apply nutrients
more closely following crop requirements, rather than following broad guidelines that often
recommend excessive fertilization. However, efforts to provide adequate nutrition to crops max be
hindered by inadequate understanding and forecasting of factors that influence nutrient storage,
cycling, accessibility, uptake, and use by crops during the grow ing season.
Improve the frequency of soil testing. Regular soil testing (e.g.. annual testing of all fields in
production) could decrease fertilization use. Because this process can be expensive and time
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consuming, fanners max test soil only every two to five years. Regular soil testing to improve
nitrogen management w ould involve new types of soil and tissue testing, such as the pre-sidedress
(late spring) soil tests being calibrated in most com belt states. Innovative technologies can assist
in improving this process. For example, in Kentucky an experimental soil testing and fertilization
applicator called the "Soil Doctor" tests soil nitrogen needs and automatically adjusts the fertilizer
application rate accordingly. While the initial capital output for a machine like this could be high,
it has been shown to decrease application rates by as much as 41 pounds per acre, a potentially
significant savings to fanners.
Improve timing of fertilizer application. Limited studies suggest that timing of application affects
nitrous oxide emissions. For example, on a broad scale, emissions from fertilizer applied in the fall
exceed those from fertilizer applied in the spring. With better understanding of these processes and
their implications for crop production, fertilizer timing could be adjusted to reduce greenhouse gas
emissions.
Improve placement of fertilizer. Some surface placement and broadcasting of fertilizers results in
excess or overlapping fertilizer application. Deep rather than surficial placement of fertilizers can
curb nitrogen loss, though this max not be compatible w ith no-till production practices. In these
practices, irrigation after fertilization could incorporate the fertilizer more deeply into the soil.
Switch to fertilizer compounds with lower nitrogen content. Although nitrous oxide production
rates of different fertilizers in relation to their benefits for various crops are highly uncertain,
switching from fertilizers with high nitrogen content, especially anhydrous ammonia, to fertilizers
with lower nitrogen content can reduce emissions, unless fanners increase fertilizer application to
maintain the previous nitrogen levels. Preliminary data on nitrogen content and nitrous oxide
emissions for various fertilizers are presented in the appendices to EPA's Phase I document. States
Workbook: Methodologies for Estimating Greenhouse Gas Emissions.
Improve crop management for more complete nitrogen uptake. Crop management techniques can
supplement the improved fertilizer application techniques described above. For example, com is
susceptible to high rates of soil erosion because it is a row crop. After the harx est of com.
substantial amounts of nitrogen generally remain in the soil. The surplus nitrogen can be captured
by inter-cropping with a grain crop such as rye. which could then be plowed back into the soil.
More information on the use of organic fertilizers is presented in section 5.10.2 below.
Conservation tillage. Alternative land tillage systems, such as low-till, no-till, and ridge-till reduce
soil losses and associated loss of nitrogen contained in the soil. Tillage practices also affect the
efficiency with which the fertilizer can be applied and incorporated into the soil.
Technology approaches
Use nitrification inhibitors. Nitrification and urease inhibitors are fertilizer additives that can
increase nitrogen-use efficiency by decreasing nitrogen loss through volatilization. Nitrification
inhibitors can increase efficiency by around 30% in some situations.
Use fertilizer coatings. Limiting or retarding fertilizer water solubility through supergranulation
or by coating a fertilizer pellet with sulphur can double efficiency, depending on the application.
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Reduce nitrogen release rate in fertilizers. Techniques that limit fertilizer availability, such as
slow-release or timed-release fertilizers, improve nitrogen-use efficiency by releasing nitrogen at
rates that approximate crop uptake. This reduces the amount of excess nitrogen available at any
given time for loss from the soil system. In addition, slow-release fertilizer can potentially decrease
the number of applications, resulting in an energy and cost savings.
POLICY OPTIONS
Fanners may pursue proven and familiar fertilization practices without understanding the negative
environmental impact of excess nitrogen application or potential benefits of reducing commercial nitrogen
use. Concurrently, scientific and technological uncertainty inhibits program development in this field. In
this sector, policy options are generally oriented around these two barriers to nitrous oxide emission
reduction.
The types of policy options listed below can be combined and integrated in a variety of ways to
control nitrous oxide emissions. For example, educational and agricultural support programs for fanners
in combination with financial or regulatory incentives applied to specific fertilizers may be an effective
comprehensive mechanism for encouraging better nitrogen-use efficiency.
Provide Information. Through educational programs or fanning and technology demonstration
projects, states can communicate to fanners critical information on fertilizer use and farm
management practices. Fanners' lack of basic information on nitrogen processes in soils is
frequently cited as a major barrier to nitrous oxide reductions. Education programs can target
efficient fertilizer use. with particular attention to appropriate application rates based on realistic
yield expectation, monitoring of nitrogen levels, and effective application techniques. These
programs help address barriers posed by the "insurance value" to fanners of high fertilizer use
levels, as well as by fanner habit and tradition. However, states should be cautious about
advocating fanning techniques and fertilization practices that are surrounded by high levels of
scientific uncertainty.
Provide Institutional Support. The Extension Sen ice is an additional means of providing
adequate and accessible technical capability for determining precise fertilizer needs by crop type,
soil characteristics, moisture, weather, and other variables. For example, states could encourage
the use of the soil testing sen ices provided through land grant colleges and extension sen ices by
decreasing fees, increasing fanner aw areness of the programs, or increasing fanner aw areness of
fertilization cost savings associated with annual soil testing. Again, however, certainty regarding
fanning practices to reduce greenhouse gas emissions and maintain crop productivity is limited at
the current time.
Support Research and Development. Little field research is being conducted on nitrous oxide
emissions from fertilizers in the United States. Many of the technological approaches presented
above have not been tested extensively. Research in this area is generally expensive because it is
labor- and/or equipment-intensive.
Provide lunancial Incentives. Low prices for fertilizers, especially in states where fertilizer
subsidies exist, cause excess consumption and nitrogen application. States may be able to revise
fertilizer and crop subsidy structures to curb the use of nitrogen-intensive fertilizers or the grow th
of nitrogen-intensive crops. Similarly, state programs may lew taxes or other price increases to
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encourage fanners to better monitor and reduce nitrogen application. A few states have also
imposed fees on fertilizers to support research and education programs, although these fees are not
intended to be nor are they considered large enough to directly affect fertilizer demand. This type
of policy may conflict w ith some state policy goals (such as support of the agricultural sector),
w hile complementing others (like surface and ground w ater protection).
Regulate fertilizer Use ant! Production. Regulating fertilizer application rates and practices is
difficult due to the lack of substantial evidence regarding the greenhouse gas benefits and to side
effects on crop production. These uncertainties could increase political sensitivities surrounding
this issue. In addition, difficulties surround w idespread enforcement of the regulation at farm sites.
However, regulating nitrogen content in synthetic fertilizers may aid reduction of nitrogen
consumption, particularly if accompanied by education and information programs for fanners.
5.10.2 Replace Industrially-Fixed Nitrogen Based Fertilizers with Renewable Nitrogen
Source Fertilizers
DESCRIPTION
Animal manures, as discussed in Section 5.12. and leguminous crops are potential organic nitrogen
fertilizers. Traditional crop rotation, dual-cropping or inter-cropping, for example, involves rotating lands
under cultivation with legumes (such as alfalfa and soybeans) in order to store nitrogen in soils, as an
alternative to synthetic fertilizer use. Current data suggest that direct nitrous oxide emissions from organic
process uses may be as high or higher than from synthetic fertilizers. In an overall greenhouse gas context,
however, replacing industrial 1\ -fixed nitrogen based fertilizers with renewable nitrogen source fertilizers
may still help reduce comprehensive greenhouse gas emissions in two ways:
1) Organic fertilizers can be used to replace synthetic nitrogen fertilizers where both are currently
applied. In current agricultural systems, fanners frequently do not consider the nitrogen content of
the organic fertilizers they apply. In these situations, they add additional synthetic fertilizers,
resulting in excess levels of nitrogen in soils. Nitrous oxide reductions w ould occur if fanners took
full advantage of organic fertilizers and only used synthetic fertilizers w hen needed as a
supplement. To adhere to this process, fanners must know and understand the nitrogen value of
the organic fertilizers. Benefits from this approach would accme immediately upon reduction of
excessive nitrogen application in soils.
2) Using organic fertilizers can conserve significant amounts of energy that w ould have gone into
synthetic fertilizer production. Aside from direct nitrous oxide emissions, energy savings from
reducing production of high-energy industrially-fixed nitrogen based fertilizers w ill result in
decreased greenhouse gas emissions. The 1991 report of the Missouri Commission on Global
Climate Change & Ozone Depletion suggested that it would be "prudent to use livestock wastes as
fertilizer rather than incurring the costs of w aste treatment and using additional energy to produce
chemical fertilizers and causing greenhouse gas emissions." Quantification of nitrous oxide
emissions from organic fertilizers per unit of nitrogen supplied to the soil is required to make this
determination, as current estimates of nitrous oxide emissions from these sources cover a wide
range. The emission reduction benefits from this type of program may be difficult to quantify, and
would not accme until currently active synthetic fertilizer plants ceased production.
CONSIDERATIONS
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The most likely renewable fertilizer for replacing synthetic fertilizer is manure. This max cause
shortages of manure in areas w here manures are productively applied to other uses, w hile it max help
alleviate manure and waste management problems in other locations. Economical ways or incentives are
needed to distribute manure to areas where it can be beneficially used. Such programs have sometimes
been discussed as manure brokering, arranging exchanges among farms to transport the excess manure to a
farm that can advantageously and economically utilize it as a nutrient source. Similarly , in programs
w here fanners max come to rely on organic fertilizer use. it would be necessary to guarantee a constant and
dependable fertilizer supply from the renewable sources.
The scientific uncertainty regarding nitrogen uptake from renew able fertilizer sources also makes it
difficult to develop renewable fertilizer programs. Programs that both help fanners accurately assess the
needs of their crops and provide reliable information on the nitrogen replacement value of renew able
fertilizers seem most promising.
Broad guidelines, based on the solids content and source of manure, have been designed in
Wisconsin and Michigan to determine the nitrogen, phosphorous, and potassium levels of manure. Using
these guidelines in experiments in Minnesota, manure has been shown to be a sufficient fertilizer for alfalfa.
Likewise, some dairy fanners in Georgia have used manure for several y ears to produce both com and
w heat. In addition, experiments in Minnesota have demonstrated that the use of either manure or
leguminous crops, in rotation and plow ed under, can increase the dry matter content of the crops grow n.
This could be advantageous to dairy and cattle fanners, because increases in dry matter content can
increase feed efficiency.
POLICY OPTIONS
Potential policy mechanisms for promoting the use of renew able fertilizers are similar to those
presented in Section 5.10.1 above. The same policy approaches, especially research programs and fanner
education and extension services. could be crafted to encourage a switch from industrially based fertilizers
to organic ones. For example, improved methods for determining the fertilization quality and the
application of manure could be developed. Similarly. broad subsidy or tax programs, or regulation of
fertilizer production could provide additional incentives for renewable fertilizer use.
5.11 EMISSIONS ASSOCIATED WITH FORESTED LANDS
Trees and other vegetation remove, or sequester, carbon dioxide from the atmosphere as they grow ,
storing it as carbon in trunks, limbs, roots, and soil. Through this process, forests provide an important
terrestrial "sink" for carbon dioxide. Furthermore, wood products are relatively long-lived structures that
store carbon, w hich makes up about half the dry w eight of w ood, rather than allowing it to be released back
to the atmosphere. Forest-related land use changes can affect the concentration of greenhouse gases in a
number of ways.
barest Clearing bv Burning results in immediate emissions of CO2 and other by -products of
combustion, such as CO. CH4. and N2O. While CO2 will later be sequestered during regrowth.
emissions of these other combustion by -products (w hich can include N2O and methane) represent a
net increase to the atmosphere.
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b'orest Regeneration will, over time, result in uptake of CO2. The net impact of forest clearing on
emissions depends on whether the forest regrows to its original level of biomass density (i.e.. the
quantity of biomass per unit of land area).
Conversion ofb'orests to Other Land Uses can result in net emissions of CO2 because land uses
such as crops, pastures, or suburban development sequester and store less carbon than do forests.
Mechanical barest Clearing changes the emissions profile of CO2 and other by-products of decay,
such as methane. The magnitude and timing of these emissions depend on the fate of the biomass
(e.g.. whether it is left on-site to decay or used for longer-lived wood products).
Disturbance of barest Soils can lead to CO2 emissions as organic material in soils is oxidized.
Losses of nitrogen, possibly in the form of N2O. are also thought to occur. Some data indicate
that conversion of forest land to other vegetative uses diminishes the capacity of soils to absorb
methane, thus potentially increasing atmospheric methane levels.
Approximately 59 percent oftimberland in the U.S. is owned by nonindustrial private forest
owners. 27 percent is publicly ow ned, and 14 percent is ow ned by the forest industry (RPAA. 1990)."
Much of the publicly owned forest land is controlled federally through the U.S. Forest Sen ice (USFS). the
National Park Sen ice. the Bureau of Land Management (BLM) and the Department of Defense. While the
ability of states to affect the use of federal forest land may be limited, states can play a key role in affecting
the use of both privately ow ned and state ow ned forests w ithin their borders. Opportunities for state action
described in this section are not mutually exclusive and frequently offer other significant benefits, such as
increased timber productivity, reduced soil erosion, improved water quality, increased biodiversity,
improved fish and wildlife habitat, and recreational opportunities.
This section presents five basic technical approaches to controlling emissions of greenhouse gases
associated with forested land. The first approach addresses maintaining the carbon storage capacity of
existing forested lands. The second addresses opportunities for enhancing the long-term potential to
sequester carbon in existing forests through increases in productivity. The third and fourth suggest that
climate change issues be integrated into state strategies for fire management and pest control, respectively.
The final approach addresses policies that affect the demand for forest products.
5.11.1 Maintain Carbon Storage Capacity of Existing Forests
DESCRIPTION
During the past 25 years, the United States has maintained a relatively stable area of forest land.
(EQ. 1995). If forests w ere being converted to other uses w ith low er biomass densities, there w ould be a
reduction in carbon sequestration, since the carbon stored in vegetation and soil is greater for forested lands
than for alternative land uses (such as crops, pastures, or commercial and suburban development).
Therefore, maintaining existing forest and timberland can significantly contribute to stabilizing carbon
sinks.
" Two-thirds of the Nation's forests (490 million acres) arc classified as timbcrlands. Timbcrlands arc defined as
forests capable of producing 20 cubic feet per acre of industrial wood annually and not reserved from timber
harvest. An additional 36 million acres is reserved from harvesting and is managed as parks or wilderness. Total
forest land in the U.S. for 1992 was approximately 737 million acres, of which the USFS owned 19 percent, the
BLM 5 percent, other federal agencies 18 percent, and non-federal entities 66 percent.
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State policy-makers max be able to maintain existing forests to preserve forest carbon sinks by:
Slowing or stopping the conversion of forested lands to less-biomass dense, non-forest land uses;
Ensuring, for forest lands where timber harvests do occur, that replanting occurs to replace the
carbon sequestration potential of the harvested forest;" and
Ensuring, for extremely carbon-dense forests (e.g.. some old growth forests) where replanting max
not offer the same level of carbon-density, that harvesting does not occur and the land is preserved
as a set-aside.
In addition, w hile there is considerable uncertainty about the net effects of logging on long-term
soil carbon emissions, logging can cause soil erosion which max contaminate water supplies, disrupt
wildlife habitat, and deplete aesthetic value of the forest. Because of these concerns and the possible
climate change benefits, states max find it desirable to undertake policies to minimize soil erosion in
existing forests.
CONSIDERATIONS
Whether maintaining a specific forest ultimately reduces net emissions of carbon depends on the
potential for change in its biomass density. Halting conversion of forests to non-forest land uses almost
certainly w ill provide significant benefits because alternative land uses store considerably less carbon than
do forests.
It is important to remember, however, that if over the long run harvested lands are replanted or
allow ed to regrow w ith trees of similar carbon content and to a similar biomass density, net cumulative
emissions max be close to zero. Determining the emissions reduction value of policies targeted at timber
harvesting on lands that remain dedicated to forestry therefore requires a case-by-case assessment.
The carbon benefits of maintaining existing forests w ill vary by region and species. For example,
forests of the Pacific Coast states, comprised principally of Douglas fir. contain on average 102 tons of
carbon per acre, w hile forests of the South Central region of the country, primarily oak-hickory forests,
contain an average of 58 tons per acre (Birdsey. 1991). In addition, state policy-makers w ill need to
characterize the process of reforestation (either natural or assisted) and assess w hether new grow th timber
w ill offer the same carbon sequestration capacity as the existing forest.
Halting all timber harvests in certain forests, such as old growth forests, max yield carbon
reduction benefits because these forests tend to have greater biomass densities and therefore store greater
amounts of carbon than do the younger, secondary, forests that max replace them. The effectiveness of
halting old grow th timber harvesting in lieu of converting old-grow th to secondary grow th, in terms of
carbon storage potential is. however, subject to some debate (Harmon, et al.. 1990). Further, the uses for
harxested material max themselves provide a carbon pool, as in the case of long-lived w ood products, such
as furniture or construction.
Because of the potential to offset carbon emissions from any source, opportunities to create newly forested areas
arc described in Chapter 6 as a cross-cutting policy option.
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State policy-makers should also consider that the net change in the carbon pool over time depends
on the extent to w hich reduced harvests are offset by increased harvests elsew here. For example, even if
net carbon dioxide emissions from U.S. forest land max be reduced by harvesting restrictions, global
carbon dioxide emissions from logging max remain the same or perhaps even increase if the demand for
wood products does not change. Policy-makers should carefully weigh these issues when evaluating
alternative policy options.
As noted above, efforts to control soil erosion max yield multiple environmental benefits. Federal
w ater pollution control statutes have been a major impetus behind state efforts to control timber harx esting
activities near streams. State controls range from voluntary compliance with guidelines developed as "best
management practices" to mandator} legal restrictions. For example, states max require that roads be
constructed away from stream banks, that cross drainage be provided for roads with significant slope, that
erosion control bars be installed throughout a site, and that roads or adjacent areas be seeded after
harx esting. In addition, since clear cutting is associated with significantly more soil erosion than selective
harx esting. some states have restricted its use.
Reduced timber harx esting. reforestation requirements, and forest management standards max
create unw anted economic impacts. Without a decrease in demand for forest products, harx est restrictions
max result in higher w ood prices and low er lex els of production. Given this potential consequence, states
in which forestry is a leading industry are unlikely to have the political support to significantly restrict
harx esting. though less costly forest management measures max find support. In addition, harx est
restrictions may reduce revenues to state and local governments from lease payments and taxes on timber
production.
POLICY OPTIONS
Support Research and Development. States max support or conduct forest carbon life cy cle
analysis to resolve the debate on carbon benefits of forest set-asides and on the change in carbon
sequestration capacity associated with harx esting and subsequent reforestation. Such studies could
be conducted on a regional basis, considering species composition, and physiographic and climatic
features of the region, as w ell as economic issues, w here appropriate.
Provide Financial Incentives. States can offer private owners of forest land incentives to keep
their lands out of production, to employ best management practices, or to encourage prompt efforts
at reforestation."' In North Dakota, the Woodland Tax law provides tax relief for landow ners w ho
agree to prohibit clear cutting, grazing, burning, and destructive cutting on woodlands. Similarly.
the State of Missouri provides tax relief to land ow ners w ho agree to maintain property as forest
cropland.
Control Development. Some states have issued tradeable property allowances for privately
ow ned forest areas that they w ish to preserve. For example. New Jersey has been successful in
capping development in the Pine Barrens through this ty pe of sy stem (Task. 1991). In addition,
state and local governments may be able to use their land use planning authorities to restrict the
conversion of forested lands to other land uses. States could also establish a fund for forest land
purchase and subsequent set-asides.
Chapter 6 provides additional information on options for encouraging the planting of trees.
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Promulgate Regulations. States max limit the amount of timber that max be removed from a given
site, specify logging practices, or impose reforestation and best management requirements. States
can do so either w ith a permit system or as part of lease provisions for timber harvests on public
lands. States could also require that least cost planning that incorporates environmental benefits be
conducted for timber harvests on state lands.
Monitor 1'brests. Some states monitor private industry implementation of best management
practices, particularly at timber stands near streams. Florida monitors these harvests by air.
targeting counties where foresters fail to use best management practices for increased technical
assistance.
Address Institutional Barriers. States should recognize that, in areas where local economies are
heavily dependent on timber production, state and local policy-makers often exert significant
pressure on field managers of federal forest lands to maintain harvests, perhaps at unsustainable
levels. States max wish to consider whether such pressures might undermine the goals of their
climate change policies.
5.11.2 Improve Productivity of Existing Forest Lands
DESCRIPTION
By increasing the productivity of forest species, demand for forest products could be met with
few er trees extracted, less carbon released to the atmosphere, and potentially more carbon sequestered.
Management approaches that can be used to improve timber stand productivity and carbon sequestration
include: thinning trees to decrease competition and stocking additional trees to achieve optimal forest
density, planting or replanting unstocked timberland. and enhancing planting sites by providing drainage
and/or adding fertilizer. The USFS estimates that if current commercial forests w ere fully stocked, their
net annual growth could increase by about 65 percent. These techniques have been extensively researched
and are readily available.
In addition, the use of improved seed stock from cross-breeding or genetic manipulation can
enhance productivity. The USFS credits genetic improvements in seed stock, achieved primarily through
plant breeding and sih icultural techniques, with substantial increases in annual tree grow th in southern
conifers.
Wood utilization technology is also being developed by the forest industry and the federal
government to meet the demand for wood products with low value, previously underutilized timber. Doing
so max mean that less wood residue is left on the forest floor or discarded at the mill to decay. The carbon
benefits derived from improved wood utilization depend upon the degree to which such utilization allows
for reduced harvests of virgin timber.
CONSIDERATIONS
Several federal and state programs encourage improved forest management. The principal federal
programs are the Cooperative Forestry Assistance Program and the Federal Incentives Program (FIP). The
Cooperative Forestry Assistance Act of 1978 authorizes federal financial and technical assistance to state
forestry agencies for nursery production and tree improvement programs, reforestation and timber stand
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improvement activities on nonfederal lands, protection and improvement of watersheds, and programs to
provide technical assistance to private landowners and others.
FIP authorizes cost-share payments for reforestation and timber stand improvement, site
preparation for natural regeneration, and firebreak construction. FIP is jointly administered by the U.S.
Forest Sen ice and the Agricultural Stabilization and Conservation Sen ice w ithin the U.S. Department of
Agriculture. A number of states also have cost share programs similar to FIP. In addition, the Cooperative
Extension Sen ice has traditionally been the primary channel for disseminating new research findings to
forestry professionals and landow ners.
While public timberland is generally intensively managed, most nonindustrial timberland is not.
Various studies identify- a number of reasons w hy nonindustrial timberland ow ners may not manage their
forests for higher productivity. First, many landowners are not aw are of w hat can be done to improve
forest growth. Second, among those who are aware of the opportunities, many may be unwilling to
undertake projects with a long payback period or relatively modest rates of return. Third, many lack the
up-front capital needed to invest in a crop that, although profitable, may not generate income for 10 to 15
years. Additionally, landowners may resist investing in improving their forested land because of the low
financial liquidity of young stands and an inability to use future forest values as collateral. Last, some
landowners use their timberland for other purposes, such as recreation, w hich do not require high
productivity.
Not all timber stand improvement practices support the goal of reducing greenhouse gas emissions
or other environmental goals. For example, increased use of nitrogen-based fertilizer in forests could
increase direct emissions of nitrous oxide (a greenhouse gas), cause ground and surface w ater
contamination from its application, produce carbon dioxide emissions from its manufacture, and lead to soil
methane emissions, by slowing the activity of methane consuming bacteria acting at the soil surface.
Intensive management disturbs forest soil which may increase soil erosion and thus reduce water quality.
Also, methods such as stand thinning expose the forest floor to more light, increasing soil surface
temperature and accelerating decomposition which liberates carbon.
In contrast to timber stand improvement techniques, some seed stock improvement techniques are
currently unavailable for w idespread use. For example, while cross-breeding is widely used, genetic
manipulation for tree improvement is still in its infancy. Like certain stand improvement techniques, some
uses of genetically improved seed stock may also work against the goal of increasing carbon sequestration
and storage. Monoculture plantings, for example, lack biodiversity and may be more susceptible to factors,
such as pestilence and disease, that reduce forest health and long term carbon storage potential.
POLICY OPTIONS
Provide Information antI Technical Assistance. States may disseminate information on the
multiple benefits of improved productivity in conjunction w ith the Cooperative Extension Sen ice.
State foresters could act as the clearinghouse for new developments in timber stand and tree
improvement techniques or provide direct technical assistance to private landowners on how to
manage their forests to achieve a variety of objectives. Presently, some states have initiated forest
management and seed stock improvement demonstration projects.
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Support Research and Development. States could support research laboratories for research and
development in stand improvement techniques, tree breeding techniques, and seed stock, that would
be particularly appropriate for use in the state and private forests within their jurisdictions.
Provide Financial Incentives. States could also provide tax incentives to private landow ners and
forest industry to improve productivity through timber stocking or other methods. Direct
payments, tax incentives, and loans could be used to provide encouragement to nonindustrial
ow ners of private timberlands to improve forest management and breeding techniques, or to
encourage the testing and use of new seed stock. Some states may be able to implement cost-
sharing programs modeled after FIP.
5.11.3 Integrate Climate Change Concerns into Fire Management Policies
DESCRIPTION
Carbon stored in biomass is released upon combustion during forest fire. Soil carbon is liberated
both during and after fire disturbance. Some of the forest carbon lost is recaptured during the rapid
regeneration of plants following wildfire. However, the direct and post-fire soil carbon emissions from
wildfire are thought to outweigh the carbon sequestered by regrow th. Wildfire burned more than 5 million
acres of U.S. forest land in 1990; forty-five percent of this land was state and privately-owned forests
(USDA. 1992).
A state's fire management strategy is likely to address multiple concerns in addition to the potential
for carbon emissions. Such concerns include protection of life and property, conservation of valuable
timber, preservation of species habitat, air quality issues, and maintenance of recreational areas, as w ell as
a countervailing concern that wildfire can serve an important ecological benefit by clearing the land of dead
and diseased vegetation and allow ing opportunities for new grow th. Because of the significance and
importance of these other considerations, it is suggested here only that the impact of forest fires on climate
change be considered when developing state fire management policies.
CONSIDERATIONS
Two principal fire management strategies can be employed to reduce carbon emissions from fire,
including:
Active fire suppression which halts direct carbon emissions. Some research, however, suggests
that fire suppression results in an accumulation of dead and dying timber on the forest floor and a
greater fire risk. Fire management by suppression may also affect species composition,
particularly of fire adapted forest communities.
Controlled or "prescribed" burning which contributes to direct carbon emissions in the short
term, but reduces fuel accumulated on the forest floor and may prevent or lessen the extent and
intensity of future wildfires. Prescribed burning also fosters goals to improve wildlife habitat, and
eradicate forest disease and pests.
More research on fire management is required to determine w hich strategy or combination of
strategies is best for minimizing carbon emissions over the long term. Some consideration must be given to
the fact that fires, in addition to liberating carbon, also liberate particulates and other air pollutants. States
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max want to consider the climate, physiography, forest species composition, and air quality within their
jurisdictions to assess the optimal fire management strategy.
POLICY OPTIONS
Support Research antI Development. States could undertake studies of fire patterns in forests in
their jurisdictions to assess strategies for optimizing carbon storage in coordination with other
forest management goals.
Inter-Agency Cooperation. State policy-makers responsible for climate change issues max w ork
with fire officials to ensure that climate change issues are reflected in fire management decisions.
5.11.4 Integrate Climate Change Concerns into Pest Management Policies
DESCRIPTION
Forest insects and diseases attack tree foliage, bark, and woody biomass. eventually killing trees.
Dow ned trees are decomposed by microorganisms and in the process biomass carbon is eventually returned
to the atmosphere as either carbon dioxide or methane. Because of the threat to valuable timber and to
agricultural operations, virtually all states already have some form of pest management program. Because
minimizing the impact of pests and diseases on existing forest land helps enhance carbon storage potential
as well as reduce emissions from biomass decay, it max prove useful to integrate climate change concerns
into pest management policies.
CONSIDERATIONS
Several methods can be used to check the development or spread of forest pests and disease.
Prescribed fire, chemical controls, biological controls, and salvage clearing have all been used successfully
in forest ecosystems. Although they contribute to reducing forest losses, each of these controls max have
long term impacts on the integrity of the ecosystem. For some infestations, none of these control methods is
successful. More research is required to find appropriate control methods for unmanageable forest pests
and disease.
The Forest Health Monitoring Program, jointly administered by the USFS. the Bureau of Land
Management, and EPA. provides assistance to state foresters in monitoring disease and insect infestation in
state forests. In addition, most states routinely monitor forest health and provide assistance to private
landowners and state land managers for the control of pests, such as training on tree health and on the
effects of environmental stress on trees.
POLICY OPTIONS
Pest management policies must be tailored to the specific species composition, climatic, and
geographic conditions of the forest in w hich they are implemented. Policy options in this area include the
following:
Provide Information. Manx states work jointly w ith the Cooperative Extension Serxice to provide
information to private landowners on methods to prevent and reduce forest pestilence and disease.
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In addition, forest health demonstration projects max be sponsored by some states. States max also
supply pest and disease resistant seed stock to landow ners.
Provide financial Incentives. States max help develop a market for timber salvaged from private
forests and provide incentives for monitoring pest incidence and dow ned timber on forest lands.
5.11.5 Institute Policies to Affect Demand for Forest Products
States max be able to reduce emissions associated w ith forested lands by pursuing policies that do
not directly affect forest land but that instead focus on the demand for forest products. This section
addresses three options for implementing this approach. The first addresses opportunities to improve the
efficiency of w ood burning to reduce the demand for fuelwood. The second focuses on policies to
encourage the use of long lived durable wood products. The third addresses recycling of paper products to
reduce demand for timber.
Improve Wood Burning Efficiency
DESCRIPTION AND CONSIDERATIONS
Wood can be used as a direct source of heat for homes and small buildings or as a source of
electric power. In addition to producing carbon dioxide, wood combustion produces particulates, nitrous
oxides, sulfur dioxide, and carbon monoxide. Improvements in wood combustion efficiency can reduce
fuelw ood consumption and decrease carbon dioxide emissions, emissions of other pollutants, and ash
accumulation. For large scale w ood combustion facilities, emissions of non-carbon pollutants can be
mitigated by a combination of improved combustion efficiency and air pollution control devices.
POLICY OPTIONS
States can employ several policies to encourage more efficient wood burning. These include the
following:
Provide Information and Education. States max educate residents and businesses on technologies
available to increase wood combustion efficiency.
Support Research and Development. New technologies, such as high efficiency wood stoves for
home heating, combust fuelwood more completely and reduce fuelwood consumption relative to
less efficient w ood stoves. States can support the development of w ood combustion efficiency
technology for both residential and commercial users of fuelw ood.
Promulgate Regulations. States max establish technology-based standards for w ood burning
stoves. Alternatively, states max restrict fuel consumption or limit allowable pollutant emissions in
order to control greenhouse gas emissions from w ood burning and to encourage improvements in
wood burning technology. For example, for large scale wood combustion facilities that produce
more than 1 million Btu per hour. New York State requires air permits that limit the allowable
emissions for each pollutant, including carbon dioxide.
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Encourage the Use of Durable Wood Products
DESCRIPTION
The potential for forests and forest products to absorb and store carbon dioxide can be expanded
by increasing the use of timber products as constaiction materials, furniture, and other durable w ood
products, w hich continue to store the w ood carbon after harvest. Carbon contained in wood products max
remain for several decades before returning to the atmosphere through decomposition or burning. Some
research indicates that the average life and. therefore, duration of carbon storage for certain w ood
constaiction materials is approximately 70 years (Row and Phelps. 1991). Particularly if the timber
harvest used for these products comes from afforested or reforested lands, rather than depleting existing
stands, the aggregate carbon pool max be expanded. Sw itching from non-renewable constaiction products
many of w hich are energy intensive in their production, such as steel can also reduce carbon dioxide
emissions by reducing energy consumption.
CONSIDERATIONS
Timber is used for a variety of products, including lumber, staictural and non-staictural panels,
pulpwood. silx ichemicals. fuelwood. and other miscellaneous industrial products, such as poles and piling,
posts, and mine timber. A large portion of the total timber harvest, about 38 percent, is used to produce
lumber, and 27 percent is used in pulp (including paper) products. U.S. consumption of timber has
increased steadily ox er the past three decades, from about 12 billion cubic feet in the early 1950s to 20
billion cubic feet in 1988.
Because the trees that are planted max eventually be harx ested and release their stored carbon,
timber end-use can be an important component in increasing long-term sequestration. Wood end-uses that
are most relevant to long term carbon storage include nexx residential and commercial building materials,
materials for building repair and remodelling, and material for furniture, cabinets, and fixtures. Increased
use of these durable xxood products can offset carbon emissions both by promoting a sink for carbon and
by substituting timber for energy intensive constaiction materials.
The use of durable xx ood products can be expanded in sex eral ways:
By encouraging longer tree rotations, which yield timber that can more easily be conx erted into
durable xx ood products;
By encouraging the demand for durable xx ood products, through price or other incentix es; and
By encouraging the supply of durable xx ood products directly .
Because xxood cannot be substituted for non-xx ood products used in constaiction on a one-for-one
basis, feasibility constraints may reduce achiex able carbon sax ings or limit the applicability of
substitutions. In addition, state policy -makers need to take a broad x iexx of the potential costs and benefits
of efforts to encourage the use of durable xx ood products. Key considerations include: regroxx th of the
forest's original biomass density; the energy related emissions associated xx ith harvesting, transporting, and
using the xx ood product; and the emissions associated xx ith production and use of the non-xx ood product
being replaced.
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POLICY OPTIONS
Several policy options are available to encourage either the supply of or the demand for durable
wood products.
Provide Information. States can encourage the production and use of durable w ood products by
disseminating information on the carbon benefits of their use. or by assisting local governments in
examining alternative specifications for building codes.
Support Research and Development. States can support research to develop w ood-utilization
technologies or forestry methods that reduce the cost of producing timber for durable products.
States can also study the extent to which wood can be substituted for non-wood products, with an
emphasis on its cost and technical feasibility and on the associated change in total greenhouse gas
emissions.
Provide Appropriate financial Incentives. Financial incentives promote both the supply and the
demand for durable wood products. Potential incentives include tax credits for the production
and/or use of durable wood products, energy or carbon taxes to raise the relative price of energy-
intensive construction materials, and timber subsidies to encourage longer harvest rotation periods.
Encourage Paper Recycling and Recycled Paper Use
By replacing virgin fiber sources with wastepaper. recycling has the potential to reduce net carbon
emissions by reducing levels of timber harvesting. Ultimately, the amount of carbon that can be
sequestered depends critically on the effects recycling has on both planting and harvest decisions and. thus,
on timber inventories as a w hole. Because paper and paperboard products currently account for 32 percent
of the municipal solid w aste stream and contribute to methane formation, recycling may relieve some of the
pressures of solid w aste disposal on landfill space (U.S. EPA. 1993a). Policy options for encouraging
recycling are presented in full detail in Section 5.6.
5.12 GREENHOUSE GASES FROM BURNING OF AGRICULTURAL WASTES
Large quantities of agricultural crop w astes (such as straw. stubble, leaves, husks, and vines) are
produced from fanning systems. In preparation for each cropping cycle, this waste must be eliminated.
This is most often done through open field burning, which increases the field's production capacity by
releasing nutrients into the soil, eliminating troublesome weeds and diseases, and removing dead material
w hich may block sunlight or impede crop grow th. The burning of agricultural crop w astes, however, also
results in significant emissions of CH4. CO. NOx. and N2O." Emissions reductions from this source can
be achieved through the disposal of agricultural waste through alternatives to burning.
Previous concern over agricultural w aste burning has focused primarily on emissions of particulate
matter rather than greenhouse gases. To control particulate emissions as regulated under the (lean Air Act
(CAA). some states have instituted smoke management programs. These programs are generally
administered by state health, environmental, or air quality agencies, or a consortium of agencies.
Burning of crop residues is not thought to be a net source of carbon dioxide (CO2) because the carbon released to
the atmosphere during burning is reabsorbed during the next growing season.
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Because agricultural crop waste burning is uncommon in many parts of the U.S.. little federal
action has been taken in this area. Under the CAA. biomass burning is regulated to the extent that it affects
air quality standards. Beyond that, reducing the burning of residues has primarily been a state concern.
Recently some areas have set limits on the burning of agricultural crop w astes, particularly in the Pacific
Northwest. For example. Oregon has passed legislation to gradually phase-down the burning of
agricultural residues until 1998. at w hich time the maximum number of acres w hich can be burnt w ill be
set at 40.000 (an 80 percent reduction from current levels) (Oregon. 1990).
The viability of any burning alternative depends on several factors, including: 1) its ability to meet
the same objectives that prescribed burning accomplishes. 2) economic competitiveness with prescribed
burning, and 3) technical feasibility. Options available for reducing emissions in this area include plowing
residues back into the soil, removing crop residues for other uses, using alternative burning techniques, and
replacing with alternative crops.
5.12.1 Plow Residue Back Into Soil
DESCRIPTION
One option for returning nutrients to the soil without burning is plowing the agricultural wastes
back into the field. For example, plowing com husks back into the field w ill enhance soil quality, which is
one of the primary objectives of open field burning. This method is limited, however, because many crops
are perennial. Such crops, like rye grass, will continue to live and produce over several seasons and
therefore cannot be plowed for several years. An alternative is slot-mulching, where slots are carved
throughout the field and fanners incorporate as much residue as possible into these slots.
CONSIDERATIONS
The potential for the incorporation of crop residues into the soil as a burning alternative is limited
primarily by economics, lack of adequate pest and disease control, and decomposition rate. The relative
importance of these factors varies with crop type and geographic location. For example. California straw
is not readily degradable. whereas rice straw in the southern rice belt rapidly decomposes. Straw
decomposition rates can vary even among soil series within individual states. In general, high straw yields,
dense clay soils, and wet environments are not conducive to straw decomposition. Improvements in straw
choppers can help overcome such adverse conditions.
Another potential problem with soil incorporation is pest, disease, and weed control. Soil
incorporation of weed seeds increases the need for weed control treatments, and can jeopardize product
quality in the marketplace. In cases where stem rot disease is a problem, continued plowing under often
results in substantial yield reductions (U.S. EPA. 1992b).
POLICY OPTIONS
Support Research antI Development. Additional field research on the benefits of crop residue soil
incorporation is needed before w idespread acceptance can be expected.
Provide Information. States can disseminate more information describing the soil benefits
achieved with this practice, effective use. and optimal situations. In doing so states may use
resources such as USDA's Soil Conservation Sen ice and the Cooperative Extension Sen ice.
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Provide L'inancial Incentives. States could also implement a fee structure to encourage the use of
emissions reduction techniques and alternatives to burning. For example, states may establish the
use of registration fees ($/acre burned) or emissions fees ($/ton emitted).
Establish Legal Limits. States can also limit the amount of acres burned through legislation. For
example. Oregon currently sets the maximum acreage that can be burned at 250.000 acres per year
(U.S. EPA. 1992b). In addition, a state may elect to restrict the time ofyear when burning can be
conducted or prohibit certain types of burning during historical seasons of nonattainment (with
respect to particulate emissions). Washington and Idaho are additional examples of states that
have set restrictions on burning, specifying when residues can be burned as a function of
meteorological conditions and other constraining factors. Specify ing the time w hen residues can be
burned w ill reduce emissions only w hen such restrictions reduce the quantity of the residues
burned. Greenhouse gas emissions occur regardless of the time the residues are burned.
5.12.2 Remove Crop Residues and Develop Alternative Uses
DESCRIPTION
Historically, it has been difficult for grass straw to compete in existing markets as a raw material
resource. Low bulk density of the straw (w hich requires costly densification). high transportation costs,
uncertainty of long-term supply, and low volume of supply in fiber markets have usually made straw non-
competitive w ith other raw materials, particularly wood wastes (U.S. EPA. 1992b).
The potential usefulness of agricultural w aste includes not only composting prior to reapplication
to the soil but other uses such as alternative (biomass) fuels or building materials. Such applications
require the mechanical removal of residues from the field. While compliance with some commodity
support programs may prohibit this removal, if no conflicts or restrictions exist the crop residues can be
used and marketed in a variety of ways.
Composting. Composting involves gathering agricultural wastes and setting them aside to decompose.
Residue collection methods with this application include raking, residue flail-chopping, and vacuuming into
sacks with soil and nitrogen sources such as chicken manure, and crew -cutting. After the w aste has
decomposed, the decayed material can either be marketed or returned to the soil as fertilizer.
Supplemental EeedMarket. Agricultural crop wastes such as grass straw can be collected and sold in a
supplemental feed market. The straw must be gathered, baled, stored, and compressed so that it can be
shipped on order. This practice is currently one of Oregon's primary alternatives to burning.
Approximately 150.000 - 250.00 tons of straw are shipped to Japan each year (Britton. 1992). Untreated
straw makes for poor quality livestock feed because of low protein and high fiber content. With
appropriate treatment (e.g.. ammoniation). the digestibility and palatability of straw can be increased
substantially, making straw a potential component of maintenance diets for ruminant livestock.
Alternative Euel Source. Agricultural residues can be used as an alternative (biomass) fuel source for
cooking, space heating, drying of agricultural products, and the production of pow er by steam engines or
Stirling motors (Strehlerand Stiitzle. 1987). Specific applications include burning the residues in furnaces
to generate heat for drying units or for space heating at home. There is tremendous potential for improving
the end-use efficiency in such energy conversion processes (Lashof and Tirpak. 1990). Biomass fuels can
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also be used to produce motive power or electricity by using a steam engine, a Stirling motor, or a gasifier.
Gasifiers can convert agricultural residues from solid fuel into gasified fuel. They have been used to
provide electricity and to pow er tractors and irrigation pumps. In all of these applications it is important to
use biomass with a relatively low moisture content; otherwise, the energy loss due to water vaporization
w ill be too high.
Paper and wood product substitution. Agricultural residues can also be used for non-energy purposes.
For example, residues can be gathered for fiber or building materials. Weyerhauser. a paper and lumber
company, is investigating the possibility of using agricultural residues as filler in particle boards.
CONSIDERATIONS
Composting can be relatively time-consuming compared to burning. The level of effort necessary
for a productive program depends on several factors, including decomposition rates and weather and
moisture conditions. Also, the process of large-scale composting is not fully understood or refined. The
Agricultural Research Sen ice (ARS) in Corvallis. Oregon, is researching the effectiveness of low-input
composting and ideal composting procedures. The USDA/ARS in Beltsville has had a successful research
program in large-scale composting and developed the Beltsville Aerated Rapid Composting (BARC)
method, currently in use at the WSSC Calverton Composting Facility.
Marketing straw in the United States may be more difficult than in foreign markets due to the
erratic and competitive nature of U.S. markets. For example, supplemental feed markets may only be a
profitable option if a drought occurs with a significant impact on crop yields, forcing the price of feed and
other agricultural products to rise. Furthermore, any physical and chemical treatments to enhance the
quality of the straw will increase the cost of this alternative. Finally. because Japan can obtain straw from
other countries such as Australia or Argentina, it may not prove to be a reliable customer for U.S. sources.
Combustion for heat generation may be the most appropriate means of replacing fuel oil with
residues, because much less investment is necessary compared to replacing fuel oil in pow er generation.
Also, the total maximum efficiency of the pow er produced by means of a turbine or steam engine is
approximately 15 percent, even though the combustion of biomass can be accomplished w ith high
efficiency (Strehler and Stiitzle. 1987). The disadvantages of gasifiers include a high particulate and tar
content of the gas. Furthermore, current gasifier designs do not accept all types of crop residues."' Finally.
after biomass bums, a silicate remains, creating a sludge problem that inhibits acceptance of residues as an
alternative fuel.
Using agricultural residues to manufacture paper products is a possible alternative. Traditionally.
paper products are manufactured using wood chips, which are cheap and readily available. However,
w ood chips do not require storage from rainy w eather and replacing them w ith agricultural residues may
require major retooling in the wood fiber industry. Despite this, however, grass straw is becoming a more
economically attractive alternative to using hardwoods. The reason for this is the projected shortage of
hardwoods in the near future and the fact that straw fibers from grass seeds are very similar in structure to
hardwoods.
POLICY OPTIONS
For a more complete technical discussion of agricultural residues as an alternative fuel source, see Strchlcrand
Stiitzle. 1987).
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Currently, significant scientific uncertainty inhibits development of programs in this field.
Therefore, research and development projects which support alternative uses for agricultural residues could
prove extremely beneficial. States could encourage alternative uses for crop residues by designing policies
compatible with those mentioned in Section 5.12.1 and Section 5.2. w hich address the advantages of using
biofuels and renew able energy sources for energy production, including co-generation and direct
combustion.
Provide Information. Information dissemination campaigns max be an effective way to encourage
alternative uses for crop residues. Given information on these alternatives, fanners may be
convinced to participate in voluntary emissions reduction programs to reduce smoke and
particulate emissions as well as greenhouse gases. Though information is available on composting,
most fanners have little experience with this practice. States can disseminate information
describing the potential soil benefits associated with this option, the manner in which it can be
implemented, and conditions under which it works best. The Cooperative Extension Sen ice is an
appropriate state vehicle for this.
Support Research and Development. Ideal composting methods need to be identified and a better
understanding of large-scale composting achieved, before w idespread adoption can be expected. In
addition, states can fund projects that investigate the viability of alternative uses for crop residues.
For example, states can provide funding to support research into w ood product substitution for
grass straw. To date, a number of studies have indicated the great potential that biomass fuels
have as an alternative fuel source. This issue needs to be examined further.
5.12.3 Use Alternative Burning Techniques
DESCRIPTION
A number of alternatives that still involve burning can also reduce emissions. This can be
accomplished, for example, either by creating a hotter, more controlled bum that combusts crop residues
more thoroughly , or by reducing the frequency of burning in conjunction w ith mechanical crop removal
techniques. Technologies and methodologies to achieve these objectives include:
Mobile l'ield Sanilizer. This is a machine designed to bum agricultural residues in place. It
serves as a method of both straw removal and field sanitation. While field tests have show n that
sanitizers can reduce carbon monoxide and hy drocarbon emissions, their applicability appears
limited. Technical and economic evaluations of field sanitizers have found problems with high
operating costs, durability, maneuverability, energy use. and operating speed. Based on these
studies, many states have discontinued research and development of mobile field sanitizers.
although there has been some success with their private development."
Propane blaming. Propane flamers consist of a propane tank and a series of nozzles. The
propane is released, ignited, and directed at ground level. Because straw residue must be removed
first for this method to be effective, this technique is typically used with other disposal methods
such as bale/stack burning (described below). While these practices are thought to bring about a
slight reduction in emissions when used together, they are much more time consuming than open
For example, an Oregon farmer currently uses a privately-developed mobile field sanitizcr. Due to the high
value of this farmer's crop, it was economical to develop and maintain the sanitizcr (U.S. EPA. 1992b). The high
costs associated with development frequently prevent other farmers from pursuing this option.
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field burning. If most of the straw residue is removed prior to flaming, this technique should not
result in major seed yield losses.
Bale Slack Burning. Bale/stack burning, the collection of crop residues into bales or stacks to
facilitate controlled burning, is a companion practice to propane flaming (which requires straw
removal). Some grow ers have turned to bale/stack burning to dispose of unmarketable crop
residues. As mentioned above, this practice results in slight reductions in emissions, but is more
time consuming than open field burning.
Less-Than-Annual Burning. This involves alternating open field burning w ith various methods of
mechanical removal techniques. The periods may involve burning every second or third year.
CONSIDERATIONS
There are a number of uncertainties that limit the applicability of some alternative burning
techniques. For example, mobile field sanitizers have not been fully developed and have proven successful
only in isolated cases. The technical problems associated with field sanitizers mentioned above need to be
addressed before w idespread acceptance of this option can be expected. Similarly, improvements in
techniques like propane flaming may be required to make it an attractive alternative. For example, studies
have shown that because of the temperature and duration of propane flaming, many of the w eed seeds are
not destroyed, ultimately resulting in increased weed infestation (U.S. EPA. 1992b). Moreover, the fossil
energy inputs required for these techniques emit greenhouse gases, so the net effect on emissions is not
clear. These problems w ill need to be addressed in order to facilitate acceptance of these alternatives.
POLICY OPTIONS
States could encourage alternative burning techniques for crop residues by designing policies
compatible with those mentioned in Section 5.12.1. Specifically, states may wish to focus on research and
development efforts or demonstration projects to eliminate some of the problems and uncertainties
discussed above.
5.12.4 Replace with Alternative Crops
DESCRIPTION
Crops whose residues are typically burned can be replaced with crops that potentially grow and
thrive under a system of non-burning, such as meadow foam, rapeseed. and Pyrethrum. Switching crops in
this way is highly dependent on economic, agronomic, institutional, and other factors. This is an area of
current research and relatively high uncertainty regarding net impact on greenhouse gas emissions.
CONSIDERATIONS
Whether this alternative is feasible depends on its ability to compete economically and its
agronomic capabilities compared with existing crops. Limited potential for major crop shifts exist where
crop patterns have developed in accordance with agronomic conditions and market demands.
Research in Oregon has shown that alternative crops with the best agronomic viability have not
been economically competitive with perennial grass seed production in the Willamette Valley. In
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California, rice fanners have been reluctant to stop fanning rice because the high clay soils are unsuitable
for grow ing other crops (U.S. EPA. 1992b). Further research may determine w hether there are crop
species that thrive without open field burning and that approach production levels of existing crops.
POLICY OPTIONS
Support Research antI Development. Research programs are necessary to determine economically
feasible substitutes for crops whose residues are typically burned. The USDA/ARS and CSRS
support research into new crops. Much of the current research on the use of alternative crops has
taken place in Oregon. The results of this type of research are often specific to a state and/or
region.
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CHAPTER 6
CROSS-CUTTING THEMES AND PROGRAM DEVELOPMENT
This chapter introduces potential organizing principles for policy development that span the
various greenhouse gas source categories examined in Chapter 5. The approaches presented here offer
some of the most significant opportunities for large-scale emission reductions, and max serve as focal
points for coordinating long-term, comprehensive planning for reducing emissions.
Programs that affect various source categories usually focus on either one economic sector, one
particular type of policy, or a more specific substantive goal. For example, a program max target the
energy or the agricultural sector, or max target municipal solid waste. Alternatively, a program max
establish an energy or carbon tax that affects various sectors. Finally, a program max focus on a
substantive issue such as biomass energy development or public education.
While the specific cross-cutting options presented here offer potential for large emission
reductions, policy-makers max want to develop other sectoral or substantive focal points that match their
local circumstances. Programs in each region of the country should certainly respond to local needs and
make full use of local resources such as available wind, solar pow er, or other renew able energy sources.
Customized programs that cut across source categories are especially promising in areas dominated by one
type of economic activity such as agriculture, forestry, or coal mining. In these areas, comprehensive
programs can foster diverse policies that support each other even though they address different greenhouse
gas sources. For example, comprehensive agricultural programs can simultaneously utilize methane from
waste products for on-site power production, increase energy efficiency, and reduce transportation
emissions stemming from waste disposal.
This chapter discusses six specific cross-cutting topics:. (1) energy conserx ation. renewable
energy, and carbon offsets in the electricity sector. (2) municipal solid waste management. (3) biomass
based energy development. (4) carbon sequestration through forestry. (5) city and regional planning, and
(6) agricultural sector planning. This information is meant to provide background for policy development
across greenhouse gas source categories by introducing these concepts and referring policy-makers to
related and more specific information in Chapter 5. In most circumstances the information presented here
is not as detailed as in Chapter 5. For more information on the linkage between these two chapters, see the
introduction in Part II of the document.
6.1 ENERGY CONSERVATION, RENEWABLE ENERGY, AND CARBON OFFSETS IN
THE ELECTRICITY SECTOR
The recent trend toward deregulation of electricity generation is transforming the U.S. electricity
sector. Electricity production previously involved only utilities constructing and operating power plants.
However, the trend now is for utilities to compete with other firms in generating electricity. with utilities
maintaining their historical role in transmission and distribution of electricity .
This section examines how states can promote greenhouse gas reductions within the context of
electricity deregulation. It provides a background for the specific technical approaches and policy options
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presented in Sections 5.1 and 5.2. While separated here for clarity, these three sections supplement each
other and should be considered together during policy analysis and development.
The remainder of this section summarizes five approaches states might either initiate directly or
utilize for guidance.
Ensure Infrastructure Access for Small Power Producers, and Promote Purchase of "Green Power "
One potential environmental benefit of electricity deregulation is the opportunity for electricity
consumers to choose to purchase power from generators using low-carbon fuel (i.e.. natural gas) or no-
carbon renew able fuels. For consumers to have this option, generators using low -carbon and no-carbon
fuels must be able to connect to the electric utility grid, so that they max provide electricity over the
utility's transmission and distribution system.
In the past, two factors have inhibited non-utility power producers from entering the electricity
market. First, these producers face high costs in linking or "interconnecting" to power transmission and
distribution networks. In addition, although the Public Utilities Regulatory Policy Act requires utilities to
provide interconnections on nondiscriminatory terms and at just and reasonable rates, in practice, many
non-utility power producers have encountered substantial resistance from electric utilities. Beyond the
basic interconnection issue, non-utility power producers historically have had difficulty selling power
directly to consumers (rather than to a utility as a middleman). State options to address these issues include
increased scrutiny of utility interconnection and back-up pricing practices to ensure that they are
nondiscriminatory to non-utility power producers, as well as policies to encourage electric utilities to
provide transmission services for non-utility power producers.
Once consumers have the option of buying pow er directly from a variety of electricity generators
(both utilities and non-utilities), the state government can encourage firms to offer "green power" (i.e..
electricity generated with low -carbon or no-carbon fuels). At the same time, the state government could
publicize the greenhouse gas benefits of green pow er, to increase demand for this environmentally friendly
option.
Institute a "Societal Benefits " Charge or a Carbon Tax on Electricity Generation
At least three states (Massachusetts. California, and New Jersey) have instituted a tax. often
termed a "societal benefits" charge, on all electricity purchased (no matter w hat fuel is used to generate the
electricity). Proceeds from this tax are typically used to promote energy efficiency and renewable energy
through research and development funding, production subsidies, tax credits, low -interest loans, or other
means. Other uses of the tax proceeds include helping low -income households pay for their energy needs.
An alternative approach would be to institute a carbon tax on fossil fuels used for electricity
generation. A carbon tax may reduce greenhouse gas emissions by encouraging energy efficiency or fuel-
switching to low -carbon energy sources. Note, however, that although related measures, such as
"externality-adders" or gasoline taxes, have been employ ed at the state level, a carbon tax at the state level
may result in undesired consequences. For example, it might provide incentives for industrial and
commercial energy consumers to relocate outside the state.
Promote voluntary adoption of energy-saving technologies
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In the past, some states have become involved in promoting energy efficiency by encouraging
electric utilities to help their customers purchase energy-efficient equipment. Such programs were know n as
"demand-side management." or DSM. DSM programs contributed to "integrated resource planning. " or
IRP (in which future electricity demands were met by investments both in energy-efficient equipment and in
new generating capacity). With the trend tow ard deregulation of the electricity sector, many states are
turning away from the utility-focused DSM and IRP programs. However, states still have opportunities to
promote voluntary adoption of energy-saving technologies. For example, a state government could provide
one-stop shopping for information on how to participate in a variety of federal energy conservation
programs, from the US EPAs Green Lights program to the US Department of Energy's Motor Challenge
program.
Establish or Support ("arbon Offset Programs
States could require, or provide financial incentives to encourage, electricity generators and other
greenhouse gas producers to reduce emissions or sequester carbon in proportion to the emissions that new
activities, such as a new power plant, will create. One option is to allow these emissions reductions to take
the form of "offsets", i.e.. a utility that wants to construct a new coal-fired power plant, for example, could
be required to sponsor a carbon sequestration forestry project or a program to reduce emissions in some
other sector, such as transportation. Combining the emissions offset project and the new power plant
project w ould aim to ensure that there is no net increase in the amount of greenhouse gases emitted to the
atmosphere.
In addition to directly mitigating the impacts of emissions from new sources, these types of "offset"
programs provide an incentive for utilities to select non-carbon energy sources when feasible. This is
because requiring carbon offsets w ill raise the costs of high-carbon options, making alternative energy
sources relatively more desirable.
With these factors in mind, some states and utilities are beginning to pursue offset programs as one
of the most promising options for mitigating the impact of energy related emissions. Applied Energy
Sen ices, for example, pioneered a forestry project in Guatemala to offset the emissions from a 100
megawatt coal-fired power plant in Connecticut and the New England Electric System is sponsoring similar
projects in Russia and Malaysia.
Several issues complicate offset program design and administration. Many are related to the fact
that large scale offset programs are a relatively new and undeveloped technique that will presumably be
refined. Another constraint is the difficult) associated with measuring the greenhouse gases emitted and
sequestered through various activities, especially long-term forestry projects where success depends on
many climatic and other uncontrollable factors. Issues of predictability and dependability become more
significant if offset programs permit investment in forestry projects in other parts of the world, where the
projects usually cost less. Further, states pursuing offset options will also have to evaluate how to treat
emissions linked to electricity received from or sent to other states or offset projects located in other states.
Support Emission Trading Programs
Emissions trading programs allow private entities to buy and sell pollution reductions that are
achieved. These market-based systems present opportunities for reducing aggregate pollution levels at a
lower cost to society. Forms of tradeable permit systems, for example, are currently utilized in the U.S. to
control non-greenhouse pollutants including sulphur dioxide and lead. These programs provide broad
incentives to all polluters to reduce emissions and improve their production processes and could
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conceivably be applied to carbon dioxide emissions as well, either domestically or internationally.
Tradeable permit programs may not be feasible or desirable at the state level, however, because of
complications arising from complex cross-boundary, administrative, and enforcement issues. They are
noted here as background on national or regional initiatives that states might support in order to help reduce
their own emissions.
In one form of tradeable permit system, the government sets an aggregate level of permissible
emissions for society as a whole and then allocates permits that allow their holders to emit a certain
quantity of pollutants. Private entities that w ant to increase their levels of pollutants (presumably to
increase production of their products, such as electricity) must buy permits from others w ho hold permits in
excess of their current needs. In this way. the government achieves its target level of aggregate emissions
at a minimum social cost and simultaneously provides an incentive for individual private sector actors to
reduce emissions so they can gain profits by selling excess permits.
Complications in designing these programs include setting a target level of emissions, distributing
Cross-cutting policies in the energy sector may affect all of the emission
source categories in Chapter 5. For example, energy taxes w ill affect all methane
and transportation issues in addition to traditional electricity production and
consumption. As stated at the beginning of this section, it is particularly
important that the information presented here be considered in the context of
technical approaches and policy options in Sections 5.1 and 5.2.
initial permits, addressing equity concerns in initial permit distribution between different polluters,
designing the system for facilitating permit sales and purchases, dealing with cross-boundary issues, and
determining the optimal allowable aggregate emission levels.
6.2 MUNICIPAL SOLID WASTE MANAGEMENT
Continuing to promote the municipal solid waste hierarchy of waste management methodsi.e..
promoting increased source reduction and recycling follow ed by combustion and landfilling of w astecan
result in significant GHG reductions. States have a number of opportunities for increasing source reduction
and recycling, thus achieving GHG reductions in the waste management sector.
As of late 1997. 45 states have statew ide goals for source reduction and/or recycling (SR&R).
Most of those goals w ere set at ambitious levels, and many states are in the process of re-evaluating the
goals. As this section describes, the climate benefits of SR&R are significant; states may consider these
benefits as they reevaluate their SR&R goals. Although GHG emissions from the waste sector typically
represent just five to ten percent of a state's GHG inventory, they may represent up to 20 percent of the
GHG reductions in a state action plan, due to GHG reductions across many sectors (e.g.. energy-related
GHGs. manufacturing non-energy GHGs. and landfill methane). EPA has conducted research to quantify
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the GHG benefits of SR&R. and is providing technical assistance to states developing mitigation plans for
the waste sector.'
The way in which municipal solid waste (MSW) is managed affects GHG emissions in several
ways. The use of energy in material production can be reduced (with accompanying GHG reductions)
through source reduction;" the same is generally tme for recycling. Source reduction and recycling can also
reduce manufacturing non-energy GHG emissions (e.g.. perfluorocarbons); in some industriesnotably
aluminum and steelsuch emissions can be significant. In the short run. the amount of carbon sequestered
in forests w ill increase w hen paper is source reduced or recycled (because timber harvests w ill be reduced).
Methane emissions from landfills can be reduced by managing the organic fraction of MSW by means
other than landfilling. However, in a properly managed landfill, landfilling can serve as a long-term carbon
sink for organic materials. Exhibit 6-1 show s the GHG sources and sinks associated w ith materials in the
municipal solid waste stream.
Source reduction and recycling in one state may in some cases result in GHG reductions in another
state. For example, a state that recycles office paper may as a result reduce energy consumption (and CO;
emissions) in another state w here office paper is manufactured. If the first state exports its w aste for
landfilling out of state, it may also reduce landfill methane emissions in a third state. The same
phenomenon can occur w ith state programs to reduce energy consumption: because many states import
electricity, one state's efforts to reduce electricity consumption may result in GHG reductions (from
reduced electricity generation) in other states. With any type of state program that may result in GHG
reductions out of state, it is important to remember that climate change is a global problem, and the state is
still helping to reduce greenhouse gas emissions, and helping the nation to meet its international greenhouse
gas commitments. Thus, a state program to reduce GHG reductions from MSW management is
w orthw hile, even though some of the GHG reductions may show up on other states" GHG inventories.
The EPA Office of Solid Waste (OSW) has quantified the GHG impacts of different methods of
managing various components of MSW. In general, source reduction (including backyard composting),
recycling (including centralized composting), and combustion have lower GHG emissions than landfilling.
EPA plans to evaluate the GHG emissions of emerging technologies for MSW management, such as
conversion of organic materials to biomass fuels.
This section examines five means by which states can promote greenhouse gas reductions through
improved management of MSW. A useful reference for quantifying the GHG emission reduction benefits
from source reduction and recycling of selected materials in MSW is a draft EPA report, (ireenhouse (ias
Emissions from Municipal Waste Management. The report is available on the Internet at
http://www.epa.gov/epaoswer/non-hwVmuncpl. Also. Appendix 2 of this guidance document presents a
mock-up for a state solid waste climate change mitigation package.
Promote Voluntary Waste Prevention and Recycling in the ('ommercial Sector
When businesses implement source reduction and recycling programs, they do so because it saves
them money (e.g.. by reducing waste disposal costs). Thus, from a state perspective, promoting voluntary
1 To reach EPA staff that can provide technical assistance to state GHG planners on MSW management options,
contact EPA's Municipal and Industrial Solid Waste Division (phone: 703-308-8300: fax 703-308-8686).
2 Source reduction, also known as waste prevention, involves altering the design, manufacture, purchase, or use of
products and materials to reduce the amount and toxicity of what gets thrown away. Source reduction reduces or
eliminates pollution at the source.
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commercial source reduction and recycling is a "no regrets" option: it makes sense even without
considering the greenhouse gas reductions achieved. Offices, grocery stores, and other businesses often can
source reduce and recycle large volumes of office paper, coraigated cardboard, and other materials. State
governments can foster commercial source reduction and recycling through a state government "buy
recycled" program, and incentives such as business development assistance and tax cuts or tax credits.
Exhibit 6-1
GHG Sources and Sinks Associated with Materials in the MSW Stream
Inputs
Ore, trees,
petroleum, ¦
energy, etc.
Life Cycle Stage' GHG Emissions/Carbon Sinks'
Raw Materials
Acquisition
Energy-related emissions
Non-energy related emissions
Change in carbon storage in forests
Energy
Recycling
I
Energy ¦
Manufacturing
-T"
Use
T
Waste
Management
-~ Energy-related emissions
Composting
Combustion
Landfilling
1 Note that source reduction affects all stages in the life cycle.
' All life cycle stages include transportation energy-related emissions,
(except that emissions from transporting products from manufacturers
to consumers were not counted in this analysis).
Energy-related emissions
Change in carbon storage in soils
CO, emissions from plastics
N,0 emissions
Credit for avoided fossil fuel use
CH, emissions
- Uncontrolled
- Flared or recovered for energy (converted to CO,)
- Credit for avoided fossil fuel use
- Credit for carbon in long-term storage
C60023-1-2
EPA"s WasteWi$e Program is a flexible program that allows partners to design their own solid waste
reduction programs tailored to their needs. It challenges companies to set and achieve source reduction and
recycling targets. EPA offers technical assistance and recognition to partners (the entitities who commit to achieve
waste reduction) and endorsers (groups who help promote WasteWi$e). States, local governments, and tribes can
sign on as partners; many (85) have already-joined the program in this capacity. Also, over 600 businesses
currently participate in the WasteWi$e Program. By diverting waste from disposal, these programs reduce waste
collection and disposal costs, reduce greenhouse gas emissions, and reduce other environmental emissions as well.
Information on WasteWi$e is available from EPAs hotline for the program (l-800-EPA-WISE) or the program s
web site (http://www.epa.gov/wastewise).
Promote ('ollccilon Efficiency for Recyclable Materials and Maximum Diversion Programs in the
Residential Sector
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Small cities in the US have been able to achieve recycling rates of 50 percent or more, while some large
cities are approaching a 50 percent recycling rate. Loveland. Colorado (population 44.300) has achieved a 57
percent recycling rate by providing curbside recycling and charging volume-based trash fees for waste disposal.
Ann Arbor. Michigan (population 1 12.000) recovers 50 percent of its residential w aste through curbside recycling
of 30 different recyclables. San Jose. California (population 850.000) recovers 44 percent of its w aste, including 55
percent of w aste from single-family households, w hich pay volume-based rates for trash sen ice.
The best means of achieving GHG reductions from increased recycling in the residential sector is often to
institute curbside recycling. Compared to a recycling program based on drop-off centers, curbside recycling
dramatically increases both participation in recycling, and the amounts of material recycled. Curbside recycling is
most cost-effective in larger communities, w here marketable quantities of recyclables may be collected each week.
Thus a state may consider encouraging larger communities to provide curbside recycling. Some communities
combine curbside recycling with waste collection by using "co-collection" trucks with bins for each type of
recyclable material, plus a compartment for non-recycled w aste.
Some cities have focused on increasing the efficiency of their w aste management operations (thus
decreasing costs), and increasing recovery at the same time. Some of the techniques used to increase efficiency
include increased automation, changes in collection frequency, and improved routing. Rochester. New York and
Mesa. Arizona both instituted curbside recycling as part of an overall efficiency upgrade. The amount of materials
recovered increased from zero to six pounds per household per w eek in Rochester. New York, and from zero to ten
pounds per household per w eek in Mesa. Arizona.
Institute "Pciv As You Throw" Pricingfor Waste Collection
"Pay as you throw" (PAYT) programs may be implemented to further increase recycling, and to provide an
incentive for source reduction. Under a PAYT program, households are charged for the amount of waste they
discard. By increasing the amount of w aste that they recycle and source reduce, households can reduce the amount
of discarded w aste and thus will reduce w aste disposal costs. PAYT programs have traditionally charged
households for the volume of w aste disposed, measured by a standard-sized bag or trash can. Where bags are used,
households must either pay for each specially-marked bag they use. or pay for pre-printed stickers to place on each
ordinary trash bag they set out. Where containers are used, a household pays a monthly or annual fee for the size
and number of containers it uses.
Over 3.000 communities have implemented PAYT programs, with many communities reporting average
waste reductions ranging from 25 to 35 percent. Information on PAYT is available through the web site maintained
by EPA"s Pay-As-You-Throw program (http://www.epa.gov/payt) and the program's help line (1-888-EPA-
PAYT).
I'arget Specific Materials in the MSW Stream
Many communities have instituted programs to divert specific materials from landfills. Such
programs have ranged from promoting composting of grass clippings to collecting second-hand electronic
goods for repair and resale.
Several communities in the U.S. collect durable goods for reuse. Programs include curbside
collection of durable goods for distribution to charities, local sw ap meets w here individuals may trade
durable goods, or drop-off sites w here individuals may leave goods that are broken or no longer of use to
them, and others may take what they can fix or use. States may promote such programs by emphasizing the
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full range of benefits, including reduced disposal costs, greenhouse gas reductions, and. w here applicable,
employment opportunities (e.g.. repairing electronic goods).
A state may reduce emissions of methane from landfills by reducing landfilling of grass clippings. Grass
clippings from a state w ith a population of 5 million, which generates grass clippings at the national average rate,
w ill emit about 103.000 metric tons of carbon dioxide equivalent (MTCDE) of methane if landfilled. Because grass
clippings decompose readily, they generate more methane when landfilled than leaves, branches, and many other
types of organic w astes. Grass clippings may be kept out of landfills through "grasscycling" (leaving grass
clippings on the lawn to decompose) or composting. Many communities have successfully implemented backyard
composting programs by giving residents free plastic composting bins. Collection of grass clippings for centralized
composting is another alternative.
Ensure Adequate Financing of Source Reduction and Recycling Programs
States can help to expand source reduction and recycling efforts by establishing financing mechanisms for
support of new programs. Alameda County. California imposes a surcharge of six dollars per ton of w aste
landfilled in the county, to support waste reduction and recycling. The fee has generated more than 30 million
dollars in revenues since 1991. This surcharge not only ensures revenue for waste reduction activities but also
creates financial incentives to reduce the amount of waste landfilled. Other types of financing could also be
developed.
For more information on municipal waste management issues see:
5.1 Greenhouse Gases from Energy Production:
Demand Side Measures
5.6 Methane from Landfills
5.11 Emissions Associated with Forested Lands
6.3 BIOMASS ENERGY DEVELOPMENT
Biomass resources, including wood and agricultural wastes, timber, and grain crops accounted for
about 3.3 percent of U.S. energy consumption in 1990. Because plants that produce these resources
sequester carbon w hile growing, using biomass as a renew able energy source to displace fossil fuels helps
mitigate carbon dioxide buildup in the atmosphere. Additional information on how trees and plants
sequester carbon is presented in Section 5.11. Emissions Associated with Forested Lands, and Section 6.3.
Tree and Timber Expansion Programs.
Biomass can be converted to gaseous, liquid, or solid fuels that may substitute for common
transportation, pow er generation, industrial, and heating fuels now used. Gaseous fuels from biomass can
be used just like natural gas. Liquid fuels, mostly ethanol and similar alcohol products, can directly
substitute for liquid petroleum fuels such as gasoline. Solid fuels, usually meaning the biomass itself after
being dried, can be burned to produce thermal energy for uses like heating buildings or can be used in direct
combustion processes at power plants in the same way as coal.
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Wood wastes and agricultural crop residues are often considered to be the most cost-effective
biomass resources since they result from other productive economic activities and are readily available.
Wastes and residues are currently used extensively for energy production in some sectors such as the paper
industry. In addition to replacing fossil fuels that produce greenhouse gas emissions, increasing the use of
these resources may help alleviate other problems such as costs and methane production associated with
waste disposal and landfills. Wood and crop residues can be gasified, liquified (into ethanol). burned
directly for use in on-site power generation, or burned to heat commercial buildings and homes.
Short rotation woody crops, mostly trees, can be burned to heat buildings or to fire conventional
power plants in a process similar to coal combustion. For example, in 1990 New York state generated
around 3 megaw atts of electricity using w ood pow er and in 1991 Vermont generated approximately 1.7
percent of its electricity from biomass at a w oodchip burning plant. Wood can also be transformed into
liquid fuels such as ethanol through enzymatic processes, although these processes are expensive to use at
the current time. Several short-rotation woody crops have been identified as "model" energy crop species
based on their rapid biomass yield potential. These crops include silver maple, sweetgum. sy camore, black
locust, eucalyptus species or hybrids, and poplar species or hybrids. The highest yielding crop appropriate
for a given region may be among these model crops or may be different, depending on soil and other
characteristics w ithin a geographical region (Sampson and Hair. 1992).
Grain crops, especially those high in sugar content such as sugar cane and com. can be converted
to ethanol through fermentation and distillation processes. This procedure is being pursued aggressively in
some areas, especially throughout the corn-belt states where various programs promote ethanol to enhance
energy self-sufficiency and support the local economy. Residues from these crops can also be used for
direct combustion or gasification, as described above.
The challenge for biomass in the future is to ensure a sustainable harvest, possibly from
plantations, to develop efficient and non-polluting systems for fuel conversion and use. and to lower
production costs so these fuels can compete w ith traditional sources. The total costs of biomass fuel
development w ill vary depending on crop productivity and biomass handling and transportation costs.
Other questions surrounding biomass fuel development include the net effect of sequestering carbon
(including impact on carbon content in soils), the effect on other greenhouse gas emissions like nitrous
oxide from fertilizer applications, the vulnerability of large plantations to pests and diseases, the
competition for w oody biomass to make pulp for paper manufacturing, and competition for land w ith
traditional agricultural crops (NAS. 1991).
A variety of policy options may help resolve these uncertainties and promote greenhouse gas reductions
through substitution of biomass fuels for fossil fuels. Policies in this area might include:
Research, pilot programs and financial incentives to encourage the development of high-quality. low -
cost. and continuously available bioenergy crops. Tax or other credits for biomass production or
reducing tax incentives for fossil fuels may help in this way.
Research and demonstration projects to encourage the development and application of more efficient
technologies that may be more competitive with other sources of energy.
Testing or construction of commercial facilities and infrastructure for using and distributing biomass-
based fuels in order to support their w idespread use in the long-term.
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The 1991 Vermont Comprehensive Energy Plan illustrates how states might promote biomass fuel
development, emphasizing how w ood products can offset the state's use of nonrenew able fuels like coal or
oil for electricity generation as well as direct heating. Similarly, the 1992 Iowa Comprehensive Energy
Plan emphasizes increasing that state's energy self-sufficiency by developing renewable resources including
ethanol and other biomass products.
For more information on biomass issues see:
5.2 Greenhouse Gases from Energy Production: Supply Side Measures
5.3 Greenhouse Gases from the Transportation Sector
5.6 Methane from Landfills
5.10 Nitrous Oxide from Fertilizer Use
5.11 Emissions Associated with Forested Lands
6.4 TREE AND TIMBER EXPANSION PROGRAMS
Trees provide an important terrestrial "sink" for carbon dioxide by removing or sequestering this
greenhouse gas from the atmosphere as they grow, and storing it in wood, foliage, and soils. Permanently
increasing the acreage devoted to forests and timberland can therefore contribute to reducing net carbon
emissions. Policies to pursue this aim can be valuable in "offsetting" or counter-balancing emissions from
other sources such as pow er plant operations. This section focuses specifically on increasing carbon
sequestration through expansion of forested lands; Section 5.11. Emissions Associated with 1'brestecl
Ixtncls. provides more details on emissions issues related to conversion of existing forest land and
consumption of wood products.
Carbon sequestration benefits may accme through projects designed specifically for this purpose or
they may accompany broader policy objectives such as enhancement of natural resources, reduced soil
erosion, or improved wildlife habitat. Several federal level forestry programs and planting initiatives and
some private sector efforts support tree planting objectives. The federal programs are administered
primarily by the U.S. Forest Service and other agencies w ithin the U.S. Department of Agriculture and by
the Department of the Interior.
One of the most significant federal efforts dedicated to expanding forested area in the U.S. was the
U.S. Tree Planting Initiative. As part of the 1990 Farm Bill, this initiative focussed on planting and
maintaining one billion trees per year in urban and rural areas. Linked with this initiative are existing
federal programs, including the Stewardship Program, the Stewardship Incentive Program, and the Urban
and Community Program, that w ork tow ards the goal of tree maintenance and planting. All 50 states have
formed State Forest Stewardship Coordinating Committees to assist state foresters with these programs.
Federal programs designed to meet other policy objectives may also help increase carbon
sequestration through tree and timber expansion. For example, the Conservation Reserve Program, aimed
at protecting highly erodible croplands, converted about 2.4 million acres into permanent tree cover since
its inception (Callaway and Ragland. 1994). Carefully tailored support for this sort of initiative illustrates
the types of multiple-benefit or "no regrets" actions that states may be able to pursue to help mitigate the
threats of climate change.
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Additional tree-planting initiatives have been undertaken by electric utilities, often with the
assistance of state governments and some non-governmental organizations, in an effort to "offset" carbon
emissions from other sources, including power plant operations. For example. PacifiCorp is implementing
carbon dioxide offset projects in Oregon that assist non-industrial landowners in planting rural lands. This
project includes cost-sharing and a requirement that trees not be harvested for at least 65 years. American
Forests' Global ReLeaffor Energy Conservation Program is also focusing on encouraging utility
companies to plant trees for energy conservation/ Further. New England Electric Systems is sponsoring
forestry programs in Malaysia and Russia to offset emissions from their U.S. based generating stations.
Section 6.1 discusses utility offset programs in more detail.
Tree and timber expansion programs in general may include reforestation (replanting former
forests) and afforestation (converting other land uses to trees). Either way. the net amount of carbon
dioxide that is sequestered annually by new tree grow th varies with the quality of the land, the age of the
tree and its species, climate, and other factors. For example, southern pines planted on cropland may
sequester about 22 percent more carbon per acre than pines planted on pasture land in the southeast
(Birdsey. 1992). At the same time, however, slow er growing tree species that offer longer crop rotation
periods or wood that can be used in longer-lived products, such as furniture, may supersede the apparent
carbon benefits of faster growing species planted in the same regions.
Policy options to support tree planting include: planting programs on public lands, direct payments
or tax subsidies for private sector tree planting, partnerships or educational seminars targeted at timber and
other forest interests, technical support for non-profit or other private groups, and forestry based carbon
offset programs. The real range of opportunities in this area depends on local circumstances including
perspectives shared by different interests involved in the forestry sector.
Because of this diversity of policy options and the technical complexities and uncertainties involved
in forestry expansion programs, the design of large-scale tree planting programs is critical to their success
in sequestering carbon over time. Programs that do not adequately consider certain important interests in
the tree and timber industry may even neutralize the carbon sequestration benefits they are trying to
achieve. For example, private forest owners not enrolled in new government forestation programs may
reduce their own tree planting because they anticipate lower timber prices when surplus government timber
is harvested. This may result in less net carbon sequestered by the government program. As another
example, because much of the carbon stored in the soil and in the woody biomass of the tree is released
when the tree is harvested, carbon benefits are reduced if the land planted under the program does not
remain permanently forested. Assuring that the planted trees remain in the ground may require long-term
commitments by landowners.
It is also important to note that most subsidies for tree planting do not preclude harvesting. Net
effects on carbon sequestration may. therefore, be unclear, especially if energy consumption associated
with harvesting activities is considered. Further, tax incentives and other subsidies must be carefully
crafted to encourage incremental behavior i.e.. to avoid rewarding individuals for activities that were
already planned. At the same time, care must be taken to avoid penalizing the forest industry and other
individuals already engaged in the desirable activity of planting trees making these actors ineligible for
benefits under a tree planting program may be counter-productive.
American Forests is a non-profit organization in Washington. D.C.
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Federal tree planting programs have employed a number of different methods to induce individuals
to participate and to ensure long-term success. For example, the Conservation Reserve Program employs
cost-share arrangements that cover a variety of land management and treatment costs, such as site
preparation, planting, and thinning. Technical assistance has been a component of the Stew ardship
Incentive Program. In addition, these programs typically specify land and landowner eligibility
requirements in order to prevent perverse results, such as clearcutting and replanting in order to receive
subsidies.
One example of a state level forestation program is the Missouri Department of Natural Resources'
Operation TRIili (Trees Renew Energy and the Environment). This program's goals are to reduce demand
for heating and cooling with strategic landscaping, to remove carbon dioxide from the atmosphere, to arrest
soil erosion, and to enhance natural w ater filtration. The Division of Environmental Quality also
incorporated a land reclamation program for mine sites into Operation TREE. Because mine sites are
typically steep and the soil is of poor quality, they are often more amenable to trees than to other types of
cover.
In addition. Minnesota recently completed a major report assessing that state's carbon dioxide
budget and making recommendations for reducing emissions with forestry. They conclude that, while land
availability is a constraint on carbon sequestration forestry projects, tree planting could be an important
component of an overall program to reduce net carbon dioxide emissions.
6.5 CITY AND REGIONAL PLANNING
Coordinated urban and suburban planning of energy issues can lead to substantial greenhouse gas
reductions. These reductions w ill stem largely from improvements in the transportation sector and from
increases in efficiency during electricity consumption and production. They may also incorporate better
use of urban and regional resources such as recyclable products, district heat, and methane from landfills.
The greatest opportunity for reducing emissions through city and regional planning stems not
simply from achieving direct reductions in these areas, but rather from exploiting the interactions between
different greenhouse gas producing activities. For example, the combination of a high density of dark
buildings in urban areas and high levels of energy consumption that generates heat, such as vehicle traffic
and commercial building energy use. tends to trap heat, creating an "urban heat island" effect. This can
lead to demand for more air conditioning, refrigeration, and other energy draining activities. Similarly. a
commercial building's energy requirements depend not only upon the building's construction and source of
energy but also its external environment, including the density and distribution of surrounding buildings
and the local climate. Additionally. the proximity of peoples' jobs to w here they live is a key determinant of
how much energy or fuel is consumed for transportation purposes. By addressing these issues through land
use planning and community design, coordinated city and regional planning offers tremendous opportunity
for reducing aggregate emissions of greenhouse gases.
State and local governments have the predominant jurisdiction to enact policies that w ill promote
these types of reductions. City and regional planners determine w here and how residential, commercial and
industrial development takes place, states frequently set energy -efficiency standards and localities enact
building codes, and both these levels of government plan and support transportation system development.
In this context, local control over land use and zoning offers one of the greatest opportunities for promoting
greenhouse gas emission reductions. It is important to realize that zoning ordinances affect these emissions
whether they intend to or not. and therefore, that city and regional planners should become aware of the
climate change implications of their actions. Zoning that permits extensive parking in urban areas, for
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example, often discourages the use of
energy efficient public
transportation. Similarly, zoning
that excludes businesses from
residential areas creates a higher
need for mobility as people must
travel farther to w ork, causing higher
levels of emissions.
Planning agencies are also
optimally situated to identify areas
where excess heat or other resources
in one sector, like industrial
production, might be used to meet the
energy needs in another sector, like
commercial heating. This is a
function that only local and state
governments can perform.
The US EPA's Smart
Grow th Network provides resources
to government, business, and civic
sector leaders interested in
developing cities and towns in ways
that are environmentally,
economically, and socially "smart."
The network's mission includes
encouraging (1) transit- and
pedestrian-oriented development and
(2) infill development in urban areas,
to reduce suburban sprawl. Both of
these policies help to reduce the use
of automobiles, and thus help reduce
greenhouse gas emissions from the transportation sector.
Exhibit 6-2: The Land Use, Transportation, Air Quality
(LUTRAQ) Project
1000 Friends of Oregon, a nonprofit membership
organization dedicated to the wise and responsible use of land,
has initiated a research demonstration project to identify and
analyze alternative development patterns to automobile-
dependent suburban spraw l. By emphasizing the connections
among land use. transportation, and air quality planning, the
project participants hope to demonstrate how changes to local
land use policies and development designs can increase the
economic feasibility of alternatives to automotive travel,
thereby reducing energy consumption; reduce the demand for
automobile-oriented facilities; increase mobility for all
segments of society; provide for sustainable population and
economic growth; minimize negative environmental impacts,
such as climate change effects from increasing greenhouse gas
emissions; and enhance community character and aw areness.
The LUTRAQ project w ill study a proposed $200
million by pass freeway and a surrounding 115 square mile area
in the Portland. Oregon metropolitan region. Using well-know n
transportation and air pollution models (EMME/2 and
MOBILE4). the project w ill identify replicable methods for
altering land use development patterns to promote pedestrian,
bicycle, and mass transit travel. These new methods w ill
provide important tools for policy makers, planners, and
citizens calculating the feasibility of alternative modes of
transportation. The project research will be conducted by a
team of internationally recognized experts in the fields of land
use planning, urban design, and computer modeling.
The International Council for Local Environmental Initiatives (ICLEI). an international association
of local authorities dedicated to helping localities mitigate environmental threats and enhance the natural
and built environments at the local level, works with local governments to identify these types of
opportunities for reducing emissions of greenhouse gases and other pollutants. Through their Urban C(^
Project. ICLEI w orks w ith the cities of Denver. Minneapolis. Miami. San Jose. Portland, and others on
greenhouse gas emission reduction programs.
Specific measures to reduce greenhouse gas emissions through city and regional planning should
focus on coordinating the proximity and mix of residential, commercial and industrial sites in order to help
mitigate the urban heat island effect, reduce or facilitate transportation needs, and use potential energy-
saving or emission-reducing resources that are currently being wasted, such as heat from industrial sites or
methane from landfills. For example. In 1994. 16 San Bernadino jurisdictions prepared a "Land Use.
Transportation, and Air Quality" manual in response to a mandate from California's South Coast Air
Quality Management District. The focus of the document is to improve air quality through land use
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measures such as transforming auto-oriented subdivisions into pedestrian neighborhoods. Other specific
planning ideas are presented below.
Establish self-sufficient, mixed-use communities by ensuring that employment, shopping,
entertainment, medical care, and similar sen ices are located near residential areas in order to
minimize transportation needs. Florida has developed several model communities with these
purposes in mind, as reflected in Dade County's "traditional neighborhood development ordinance."
Support central district heating and cooling, w hich involves capturing and channeling waste heat
(usually from industrial facilities) or heat from a central boiler to meet heating needs in commercial
or residential buildings. This may involve developing infrastructure to transfer the heat (as steam
or hot w ater) between locations and planning industrial, manufacturing, commercial, and
residential centers in relative proximity to each other. Almost half of the homes in Sw eden are
heated this way.
Plan the density, distribution, color, and facades (may include glass-types) of buildings so heat can
escape the city to help mitigate the urban heat island effect. Develop urban tree programs to
provide summer shade and to act as shelter belts against cold winds in the winter that draw the heat
from buildings.4
Establish and enforce building codes and energy-efficiency standards that help minimize
residential, commercial, and industrial energy consumption.
Design and build "green space", i.e.. parks, urban green wards, etc.. These green spaces can help
reduce urban heat island effects, while also sequestering carbon dioxide.
Facilitate and promote public transportation systems in coordination w ith all the other planning
measures listed above, reducing direct carbon dioxide emissions from automobiles and decreasing
transportation systems contributions to the urban heat island.
Support innovative work and transportation alternatives such as telecommuting in order to reduce
overall commuting needs, again reducing direct carbon dioxide emissions and urban heat trapping.
6.6 AGRICULTURAL SECTOR PLANNING
Concentrating on one sector of the economy can provide a useful focal point for comprehensive and
w ell-coordinated policy development. As an example, the agricultural sector contributes to greenhouse gas
emissions in a variety of ways. For example:
Greenhouse gases are emitted through energy consumption during field operations and agro-
chemical production, including fertilizers, pesticides, and herbicides;
Greenhouse gases are emitted when agricultural crop wastes are burned;
Cool Communities is a voluntary program sponsored by DOE. The function of Cool Communities is to
encourage the strategic planting of trees to provide shade and windbreaks to residential and commercial buildings,
thereby, improving energy efficiency and reducing the urban heat island effect. These trees also serve as a carbon
sink, contributing to the overall carbon reservoir both above and below ground. (Cool Communities is Action #11
of the CCAP).
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Methane is emitted from livestock and poultry manure, through enteric fermentation in
domesticated animals, and from flooded rice fields;
Nitrous oxide is emitted as a result of nitrogenous fertilizer use;
Agricultural production decisions alter land use. which in turn affect greenhouse gas emissions;
and
Agriculture offers biomass fuel potential.
By focusing on the agricultural sector, therefore, policy-makers can integrate several greenhouse gas
reduction measures into a single, comprehensive program.
The greatest opportunities for reducing greenhouse gas emissions in the agricultural sector may
involve not only direct actions to address each of these sources, as Chapter 5 discusses, but also innovative
approaches that combine policies so that emission reductions from one source support reductions from
others. For example, methane can realistically be captured from some manure systems and used as an
energy source in production processes or for heating buildings. This decreases direct methane emissions
For more information on measures particularly relevant to city and regional planning see:
5.1 Greenhouse Gases from Energy Consumption: Demand Side Measures
5.2 Greenhouse Gases from Energy Production: Supply Side Measures
5.3 Greenhouse Gases from the Transportation Sector
5.4 Methane from Natural Gas and Oil Systems
5.6 Methane from Landfills
and reduces the need for energy from traditional fossil fuel sources (see Exhibit 6-3). Additionally,
composting crop residues and using them as fertilizer or grow ing leguminous crops w here residues can be
plowed into fields as a nitrogen source w ill reduce carbon dioxide emissions from crop burning and may
help decrease nitrous oxide and other emissions associated with fertilizer applications. Similarly,
processing crop residues into biofuels has multiple benefits.
States can usually promote these or other innovative mechanisms for reducing emissions from
multiple sources through individual projects or by developing broader programs under which a range of
specific actions can be undertaken. Projects might include, for example, improving the understanding and
increasing the implementation of integrated pest management (IPM) activities. IPM has the potential to not
only reduce the need for and use of harmful pesticides, but it can also increase efficiency and productivity,
thereby, reducing emissions from energy-related activities. Another potential project could include
improving the efficiency of nitrogen fertilizer use. This has the potential to not only result in low er
emissions of N2O from microbial activity occurring in the soil, but also lower emissions of CO2 from
electricity and natural gas consumption during the manufacture of fertilizer. Also, both projects offer
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benefits to the fanner in addition to environmental, including decreased health risks (from a reduction in
pesticide use), increased productivity, and decreased energy costs."
Exhibit 6-3: Broiler Litter Program in Alabama
The Broiler Litter Program is co-sponsored by the Science. Technology and Energy Division
of the Alabama Department of Economic and Community Affairs and the U.S. Department of
Agriculture's Tennessee Valley Resource Conservation and Development Council. This innovative
program addresses improvements in energy efficiency, solid waste reduction, and agricultural
productivity. In the pilot program, newspaper is shredded and blown over a poultry house floor. Baby
chicks are then brought in and. within a couple of days, the shredded paper becomes matted and slick
from the droppings and moisture. A few days later, the matted paper begins to break up. In six w eeks,
the broilers are taken to market, at w hich time either a new layer of paper is added to the floor or the
floor is cleaned up and the process repeated. When the litter is collected from the poultry house floor,
it is spread on crops as fertilizer or is mixed with feed and fed to livestock for its nutritional value.
Because fanners can reduce their purchases of commercial fertilizers, greenhouse gas
emissions associated with the production and use of the fertilizer are reduced. In addition to the
benefits to the fanner in feed and fertilizer savings, the Broiler Litter Program can enhance recycling
efforts by creating demand for old new spapers and by decreasing the flow of w astes to the limited
amount of available landfill space. Furthermore, the use of shredded new spaper for bedding also
eliminates the need to truck in wood chips from as far away as 250 miles, thereby saving on fuel and
transportation costs. Finally, fanners have also noticed decreases in their energy bills, primarily due to
the insulating effects of the shredded new spaper. This reduction in fuel consumption results in low er
CO2 and other energy-related emissions. With more than 2.000 chicken producers in the four
Alabama counties w here project demonstrations are held, more savings are expected as the program
gains popularity.
Public recognition or other rewards for fanners who reduce emissions from more than one source
simultaneously may also enhance fanner interest in these activities. Support for demonstration projects in
multiple-source emission reductions can also generate fanner interest, especially if coordinated with well-
known and successful existing farms. Another successful approach may be to make sure that fanners
receive a uniform and consistent message about the needs, benefits, and related opportunities for multiple-
source emission reductions from all government programs with which they commonly interact. For
example, a common message about the imperatives and benefits of emission reductions from state
agricultural agencies, environmental agencies, extension agents, and even in trade journals and other
publications can consistently reinforce the fact that farms can simultaneously reduce emissions and save
money.
States may gain additional benefits by developing broader programs to coordinate all these types of
projects. For example. Chapter 7 describes the Iowa Agricultural Energy Environmental Initiative, a wide-
ranging program that serves as a base for a variety of efforts to reduce energy consumption and pollution in
Iow a's agricultural sector. Under this program, a diverse range of projects are tied to a common theme.
The CCAP provides detailed descriptions and analyses of voluntary programs designed to reduce pesticide use
and increase the efficiency of nitrogen fertilizer applications (Actions #17 and #18. respectively).
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garnering publicity and political support as well as resources from a variety of external sources. Without
the central program in place, several diverse projects could not be linked to a common initiative and would
not receive the same level of popular or political support.
For more information on agricultural sector planning see:
5.1 Greenhouse Gases from Energy Consumption: Demand Side Measures
5.2 Greenhouse Gases from Energy Production: Supply Side Measures
5.3 Greenhouse Gases from the Transportation Sector
5.7 Methane Emissions from Domesticated Livestock
5.8 Methane from Animal Manure
5.9 Methane from Rice Cultivation
5.10 Nitrous Oxide from Fertilizer Use
5.11 Emissions Associated with Forested Lands
5.12 Greenhouse Gases from Burning of Agricultural Wastes
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PART III
PROGRAM DEVELOPMENT
AND STATE ACTION PLAN PREPARATION
The two preceding chapters provide a menu of policy options that states might include in a State
Action Plan. This part of the document explains how states can choose from among those options and meld
them into comprehensive climate change mitigation programs. It also provides a framework for the actual
State Action Plan.
Chapter 7. Climate Change Program Development, is provided help states anticipate institutional,
political, and other organizational issues that may complicate their program design efforts.
Chapter 8. Analyzing Policy Options, clarifies the different processes and tools states might use
for analyzing and comparing policy options, highlighting the many complexities involved in this
process.
Chapter 9. Preparing the State Action Plan, gives examples of the types and content of State
Action Plans that EPA feels w ould support national efforts in this arena and w ould provide a
consistent base for the federal government in allocating additional resources and technical
assistance to states.
This information should help state policy-makers anticipate many of the complications that may
arise as they structure actual climate change mitigation programs.
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7. CLIMATE CHANGE PROGRAM DEVELOPMENT 7-1
7.1 TIME PERSPECTIVES IN CLIMATE CHANGE PROGRAM DESIGN 7-1
7.1.1 Structuring Time Frame Considerations in Program Design 7-1
7.1.2 Models for Including Time Frame Considerations in Program Development 7-3
7.2 IMPORTANT ACTORS IN CLIMATE CHANGE PROGRAM DESIGN 7-4
7.3 POLITICAL CONSIDERATIONS IN PROGRAM DEVELOPMENT 7-5
7.3.1 Developing Programs and Processes that Foster Broad-Based Political Support 7-5
7.3.2 Using Policies Strategically Within the Time Frames of Program Development 7-6
7.3.3 Utilizing Legislative and Executive Action Strategically when Feasible 7-6
7.4 COORDINATING CLIMATE CHANGE PROGRAMS: INTERACTION BETWEEN
AGENCIES 7-7
7.4.1 Partnerships Between State Agencies 7-7
7.4.3 Structuring Partnerships/Program Coordination and Administration 7-8
7.5 CLIMATE CHANGE PROGRAM FINANCING 7-10
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CHAPTER 7
CLIMATE CHANGE PROGRAM DEVELOPMENT
This chapter addresses the process of planning, implementing, and administering climate change
mitigation programs. It summarizes complexities that states max encounter during the development of
greenhouse gas emission reduction policies and describes how several states have structured their programs
to deal with these issues. Ideally, the information presented here w ill help elucidate some of the criteria that
max be important when designing programs, including time frame considerations and political and
administrative feasibility, as discussed in Chapter 4.
Specific topics addressed in this chapter include the important actors who affect climate change
program design, political considerations relating to climate change program development, treatment of time
perspectives, interaction between various agencies within and external to state governments, general
program administration, and program financing.
7.1 TIME PERSPECTIVES IN CLIMATE CHANGE PROGRAM DESIGN
As highlighted throughout this document, states should anticipate that climate change policy
formulation w ill be a dynamic, evolving process. For this reason, program design frequently depends upon
a state's approach for looking at near-, mid-, and long-range issues. Time frame issues are relevant in the
political, organizational and administrative aspects of program planning. For example:
Greenhouse gas emissions today w ill affect climate change and its impacts at the local level for
many decades.
The capacity to reduce greenhouse gas emissions, especially through log-range mitigation options,
depends on anticipated changes in science and technology.
One reason current emission forecasts are important is that they provide a baseline for analyzing
potential emission reduction impacts from various policy options ranging across time frames.
Dynamic programs with goals and criteria that vary across time frames max be more effective than
programs adhering to one static set of objectives. Programs benefit from qualitative and
quantitative short-, mid-, and long-range emission reduction targets and goals.
Policy evaluation, entailing predictions and measurements of probable program impacts, depends
heavily on time frame considerations. Key time frame assumptions are critical for conducting
emissions analysis and economic impact analysis. These same time frame assumptions play a
significant role in driving any formal emissions or climate change modeling efforts a state max
decide to pursue.
7.1.1 Structuring Time Frame Considerations in Program Design
Throughout this document time frame considerations are split into near-, mid-, and long-range
classifications. This section defines and examines these classifications in more detail, introducing the
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advantages, constraints, and opportunities surrounding policy planning and implementation within each
one.
Near-Range
Near range actions can be initiated immediately. Among other benefits, these policies offer the
opportunity to implement immediate emission reductions, set precedents for state actions on climate
change, demonstrate new technical approaches for addressing various emission sources, develop an analytic
base for future actions, and generate immediate and future political support by incorporating various
important actors in high visibility and popular projects. Within this time frame many "no-regrets" policies
can often be implemented at relatively low cost.1
The primary constraints associated with near-range actions are typically related to the technical,
organizational, political, or financial feasibility of alternative options. These constraints stem from the
scientific, economic, and technological uncertainty surrounding climate change mitigation measures and
from the frequent need to gamer support from diverse sectors of society and to coordinate actions between
government agencies. (Other sections in this chapter discuss these political and organizational issues in
more detail.)
Additionally, without comprehensive and longer-range program design, actions focused on the
near-term can come to dominate state programs and drain financial, analytical, institutional, and political
resources from initiatives that can have more significant impacts but that w ill take longer to develop and
implement. Also, states that pursue only "no-regrets" actions often find that they do not innovate or
develop new policy ideas for addressing greenhouse gas emissions. For these reasons, near-range actions
should generally be envisioned as part of larger and more comprehensive programs and should be
communicated to the public and other important stakeholders in this way.
Mid-Range
Mid-range policies are often considered in a ten- to twenty-year time frame, hinging on issues such
as technology development and implementation feasibility, as well as on emissions and economic forecasts.
Policies in this range often involve significantly more analysis, planning, and investment than near-term
measures. They also offer significantly greater opportunity for larger emissions impacts.
Mid-range measures can often be designed to integrate with other state policy objectives such as
increasing energy efficiency and decreasing air and w ater pollution. Careful planning can thus yield
multiple benefits to the state and enhance political support for these policies. Furthermore, establishing
mid- to long-range climate change mitigation objectives can also encourage technical and political
innovation. Plans to reduce utility or transportation sector emissions to a certain level within fifteen or
twenty years, for example, may prompt policy-makers to develop innovative approaches to greenhouse gas
reductions. Policies planned in this time frame should be careful to maintain flexibility so that they can
adapt to changing circumstances, such as technical advances or economic downturns.
Long-Range
Long-range actions to address climate change can incorporate specific policy objectives that may
take twenty or more years to enact. Successfully encouraging the complete transition in industrial and
1 "No-rcgrcts" policies arc defined in Chapter 4.
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commercial energy use away from carbon-intensive fossil fuels, for example, max take many years.
Similarly, it max take several decades to spread and institutionalize comprehensive public awareness at all
age levels about climate change issues. These measures max represent fundamental changes in how our
society deals with these and other topics.
These long-range actions are perhaps best viewed as visionary objectives that states can support
through a variety of near- and mid-term policies. They are sometimes more difficult to establish outside of
a general state plan (in transportation or education, for example) because future economic developments,
evolution in our understanding of climate change, and impacts from the interaction betw een various policies
are difficult or impossible to forecast.
Even amidst these constraints, however, these approaches are critically important. They often
offer the most hope for permanent stabilization of greenhouse gas emissions. Comprehensive state
programs established now can set the groundwork and the context for addressing these fundamental, long-
range objectives while maximizing near- and mid-range emission reductions the most effectively.
7.1.2 Models for Including Time Frame Considerations in Program Development
States should integrate time frame considerations into program planning to match local institutional
and political circumstances. Policy planning max vary, for example, between states w here legislatures
w ork full-time and states w here legislatures meet for only part of the year. Ideal programs w ill probably
combine and implement policies that consistently address near-, mid-, and long-range objectives. Specific
policies max conceivably address all these time ranges while others w ill concentrate their impact within
only one time frame.
A variety of organizational structures for program design can support policy development amidst
these complications. Three possibilities are discussed below in detail, and examples are provided.
Mid-cmd Long-Range Program Targets CoupletI With Near-Term Policy Plans
The State of Oregon developed a program structure that incorporates a mid-range emission
reduction objective w ith repeated two-year emission reduction plans (Oregon. 1990). According to policy-
makers in that state, one of the foremost benefits of this approach is that it provides a formal program
target in the mid-term that prevents the state from delaying action on this issue, while at the same time
utilizing a structure that incorporates opportunities for program development, evaluation, and revision
every two years as necessary. This flexibility offers the opportunity for policy-makers to respond to
scientific, economic, and political changes, and to make program adjustments based on organizational and
administrative issues as well.
One apparent detriment of Oregon's set mid-term target is that it seems to have impeded
consideration of potentially important policy options with longer-term orientations. For example,
transportation and land-use changes that w ould take more than twenty years to implement or to produce
emission benefits are largely excluded from a system that establishes a mid-term goal with no incentives for
longer-term policy development.
Immediate Action to Initiate the Climate Change Policy T'ormulation Process
Some states have taken immediate-term action on this issue before conducting more comprehensive
program planning efforts. For example. Missouri. Vermont, and other states have authorized and
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conducted climate change studies. Long-term benefits from these efforts seem mixed. In some areas these
types of studies have helped set the climate change policy formulation process in motion, generating interest
among actors and setting the stage for future action. How ever, in other areas these studies have provided
little momentum, and either further action has not been taken, or it has been delayed.
Iow a's experiences illustrate this point. The Iow a Department of Natural Resources conducted an
initial inventory but has taken little coordinated action since then to address climate change specifically,
although it has pursued other initiatives, such as energy-efficiency and water pollution reduction programs,
that simultaneously help reduce greenhouse gas emissions. Their initial action on climate change has yet to
lead to a more structured program for dealing with this issue.
California's initial w ork on climate change, on the other hand, helped generate significant public
and political interest in this issue. As part of their actions tow ards producing a complete policy report on
climate change and greenhouse gas issues, which w as mandated by its legislature. California developed an
initial interim study that seems to have encouraged many different private and public interests to become
involved. The interim study made it clear that the state would be taking further action in this field.
Without the mandate for the later policy report, some policy-makers in California are uncertain as to
w hether the initial report w ould have generated so much public interest.
1'caslbHllv and "No-Regrets"Standards to Structure Policy Choices
Another approach to initial policy development necessitates that policies be based on factors such
as technological feasibility and cost-effectiveness. This conservative approach may span all time frames; in
California it is based on the state's intent to initiate select measures which have greenhouse gas reduction
benefits, w hile also completing more policy research that may lead to expansion and refinement of the
emission reduction program. "No-regrets" policy guidelines frequently offer similar advantages. These
types of guidelines initiate policies that are completely beneficial to the state and may help build political
consensus for further action. Both the feasibility-based and no-regrets approaches may help reduce
political resistance to new programs while demonstrating some action to address climate change.
These approaches can also suffer from the same constraints as those discussed in the above section
(Immediate Action to Initiate the Climate Change Policy Formulation Process). Without implementing
some direct mechanism or incentive to initiate actual policy development, like a quantitative or qualitative
mid-range target or a specific mandate to action, these feasibility -based and no-regrets actions do not
always propel states towards further action. The highest utility from no-regrets and feasibility-based
actions seems to come w hen they are combined w ith other incentives w ithin the context of larger or more
structured programs, perhaps as part of a longer-term no-regrets plan.
7.2 IMPORTANT ACTORS IN CLIMATE CHANGE PROGRAM DESIGN
Interactions betw een several distinct types of actors set the context for climate change programs.
These actors maintain resources and know ledge that contribute to policy development, determine program
structure or policy content, or influence program design in other ways.
Specific organizations and individuals will vary in each state depending on how programs address
sectors, including transportation, energy supply, energy use. forestry, industry, and agriculture. Some will
participate during the initial phases of program design, w hile others w ill be more active during policy
implementation or long-term program administration. Six broad categories of actors are presented below:
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Private sector interests, who often maintain significant data and analytic capabilities relevant to
emissions planning, and who may be affected by new emission reduction policies;
Citizen and advocacy groups, including those in the environmental, commercial, health and safety,
and scientific fields;
State agencies, w hich maintain government data and analytic capacity, as w ell as policy and
implementation jurisdiction in the sectors that may be expected to reduce greenhouse gas
emissions;
State governmental executives, including those concerned directly w ith climate change, those
involved in managing the state economy, and those who may be prompted to comply with federal
initiatives regarding climate change or other policy issues that affect the above-mentioned sectors;
Legislators, w hose interests and concerns may vary with regards to the impact of climate change
mitigation policies on their constituents, including state citizens and other representatives from the
various economic sectors that produce emissions;
Federal agencies, especially those whose field programs in states may be affected, as w ell as those
that provide grant monies, other funding, or technical assistance supporting states' climate change
programs.
7.3 POLITICAL CONSIDERATIONS IN PROGRAM DEVELOPMENT
Political feasibility may be one of the foremost criteria for policy selection and program
structuring. In some circumstances political controversy has inhibited aspects of state-level program
development while, in other situations, deliberate planning around political issues seems to have
strengthened program design. States may want to think strategically about how to structure programs in
order to draw input from the various important actors while minimizing unnecessary political
confrontation.
Political controversy in this field frequently stems from the multi-sector, long-term, and
scientifically and economically complex nature of climate change issues. In this context, many of the
important actors listed above may see their interests threatened and become concerned about government
action. This frequently includes individual citizens and their elected representatives who are aware that
these emission reduction policies can significantly impact peoples' lifestyles. Public interest groups,
utilities, industry, state legislators, and various state agencies may share certain perspectives and disagree
on others. These perspectives may also vary between initial policy planning, program implementation, and
ongoing program administration.
While interactions between the various important actors will result in different political dynamics
in every distinct situation, recent state experiences highlight three consistent topics that states w ith new or
changing programs may want to consider. States may want to investigate how they can develop programs
and processes that foster broad-based political support, how they can use particular policies strategically
within the time frames of program development, and how they can plan and utilize legislative and executive
actions strategically, when feasible. In addition to summarizing these issues below, discussions throughout
the rest of this chapter reflect these types of political complexities and ways states might deal with them.
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7.3.1 Developing Programs and Processes that Foster Broad-Based Political Support
Because so many distinct types of actors have an interest in and influence over climate change
policy formulation, programs without broad-based support max have difficulty building the momentum
necessary to initiate emission reduction policies. Furthermore, climate change mitigation efforts often
depend not only on fostering enough political support to initiate programs, but also on continuing support
and action to carry out program objectives. For example, states max need direct action by private sector
actors to assist in actual emissions reductions; support from citizens groups to communicate with different
sectors of the general public; and data and skills from various agencies to complete complex analyses. For
these reasons, any program planning that excludes or offends important actors can potentially lead these
actors to inhibit program development, either through direct political confrontation or by withholding
analytic, enforcement, and other institutional resources.
At the same time, states max encounter organizational and administrative problems if they
incorporate too many tangentially connected actors into planning and implementation processes. Some
states have indicated that, because of the broad nature of this issue, groups with diverse interests
marginally related to climate change have sought to become involved in state planning processes. While
their political support max be valuable, states should carefully w eigh this against additional burdens that
might arise from incorporating distinct actors with agendas beyond the purview of the state's vision of
climate change policy formulation.
7.3.2 Using Policies Strategically Within the Time Frames of Program Development
Near-, mid-, or long-range policy criteria max include requirements that some policies help bolster
a program's political strength in addition to directly affecting greenhouse gas emissions. For example,
policies can be designed to demonstrate success and win broad based support immediately. Alternatively,
they can foster the support of specific actors through other mechanisms in the immediate or longer terms.
Examples of policies that max strengthen overall program support immediately include projects
with highly visible results that readily demonstrate net benefits to the state while reducing greenhouse gas
emissions. For example, aggressive programs that quickly demonstrate the benefits of residential and
commercial energy-efficiency efforts or methane processing at landfill sites can encourage citizen groups,
politicians, and industries to support state climate change mitigation efforts. These projects emphasize
quick success in order to build constituencies and consensus.
States max also find it valuable politically to develop projects advocated by specific citizen or
industry groups. Inclusion of such projects max help w in the support of these groups for the entire climate
change program, while the magnitude of their immediate and direct effects on emissions max vary. Urban
tree planting programs, advocated by citizen groups, for example, max have a minimal impact on
emissions, but they serve to include these important groups in the policy planning process immediately.
This can help generate public awareness of climate change issues, and set a precedent for state or local
action to address this topic. However, it is important that states avoid diffusing the momentum behind
broader climate change program development by casting these projects as initial steps towards addressing
this critical issue, not as near- or long-range solutions in and of themselves.
Other policies or projects may not generate immediate political support but can be designed to do
so as they evolve over the longer term. For example, states may design public relations programs that
publicize annual or bi-annual achievements towards reaching some preset emissions reduction goal and
highlight the economic sectors or specific outstanding actors that have contributed. Alternatively, state
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policy-makers max write provisions into their initial State Action Plan to help ensure that new projects
designed around political criteria, among other factors, are implemented every year or two.
7.3.3 Utilizing Legislative and Executive Action Strategically when Feasible
The type of political authorization programs receive can significantly influence how these
programs develop. For example, legislative mandates can help circumvent some potentially destructive
controversies over policy formulation, while executive directives in many situations permit quicker and
more independent performance by agencies. With careful planning, states max accrue additional benefits
and avoid particular detriments related to differences betw een these tw o modes of program authorization.
States should recognize these among other motives for determining how to approach potentially
controversial issues.
Oregon and California's experience in setting quantitative programs goals highlights this point;
Oregon has produced a quantitative goal while California has not. Oregon's quantitative greenhouse gas
emission target was set by the legislature (Oregon. 1990). This fact seems to have helped minimize the
political controversy and amount of state resources needed to assist in goal setting. On the other hand, the
California Energy Commission has addressed goal setting in a public forum and has experienced high levels
of controversy on this unresolved issue (CEC. 1991). While California has achieved other extremely
important objectives through the public forum process, the impasse in this case illustrates how political
controversy max affect the results of dealing with certain issues through a particular approach.
7.4 COORDINATING CLIMATE CHANGE PROGRAMS: INTERACTION BETWEEN
AGENCIES
Climate change mitigation policies across all time frames are likely to require coordination among
various state agencies, as well as between states and federal and local governments. In the initial phases of
program development, high levels of interaction w ill help states address the multi-sector nature of this issue
by strengthening program comprehensiveness across sectors, garnering broad-based political support, and
tapping all available resources for analyzing and addressing greenhouse gas emissions. In addition to
facilitating and promoting the initial phases of program design, ongoing coordination between agencies w ill
help facilitate program evolution and dynamic responses to changing climate change and policy
circumstances in the future.
Manx current and recent state actions to address climate change illustrate the value of interagency
coordination from the outset and provide potential models for structuring such interaction. For example.
Missouri. California. South Carolina and others have taken deliberate executive or legislative action to
coordinate programs between agencies in this field. The sections below provide additional information and
ideas on state partnerships, federal and local partnerships, and procedures for coordinating interagency
action. It also highlights potential benefits and drawbacks learned through various experiences.
7.4.1 Partnerships Between State Agencies
To be effective, program design, evaluation, and implementation must incorporate the various
government agencies that retain policy jurisdiction and analytic capacity regarding these numerous sectors.
Initial program design max also benefit from involving state tax and legal agencies. Integration of various
state agencies into the climate change policy planning process may:
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Enhance program planning and analytic efficiency. Draw ing on each agency's expertise and
analytic strengths, integrated climate change programs can use the state's current resources
efficiently and heighten the program impact. This may include relying on staff in certain agencies
to analyze topics within their jurisdiction, like transportation or agriculture, and it may also involve
employing the analytic capacities of various agencies to heighten program efficiency, like utilizing
an energy office's forecasting skills. In these ways, pooling the substantive and analytic know ledge
of climate change program planners efficiently draws on current state resources and helps ensure
comprehensive climate change mitigation programs.
Avoid program duplication between agencies working on similar or related issues. With careful
coordination, agencies may complement rather than duplicate or damage each other's efforts.
Eoster a strong political base. As noted in the previous section, voluntary consensus on policies
among the important actors, including state agencies w ith jurisdiction in the various sectors,
strengthens climate change programs significantly.
Support strong liaison with industry and citizen groups in each sector. Where appropriate, new
climate change programs can utilize and perhaps strengthen the ties that state agencies in diverse
sectors already have w ith their constituents, instead of duplicating efforts by building the same
liaisons and working relationships from the beginning.
Improve each agency's existing programs and administrative capacity. Tying climate change
issues to existing programs may enhance the analytic or political legitimacy of climate change-
related programs. For example, strategies aimed at reducing emissions of N2O through the
reduction of nitrogen fertilizer use may consider tying this objective to existing and planned
groundwater protection programs that stress the need to reduce fertilizer use. Similarly, the threat
of climate change may provide additional reasons for establishing or enhancing reforestation
programs and improving and expanding energy-efficiency or mass transit. This is the core of the
"no-regrets" approach introduced in Chapter 4.
Help prepare agencies for future policy developments. Individual agencies that are involved in
program planning may better anticipate how climate change issues w ill affect them in the longer
term. For example, state agencies participating in climate change program planning may gain a
broader understanding of how international and national actions, as w ell as eventual climatic
changes, are likely to affect their areas of jurisdiction.
Exhibit 7-1 provides one example of coordination betw een state agencies that supports greenhouse
gas emission reductions.
7.4.2 Interaction With Federal and Local Agencies
Close liaison with other levels of government can also enhance state climate change mitigation
efforts. Deliberate linking with federal and with local initiatives can strengthen a program's effectiveness in
many ways. For example, in addition to broadening the program's political base, interaction may provide
access to additional skills and other resources that programs can draw upon and may help facilitate
productive program interaction in areas w here jurisdictions overlap, such as the transportation, buildings,
and land use sectors.
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Exhibit 7-1: The Iowa Agricultural Energy Environmental Initiative
Summary: The Iowa Agricultural Energy Environmental Initiative is a consortium of federal, state, and local
agencies and institutions organized to implement an array of projects focused on pollution prevention in
agriculture. The Initiative is predicated on the belief that integrated and innovative policy models arc
required to deal with broad-reaching environmental issues. It insists that agencies cannot work at cross
purposes, and that shared resources and expertise can provide better results than individual efforts. The
consortium's goal of "accelerating the adoption of improved farm management practices that reduce the
environmental impacts of Iowa agriculture, reduce consumption of non-renewable energy resources, and
enhance the efficiency and probability of farm management" is implemented through demonstration,
education, and research programs. Major parts of this program include the Big Spring Basin Demonstration
Project (reducing the use of nitrogen fertilizer), the Integrated Farm Management Demonstration Project
(nitrogen management and crop consulting), and the Model Farms Demonstration Project (management of
farm resources). While not its explicit purpose, this program reduces greenhouse gas emissions by
promoting energy efficiency on farms and by reducing nitrogen fertilizer consumption, which directly lowers
nitrous oxide emissions and indirectly lowers carbon dioxide emissions at the energy-intensive plants that
produce the fertilizers.
Organization: The Agricultural Energy Environmental Initiative developed through an earlier coalition of
groups which convened in the early 1980s to tackle groundwater problems. The initiative operates on three
fundamental principles: (1) Interagency coordination consumes time and energy, and therefore depends on a
nucleus of dedicated, willing participants: (2) Consensus on all issues is an impossible goal, but a basic
consensus on program directions is necessary; and (3) Agency goals or personal egos must at times be
sacrificed for group success. The Initiative began by identifying potential participants in the coalition and
the problems, needs, and relevant authorities involved in this issue. With each participant's agenda and
potential contributions defined, key individuals help apportion human and monetary resources towards
projects that arc valued by the entire coalition. The primary responsibilities of the Initiative have
traditionally rested with the Iowa Department of Natural Resources, although there is no official lead agency.
Similarly, the coalition has no explicit structure, although there arc formal working agreements for each
project. Projects, after being designed, arc fit into various agencies' existing programs in order to achieve
maximum implementation efficiency and maximum integration into mainstream agency programming.
Member groups include: Iowa Department of Agriculture and Land Stewardship. Iowa Department of
Natural Resources. USD A - Soil Conservation Sen ice. Agricultural Stabilization and Conservation Sen ice.
Agricultural Research Sen ice. US EPA Region VII. Iowa State University, the Leopold Center for
Sustainable Agriculture, the University of Iowa. Iowa Soil and Water Conservation Districts, the Practical
Farmers of Iowa, and other private interest groups.
Programs: The Initiative creates pilot programs that local authorities or private farms can adopt as public
sector enterprises or private businesses. Prior to project implementation, sociological and farm management
surveys arc conducted in order to ascertain current practices, problems, and willingness and ability of
impacted individuals to contribute. Additionally, the program calls for a structured feedback loop from the
local level. This loop allows for continual adjustments and corrections based on what is happening where the
project is being implemented, and helps generate grassroots support and commitment. A final requirement is
long-term feasibility, based on project transferability criteria. Some demonstration projects integrate and
support agribusiness in order to enhance long term process and technology adoption. Once a project is
formatted, aggressive marketing generates widespread visibility, and an information delivery plan promotes
expansion of impacts beyond those directly involved.
In addition to the potential direct benefits from interacting with federal and local agencies, states
possess a unique opportunity to encourage the other levels of government to act on the climate change
issue. For example, state action and pressure may set precedents for national policy -making, and
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innovative state programs can provide incentives for cities and localities to design their standard policies
to help reduce greenhouse gas emissions.
Liaison with the federal government may be particularly helpful in terms of accessing grant monies
and other forms of program financing, enlisting technical support, facilitating areas of overlapping
jurisdiction, and mitigating or setting the context for potential future federal regulatory or other action on
this issue. This type of coordination is especially relevant, for example, in areas such as transportation
policy design, energy efficiency regulation on appliances, and electric utility regulation. In these areas the
federal government has taken certain actions that in part preempt what states can do and in part require or
empow er states to perform other functions.
7.4.3 Structuring Partnerships/Program Coordination and Administration
It is often valuable for one agency, or some other officially designated government body, to
maintain responsibility for program coordination. As illustrated below , this may be an existing agency, a
specially designated task force, or some other central organizing unit. By providing a central focal point
for the various important actors, as well as a central record-keeping and administrative unit, this type of
structure may help circumvent coordination and authority problems. Some states report that lack of a
formally designated, centrally responsible agency undermines any agencies who do try to act in this area,
even if they are instructed to do so by executive or legislative action.
States involved in climate change policy formulation have dealt with this issue in several ways.
For example. South Carolina incorporates two interagency feedback loops into their program structure.
First, they involve agency heads in program planning and development. Second, they solicit input from
program managers and others who are responsible for actually implementing and administering policies.
Exhibit 7-2 presents examples of how various states have approached program coordination w ith regards to
climate change.
State policy-makers have also suggested that it is valuable to develop a mechanism for monitoring
recent changes in the understanding of climate change mitigation from scientific, economic, and policy
perspectives. This may involve recruiting scientists or university staff who are knowledgeable about
greenhouse gases and related issues within a particular state for program planning efforts. Monitoring may
also involve efforts to keep abreast of current literature and attend professional and academic conferences
on this topic.
7.5 CLIMATE CHANGE PROGRAM FINANCING
While this document does not provide comprehensive guidance in program financing, this topic
may influence program structure in various ways. For example, sources of available financing can
sometimes dictate the direction that new programs adopt. With this consideration in mind, financing
mechanisms should closely correlate with pre-detennined program objectives and capabilities during the
phases of initial program development, program implementation, and ongoing program administration.
Similarly, financing mechanisms may change in the transition between near-, mid-, and long-range emission
reduction measures. In general, it may be helpful to separate financing mechanisms into three categories:
Financing through Existing Revenue Sources. This may involve direct budget allocations for climate
change mitigation activities or inclusion of climate change mitigation programs under the jurisdiction
and purview of an existing agency. The latter approach may be appropriate in the many situations
w here greenhouse gas emission reduction and other policy goals overlap, such as in transportation and
energy planning, ground water protection, and wildlife or habitat preservation.
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Exhibit 7-2: Examples of State Approaches to Program Coordination
South Carolina: South Carolina issued an executive order that authorizes the State Water Resources Board to
administer a climate change task force. This task force is tied to the governor's office and state legislative
committees, and makes recommendations on climate change issues to both branches of government. Its
membership is drawn from public and private sector groups, including utilities and citizen organizations. It is
structured around working groups that focus on the various economic sectors impacted by climate change. The
State Water Resources Board, as the administrative agency, helps ensure broad based participation and
maintains centralized contact and coordination with all participants.
Missouri: Missouri has established two separate bodies charged with researching and recommending state
action on energy futures issues. The first is the Energy Futures Coalition, a broad based, governor appointed
body that examines the impact of energy issues on topics such as economic development and state employment.
The second is the Energy Futures Steering Committee, an interagency task force formed by the state Division of
Energy to examine energy efficiency issues.
Orcuon: In 1990. the Oregon legislature directed the state's Department of Energy (ODOE) to chair a 12-
agcncy task force to analyze the potential impact of global warming in Oregon and make recommendations on
how state agencies should respond to the threat. In 1991. the legislature further directed ODOE to prepare a
strategy to reduce greenhouse gas emissions to a level 20 percent below 1988 levels by 2005. This target level
of emission reductions did not represent a formal state goal, but it did provide a focal point around which state
agencies could analyze climate change issues. The strategy resulting from this work was presented as a study,
not as an actual implementation plan. In 1992. the Oregon Progress Board, a public-private steering committee
cliaircd by the Governor, adopted a formal benchmark to stabilize carbon dioxide emissions at 1990 levels by
1995. Finally. Oregon's Fifth Biennial Energy Plan, produced in May of 1993. directs ODOE to develop a plan
to keep Oregon's carbon dioxide emissions at the 1990 levels. The plan will be a specific strategy to achieve
the carbon dioxide benchmark. Stabilizing carbon dioxide emissions will then be one of the guiding elements
of the Sixth Biennial Energy Plan, which is due in 1995. In conjunction with these efforts. ODOE coordinates
working group sessions with participation from throughout the public and private sectors: these working groups
study substantive issues such as utility impact, petroleum fuels. CFCs. and other important topics.
California: Legislation established the California Energy Commission (CEC) as the lead agency in a multi-
agency study examining climate change issues and required the CEC to produce a climate change policy report.
The initial phases of California action in this area arc focused on research and information gathering and
dissemination. California has yet to produce an actual strategic policy plan, however. The legislation directing
CEC to act on this issue established specific topics and economic sectors to be analyzed and mandated that
other specific state agencies be involved. CEC expanded the agency list and adopted a public climate change
forum for analyzing all aspects of this issue. The state governor also issued an additional directive, without
timelines or other guidance, for CEC to examine potential CO2 emission reduction goals.
Developing New or Dedicated Revenue Sources. This often entails innovative financing schemes,
including those that raise money through fees or taxes that help discourage greenhouse gas emissions.
Approaches in this area may include "green fees" and other charge systems, dedicated utility taxes or
charges, original private sector capital development programs, or other innovative financing. Examples
of this general type of financing scheme include carbon and energy taxes that discourage fuel
consumption, landfill fees that indirectly help mitigate methane emissions, and permit fees required for
timber harvest.
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Revenue from External Sources. This includes federal technical support and money from federal grant
programs. Similar to intra-state policy overlap with existing programs, as described above, greenhouse
gas emission reduction policies max fall under the domain of existing federal programs. For example,
sources w ith potential climate change applications include U.S. Department of Energy funds allocated
to improving energy efficiency. U.S. Department of Agriculture funds allocated to improving fertilizer
application and management, and U.S. Environmental Protection Agency funds allocated to enforcing
the Clean Air Act.
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CHAPTER 8
ANALYZING POLICY OPTIONS
Climate change analysis requires choosing strategies that effectively balance trade-offs between
potentially competing goals in a politically charged environment that is also fraught with technical,
scientific, and economic uncertainties. Central to devising an effective climate change strategy, therefore,
is a need for researchers to present clear, concise, and relevant information to policy makers. Policy-
makers. then, require a framework that allows them to choose among alternative policies, and to compile a
coordinated strategy for achieving greenhouse gas (GHG) emissions reductions. The resulting strategy
should not only meet overall goals, but should also combine policy options, that are themselves acceptable.
Consistent with this perspective on climate change policy analysis, this chapter is intended to lend
some initial structure to the extremely difficult task of analyzing policies in this field, by illustrating some
of the concepts and ideas that max help states develop their programs. The information in this chapter
provides only the starting point for a climate change analysis. The first section establishes a basic
framew ork that considers each policy option in light of the issues that are most important to each individual
state. This section is followed by three sections that discuss how states can analyze and consider the
benefits, costs, and other impacts of policy options. Section 8.5 highlights analytical complexities and
fundamental social assumptions that state policy-makers will need to address. Finally, the last two sections
introduce some of the methodologies or decision tools states might consider using to conduct analyses,
presenting both theoretical approaches and specific models and tools that have been developed to address
climate change issues.
8.1 ESTABLISHING A CONSISTENT FRAMEWORK FOR POLICY ANALYSIS
A policy analysis framework can provide a consistent lens through which policy-makers can
examine all policies. Without such a framework, it can be difficult to compare and assess potential climate
change mitigation policies that affect diverse and unrelated sectors of society over broad time frames. This
section describes a basic structure policy-makers can use for comprehensive and consistent policy analysis.
States max choose to proceed in a less formal manner than this framework suggests; the information
presented here is meant to highlight the most important considerations in climate change policy analysis and
to offer some tools that can be used to help structure this issue.
8.1.1 Structure of the Policy Analysis Framework
Any framew ork for evaluating climate change mitigation policies should help decision makers link
those policies to a state's goals and priorities. One established approach for structuring this framew ork is
to consider each policy option in relation to a set of explicit evaluation criteria. If those criteria are rooted
in the state's fundamental goals and priorities, this structure will provide a link to the state's most important
objectives. Chapter 4. Establishing Emission Reduction Program Goals and Evaluative Criteria.
examines the process of setting goals and criteria in detail. By fostering comparison of policies on a
uniform basis, this approach also helps policy-makers assess the relative strengths and w eaknesses of the
alternatives in a consistent manner, and can highlight areas where further research or analysis is needed.
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One analytical mechanism policy-makers can use is a matrix that lists the set of criteria along the
top and policy options down the side. The matrix can then be used to indicate how each policy option
ranks under each criterion. Exhibit 8-1 presents a sample matrix in this format.
Exhibit 8-1: Sample Policy-Criteria Matrix
The sample criteria, policies, and other data presented in this box illustrate how a policy-criteria matrix can be
constmcted to help frame the climate cliangc issue and clarify tradeoffs between policy options. Entries in each
cell typically provide a brief summary of the performance of a single option with respect to the indicated criterion.
Entries may represent the result of sophisticated engineering or economic research or may result from more
informal and subjective judgment. The sample data presented here do not represent the results of actual policy
analyses.
Criteria
Policies
Emission Reductions
(Tons of carbon-
equivalent emissions
annually)
Private Sector Costs
(Normalized to base
year using 7%
discount rates)
Social Equity Ranking
(1 = low. 5 = high)
Existing Institutional
Capacity
(X = yes: blank = no)
Mctlianc Recovery
Technology
Demonstration
58.4
$0
4
(medium-high)
X
Methane Emissions
Tax
123.0
$985,000
->
(medium)
Alternative Fuel Tax
Subsidv
456.9
$43,000
1
(low)
X
The type and level of information used to relate each policy option to each criterion, indicated in
the cells or boxes in the matrix, facilitates not only assessing of the policy in light of state goals and
priorities, but also examining the tradeoffs between different policy options. For this reason, it is critical to
use the same unit of measurement to evaluate one criterion as it relates to all policies. For example,
emission reductions from all the various greenhouse gas sources (for example, methane from landfills,
nitrous oxides from fertilizer use. carbon dioxide from electricity generation) can be converted to a common
scale, such as million kilograms of CC>2-cquivalent. using the global warming potential concept;1 such
conversions will facilitate cross-policy assessments of emission reduction potential.
The units of measurement max vary significantly among the different criteria and max be
quantitative or qualitative. If precise quantitative data are unavailable or inappropriate, policy analysts
max be able to create a relative scale for ranking policies against criteria; this max involve simply
classifying policies on a criterion as high, medium, or low. or it max mean developing a ranking system that
utilizes some numerical scale. In other situations, simply acknowledging that a policy meets a certain
criteria max prove valuable: in the policy matrix, it means entering an "X" in various cells.
8.1.2 Application of the Policy Analysis Framework
1 Global Warming Potential is discussed in more detail in Chapter 2. It is important to note that this scale is not
precise and that it is the current subject of some controversy because of debates over approaches to integrating the
life-cycle effects of carbon dioxide.
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The framew ork presented here provides a starting point for analyzing policy options. Depending
on circumstances, policy-makers may need to modify the framework during the analysis process. Three
particular issues may require restructuring the framework. These include: 1) the need to develop
groupings of policies that are evaluated together in order to maximize benefits or avoid conflicts from
interaction between options; 2) to iterate or incorporate new data during the evaluation process; and 3) to
consider time frame issues within the framew ork. Each of these issues is discussed below.
Policy Packages or Multi-Option Strategics
The basic policy analytic framework can be used not only to evaluate individual policy options, but
also combinations of options. The matrix structure easily facilitates this analysis, w ith policy packages or
strategies listed down the side rather than single policy options. States may wish to consider various policy
"packages." which combine options that together reflect a particular strategy. In this way. policy-makers
can evaluate the pros and cons of various potential strategies or broad approaches in relation to a constant
set of evaluative criteria.
This type of packaging could be relevant w hen climate change programs are expected to be
comprehensive across multiple sectors of society or w hen a wide array of policy options are being
considered for other reasons. States may wish to evaluate a variety of policy combinations, for example,
that are designed to encourage both demand side and supply side emission reductions in the energy sector
and to promote alternative fuel use at the same time. Packaging can also facilitate comparisons of overall
strategies that target different sectors or strategies that start with the goal of complementarity with other
state objectives and programs.
Iteration During Program Development
The optimal combination of policies or the best approach for analyzing options may not be
apparent at the outset of climate change program planning. Not only may new scientific or economic
information develop, but the process of evaluating alternative policies may itself generate new or additional
information that should be folded back into the policy analysis. For example, if in the process of evaluating
a state's initial list of potential greenhouse gas reduction policies, policy-makers discover unanticipated
conflicts between various options, or if political transitions shift the importance of some criteria relative to
others, then policy-makers may w ant to reformulate their approach, develop new options, and conduct the
evaluation again.
Time T'rame Considerations in the Policy Analytic T'ramework
Policies can achieve benefits or incur costs in the near-, mid-, or long-term. The timing of policy
outcomes (i.e.. benefits, costs, and other impacts) should be clear during policy evaluation so that policy-
makers can consider how policies and their impacts may overlap in the future, either in terms of achieving
direct emission reductions, generating political support, or fostering other inter-temporal results. One
option is to conduct separate analyses for each time frame. Chapter 7 discusses time frame issues in more
detail and highlights how some policies may in fact be designed in one time frame specifically to foster
benefits in another.
Within the matrix format, considering time frame issues may mean sub-dividing relevant criteria
into near-, mid-, and long-term columns so that the relative impact of each policy within each time frame
can be evaluated and illustrated. This reflects one aspect of climate change that may complicate the
analysis but also significantly enhance the information presented. This is especially tme with respect to
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policy goals or objectives that cross time frames, as mentioned above, and max aid in generating high levels
of political support in the near term to build consensus for future program expansion.
8.2 ESTIMATING BENEFITS
Whether implicitly or explicitly, policy-makers often try to gauge the social benefits and costs of
alternative policies and then pursue those options that offer the highest net benefits. In the case of climate
change, quantitative benefit analysis is extremely difficult, because so few of the physical impacts have
been quantified at the state level, and even fewer have been monetized. For example, most analysts would
agree that quantifying and monetizing all the impacts of sea level rise and climatic influences on
agricultural systems, water resources, or biodiversity is beyond current technical and analytic capacity.1
Accordingly, it is impossible to measure in standard economic terms the value or benefits of preventative
Exhibit 8-2: Complications in Estimating Benefits
Uncertainty surrounds many aspects of climate change, including:
The magnitude of global average change in temperature, precipitation, and sea level rise:
Regional projections of temperature change, precipitation, and soil moisture:
The timing of changes in climate and related variables, such as sea level rise:
The potential of commercially managed systems, such as agriculture and forestry, to adapt:
The response of unmanaged ecosystems, including terrestrial and marine vegetation and animal
species, to climate change:
Impacts of climate change on other sectors, such as water resources, coastal wetlands, human health,
and energy supply and demand: and
The value to the public of mitigating these potential impacts.
policies. Exhibit 8-2 summarizes some of the complications surrounding analysis of the benefits of climate
change mitigation policies.
This does not mean, of course, that it is not worth taking extensive action to mitigate these
potential threats. In fact, many policy-makers believe that the foremost public benefit of greenhouse gas
emissions reduction policies is to guard against the possibility of devastating impacts to the earth. In this
sense, emissions reduction policies become an important insurance mechanism for the states, the nation,
and the w orld, and they are a measure of our society's willingness to pay to prevent or ameliorate the
impacts of climate change.
Three primary categories of benefits are somew hat more tangible and measurable, and thus more
practical to use in policy planning and analysis. The remainder of this section discusses these categories,
w hile Sections 8.5 and 8.6 provide more information on comparing costs and benefits of various options.
: EPA is conducting extensive research on the benefits of climate change mitigation and on alternative frameworks
for dealing with the uncertainties surrounding this issue.
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The three categories outlined below include use of greenhouse gas emissions reductions as a prow for the
benefits of mitigating climate change, considering ancillary benefits of emissions reduction policies, and
considering political and organizational benefits of addressing climate change.
8.2.1 Using Greenhouse Gas Emissions Reductions as a Proxy for the Benefits of Mitigating
Climate Change
Estimating how policies affect greenhouse gas emissions is the most direct way to judge their role
in mitigating the threats of climate change. Essentially, greater benefits come with larger emissions
reductions. While even estimating a policy's actual level of emissions reductions is not a simple process, it
provides a basic structure for comparing the climate change mitigation potential of various policies.
The basic process for estimating a policy's probable effect on greenhouse gas emissions anticipates
how implementing the policy w ill change the equations used to calculate emissions from each greenhouse
gas source. These can be changes in the magnitude of the independent variables that drive those
calculations or changes in the fundamental structure of the actual equations. Chapter 3. Measuring and
Forecasting (Jreenhouse (Jas Emissions, examines these issues in detail and provides examples of their
application.
To compare emission reductions achieved by different policies, the effect on w anning of different
greenhouse gases is evaluated on a common scale. For example, equal reductions in carbon dioxide and
methane will have significantly different impacts on global wanning. As Chapter 2 discusses, the
International Panel on Climate Change has established a common measure, called Global Wanning
Potential (GWP). for comparing the relative impact of the various greenhouse gases. Although there exists
some controversy as to the accuracy of GWP estimates at the current time, this scale is widely used by
climate change analysts to measure the relative benefits of different emission reduction policy options. In
the policy analytic framework, numbers representing emissions reductions for diverse policy options can
then be presented and compared. In some cases, estimating the benefits of a greenhouse gas reduction
strategy requires a more complex analysis, as illustrated in Exhibit 8-3.
8.2.2 Considering the Ancillary Environmental and Social Benefits of Emissions Reduction
Policies
In addition to helping mitigate global climate change, reducing greenhouse gas emissions can
provide other benefits. Policies to reduce greenhouse gas emissions from automobiles and electric utilities,
for example, can improve air and water quality, with positive consequences for human health and natural
systems. Similarly, policies to improve residential, commercial, and industrial energy efficiency can reduce
costs and stimulate economic grow th and competitiveness. Policies to recycle or reuse waste products can
reduce greenhouse gas emissions and simultaneously reduce the need for costly municipal solid waste
disposal.
In some cases, these benefits can outweigh the costs of policies designed to reduce greenhouse gas
emissions. These approaches are often the most attractive options in the early phases of climate change
program design, when program financing and political support may be low or tentative. It is important,
however, that states not rely solely on these types of policies since most data indicate the total emissions
reductions they can achieve, if implemented throughout the country, w ould not be enough to reach most
climate change mitigation goals. Chapter 7 discusses the favorable and unfavorable political and
organizational aspects of these types of approaches in more detail.
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Exhibit 8-3: Determining the Value of Manure
When choosing between alternative policies, it may be important to quantify the benefits of a
particular mitigation option before a decision can be reached. For example, using the manure from
livestock, a farm can reduce its fertilizer consumption and associated greenhouse gas emissions. However,
those benefits can be difficult to use to compare policy options unless they arc quantified into a common unit
of measurement.
Along these lines, the Soil and Plant Analysis Lab of the University of Wisconsin and the Arlington
Agricultural Research Sen ice (ARS) have developed a five-step method for determining the nutrient value
of manure.
1) Determine the manure load si/c (volume): For a level box-end spreader, multiply the box length,
the box width, and wall height together. If the load is heaped, multiply these factors by the total manure
height divided by the side wall height.
2) Determine the manure density: Weigh a 5-gallon bucket of manure to obtain the manure density
(weight/volume). Convert density to pounds per cubic foot.
3) Determine load weight: Multiply the load si/c (step 1) by the manure density (step 2).
4) Determine the pounds of nutrients per load: Multiply the load weight by the pounds of nutrient per
ton of manure (which varies by animal type), based on values available from ARS.
5) Determine the total amount of nutrients spread per field or per acre: To determine the amount per
field, multiply the pounds of nutrient per load (step 4) by the number of loads per field. Divide this number
by the number of acres per field to get the nutrients spread per acre.
This method allows for a direct comparison between the manure and the amount of commercial
fertilizer recommended. Thus, the estimated manure value can be used by policy makers in any calculatons
necessary for evaluating this particular option.
Measuring and comparing diverse types of benefits across policy options can be difficult. One
approach is to assess these benefits in terms of how they will reduce current and future costs for society.
This may mean estimating cost savings directly for factors such as improved energy efficiency or reduced
fertilizer consumption. Alternatively, it may mean estimating avoided costs of remediation or replacement.
The benefits of enacting policies to prevent pollution of a w ater system, for example, can
be measured as the avoided cost of future clean up of that w ater system and the surrounding environment.
Similarly, the benefits of reducing w astes can be measured as the avoided cost of depositing those w astes in
landfills.
In other cases, however, society w ould not have chosen to remediate all damages or replace all lost
sen ices. Some benefits, for example, such as reduced emissions of air pollutants covered by the Clean Air
Act. might not have occurred otherwise. In this case, the benefits are the improvements in human health,
visibility, aesthetics, and ecosystem health that result. There are a wide array of analytic and economic
techniques that policy -makers can draw from to conduct these benefit calculations. Extensive information
on these topics is available in natural resource and environmental economics literature and other current
literature. Topical literature assigns monetary or other quantitative values to potential benefits and costs.
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However, monetizing certain kinds of benefits of climate change measures, such as ecosystem damage, is
subject to considerable analytical uncertainty and often political controversy.
8.2.3 Considering the Political and Institutional Benefits of Addressing Climate Change
Some states have indicated that there can be substantial political and institutional benefits to
initiating climate change mitigation programs and pursuing emissions reduction policies. Exhibit 2-3 in
Chapter 2 reflects the positive attitudes of many states toward this issue. These benefits may include:
public visibility as a proactive government on this issue, which may enhance the national and
international image of the state, set precedents for national action, and inspire other state and national
governments to act;
receiving special assistance, such as receiving program support from EPA for developing climate
change mitigation programs or receiving targeted aid or technical assistance for particular programs
from other national and international organizations;
helping the United States meet national goals and fulfill international obligations, w hich can be
accomplished only if states take strong action; and
preparing for the future by developing the foundation for programs that are likely to grow in
importance over time.
As always, these and other potential benefits are only relevant relative to a state's particular goals
and priorities. Each state must determine which factors are important to pursue.
8.3 ESTIMATING COSTS
Most policies encompass a range of associated costs. These include, for example, the government's
costs for designing, implementing, and enforcing new policies, private sector costs linked to changes in
production practices or compliance w ith new regulations, and costs to citizens in the form of higher prices
for consumer goods or more time spent on activities such as recycling w astes. This section provides an
introductory outline of how states might account for these costs during climate change policy analysis.
It is important first to distinguish the total cost of a policy option from its incremental cost. Most
economists w ould agree that incremental costs are the appropriate focus of a cost-benefit analysis, although
total costs can be important from an institutional or political perspective. Incremental costs are defined as
costs that are the direct result of adopting the particular policy under consideration. Incremental costs can
be determined by conceiving of a "baseline" scenario that reflects events likely to occur in the absence of a
policy change and comparing it to a "policy scenario" that incorporates the likely outcome of the policy
option. The difference in costs under these two scenarios reflects the incremental cost.
The incremental costs associated with climate change mitigation policies are those expenditures by
individuals or organizations that w ould not have occurred if the policy had not been implemented. For
example, public or private sector recordkeeping activities that would have been undertaken with existing
resources should not be included in economic cost calculations. However, if the time and effort dedicated
to new activities does prevent workers from carrying out tasks they used to conduct, then there is a social
cost involved.
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The purchase of new emissions-control equipment by industry, for example, often represents
expenditures that would not have occurred without government regulation, and is an incremental cost of
that regulation. Similarly, the amount of money the government spends designing, implementing, and
enforcing that regulation is an incremental cost. These are the costs that policy-makers must consider w hen
evaluating the social w elfare implications of different policy options.
Economists distinguish between social costs, (costs that result from lost output or displaced
resources) and costs that affect an individual sector, but do not necessarily represent losses to society. The
incremental costs described above are "true" social costs. Some policies, however, induce a "transfer of
w ealth" between members of society but do not represent a new social expenditure. For example, taxes on
fossil fuels or nitrogen based fertilizers will result in less wealth for individuals and businesses and more
for the government. Because levels of fuel or fertilizer consumption changes in response to higher costs to
producers or prices to consumers, there is a social cost to a tax as resources are moved to alternative uses.
However, the money that is transferred between the individuals and the government is not considered to
be a social cost. Transfers, in general, redistribute w ealth but do not result in economic costs per se.
Although, the amount of money the government spends administering the tax is a tme social cost. Non-
economists may refer to economics textbooks and other current literature for a more thorough explanation
of how to estimate costs.
8.3.1 Pi ocess for Calculating Social Costs
Social costs that should be considered during economic evaluation of climate change policies can
result from expenditures in any sector of society. For example:
State and local governments may incur incremental costs associated with policy design, administration,
monitoring, permitting, enforcement, or other activities.
Industry may incur costs to modify- production plants and equipment, alter operating practices, institute
new waste disposal practices, or change their labor mix.
Consumers may incur costs in making their homes more energy efficient, or by paying higher prices for
goods and services or spending more time and effort recycling waste products.
Product quality, innovation, or general productivity may be adversely affected; if the same resource
investments yield less benefits in any of these ways, society has realized some new cost.
Policies may displace resources such as labor or capital equipment; if resources do not find equivalent
employment elsew here in society, then their displacement also imposes a long-term cost on society.
Cost also results from unemployment, because local industries that sen ice the industry w here jobs are
lost may also suffer. Even if resources do become employed elsewhere, the transition between jobs, or
movement of financial capital, can be unpleasant, and. at the least, imposes the transitional costs, or
"transactions costs", on society.
Costs that fit these categories can be analyzed at a variety of levels or from a variety of perspectives.
Exhibit 8-4 discusses some of the levels of information states may w ant to include in their cost analyses.
In the policy analytic framework, aggregated social costs may be a key policy evaluation criteria.
A common approach for estimating social costs related to each policy option from all the sources listed
above involves six basic steps:
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Exhibit 8-4: Dimensions of Costs
Depending on the level of analytic complexity a state needs or wants to adopt, social costs can be
assessed with regard to various dimensions or perspectives. These include:
breadth - the number of affected activities:
depth - the level of quantitative and detailed cost estimates for these activities: and
scope - the range of the effort to locate secondary effects (and costs) of these activities (e.g..
docs the effort to analyze costs and economic impacts extend beyond the primary market
affected).
Expanding an analysis along any of these dimensions can provide additional valuable information,
but also requires more resources. In its simplest form, cost information can be presented as an inventory of
activities that arc sources of costs. For example, sources of costs to industry might include retooling
equipment or increasing quality control, filling out reporting forms, interacting with technology transfer
committees, and hiring more educated labor to use more complicated equipment. An intermediate form of
analysis involves seeking to quantify, using engineering cost studies and other information, each activity and
source of cost. Where significant price and output effects arc expected, the analysis can be expanded to
include a representation of demand and supply conditions in the relevant markct(s). This is frequently called
partial equilibrium analysis. The most complex form of cost analysis uses general equilibrium models that
capture multi-sector interactions and subsume a variety of markets (see Section 8.7).
1. Determine who in society will he affected hy the policy. This means identifying and listing each
type of public and private sector actor that will incur new costs. This may include government
agencies, small and large firms, individual consumers, and others.
2. Separate the affected community into homogenous groups. This means creating groupings or
categories of actors that are similar to each other in terms of how they conduct their business, both
before and after the policy is enacted. The point is to group together actors w ho are likely to react
in a similar manner to the new policy. Some groupings, such as one type of small industry, w ill be
heavily affected and w ill need to change their operations significantly, while a different type of
small industry will only need to make small changes. These should be classified as separate groups
even though each is part of the broader small-industry category .
3. Determine the hase-line costs for each group. This means identifying the procedures or
operations that will change for each group under the new policy and calculating the current pre-
policy costs of those procedures. For example, if production processes, w aste disposal, or record
keeping will change, costs associated with these activities should be calculated before the changes
take place. These calculations should be sure to incorporate both operating and capital costs.
4. Determine new cost levels for each group. Given the new policy, calculate the expected operating
and capital costs associated with the modified procedures. This means figuring out the costs
associated with conducting business if the new policy is in place.
5. Calculate the incremental cost of the policy for each group. For each group, subtract the pre-
policy costs (the base-line from step 3) from the post-policy costs (step 4) to determine the
incremental costs to the group of the new policy. In some cases, incremental costs can be
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calculated directly, without first specify ing the baseline in Step 4 (i.e.. the baseline is implicitly
zero). For example, the cost of planting shade trees in residential neighborhoods can be calculated
directly as the cost of labor, seedlings, etc.
6. Calculate total cost. Sum the incremental costs from all the affected groups into an aggregate
annual cost figure for the policy in all years that the policy has costs. As Exhibit 8-5 discusses,
economists and policy-makers usually include the present value of costs that w ill be incurred
Exhibit 8-5: Time Frames and Cost Analysis
Social costs generally fall into one of two classes: onc-timc. up-front costs (such as equipment
purchases), and recurring annual costs (such as compliance reporting or increased equipment maintenance
costs). Because costs may vary over the time-period of the analysis, cost information can be presented for
decision-makers in a variety of ways. Actual annual costs arc useful, for example, because the bulk of
adjustments to new government policies often occur in the first few years the policy is in effect.
For comparing diverse policies, however, an aggregate measure of costs on a common scale is
needed. Present value is one measure that transforms streams of future costs - using a discount rate - into
a measure of comparable worth today. Section 8.5 describes alternative approaches to selecting the social
discount rate to apply to projected future costs in order to calculate their current value. Comparisons of
present value, however, can be complicated by questions of how to truncate the streams of costs that arc
compared.
A complement to calculating present values is annualized costs. Annualizing costs converts the
stream of actual costs into a constant cost stream. Annualized costs provide a metric for comparing policies
that have different lifetimes over which they would naturally be analyzed. For example, policies involving
process changes at an electric utility would generally include cost analysis over 30 years, the expected
lifetime of the plant. In contrast, forestry projects would naturally be analyzed for one or more tree rotation
lengths, which vary widely by tree species. Annualizing costs provides one method for comparing these
two options.
Annualized costs arc also useful when comparing programs that involve non-monetized benefits,
such as emissions reductions. In this case, annualized costs can be compared to average annual emissions
reductions to calculate the cost-cffcctivcncss of alternative policies. Present value costs can be similarly
compared to cumulative annual emissions reductions, providing similar, but not identical, results.
throughout future years because of the new policy.
8.3.2 Complications Associated with Social Cost Calculation
Estimates of the total costs associated with each policy option can be used for describing policies
and illustrating tradeoffs within the analytical framew ork. States should be aw are of several areas for
caution, however, when conducting these calculations.
First, costs should not be double-counted. In some situations the same cost max filter its wax
through different groups of actors but should not be included in the aggregate cost calculations more than
once. Higher costs to firms, for example, max be passed on to. and result directly in higher prices for.
consumers. This cost should not be calculated and incorporated for both these actors, since it really
represents only one net increase in total costs to society.
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The second area for caution involves explicitly distinguishing wealth transfers from real resource
allocation costs. As noted above, transfers of money or resources betw een groups of actors do not
represent real costs to society. A large part of the impact of tax revenues, for example, is a transfer of
wealth from citizens or private organizations to the government. While non-cost elements of these types of
wealth transfers are certainly relevant in program evaluation, they should not be directly incorporated into
social cost calculations. Other aspects of taxes may in fact represent tme social costs, such as market
distortions or potential long-run losses in productivity or competitiveness. Section 8.4 discusses this issue
in more detail.
The final caution regarding social cost calculations is that apparent price impacts may actually be
rooted in factors external to the new policy. While such changes may affect costs between the pre- and
post-policy scenarios, they are not part of the incremental cost of the policy. For example, an external
influence may cause refrigeration or air conditioning prices to rise regardless of new emission reduction
policies. While these price changes may induce (or reflect) real costs to society, they are completely
unrelated to climate change mitigation policies and their effects should be included in the baseline and not
in the social cost calculations.
8.4 ESTIMATING OTHER IMPACTS
Greenhouse gas emission reduction policies may have a number of important impacts in addition to
those quantified in standard social benefit and cost calculations. General effects on the economy, on
specific sectors of the economy, and on different income classes within urban or rural populations are all
similar concerns in the state policy making environment. These impacts influence the desirability of
alternative policy strategies, and also affect public attitudes, the political feasibility of climate change
programs, and the financial or other resources allocated to climate change mitigation efforts. While these
political and administrative factors are difficult to separate or measure during policy analysis, they are
critically important to long-term success in combating global climate change.
Political and organizational implications can result from financial factors, such as the wealth
transfers discussed in Section 8.3. induced by policy change. These impacts may cause serious economic
disruption within a region or may undermine other public policy objectives but will not appear in social
cost calculations because they only represent shifts of resources among segments of society. Plant or mine
closures in one region of the country, for example, may yield net benefits to society in terms of combatting
damage to the environment and human health, but may undermine the region's economy. This same policy
action may result in high rates of temporary unemployment and migration of people to other states.
Obviously, state policy -makers must consider these factors.
Within the policy analytic framework explicit evaluative criteria can be created for each area of
social concern. Including political feasibility or social equity criteria in the policy matrix, for example,
ensures that these issues w ill be considered in evaluating every policy option. Chapter 4 presents a number
of potential criteria that states might employ: the exact criteria a state defines will reflect local priorities
and circumstances. The potentially important policy impacts sometime ignored by social benefit and cost
calculations include:
Impacts on Specific Sectors of the Economy. For example, transportation and agriculture may be most
affected by some measures, w hile the residential sector and industry may be hit harder by others. The
division of impacts between sectors may be considered favorable or unfavorable by state policy-makers
depending on their priorities. If the state is trying to reduce emissions largely within one sector, for
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example, then a criterion that highlights how each policy affects that sector may be w orth developing.
On the other hand, states may wish to protect rather than target certain sectors; well-developed criteria
can help account for this concern as well.
Impacts on Employment. When jobs are permanently lost so that individuals remain unemployed, or if
new jobs are less productive or low er paying than lost jobs, there is an economic cost since the output
is low er. Labor shifting between jobs, however, is not necessarily an economic cost. Nonetheless, job
loss is obviously an important social issue, as well as being politically significant. The degree to which
policies induce labor shifts is. thus, usually a critical consideration in policy analysis.
Regressivity or Progressivitv of the Policy. Policies may extract greater payments from some income
classes than from others. Taxes on household products, for example, are generally considered to
impose a greater burden on low income households because these households spend a higher proportion
of their annual income on such products than do households w ith higher incomes.
Impacts on Government finances and Revenues. Most policies w ill affect government finances in
some way. Measures that require high levels of administration and enforcement by government
agencies, for example, may demand significant dedicated budget allocations. Taxes to reduce
consumption of greenhouse gas producing products and activities, on the other hand, will raise
government revenues. Whether or not these issues are legitimately factored into social cost
calculations, they w ill have certain political and administrative implications that may be important to
consider during policy planning.
Impacts on Other Government Work. Depending on how new programs or policies are administered,
they may disrupt current government operations. If a new program in a state energy office, for
example, requires staff time for administrative and other functions, current activities may be displaced
ordisaipted. While such impacts do represent a social cost, they are often ignored, especially if no
new resources, such as budgets or employees, are allocated to help cover the new activities.
8.5 GENERAL COMPLEXITIES IN ESTIMATING POLICY IMPACTS
The above sections on benefits, costs, and other impacts highlight potentially important evaluative
criteria. Impacts of climate change and of climate change policies, however, may both extend many years
into the future and be highly uncertain. The policy-maker, therefore, is charged with selecting an analytical
framework that adequately addresses the decision-making problem. In this context, complexities
surrounding policy evaluation fall into one of two categories: 1) assumptions that underlie how states w ill
treat social risk and social value over time; or 2) limitations on applicable policy evaluation procedures that
are rooted in the uncertainty surrounding climate change.
Specific issues relating to each of these types of complexities are introduced below. These include
determining social discount rates to use in policy analysis, dealing with uncertainty regarding policy
impacts, and dealing with uncertainty about the impacts of climate change itself. States may wish to
consider these issues and establish standards for dealing with them before conducting full-scale policy
analysis.
Determining Social Discount Rates
Policy-makers must consider the future ramifications of greenhouse gas emission reduction
policies. Because discount rates are generally used to calculate the present value of benefits and costs that
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accaic in the future, alternative discount rates and alternative methods of applying them carry significantly
different implications for policy development. The information presented in this section introduces some of
the foremost considerations surrounding selection and application of specific discount rates. Policy-makers
interested in this issue may wish to review the extensive economic literature on discounting and
environmental policy/
The fundamental issue underlying the choice of a specific discount rate is that higher rates w ill
result in low er valuation of future costs and benefits. As a result, a higher discount rate w ill w eight future
policy impacts less in current decision making. At a discount rate of 0%. for example, future costs and
benefits are treated exactly the same as current costs and benefits; a $100 impact observed fifty years from
now would be considered equivalent to a $100 impact felt today. At a 5% discount rate the same $100
future impact would be valued as $8.72. Similarly, at a 10% rate it would be valued at $0.85.
Discounting is especially relevant to greenhouse gas emission reduction policy development and selection
since climate change is such a long-term issue.
There is a considerable body of literature discussing w hat the appropriate discount rate is for
public policy decision-making. Most economists would argue that the rate should not be zero. Rather,
costs and benefits incurred in the future should be weighed less heavily than current costs and benefits;
because resources today can be invested in the future, using a positive discount rate is analogous to
financial decisions that firms make when comparing streams of costs and revenues. Moreover, individuals
tend to weigh current costs and benefits more than future costs and benefits in their own decision-making.
For example, individuals often prefer a less expensive product to a more expensive product that is more
reliable and w ill be less costly to own and operate in the long run.
Because of ethical issues surrounding discounting, many analysts argue for the use of low discount
rates. The inter-generational nature of long-range planning, for example, necessitates that some of the
parties w ho w ill experience the costs and benefits of policies do not yet exist. Many individuals w ill not be
bom and organizations not formed until some time in the future. Given this situation, the irreversible
nature of potential threat from climate change may require greater caution (i.e.. a low er discount rate).
Conversely, it has been argued that the current generation should treat future generations exactly as w e
would treat ourselves, potentially resulting in higher discount rates. These are issues that states should
consider and evaluate in more detail.
Assuming these ethical questions are resolved, numerous practical questions remain as to the
choice of an appropriate discount rate. The economic debate about w hat the discount rate should be
examines a variety of issues, including the real resources that are displaced by the investment, riskiness,
and other factors. In general, decisions by businesses and private individuals are made using private
discount rates that are usually higher than social discount rates used by governments to set policy. Thus,
measures that may not be implemented by individuals or industries on their own. may. nevertheless, be
cost-beneficial from a social perspective.
Inherent Uncertainly in Valuing Impacts of Climate Change Policies
Social benefits are typically measured by economists as the damages avoided by taking some
policy action. For example, the benefits of climate change mitigation are equal to the value to society of
1 For more information, see Lind. 1982. States may also want to review the U.S. Office and Management and
Budget's (OMB) analyses of social discount rates as they apply to federal programs (OMB Circular A-94. Revised
October 29. 1992).
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avoiding any negative impacts of climate change in the future. Although available estimates suggest that
the climate changes associated with a wanner planet may have significant implications for the environment,
the economy, and human health, estimates of the value of avoiding these changes are incomplete and
uncertain. Estimating the impacts and associated future costs of climate change is. thus, a primary focal
point of current national and international research.
Because of these complications, as Section 8.2 explains, the amount of emission reductions policies
achieve is most often used to measure the benefits of different policies to mitigate climate change. Since
this assumes that greater benefits result from emission reductions, there are direct implications for the
analytic methodologies states use to evaluate policies. As suggested later in this chapter, for example,
analyzing policies based on emission reductions encourages cost-effectiveness rather than benefit-cost
analyses (see Section 8.6).
States deal with the issue of uncertainty surrounding climate change impacts through the level of
effort that they devote to climate change mitigation programs. States that want to wait until the
uncertainties are reduced, or that do not recognize their significant potential for helping mitigate this
problem, either take no action or pursue a conservative approach. Alternatively, states that believe it is
worth acting amidst these uncertainties, on the other hand, often tend to be more aggressive in developing
mitigation policies. In either case, however, the amount of greenhouse gas emission reductions attained
through various policy options still usually serves as the proxy for the benefits of mitigating climate change
since the actual "avoided damages" of not addressing climate change are impossible to quantify-, though
they may be significant.
Uncertainly Regarding Policy Impact
The actual impact of some policy options on greenhouse gases can also be difficult to measure and
forecast. The uncertainty is especially relevant for policies that provide indirect emissions control, such as
financial incentives or educational programs, for policies that span long time frames, and for policies that
may interact with other emission reduction policies or with other state initiatives. Actually calculating
emissions reductions may require a sophisticated understanding of the policy and the sector affected. If
policy analysts do not know exactly how price changes affect fertilizer demand, for example, then the effect
of a nitrogen-based fertilizer tax w ill be uncertain and emission reductions w ill be difficult to quantify.
Some policies to decrease fossil fuel consumption in the residential or transportation sectors may escalate
the demand for electricity, which may offset reductions in greenhouse gas emissions, depending on w hat
type of pow er plants supply the additional electricity. These positive and negative interactions are most
difficult to predict in the long term w hen other economic or social fluctuations w ill affect greenhouse gases
and policy success as well.
Similarly, education policies are critically important but are difficult to link explicitly to
components of the equations for computing emissions. Acknowledging these issues is especially important
for ensuring that some critical programs, such as public education and long-term urban planning, are not
dismissed or ignored because they cannot be linked to direct emission reductions.
8.6 BASIC METHODOLOGIES FOR EVALUATING CLIMATE CHANGE ISSUES
Depending on state goals, resources, and institutional capacity. policy analysis to evaluate
greenhouse gas reduction options and to account for the complexities listed above can be conducted with a
range of methodologies or analytic tools. The policy analytic framew ork highlighted in this chapter
represents one way to frame the climate change issue as a whole and illustrate the tradeoffs between
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different options. A variety of alternative or supplemental approaches may enhance climate change policy
analysis. These can range from simple computer spreadsheet approaches to complex and comprehensive
modeling efforts, either of which can be supplemented by economic or engineering research. While the full
range of these approaches cannot be discussed here in detail, some of the general issues and the basic
structures that states might consider are w orth reviewing.
The analytic approach for examining particular policy options can become increasingly complex
depending on the factors and levels of information a state w ishes to incorporate. A simple approach for
states to follow is to rank different options based on how well they meet each criterion. More substantial
information may be desirable, however, such as an understanding of the precise magnitudes of various
policy impacts. In cases where benefit or cost estimation is not straightforward, states may want to use
methodologies such as risk analysis, econometric evaluation, linear programming, and other analytic tools.
The remainder of this section reviews decision making constructs that include benefit-cost analysis, cost-
effectiveness analysis and multi-criteria decision making.
In the end. the particular methodologies and tools a state uses to conduct climate change policy
analyses will depend on local circumstances, including resource and institutional constraints. It is perhaps
obvious, but important, that there is a trade-off between obtaining solid and reliable information and the
cost and time expended in accumulating that information. For many states, this may suggest using simpler
decision guidelines unless they can w ork w ith other governments or regional coalitions on more
comprehensive projects.
The types of policy analysis and decision making methodologies summarized below , as w ell as
others not listed here, are not necessarily exclusive, but may overlap and complement each other in various
ways. In addition, the risk, time frame, and discounting issues discussed above are common and
fundamental to all these approaches. Extensive and more complete literature is available on all these
topics; the information presented here is intended only to provide examples to state policymakers for ways
to analyze policy options.
Bcncfil-( \>st Analysis
Benefit-cost analysis offers a framework for choosing among alternative policy options that
involves monetarily valuing the impacts of the policies under consideration and selecting the policies with
the highest net benefits. This approach attempts to account for all benefits and costs, including difficult-to-
monetize effects such as ecosystem damage or effects on human health.' This process may have limited
usefulness in the current context, because of the cost and problems involved in comprehensively quantifying
the value of climate change impacts at the state level. Further, many state and federal agencies, including
EPA and OTA. as w ell as private researchers, have investigated and quantified at least a portion of these
impacts, for some regions or nationally (Cline. 1992; Fankhauser. 1994; IPCC. 1992a; Nordhaus. 1994;
OTA. 1993; and U.S.EPA. 1989). Extensive economic literature is available on benefit-cost procedures
and different means of valuing non-quantitative factors.
( \>st-Effectiveness Analysis
' Typically, bcncfit-cost analysis involves the following steps: (1) measuring, in monetary terms, all of the costs
and benefits of each policy over time; (2) for costs and benefits that occur in the future, calculating their present
value by application of an appropriate discount rate; (3) calculating the net benefit of each policy by subtracting the
present value of the costs from the present value of the benefits; and (4) choosing the policy option that offer the
highest net benefits.
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Cost-effectiveness analysis simplifies policy analysis by allow ing one policy impact, such as the
benefits of climate change mitigation, to be measured in non-monetary terms. If emissions of different
greenhouse gases are represented on a common scale, such as 100-year estimated global w arming potential
(GWP). cost-effectiveness promotes calculation of a dollar-per-unit-GWP-reduced figure. This same
analysis can be conducted with any other common scale, such as tons-of-carbon-equivalent emissions
reduced. While cost effectiveness analysis lets policy-makers rank options on a common cost-per-unit
scale, policy-makers must still determine w hich or how many of those policies to enact. Exhibit 8-6
illustrates these points.
Exhibit 8-6: Sample Results of Cost-Effectiveness Analysis
This tabic illustrates the results of cost-cffcctivcncss analyses. While in an ideal situation data arc available
to generate these types of numbers with precision, in reality the cost and emissions-reduction figures arc
often subject to high levels of uncertainty. The data below do not represent the results of actual analyses:
Sample Policy Option Hypothetical Associated Cost-per-ton of
Carbon Equivalent Emissions Reduced
Total Potential Emission
Reductions (tons)
1) Methane Recovery Technology $54.00
Demonstration and Support
58.4
2) Methane Emissions Tax $31.00
123.0
3) Alternative Fuels Subsidy $45.00
456.9
4) . . .
Given these constraints, cost-effectiveness analysis often serves as a basis for selecting a least-cost
combination of policies to achieve some preset goal, such as a 20% overall emission reduction by some
target year, or as a basis for selecting the combination of policies that w ill bring the highest level of
emission reduction benefits given a certain financial or other resource constraint. For example, states can
use this type of analysis to calculate the highest level of emission reductions possible given a preset budget.
Multiple Attribute Decision Analysis
A variety of analytic methodologies facilitate the structured consideration of multiple and diverse
social objectives during policy evaluation, such as considering emission reductions costs, political
feasibility, and social equity at the same time. By weighing evaluative criteria, assigning probabilities to
certain policy outcomes, and developing utility functions to represent the value of these outcomes, these
methodologies allow decision makers to consider policy impacts on diverse criteria that cannot be expressed
in common units. The end product of this type of decision analysis is usually a probability-based
prescription for what policy or combination of policies offers greatest expected social benefit. This
analysis hinges on a w ell-defined set of data inputs and constraints.
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Extensive literature is available on the types and different policy applications of decision analysis
methodologies. The most straightforward of these methodologies allocates probabilities and payoffs to all
the potential benefits and costs associated with alternative policy choices. This process, best serving
decision makers and analysts who face uncertain outcomes from a set of given actions, is often
incorporated into various stages of cost-effectiveness and benefit-cost analysis. It is generally used to
determine the expected value of options or policy impacts by combining the probabilities of different
potential outcomes with w eights assigned to the social value or utility of those outcomes. Exhibit 8-7
illustrates some of the components of multi-attribute decision analysis.
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A more complex but similar technique is called the Analytic Hierarchy Process (AHP)/ This is a
procedure that specifically attempts to provide structure to multi-criteria decisions involving problems of
Exhibit 8-7: Sample Multi-Attribute Decision Analysis
Due to its complexity, multi-attribute decision analysis can not be thoroughly illustrated here. This box
shows the types of information that might factor into two stages of this kind of analysis. The information
here is only a simplistic representation of this type of analysis and docs not reflect many of the details and
complexities involved.
Staac 1: Assign Probabilities and Values to Possible Policy Outcomes
Regarding a specific policy option, such as an alternative fuels subsidy, policy makers might decide
that there arc three possible outcomes within a fivc-ycar time frame, each carrying a certain value. The
"value", developed as an earlier part of the analysis, may be derived from emissions reduction projections,
costs, and other factors: extensive analytic processes exist for defining and developing both "value" and
"probability" estimates. The sample below is only illustrative and docs not represent an actual analyses.
Sample Possible Outcomes Value of outcomes Probability Value *
($ or some other measure) Probability
1) Successful conversion to $11,380 * .25 = $2,845
alternative fuels
2) Partial conversion to $2,385 * .60 = $1,431
alternative fuels
3) Citizens reject or $0 * .15 = $0
legislature repeals the policy
Sum Expected Value of this Policy Option $4,276
Stage 2: Analyze Alternative Policies Based on Expected Values
Depending on the analytic structure chosen, policy makers may be able to compare the sum expected
values of different policy options, or combinations of options, and select those with the highest expected
values, given the predetermined probabilities and outcomes. Results of this analysis could look like the
following:
Policy Option Expected Value
1) Methane Recovery Technology Demonstration and Support 19.784
For more information cm the Analytic Hierarchy Process, sec Dvcr. 1992.
2) Methane Emissions "Tax " " 7.900
3) Alternative Fuels Subsidy . 4.276
o-1 O
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choice and prioritization between criteria, as climate change policy formulation does. Using AHP. policy-
makers develop a decision hierarchy that identifies and compares alternatives. The broad approach is to
staicture the complex decision first and then to focus attention on individual components of that decision,
using subjective judgements (as supported by the process itself) on aspects of the problem for w hich no
quantitative scale exists. Certain computer software tools are designed specifically to support this type of
analysis. The fundamental benefits of this approach is that it structures complex decisions, provides a
reliable mechanism for ranking non-quantitative issues, and focuses on objectives that policy-makers are
trying to achieve rather than on the explicit alternatives. While there do not appear to be applications of
AHP in the climate change field, it has been used for some renewable energy and sustainable resource
analysis." States may want to investigate these techniques further.
8.7 MORE COMPLEX TECHNICAL TOOLS FOR ASSESSING GREENHOUSE GAS
POLICIES
Some regional, national, and international analysts are using technical tools beyond the methods
described in this chapter to deal with the complexities surrounding climate change. This section illustrates
a limited set of the tools that have been applied to address the follow ing tasks:
Demonstration of technical issues in global change;
Policy exercises involving stabilizing of emissions, atmospheric composition, or climate;
Risk assessment pertaining to climate change; and
Risk management pertaining to climate change.
The information in this section is derived largely from national and international sources, and may
not apply at regional and state levels, especially given local goals and agendas. If states choose to
investigate complex modeling, cooperative arrangements with relevant research and federal institutions and
with other states may facilitate the application of more complex methodologies to the development or
implementation of state policies on greenhouse gas emissions. The tools listed here require significant
investment of financial and other resources to develop.
There is currently no single tool that simultaneously addresses all of the above tasks. Some of the
methodologies that are applicable to greenhouse gas policy analysis are summarized in Exhibit 8-8. An
example of one of the more comprehensive methodologies is the Integrated Model to Assess the Greenhouse
Effect (IMAGE), developed by the National Institute of Public Health and Environmental Protection
(RIVM) of the Netherlands. Exhibit 8-9 provides a diagram of IMAGE'S modular staicture. Note in
particular the follow ing assessment tiers in the overall methodology, illustrated in that diagram:
Energy/economics and land use models;
Atmospheric composition models;
Global and regional climate impact models; and
Socio-economic impact models.
" For example, the Analytic Hierarchy Process contributed to biomass energy assessments by the Southeastern
Regional Biomass Energy Program.
8-19
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Exhibit 8-8: Sample Methodologies for Analyzing Greenhouse Gas Policies
Acronym
Energy Use
Emissions
Atmospheric
Climate
Socio-
Scale
Model
Model
Composition
Impacts
Economic
Model
Model
Impacts
PC-AEO
Yes
No
No
No
No
Regional
TEMIS
Yes
Yes
No
No
No
Urban
ISAAC
Yes
Yes
No
No
No
Regional
MARKAL
Yes
Yes
No
No
No
Regional
IE A/OR AU
Yes
Yes
No
No
No
Global
DICE
Yes
Yes
Yes
Yes
Yes
Global
ASF
Yes
Yes
Yes
Yes
Yes
Global
MAGIC/
Yes
Yes
Yes
Yes
No
Global
ESCAPE
No
No
No
Yes
Yes
Regional
IMAGE
Yes
Yes
Yes
Yes
Yes
Regional
DRI/
Yes
Yes
No
No
Yes
National/
McGraw-Hill
Regional
REMI*
Yes
Yes
No
No
Yes
Regional
IDEAS (DOE)
Yes
Yes
No
No
Yes
National
* Regional Economics Models. Inc.
The regional assessment capability of IMAGE is limited to impacts specific to the Netherlands. A
similar comprehensive methodology, the MAGIC and ESCAPE models of the Climate Research Unit
(CRU) of the University of East Anglia. can be used to examine regional impacts in Europe. Ongoing
development efforts by the U.S. Environmental Protection Agency's Office of Policy. Planning and
Evaluation and at Batelle Pacific Northwest Laboratory are expected to yield comprehensive policy models
that are applicable to the United States at the national and regional levels.
Policy-makers interested solely in stabilizing emissions or atmospheric concentrations of
greenhouse gases, rather than in policies that address climate stabilization or the full range of socio-
economic impacts, max not necessarily need to resort to a comprehensive assessment model. The Dynamic
Integrated Climate-Economy (DICE) model of Nordhaus (1992). which utilizes a global, inter-temporal
general-equilibrium model of economic grow th and climate change, provides simpler estimates of global
impacts. A more complex model used within the United States is the EPA's Atmospheric Stabilization
Framework (ASF), which combines energy/economics and land use models and atmospheric composition
models with a highly simplified global impacts models.
8-20
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Exhibit 8-9: Modular Structure for the Integrated Model to Assess the Greenhouse Effect
industrial
pathways
energy
pathways
ENERGY/ECONOMICS MODEL
IMAGE
agricultural
pathways
deforestation
natural
sources
LAND USE CHANGE MODEL
CFC
HCFC/HFC
SCU'CHjCClJ
production
production
production^
~
t
CFC I
HCFC'HFC
cc^wscwJ
emission
emission
~mission
crc
HCFC/HFC
CCVCHjCCtj
concwttMUon
r.anmnlitf.m
eOnCCTtrtf Kxl
Iftl/trt
n -
I VI
vapour
CFC/ SUBSTITUTE MODEL
UV-B
t
exDO*ure
1
t
sltln
cancer
rifilt
analysts ::
UVB-IMPACT MODEL
NO,
emission i
itfopo»ghcf>c
o,
NMVOC
emission
CII4
emission
1 0H 1
CO 1
production!
mission |
t
T
*
OH
CH»
CO
u>no«&wiion
cwiGMntrnikn
ctmfitnAbal saseasmertt
' regional asscssmont (for the Netherlands )
* Input/oulpul connection
feedbacks
5
SOCIO ECONOMIC IMPACT MODEL
The IMAGE model was developed by the National Institute of Public Health and Environmental Protection
(RIVM) of the Netherlands. Details regarding its structure and application are available in the RIVM brochure.
Global Change Research Programme: An Overview.
Several methodologies are solely applicable to estimating energy use and/or accompanying
emissions of greenhouse gases amd have extensive economic modeling components. At the global level,
there is the ORAU energy/economics model of carbon dioxide emissions developed by the International
Energy Agency. A spreadsheet model that can be employed to forecast regional industrial energy use. but
does not estimate greenhouse gas emissions, is the U.S. Department of Energy's PC-AEO model, which is
coded in Lotus 1-2-3. An especially useful regional emissions model is MARKAL. which has been adapted
to evaluate carbon dioxide emission control strategies by the New York State Energy Office. Other
methodologies for forecasting CO2 emissions are the Joint Decision Analysis Model (ISAAC), which was
developed by the Bonneville Power Administration and used to examine future emissions in the Pacific
Northw est by the Oregon Department of Energy, and the Total Emissions Model for Integrated Systems
(TEMIS). which is a fuel cycle model developed by the OKO Institute in Germany and is best used to
simulate urban emissions, when specific local data are available.
8-21
-------
CHAPTER 9 Error! Bookmark not defined.
9. PREPARING THE STATE ACTION PLAN 1
9.1 EXECUTIVE SUMMARY 1
9.2 BACKGROUND ON THE SCIENCE OF CLIMATE CHANGE 1
9.3 REGIONAL AND LOCAL RISKS AND VULNERABILITIES 1
9.4 1990 AND FORECAST BASELINE EMISSIONS 2
9.5 GOALS AND TARGETS 2
9.6 ALTERNATIVE POLICY OPTIONS 2
9.7 IDENTIFICATION AND SCREENING OF MITIGATION ACTIONS 2
9.8 FORECAST IMPACTS OF MITIGATION 2
9.9 RECOMMENDATIONS AND STRATEGY FOR IMPLEMENTATION 4
-------
CHAPTER 9
PREPARING THE STATE ACTION PLAN
The previous chapters provided some detail on the issues with which states should deal and the
processes they should go through when developing their Climate Change Action Plans. This chapter is
intended to assist states in developing an organizational framew ork for presenting the information in their
plans.
While each state bears chief responsibility for drafting its ow n plan, it is important to bear in mind
that climate change is a global issue and that the nation has made an international commitment to reducing
greenhouse gas emissions. Each state's action is part of a concerted, national effort. It is therefore possible
and desirable to identify components of a State Climate Change Action Plan that should be common to all
states. An action plan should contain at least the following elements:
Executive Summary
Background on the Science of Climate Change
Regional and Local Risks and Vulnerabilities
1990 and Forecast Baseline Emissions
Goals and Targets
Alternative Policy Options
Identification and Screening of Mitigation Actions
Forecast Impacts of Mitigation Actions
Recommendations and Strategy for Implementation
Each of these elements of the action plan will be discussed in turn, with references to the appropriate
sections of this guidance document.
9.1 EXECUTIVE SUMMARY
This section summarizes the Plan s conclusions and recommendations.
9.2 BACKGROUND ON THE SCIENCE OF CLIMATE CHANGE
For some readers, the Plan w ill serve as their first introduction to the issues surrounding climate
change, while others may already be well educated about the subject. A concise presentation on the science
of climate change and the history of national and international climate change policy. as discussed in
Chapter 2. w ill help to educate readers about the problems confronted in the Plan.
9.3 REGIONAL AND LOCAL RISKS AND VULNERABILITIES
The global phenomenon of climate change w ill manifest itself at the regional and local levels. To
the extent possible, states should anticipate the local and regional manifestations of climate change, such as
shifting patterns of agriculture, increased incidence of temperature-related diseases, and risks to w ater
resources.
9-1
-------
9.4
1990 AND FORECAST BASELINE EMISSIONS
As discussed in Chapter 3. identifying major sources of anthropogenic greenhouse gases will
enable states to prioritize various policy initiatives. This inventory of greenhouse gas emissions will also
establish a baseline against w hich the effectiveness of mitigation activities may be measured. For
inventories developed in partnership with EPA. states are requested to use the year 1990 as their baseline
year. The choice of 1990 as a baseline is consistent with the nation's international commitment under the
framework Convention for Climate Change to return the nation's greenhouse gas emissions to 1990 levels
by the year 2000.
To evaluate the set of mitigation actions contained in the Plan, each state should also forecast a
baseline set of emissions. The forecast (see sec. 3.2) baseline scenario describes a future in w hich a state
conducts "business as usual." pursuing no initiatives specifically targeted to reduce or sequester greenhouse
gases. At the same time, the baseline scenario must portray the expected economic, social, demographic,
and technological developments over some future time horizon. The maximum time frame for projecting
emissions is generally 15 to 20 years.
9.5 GOALS AND TARGETS
Once baseline emissions have been forecast, each state should commit to attaining realistic,
measurable goals of greenhouse gas reduction or sequestration, as discussed in Chapter 4. Using the
baseline forecast, states mav establish reduction or sequestration goals over a given period of time (see sec.
7.1).
9.6 ALTERNATIVE POLICY OPTIONS
Although this guidance document is intended to assist states in formulating mitigation strategies.
i.e. strategies to reduce greenhouse gas emissions, states may also choose to develop strategies that w ill
allow them to adapt to the potential changes that climate change may generate. States should discuss these
adaptation strategies in a separate section, distinct from mitigation strategies.
9.7 IDENTIFICATION AND SCREENING OF MITIGATION ACTIONS
Based on the guidance provided by Chapters 5 and 6. states can begin to identify policy options to
reduce greenhouse gas emissions. These options can then be analyzed, as discussed in Chapter 8. to select
mitigation actions that are economically viable, politically feasible, and technologically plausible.
When identifying and screening mitigation actions, states should also describe the process through
which they arrived at their conclusions. They should discuss:
the political infrastructure that ensured the Plan's formulation (see sees. 7.2. 7.3. and 7.4);
the development and application of selection criteria used to screen mitigation actions (see sec.
4.3); and
the analytical tools used to compare mitigation options (see Chapter 8).
9.8 FORECAST IMPACTS OF MITIGATION
9-2
-------
Once a state has identified those mitigation actions that are economically viable, politically
feasible, and technologically plausible, it should analyze and communicate the benefits of these actions
through the use of mitigation scenarios. Mitigation scenarios are not predictions of the future. Rather, they
allow policymakers and the public to imagine the future by modeling the effects of a w ide range of policy
initiatives.
The mitigation scenario describes a future similar to the baseline scenario with respect to
underlying economic and demographic trends; however, it assumes initiatives are taken to address the issue
of climate change. The mitigation scenario should take into account both the technical potential for
reducing or sequestering greenhouse gases and the institutional, cultural, and political constraints that max
prevent a state from exploiting all technical possibilities. States max develop several mitigation scenarios
based on different assumptions that vary according to the degree to which they yield greenhouse gas
reductions.
It is beyond the scope of this guidance document to go into the specifics of the various models that
have been developed to generate long-term forecasts of climate-related phenomenon. Forecasting emissions
relies on such uncertain variables as population growth, energy consumption and changing sources of
power, number of automobiles, and changes in the agriculture and forestry sector. Section 3.2 of this
guidance document provides a broad overview of forecasting methods. Whichever forecasting method a
state uses, it will probably involve three essential broad types of activities: data collection and analysis:
quantification of emissions/reductions/sequestration: and extrapolation.
Data ('ollection and Analysis. Currently, greenhouse gas emissions are estimated by multiplying
data that measure the level of activity that generates greenhouse gases (hereinafter referred to as
"GHG activities ") with the appropriate greenhouse gas coefficient. It is therefore necessary to
collect these data, w hich can be accomplished w hen states complete their greenhouse gas
inventories (see sec. 3.1).
Some effort must also go into collecting data on the parametric assumptions that underlie the
scenarios. States should determine and define which societal indicatorssuch as population
grow th. GDP. market penetration rate for certain technologiessignificantly affect GHG
activities. These key parameters will be used to make extrapolations of greenhouse gas emissions
in the future.
Quantification of Emissions Reductions Sequestration. Methods currently exist to estimate
greenhouse gas emissions based on data on GHG activities (see EPA's State Workbook:
Methodologies for Estimating Greenhouse Gas Emissions). States should develop methodologies
to quantify- the greenhouse gas reduction or sequestration associated with their set of mitigation
actions.
Extrapolation. States should develop a modela quantitative means to express the relationship
betw een the key parameters and GHG activitiesthat permit estimates of the level of GHG
activity from a given parametric value. To forecast future levels of GHG activity, projected values
of the key parameters can be input into the model. These projected parametric values max be
exogenous (i.e. external to the model) or max be based on assumptions and algorithms
incorporated within the model.
9-3
-------
9.9
RECOMMENDATIONS AND STRATEGY FOR IMPLEMENTATION
The ultimate product of a state's analytical efforts in developing a Climate Change Action Plan is a
set of policy recommendations and a strategy to implement those recommendations. The implementation
strategy should clearly lay out the tasks that must be accomplished, the agencies or parties responsible for
accomplishing those tasks, and a timeline for implementation.
Depending on their implementation strategy, states max organize their policy recommendations in a
variety of ways. States max organize recommendations by:
targeted sector (e.g. utilities, transportation, agriculture);
fuel source (e.g. coal, gasoline, natural gas);
amount of greenhouse gas reductions anticipated;
cost of implementation; or
governmental role (e.g. legislative actions, regulatory actions, voluntary actions).
States w ho respond to the challenge of climate change face a daunting mission, but one that is
critical to the world's well-being. The scientific evidence strongly suggests that increasing the
concentration of greenhouse gases will alter global climate. While the effects of global climate change are
uncertain, they could be substantial. Sea-level rise could inundate many coastal areas, entire species could
be threatened with extinction and ecosystems lost.
This guidance document outlines procedures and strategies that states max use to implement
initiatives that not only reduce greenhouse gas emissions, but that conserxe energy and enhance economic
efficiency as well. Hopefully, it will help to facilitate continued collaborations among the state, local, and
the federal governments and to encourage states to forge innovative, creative, locally-based approaches to
risks that threaten the global commons.
9-4
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GLOSSARY1
Aerosol: Particulate material, other than water or ice. in the atmosphere. Aerosols are important in the
atmosphere as nuclei for the condensation of w ater droplets and ice crystals, as participants in
various chemical cycles, and as absorbers and scatterers of solar radiation, thereby influencing
the radiation budget of the earth-atmosphere system, w hich in turn influences the climate on the
surface of the Earth.
Afforestation: The process of establishing a forest, especially on land not previously forested.
Anaerobic Fermentation: Fermentation that occurs under conditions where oxygen is not present. For
example, methane emissions from landfills result from anaerobic fermentation of the landfilled
waste.
Anthropogenic: Of. relating to. or resulting from the influence of human beings on nature.
Atmosphere: The envelope of air surrounding the Earth and bound to it by the Earth's gravitational
attraction.
Biomass: The total dry organic matter or stored energy content of living organisms that is present at a
specific time in a defined unit (ecosystem, crop, etc.) of the Earth's surface.
Biosphere: The portion of Earth and its atmosphere that can support life.
Carbon Sink: A pool (reservoir) that absorbs or takes up released carbon from another part of the
carbon cycle. For example, if the net exchange between the biosphere and the atmosphere is
toward the atmosphere, the biosphere is the source, and the atmosphere is the sink.
Carbon Dioxide (CO,): Carbon dioxide is an abundant greenhouse gas. accounting for about 66 percent
of the total contribution in 1990 of all greenhouse gases to radiative forcing. Atmospheric
concentrations have risen 25% since the beginning of the Industrial Revolution. Anthropogenic
source of carbon dioxide emissions include combustion of solid, liquid, and gases fuels, (e.g..
coal. oil. and natural gas. respectively), deforestation, and non-energy production processes such
as cement-production.
Carbon Monoxide (CO): Carbon monoxide is an odorless, invisible gas created when carbon-
containing fuels are burned incompletely. Participating in various chemical reactions in the
atmosphere. CO contributes to smog formation, acid rain, and the buildup of methane (CH,). CO
elevates concentrations of CH, and tropospheric ozone (O,) by chemical reactions with the
atmospheric constituents (i.e.. the hvdroxvl radical) that would otherwise assist in destroving
CH, and O,.
Chlorofluorocarbons (CFCs): A family of inert non-toxic and easily liquified chemicals used in
refrigeration, air conditioning, packaging, and insulation or as solvents or aerosol propellants.
' Sonic of the definitions shown here arc taken from the Carbon Dioxide and Climate C/ossary produced by the
Carbon Dioxide Information Analysis Center of Oak Ridge National Laboratory.
G-l
-------
Because they are not destroyed in the lower atmosphere, they drift into the upper atmosphere
where their chlorine components destroy ozone.
Climate Change: The long-term fluctuations in temperature, precipitation, wind, and all other aspects of
the Earth's climate.
Deforestation: The removal of forest stands by cutting and burning to provide land for agricultural
purposes, residential or industrial building sites, roads, etc. or by harvesting trees for building
materials or fuel.
Enteric Fermentation: Fermentation that occurs in the intestines. For example, methane emissions
produced as part of the normal digestive processes of ruminant animals is referred to as "enteric
fermentation."
Flux: Rate of substance flowing into the atmosphere (e.g. lbs/ftVsecond).
Global Warming Potential (GWP): Gases can exert a radiative forcing both directly and indirectly:
direct forcing occurs when the gas itself is a greenhouse gas; indirect forcing occurs when
chemical transformation of the original gas produces a gas or gases which themselves are
greenhouse gases. The concept of the Global Wanning Potential has been developed for policy-
makers as a measure of the possible wanning effect on the surface-troposphere system arising
from the emissions of each gas relative to CO,.
Greenhouse Effect: A popular term used to describe the roles of w ater vapor, carbon dioxide, and other
trace gases in keeping the Earth's surface wanner than it would be otherwise.
Greenhouse Gases: Those gases, such as water vapor, carbon dioxide, tropospheric ozone, nitrous
oxide, and methane that are transparent to solar radiation but opaque to infrared or longwave
radiation. Their action is similar to that of glass in a greenhouse.
Hydrofluorocarbons (HFCs): HFCs are substitutes for CFCs and HCFCs which are being phased-out
under the Montreal Protocol on Substances that Deplete the Ozone Layer. HFCs max have an
ozone depletion potential (ODP) of zero, however, they are very pow erful greenhouse gases. For
example. HFC-23 and HFC-134a have a GWPs of 10.000 and 1.200 respectively.
Methane (CH4): Follow ing carbon dioxide, methane is the most important greenhouse gas in terms of
global contribution to radiative forcing (18 percent). Anthropogenic sources of methane include
wetland rice cultivation, enteric fermentation by domestic livestock, anaerobic fermentation of
organic wastes, coal mining, biomass burning, and the production, transportation, and
distribution of natural gas.
Nitrous Oxide (N,0): Nitrous oxide is responsible for about 5 percent of the total contribution in 1990
of all greenhouse gases to radiative forcing. Nitrous oxide is produced from a w ide variety of
biological and anthropogenic sources. Activities as diverse as the applications of nitrogen
fertilizers and the consumption of fuel emit N,0.
Nitrogen Oxides (NO,,: One form of odd-nitrogen, denoted as NOs is defined as the sum of tw o species.
NO and NO,. NOs is created in lighting, in natural fires, in fossil-fuel combustion, and in the
stratosphere from N,0. It plays an important role in the global wanning process due to its
G-2
-------
contribution to the formation of ozone (O,).
Nonmethane Volatile Organic Compounds (NIMVOCs): NMVOCs are frequently divided into
methane and non-methane compounds. NMVOCs include compounds such as propane, butane,
and ethane (see also discussion on Volatile Organic Compounds).
Ozone (03): A molecule made up of three atoms of oxygen. In the stratosphere, it occurs naturally and
it provides a protective layer shielding the Earth from ultraviolet radiation and subsequent
harmful health effects on humans and the environment. In the troposphere, it is a chemical
oxidant and major component of photochemical smog.
Perfluorinated Carbons (PFCs): PFCs are powerful greenhouse gases that are emitted during the
reduction of alumina in the primary smelting process. Eventually. PFCs are to be used as
substitutes for CFCs and HCFCs. PFCs have a GWP of 5.400.
Radiative Forcing: The measure used to determine the extent to which the atmosphere is trapping heat
due to emissions of greenhouse gases.
Radiatively Active Gases: Gases that absorb incoming solar radiation or outgoing infrared radiation,
thus affecting the vertical temperature profile of the atmosphere. Most frequently cited as being
radiatively active gases are water vapor, carbon dioxide, nitrous oxide, chlorofluorocarbons. and
ozone.
Stratosphere: Region of the upper atmosphere extending from the tropopause (about 5 to 9 miles
altitude) to about 30 miles.
Trace Gas: A minor constituent of the atmosphere. The most important trace gases contributing to the
greenhouse effect include water vapor, carbon dioxide, ozone, methane, ammonia, nitric acid,
nitrous oxide, and sulfur dioxide.
Troposphere: The inner layer of the atmosphere below about 15 km. w ithin w hich there is normally a
steady decrease of temperature w ith increasing altitude. Nearly all clouds form and weather
conditions manifest themselves within this region, and its thermal structure is caused primarily
by the heating of the Earth's surface by solar radiation, follow ed by heat transfer by turbulent
mixing and convection.
Volatile Organic Compounds (VOCs): Volatile organic compounds along with nitrogen oxides are
participants in atmospheric chemical and physical processes that result in the formation of ozone
and other photochemical oxidants. The largest sources of reactive VOC emissions are
transportation sources and industrial processes. Miscellaneous sources, primarily forest w ildfires
and non-industrial consumption of organic solvents, also contribute significantly to total VOC
emissions.
G-3
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CLIMATE CHANGE ACTION PLANS
CLIMATE CHANGE ACTION PLAN FOR ILLINOIS Appendix 1-2
CLIMATE CHANGE ACTION PLAN FOR IOWA Appendix 1-6
CLIMATE CHANGE ACTION PLAN FOR OREGON Appendix 1-11
CLIMATE CHANGE ACTION PLAN FOR PENNSYLVANIA Appendix 1-17
CLIMATE CHANGE ACTION PLAN FOR WASHINGTON STATE Appendix 1-22
Appendix 1-1
-------
CLIMATE CHANGE ACTION PLAN FOR ILLINOIS
State Overview
Illinois completed the Climate Change Action Plan for Illinois in June 1994 as part two of a
three-step program. During step one (development of emissions inventory), Illinois calculated
the state's greenhouse gas (GHG) emissions and identified the largest sources of these
emissions. The third step will be to implement the actions articulated in the state's plan.
Total emissions in 1990 were 242 million metric tons of carbon dioxide equivalent (MMTCDE).
The greatest sources were fossil fuel combustion in the transportation and utility sectors with
58 MMTCDE each, and in the industrial sector with 53 MMTCDE.1 The Action Plan for Illinois
presents strategies for reducing emissions in these sectors as well as in the commercial
energy and land use sectors. Strategies addressing sources with the highest emissions are
shown in Table 1. Overall, the objective of Illinois' Action Plan is to reduce GHG emissions by
10 MMTCDE compared to a "business as usual" scenario, in order to reduce emissions to
1990 levels by the year 2000.
Table 1. Highest Emission Sources and Associated Mitigation Strategies
Source of Emissions
Mitigation Strategy
Transportation Fossil Fuel Combustion
CAFE (Corporate Average Fuel Economy)
Standards (30, 35, and 45 mpg)
Powering vehicles with gasohol, ethanol (E-100),
or compressed natural gas
Utility Fossil Fuel Combustion
Natural gas switching
Industrial Sector Fossil Fuel Combustion
C02 scrubbers
More efficient industrial motors
More efficient industrial lighting
The Action Plan also identified the effects that climate change could have on Illinois. State
officials are primarily concerned with potential effects on the state's agriculture, infrastructure,
water resources, water and highway transportation, cooling energy, natural ecosystems, and
human health.
State Mitigation Strategies
Illinois evaluated over 20 greenhouse gas mitigation actions for the fossil fuel and land use
sectors, as well as one cross-sectoral action, as outlined in Table 2. Possible GHG reductions
and associated costs are also shown in this table. The measures are summarized below.
1 These values are from the summary of the Illinois greenhouse gas inventory.
Appendix 1-2
-------
Table 2. Greenhouse Gas Mitigation Strategies3
Sector
Strategy
Projected Annual Emission
Reductions in year 2000
(MTCDE)
Cost of
Reduction
($/MTCDE)
Fossil Fuel Combustion
Residential
Residential A/C
130,637
-80
New Housing Efficiency
1,769,947
-72
Hot Water Heaters
582,422
-32
Refrigerators
113,400
17
Residential Furnaces
514,382
14
Subtotal
3,110,789
-47
Commercial
Commercial A/C
136,080
-139
Commercial Refrigeration
36,288
-37
Commercial Lighting
518,011
13
Subtotal
690,379
-19
Industrial
Industrial Motors
110,678
-36
Industrial Lighting
163,296
-33
CO2 Scrubbers
44,772,134
33-110
Subtotal"
45,046,109
71
Transportation
CAFE Standards (30 mpg)
409,147
0
CAFE Standards (35 mpg)
1,696,464
63
CAFE Standards (40 mpg)
2,969,266
116
Gasohol
1,407,067
22-64
Ethanol Vehicles (E-100)
8,364,384
30-82
CNG Vehicles
2,489,357
51-67
Subtotal"
17,335,685
65
Utility
Utility Transformers
54,432
-3
Natural Gas Switching
21,954,240
42-57
Subtotal"
22,008,672
49
Forestry
Pasture
6.85/acre
1.08
Grazed Forest
7.65/acre
0.97
Eroding Cropland
8.78/acre
0.76
Subtotal
not estimated
not estimated
Cross-sectoral
Joint Implementation
not estimated
not estimated
Total
88,191,634
60
3 Please note that the estimates in the table are given in metric tons of carbon dioxide equivalent.
b This subtotal was calculated based on the midpoint of the range of costs for each measure in this sector.
Appendix 1-3
-------
Fossil Fuel Combustion
Most of the measures evaluated by Illinois involve energy efficiency. Improved efficiency in the
residential, commercial, transportation, and utility sectors were all estimated to offer cost
savings as well as greenhouse gas reductions. Use of biofuels (gasohol and ethanol vehicles)
offer possible reductions of more than 10 MMTCDE per year. The two actions with the greatest
potential reductions are use of C02 scrubbers (45 MMTCDE) and switching from coal to natural
gas for power generation (22 MMTCDE). Both of these options would require significant
expenditures costs per MTCDE are on the order of $27 to $91 for scrubbers and $34 to $47
for fuel switching.
Land Use
Afforestation is presented in the Illinois Action Plan as a low-cost, "no regrets" option that
provides benefits beyond emission reductions. Tree seedlings are supplied by the state's
nursery program and planted by landowners on marginal land. The 40 year levelized cost of
sequestering C02 in Illinois is between $0.69-0.89 per metric ton, while the C02 offset ranges
from 6.8-8.8 metric tons/acre/year. Currently, the demand for tree seedlings exceeds the
supply; expansion of the state's nursery program could yield higher C02 sequestration at a
very low cost.
Cross-sectoral
Joint implementation projects (i.e., projects whereby one country assists another in reducing
greenhouse gas emissions through technology transfer or other means, and in return receives
emission reduction credits) are presented in Illinois' Action Plan. These projects may be more
cost-effective than domestic reductions. The Action Plan provides an example of the potential
benefits of joint implementation: reducing emissions in China by 18 million short tons of
carbon dioxide through cost saving measures is compared to spending $500 million dollars
annually to achieve the same reductions in Illinois.
Recommendations
The Climate Change Action Plan for Illinois recommends the following framework for the
state's policy-makers for developing a response to global climate change:
1. Make energy efficiency and forestation, which are relatively low-cost and have other
environmental, social and economic benefits, the centerpiece of Illinois' climate change policy.
2. Expand the state's rural and urban tree planting programs and increase forest management
assistance to private forest landowners.
3. Provide cost sharing and technical assistance to landowners and communities for tree
planting and management.
4. Assist Illinois companies in meeting their commitments under the Climate Wise and Climate
Challenge programs.
5. Partner with the federal government to implement energy efficiency programs under the
U.S. Climate Change Action Plan.
6. Test joint implementation as an option for cost effective emissions reductions and, where
efficient, promote the option for meeting long term emissions reduction requirements by utilities
and industry.
Appendix 1-4
-------
7. Partner with the federal government to capture and use methane gas from landfills.
8. Promote research, development, and adoption of renewable fuels and biomass including
ethanol fuel and soy-based fuel.
Appendix 1-5
-------
CLIMATE CHANGE ACTION PLAN FOR IOWA
State Overview
Iowa completed the Iowa Greenhouse Gas Action Plan (the Action Plan) in December 1996 as
part two of a three-step program. During step one (development of emissions inventory), Iowa
calculated the state's greenhouse gas (GHG) emissions and identified the largest sources of
emissions. The third step will be to implement the actions specified in the state's plan.
Total GHG emissions in 1990 were 70.7 million metric tons of carbon dioxide equivalent
(MMTCDE). The greatest sources were electric utilities with 25 MMTCDE, and agriculture with
15 MMTCDE.2 The Action Plan for Iowa presents options for (1) reducing emissions from these
sources (as shown in Table 1), as well as in the residential, commercial, industrial, and
transportation sectors, and (2) increasing forest carbon sequestration. Overall, the objectives
of Iowa's Action Plan are to reduce GHG emissions to 1990 levels by the year 2000 which
will require a reduction of 5.7 MMTCDE below projected baseline emissions, and to achieve
further reductions by 2010.
Table 1. Highest Emission Sources and Associated Mitigation Strategies
Source of Emissions
Mitigation Strategy
Electric utilities
State & Federal voluntary programs for end
users of electricity
Growing energy crops
Developing wind power
Emissions trading (i.e., financing emission
reductions in other sectors, or outside Iowa)
Reporting facility-level GHG emissions
Agriculture
Reducing N20 from fertilizers
Improved manure management
Continued improvement of farm efficiency
The Action Plan also identified the effects that climate change could have on Iowa. State
officials are primarily concerned with the potential effects on the state's agriculture, water
supply, and energy demand.
State Mitigation Strategies
Iowa has identified greenhouse gas mitigation measures for 7 sectors, as described below.
The Action Plan discusses 34 options, and selects 16 as the most cost-effective and easily
achievable. If the 16 options are implemented, the state projects that GHG emissions would be
2 These values are from the summary of the Iowa greenhouse gas inventory.
Appendix 1-6
-------
reduced to 1990 levels by 2000.3 The GHG reductions expected from each option are shown
in Table 2.
Fossil Fuel Combustion
Residential
State and Federal programs: Residential energy efficiency options include (1) ongoing energy
efficiency education programs for builders and building officials to improve compliance with
requirements to construct new homes in conformance with the Model Energy Code (MEC), and
(2) using Iowa's Home Energy Rating System (HERS) to indicate which homes merit energy
efficient mortgages (EEMs).
Transportation
Improve vehicle fleet efficiency: The emission reduction estimates in this sector rely on
implementing a revenue-neutral rebate system whereby there is a rebate for vehicles with a
relatively high fuel efficiency and a fee for those that achieve fewer miles per gallon.
Discourage single occupancy trips: Options include cashing out employer provided parking in
urban areas, and promoting transit use and telecommuting.The emission reduction estimates
in this sector rely on implementing a revenue-neutral rebate system whereby there is a rebate
for vehicles with a relatively high fuel efficiency and a fee for those that achieve fewer miles
per gallon.
Commercial
State and Federal energy efficiency measures: Several programs are in force or are to be
implemented in Iowa. These programs, described below, include (1)Rebuild Iowa, (2) Building
Energy Management Programs (includes Iowa Energy Bank program and the Iowa Facilities
Improvement Corporation), (3) Energy Star Buildings, and (4) Green Lights.
(1) The Rebuild Iowa program is an opportunity for communities to invest in cost-effective
energy improvements in their schools, hospitals, local governments, colleges, commercial and
industrial facilities, and multi-family dwellings. At present, with the help of a federal grant, five
communities have been selected to participate in the program. As buildings become more
efficient through the program, they will serve as examples for managers of similar facilities in
other communities.
(2) The Building Energy Management Program provides advice, and helps identify and finance
the installation of energy improvement measures for state facilities, schools, hospitals, private
colleges, and local governments. Financing is structured so that energy savings cover the cost
of lease or loan payments for the measures, and the payback is six years or less.
(3) Energy Star Buildings is a federal program designed to improve efficiency in heating,
cooling, and air handling equipment.
(4) Green Lights, another federal program, promotes efficiency in facility lighting.
3 The Action Plan also specifies the maximum feasible extent to which these policy options could be
implemented. At the maximum feasible levels, additional GHG reductions of 19 MMTCDE would be
achieved by 2010.
Appendix 1-7
-------
Page Intentionally Blank
Appendix 1-8
-------
Table 2. Greenhouse Gas Mitigation Strategies
Sector
Strategy/Action
Annual Emissions
Reductions (MTCDE)
in 2010 (Priority
Options)
Cost Per
MTCDE
Fossil Fuel Combustion
Residential
Improved Efficiency Measures
State and Federal voluntary programs
610,000
not estimated
Sub-total
610,000
Industrial
& Commercial
Improved Efficiency Measures
State voluntary programs
70,000
not estimated
Federal voluntary programs
1,900,000
not estimated
Emissions Trading
1,810,000
not estimated
Reporting Facility GHG Emissions
1,270,000
not estimated
Sub-total
5,050,000
Transportation
Improved Efficiency Measures
Revenue neutral fee/rebate
2,630,000
not estimated
Economic Incentives
Discourage single occupancy trips
160,000
not estimated
Sub-total
2,790,000
Electricity
Generation
Improved Efficiency Measures
Demand side management
180,000
not estimated
Production of energy crops
80,000
not estimated
Wind power development
250,000
not estimated
Emissions trading
1,810,000
not estimated
Reporting Facility GHG Emissions
1,270,000
not estimated
Sub-total
3,590,000
not estimated
Forestry
Tree Planting Program
2,450,000
not estimated
Sub-total
2,450,000
not estimated
Agriculture
Reducing N20 from Fertilizers
360,000
cost savings
Improved Manure Management
90,000
not estimated
Continued Improvement of farm
efficiency
90,000
not estimated
Sub-total
540,000
not estimated
TOTAL
15 million
Annual cost
saving of
$300 million
Please note that the estimates in the table are given in metric tons of carbon dioxide equivalent (MTCDE).
Appendix 1-9
-------
Industrial
State and Federal energy efficiency measures : Voluntary programs that are currently in place
include (1) Climate Wise, (2) Total Assessment Audit (TAA), and (3) Motor Challenge. These
programs are explained in turn:
(1) The Climate Wise program provides information and assistance on a range of
emission reduction opportunities. Companies are encouraged to reduce emissions by
measures such as altering production processes, switching to lower carbon content
fuels and renewable energy, implementing employee mass transit, and tracking energy
use for efficiency improvements.
(2)The TAA works in conjunction with the Climate Wse Program by analyzing waste
and productivity operations. The audits help firms enhance their competitive position
and improve their economic success.
(3) Motor Challenge promotes energy efficient electric motor systems; motor systems
account for 75 percent of the electricity used in industry. The aims of the program are
to increase the use of efficient motors and drive systems, improve industrial
competitiveness and productivity, save energy, and decrease industrial waste and
pollution.
Electricity Generation (Wind Power, Demand Side Management, and Production of
Energy Crops)
Wnd Power: Iowa has good potential for wind power, but at present it is not cost-effective
compared to conventional energy sources, because coal fired power plants can produce
electricity at less than $0.02/kW-hr. A state program developed under the 1991 Energy
Efficiency Act requires utilities to purchase 105 megawatts (MW) of alternate-energy which will
be provided by wind power or other sources. The Iowa Utilities Board has given investor-
owned utilities a 1997 deadline for meeting this goal; the Action Plan anticipates that wind
power will supply the majority of this energy supply.
Demand Side Management: Utilities are investing millions of dollars in programs to improve
their customers' energy efficiency; these programs will continue and may expand by the year
2010. Spending on energy efficiency programs by Iowa utilities topped $76 million in 1994.
Outreach efforts targeted 226,000 residential and business customers and encouraged
improved lighting efficiency and installation of more efficient heating, ventilation, and air
conditioning (HVAC) equipment.
Production of Energy Crops: Programs are underway to determine the feasibility of growing
switchgrass in Iowa as a renewable biofuel that would also sequester carbon dioxide. One
study has indicated that co-firing switchgrass with coal would be the most practical and
economical way to establish a biomass energy industry. It further projected that with relatively
low cost modifications at an existing utility, a biomass capacity of 35 MW could be achieved.
This would require an estimated 200,000 tons of biomass annually.
Cross-sectoral (Commercial, Industrial and Electricity Generation)
Emissions Trading: A global, national, or regional C02 trading system could be used effectively
to reduce overall GHG emissions while making pollution control a less expensive effort. Iowa
estimated its emission reduction potential on the basis of a system similar to the sulfur dioxide
Appendix 1-10
-------
allowance system in which allowances are allocated to each emitter based on their baseline
C02 emissions.
CO? Emission Inventory: Under this strategy, a reporting system is proposed for greenhouse
gas emissions. Like the 1986 Toxic Release Inventory (TRI) reporting program, the top ten
emitters of GHGs within the state would be published. The state hopes that, as in the case of
the TRI, most industries would take actions to reduce emissions to get their facilities off the list
and to improve public relations. Because the program could only be implemented a few years
prior to 2000, annual reductions of only 1 percent have been estimated for this strategy in the
industrial and utility sectors.
Agriculture (Fertilizer Use, Manure Management, and Improvement of Farm
Energy Efficiency)
Reducing N?Q from Fertilizers: A number of programs have been in effect in Iowa since 1982
to improve nitrogen management on Iowa farms. The programs include the Big Spring
Demonstration project, the Integrated Farm Management Demonstration Project, the
Integrated Crop Management Project, and the Model Farms Demonstration project. The
education programs were funded by oil overcharge revenues at a cost of $26 million, with
savings to farmers of $363 million.
Improved Manure Management: Iowa has the largest number of hogs of any state (14 million).
Under the priority option, state legislation would require large producers (those with more than
5,000 animals) to have methane capture facilities by the year 2000.This will reduce emissions
by 0.02 MMTCDE per year after the year 2000.
Continued Improvement of Farm Energy Efficiency: Total farm energy consumption in 1989
was only 60 percent of 1975 consumption, despite little change in acreage farmed. For this
strategy it is assumed that further efficiency gains will be made, without the need for state
action.
Forestry
Tree Planting Program: As a priority option, a total of 200,000 acres should be reforested with
poplar and native trees by the year 2015. This would be accomplished by voluntary efforts,
"free-trees" programs, Conservation Reserve Program conversion to permanent forest land,
and land purchases.
RECOMMENDATIONS
The options summarized in the Action Plan are largely voluntary in nature and many have
already been underway for several years. To help implement additional options that are not
currently underway, the Iowa Greenhouse Gas Action Plan also recommends actions at the
federal level. These are:
Beyond adopting public policies that directly affect those within its borders, Iowa can work
with other states to influence the adoption of federal policies to conserve energy and
reduce C02 emissions.
Emissions trading is a difficult program for Iowa to enact alone. Rather, the state should
encourage the federal government to adopt an innovative C02 emission allowance system
Appendix 1-11
-------
that would reduce C02 emissions equitably and efficiently.
Appendix 1-12
-------
CLIMATE CHANGE ACTION PLAN FOR OREGON
State Overview
Oregon completed the Report on Reducing Oregon's Greenhouse Gas Emissions (the Action
Plan) in March 1995, as part two of a three-step program. During step one (development of
emissions inventory), Oregon calculated the state's greenhouse gas (GHG) emissions and
identified the largest sources of emissions. The third step will be to implement the actions
specified in the state's plan. The Action Plan describes Oregon's strategy, which consists of
near-term actions (i.e., a five year action plan) and longer term actions, as well as a scenario
of what it might take to stabilize Oregon's greenhouse gas emissions at 1990 levels. This
scenario is presented in Appendix A of the Action Plan, and is summarized at the end of this
Action Plan summary. The Oregon Department Of Energy (ODOE) does not propose that
Oregon stabilize GHG emissions, because of the economic losses the state would incur in
doing so. Nonetheless, the Action Plan evaluates the type and magnitude of measures
required to meet a stabilization goal.
Total GHG emissions in 1990 were 56 million metric tons of carbon dioxide equivalent
(MMTCDE). The greatest sources were fossil fuel combustion for transportation with 20 million
MMTCDE, and electric utilities with 16 MMTCDE.4 Oregon's strategy presents options for (1)
reducing emissions from these sectors (as shown in Table 1), (2) reducing emissions from
fossil fuel combustion in the residential, commercial, and industrial sectors, (3) reducing
emissions from solid waste management, and (4) increasing forest carbon sequestration.
Oregon predicts that its GHG strategy will reduce GHG emissions by "at least 2 million tons"
(presumably, 2 million short tons of carbon dioxide equivalent) in 2015, compared to a
"business as usual" scenario.
Table 1. Highest Emission Sources and Associated Mitigation Strategies
Source of Emissions
Mitigation Strategy
Transportation
Implement the Oregon Transportation Plan (including
telecommuting)
Electric utilities
Consider GHG emissions in integrated resource plans. Find
new ways to fund and achieve energy efficiency.
The Action Plan also identified the effects that climate change could have on Oregon. State
officials are primarily concerned with the potential effects of sea-level rise on Oregon's coast.
State Mitigation Strategies
Oregon has identified greenhouse gas mitigation strategies for six sectors, as described below.
The Action Plan does not project the GHG reductions that will be achieved by each strategy,
nor the cost of the various strategies.
4 These values are from the summary of the Oregon greenhouse gas inventory.
Appendix 1-13
-------
Residential
If extended, the Residential Tax Credit program will continue to provide loans, rebates and tax
credits to households to fund energy efficiency improvements, while the Home Oil
Weatherization Program will continue to fund home weatherization. In addition, the Oregon
Department Of Energy (ODOE) (1) has developed standards for homes and appliances; (2)
provides technical information to consumers on ways to save energy; and (3) supports pricing
strategies and environmental costing policies that signal to consumers the need to conserve
energy and reduce GHG emissions.
Industrial and Commercial
The ODOE has a range of energy efficiency programs for this sector, including (1) codes and
standards for appliances, (2) training for building operators to run their equipment efficiently,
and (3) demonstration projects for new energy saving technologies. The Oregon Resource
Efficiency and Waste Prevention Program helps businesses, schools, industry, and cities use
energy efficiency measures to save money and reduce GHG emissions. The program helps
reduce costs by proposing ways to increase energy efficiency and decrease the production of
solid waste. The state also provides incentives for the recycling of waste.
Transportation
The five year action plan calls for implementing the Oregon Transportation Plan (OTP), which
would result in construction of more bike lanes and walkways. However, additional sources of
state, federal, and local funding will be needed to implement this plan. As part of the OTP and
in harmony with the state's "20 x 2000" executive order (which directs Oregon state
government to reduce its energy use in facilities and transportation 20 percent by 2000 ), the
ODOE is also collaborating with public and private employers to implement telecommuting;
particularly in the Portland area, to meet federal air quality standards. The Business Energy
Tax Credit program offers an incentive for purchasing telecommuting equipment.
The Plan also calls for the Oregon Department Of Transportation (ODOT) to develop an
integrated management system that guarantees compatibility of intermodal facilities and
systems. For example, it calls for rail mainlines to have convenient ramp, terminal, and reload
facilities for transfers from truck to rail for longhaul movement of freight.
In addition to the OTP, the Action Plan suggests educational efforts to inform state residents
about ways to save fuel when maintaining and operating their cars and trucks. The Action Plan
also calls for study of the potential for encouraging the purchase of efficient cars and trucks
through market-based incentives.
Utility
The Oregon Public Utility Commission requires utilities to consider C02 emissions as they
design their integrated resource plans. Oregon recognizes that the most efficient way to limit
damage is to ensure that prices signal the full costs of energy. The state continues to seek
ways to incorporate environmental consequences into energy decisions. As a result of electric
utility deregulation, it is hard for utilities to finance efficiency measures; because of this, the
Action Plan calls for finding new ways to fund energy efficiency.
Appendix 1-14
-------
Forestry
The Oregon Forest Resources Trust (FRT), administered by the Oregon Department of
Forestry, aims to plant trees in 250,000 acres of damaged, non-productive and under-
productive forest lands over 15 years. Within the next five years, the state plans to fulfill a
substantial portion of the goals of the FRT. The state makes low interest loans to private, non-
industrial landowners for initial reforestation and rehabilitation costs. The landowners then
repay the loans by paying a percentage of the after-tax receipts when they harvest the timber.
Municipal (Recycling and Solid Waste Management)
The five year action plan seeks to implement the Oregon State Integrated Resource and Solid
Waste Management Plan. The solid waste plan calls for a continuous decrease in per-capita
solid waste disposal, and for using recycled materials in production and manufacturing. It has a
goal of a 50 percent recovery rate. As an incentive, the State's Business Energy Tax Credit
program offers a 35% tax credit for purchasing equipment to recycle materials and to
incorporate recycled materials into new products. By reducing the amount of waste that goes
into landfills and capturing or flaring landfill gases, methane emissions from landfills will be
reduced by 0.04 million tons by 2015 (beyond the reductions from the capture or flaring of
methane from large landfills due to EPA's landfill gas regulation).
Cross-sectoral
Additional aims of the five year action plan include helping the Portland metropolitan area
achieve the goals of its C02 reduction strategy. The Action Plan also calls for research on (1)
the effects of climate change on water, fisheries, agricultural and forestry resources; (2) sea
level rise on Oregon's coast; and (3) climate change adaptation and mitigation.
Recommendations
The five year action plan includes existing plans and regulations that are in the early stages of
implementation as well as supplementary actions that could be implemented in the near term.
Because of the scope of the changes and the economic consequences for a state acting
alone, ODOE does not recommend actions that would stabilize emissions. In particular, ODOE
found no way to achieve sufficient reductions from transportation emissions through state
actions alone. Also, the state could not find a way to meet new demand in the electricity sector
solely with energy efficiency and renewable energy.
In light of this, the Action Plan suggests that the following national actions should be
implemented:
- Focus federal research and development, standards, incentives, collaborations, and
promotion activities to give priority to reducing greenhouse gas emissions, and use pricing
mechanisms to incorporate climate change externalities into the marketplace.
- Take leadership in areas where the federal government has pre-empted the states from
acting (e.g., vehicle and appliance efficiency standards). Leadership would involve (1) setting
standards, (2) sponsoring collaborative efforts with industry, states and other parties, and (3)
achieving significant advances in research and development.
Appendix 1-15
-------
- Institute pricing mechanisms such as a carbon tax or tradable permits for carbon emissions,
which would be most effective as part of a national, and probably international, effort.
- Institute a national gas-guzzler fee / gas-sipper rebate ("feebate") program. This would be an
incentive to consumers to purchase efficient vehicles, and a disincentive to purchase inefficient
ones. A national program could have a greater impact than a state program in that it could
influence manufacturers to provide more choices for efficient vehicles.
- Support research, development, and demonstration (RD&D) of new renewable resource
technologies and efficient energy conversion technologies such as fuel cells, and re-direct
RD&D funds away from fossil fuels and nuclear power and toward renewable resources and
efficient technologies.
- Collaborate with other stakeholders to develop an overall appliance and equipment efficiency
strategy to link new standards to RD&D and commercialization efforts.
- Revise alternative fuels policy for vehicles, to develop and promote only those fuels that
reduce greenhouses gas emissions.
Additional strategies, beyond those specified in Oregon's Climate Change Strategy, that would
need to be implemented to stabilize GHG emissions in Oregon include the following:
Pav-as-vou-drive insurance - This would involve charging an extra 50 cents per gallon of
gasoline for insurance, instead of the driver paying monthly or annually. Ideally this would have
to be a federal program so that people living near the state border did not have an incentive to
buy fuel in other states.
Corporate Average Fuel Economy standards (CAFE) The GHG reductions projected for this
measure assume that cars achieve 50 miles per gallon (MPG) by 2015 and light trucks 40
MPG. At present the federal government forbids states from setting energy efficiency
standards. The current federal CAFE standard for cars is 27.5 MPG and for light trucks is 20.5
MPG.
Feebates - This is a cash incentive for consumers of efficient vehicles, combined with a
surcharge to discourage consumers from buying inefficient vehicles.
Better tires - Driving with under-inflated tires increases fuel consumption and makes the tires
wear out faster. The Action Plan relies on the US Department of Transportation to establish tire
standards. An education campaign could also alert the public to the potential savings.
Electric cars - The scenario forecasts the potential C02 emission reductions from having up to
15% of new car purchases being electric cars by 2010. It further assumes that the increase in
electric load will be met by renewable-based generation.
Gasohol - As an alternative fuel, the scenario assumes that low C02 gasohol will provide 20%
of the gasoline market by 2000, increasing to 65% by 2010. It also assumes that gasohol will
only be used in the winter months because of air quality concerns about using it in the
summer.
Appendix 1-16
-------
Non-transportation petroleum fuels efficiencies - efficiency measures for commercial and
industrial equipment, such as improved operations and maintenance, and boiler efficiency
improvements, could reduce C02 emissions from such equipment by 10 percent.
Appendix 1-17
-------
SUMMARY OF APPENDIX A OF OREGON'S CLIMATE CHANGE ACTION PLAN
Hypothetical Greenhouse Gas Mitigation Strategies and Associated Emission
Reductions in 2000 and 2010 (for Oregon's Stabilization Scenario)
Sector
Strategy / action
Potential annual
emission reductions
(MTCDE) in 2000
Potential annual emission
reductions (MTCDE) in
2010
Residential
Subtotal
-
-
Commercial
Subtotal
0
0
Industrial
Improved efficiency measures
non-transportation petroleum efficiencies
97,070
317,520
natural gas efficiencies
Improved industrial processes
Inert anodes for alumina reduction
Subtotal
199,584
0
296,654
654,998
73,483
1,046,001
Transportation
Improved efficiency measures
Freight hauling efficiency improvements
Fuel switching
229,522
554,299
Cellulose and waste biomass based gasoh
213,192
509,393
New regulations
Oregon transportation plan
Economic incentives
Pay-as-you-drive insurance, High MPG cars
and light trucks (CAFE), Feebates, better
tires & electric cars.
0
1,075,939
684,936
4,093,286
Subtotal
1,518,653
5,841,914
Electricity generation
Renewables/ nuclear
Renewable resources and energy efficiency
233,150
2,747,909
Subtotal
233,150
2,747,909
Forestry
Tree planting program
Forest Trust resources timber offsets
Additional In state timber offsets
54,432
0
296,654
766,584
Subtotal
54,432
1,063,238
Agriculture
Subtotal
0
0
Municipal
Subtotal
-
-
Cross - sectoral
Subtotal
-
-
TOTAL
2,102,890
10,114,243
Please note that the estimates in the table are given in metric tons of carbon dioxide equivalent. No cost data are
provided in Oregon's Action Plan.
A dash indicates that the data are not available. Oregon also provides emission reduction estimates for 2005 and
2015.
Timber offsets - the stabilization plan reflects an additional 400,000 acres of Douglas fir and
350,000 acres of ponderosa pine. The cost would be about $25 - $45 per ton of carbon
sequestered.
Inert anodes for alumina reduction - Technology is available to reduce perfluorocarbon
emissions in the aluminum industry by 30 to 60 percent. Using an inert anode would reduce
both carbon and perfluorocarbon emissions. The US Department of Energy and EPA are
supporting research in this area.
Appendix 1-18
-------
Natural gas efficiencies - the stabilization scenario reflects a decrease in natural gas
consumption of 10 percent as a result of new equipment standards and better design of
equipment for space conditioning, water heating, cooking and commercial and industrial
processes. The reductions could be greater if the federal government introduced more
stringent standards for new furnaces and water heaters.
Freight hauling - reductions in diesel fuel emissions could be achieved by more aerodynamic
designs; improved tires, transmissions, and engines; electronic engine controls; scheduling
improvements; and reductions in empty back hauling. The stabilization scenario assumes that
diesel is used mostly for freight hauling by truck and train, and that there would be a 10
percent reduction in GHG emissions as a result of the above measures.
Even with all these measures in force, Oregon would still have excess C02 emissions of 5
million tons above the target in 2000, and excess C02 emissions of 2.6 million tons in 2015. To
achieve these additional GHG reductions, Oregon states that a national carbon tax or tradable
emission allowances would be needed.
Appendix 1-19
-------
CLIMATE CHANGE ACTION PLAN FOR PENNSYLVANIA
State Overview
Pennsylvania completed Phase II of the Greenhouse Gas Inventory: Reducing Pennsylvania's
Anthropogenic Greenhouse Gas Emissions (the Action Plan) in January 1995 as the second
phase of a three-phase program. During step one (development of an emissions inventory),
Pennsylvania calculated the state's greenhouse gas (GHG) emissions and identified the
largest sources of these emissions. The third step will be to implement the actions specified in
the state's plan.
Total GHG emissions in 1990 were 278 million metric tons of carbon dioxide equivalent
(MMTCDE). The greatest sources of emissions were fossil fuel combustion in (1) the utility
sector with 89 MMTCDE, (2) the industrial sector with 62 MMTCDE, and (3) the transportation
sector with 57 MMTCDE.5 The Action Plan for Pennsylvania presents strategies for reducing
emissions from these sources as well as from commercial and residential fossil fuel
combustion, mining and extraction, landfills, agriculture, and land use. Strategies addressing
two of Pennsylvania's three highest emission sources are shown in Table 1. Overall, the
objective of the Action Plan is to reduce GHG emissions "through viable mechanisms that do
not inhibit the state's economy." The Pennsylvania Energy Office (PEO) did not set a target
emissions level in the Action Plan, nor a target date for implementing the plan. The Action Plan
does not address the effects that climate change could have on the state.
Table 1. Highest Emission Sources and Associated Mitigation Strategies
Source of Emissions
Mitigation Strategy
Utility Fossil Fuel Combustion
Clean Coal Projects
Demand Side Management
Transportation Fossil Fuel Combustion
Employer Trip Reduction
Enhanced Vehicle Inspection and Maintenance
Program
State Mitigation Strategies
Pennsylvania identified more than 15 GHG mitigation strategies in the areas of fossil fuel
combustion, mining and extraction, landfills, agriculture, and land use sectors, as well as five
cross-sectoral actions, as outlined in Table 2. The plan identified programs currently in place
as well as proposed actions to further reduce GHG emissions. The Action Plan does not
provide specific emission reduction potentials for most actions, nor does it estimate costs for
individual actions. The GHG reduction measures are summarized below.
5 These values are from the summary of the Pennsylvania greenhouse gas inventory.
Appendix 1-20
-------
Table 2. Greenhouse Gas Mitigation Strategies
Sector
Strategy
Projected Annual Emission
Reductions in 2010 (MTCDE)
Fossil Fuel Combustion
Residential
Building Energy Conservation Act
not estimated
Community Action and Resources for Energy Savings
not estimated
Subtotal
not estimated
Commercial
Green Lights Program
not estimated
Building Energy Conservation Act
not estimated
Subtotal
not estimated
Transportation
Enhanced Vehicle Inspection and Maintenance Program
not estimated
Employer Trip Reduction
not estimated
Subtotal
not estimated
Utility
Clean Coal Projects
not estimated
Demand Side Management
2,721,600
Subtotal
not estimated
Mining/Extraction
Coalbed Methane Recovery and Use
not estimated
Landfills
Landfill Gas Recovery
not estimated
Grants for Landfill Gas Capture
not estimated
Subtotal
not estimated
Agriculture
Nutrient Management Program
not estimated
Deep-Pit Manure Systems
not estimated
Information Dissemination
not estimated
Subtotal
not estimated
Land Use
Cool Communities
not estimated
Stabilization of Forest Lands
not estimated
Subtotal
not estimated
Cross-Sectoral
State Agency Task Force
not estimated
PEO Partnerships
not estimated
PEO Educational Outreach
not estimated
Grant Programs
not estimated
Extension of Cool Communities Program (outreach to local
officials)
not estimated
Subtotal
not estimated
Total
not estimated
Appendix 1-21
-------
Fossil Fuel Combustion
Residential
Building Energy Conservation Act (BECA) - Pennsylvania enacted BECA, Pennsylvania's Act
222, to require that design and construction of new residential buildings meet minimum energy
conservation standards. This also applies to additions and renovations to existing buildings.
Community Action and Resources for Energy Savings (CARES) - Project CARES is designed
to implement various energy efficiency measures in specific communities. One such activity
involved weatherization improvements in a low to moderate income apartment complex.
Commercial
Green Lights Program - PEO encourages small businesses to participate in EPA's ongoing
Green Lights Program, which promotes energy efficiency in lighting.
Building Energy Conservation Act (BECA) - BECA, described above for the residential sector,
also applies to commercial buildings.
Transportation
Enhanced Vehicle Inspection and Maintenance Program - This program requires automobiles
to operate at "standardized efficiencies" that reduce emissions.
Employer Trip Reduction Program - This program reduces the number of vehicles traveling to
and from employment sites by promoting measures such as "high occupancy vehicles,
enhanced transit services, and improved parking management measures for companies [with
more than 100 employees] in areas of severe ozone nonattainment." In addition, "each large
employer in the five-county area around Philadelphia is required to achieve a commuting
employee passenger occupancy of approximately 25% more than that of the area-wide
average occupancy per commuting vehicle."
Utility
Clean Coal Projects - The Pennsylvania Energy Authority has designated nearly $13 million
dollars for research projects focused on environmental enhancement, energy efficiency, and
conservation. To date, 58 Clean Coal Projects have been supported.
Demand Side Management Plans - These plans will evolve into programs that prevent
emissions of carbon dioxide by over 2.7 MMTCDE per year by 2010. All Pennsylvania utilities
are required to submit demand side management plans to the Pennsylvania Public Utility
Commission.
Mining/Extraction
Coalbed Methane Recovery and Use - The plan proposes that PEO and the Department of
Environmental Quality should work collaboratively to implement a program to encourage the
capture and use of coalbed methane.
Appendix 1-22
-------
Landfills
Landfill Gas Recovery - Seven of the landfills in Pennsylvania are already recovering landfill
methane or are planning to do so. The PEO and the Department of Environmental Regulation
(DER) participate in EPA's Landfill Methane Outreach Program as State Allies.
Grants for Landfill Gas Capture - The Pennsylvania Economic Development Financing
Authority (PEDFA) makes low-interest loans for landfill gas recovery projects. PEDFA makes
loans for up to 100% of project costs, at 75 percent of the prime interest rate, for a term of up
to 30 years.
Agriculture: Manure Management
Nutrient Management Program - the Department of Agriculture operates a Nutrient
Management Program that provides information to farmers and others, and sponsors programs
on issues such as alternative uses for manure.
Deep-Pit Manure Systems - The Pennsylvania Department of Agriculture and the Pennsylvania
Department of Environmental Resources are actively pursuing the enhancement of deep-pit
manure systems to collect methane for use in near-site electricity generation.
Information Dissemination - The plan proposes that the PEO and the Department of
Agriculture should provide farmers with information about energy-efficient sustainable farming
practices.
Land Use
Cool Communities - This program, organized by PEO and the DER, creates local partnerships
to reduce the urban heat island effect through strategic tree planting and surface color
lightening.
Forest Lands - Pennsylvania forest growth exceeds harvests; as a result, the state's
17,000,000 acres of forest lands sequester approximately 141 MMTCDE a year.
Cross-sectoral
State Agency Task Force - Pennsylvania established a task force of state agencies (PEO,
Public Utilities Commission, Department of Agriculture, Department of Transportation, and
Department of Commerce) to formulate state policies to reduce greenhouse gas emissions.
PEO Partnerships - PEO will continue to engage in partnerships with private sector firms and
local governments to establish energy conservation practices and promote the use of
alternative sources of energy.
PEO Educational Outreach Programs - The plan proposes that the PEO should perform more
education and outreach activities in order to make state residents more energy- and
environmentally-literate. PEO staff have met with various interest groups, including the Council
of Boroughs, to make progress towards achieving this goal.
Grant Programs - Pennsylvania has a number of grant programs that could reduce the
emissions of greenhouse gases. These programs include the Energy and Environmental
Grants Program, the Recycling Grants Program, and the Alternative Fuels Program.
Appendix 1-23
-------
Expansion of the Cool Communities Program - The plan proposes an expansion of the Cool
Communities program to include an educational and technical assistance program for local
officials and also an improved training program for urban foresters.
Recommendations
The Pennsylvania Action Plan suggests future actions concentrated on education and
technical assistance, the adoption of environmentally sound technologies, and the
establishment of a cooperative public-private approach to addressing GHG emissions. These
recommendations, taken verbatim from the Action Plan, are listed below:
1. Community Action Programs, consisting of direct technical assistance, public information
programs, and the development of tailored energy and environmental programs, have been
proposed. These multi-phased community energy efficiency programs would focus the
attention of local leaders on the greenhouse gas issue and provide these leaders with
information and assistance on energy and environmental issues.
2. Expansion of the Cool Communities Program to include an educational and technical
assistance program for local officials and also an enhanced training program for urban
foresters. This enhanced training in cool community concepts will better equip urban foresters
to provide on-site assistance to communities interested in implementing the program.
3. As an extension of the Cool Communities Program, the Commonwealth should organize
and implement a program of outreach and technical assistance to local governments in the
area of energy efficiency. This type of program could be developed by the PEO and delivered
to local governments through existing training and outreach services conducted by the
Pennsylvania Department of Community Affairs.
4. The PEO and the DER should work together to implement a program to facilitate the capture
and use of coalbed methane. Such a program could be modeled after the Landfill Gas
Outreach Program. A potential mechanism for this program may involve the DER which,
through its Bureau of Oil and Gas Management, has held a series of meetings to pursue a
coalbed methane program.
5. The Commonwealth, through the PEO and the Department of Agriculture, should expand
information to farmers about sustainable farming practices which not only are energy efficient,
but which are also beneficial to the local environment. This could be accomplished through the
use of existing mechanisms such as the Nutrient Management Program. This could also
include developing a joint strategy to develop cost effective designs for small scale on-farm
digesters that would collect methane and turn it into a usable energy source for the farm. A
mechanism of this could be financial assistance for the design of such systems offered
through the Commonwealth programs, such as the Agricultural Technology Loan program in
the Department of Agriculture or from other sources, such as the Center for Rural
Development. In addition, the Department of Agriculture, in conjunction with the PEO, should
develop Pennsylvania's electrofarming potential through use of crops like C-4 switchgrass.
Appendix 1-24
-------
CLIMATE CHANGE ACTION PLAN FOR WASHINGTON STATE
State Overview
Washington State completed the Greenhouse Gas Mitigation Options for Washington State
(the Action Plan) in April 1996 as part two of a three-step program. During step one
(development of emissions inventory), Washington calculated the state's greenhouse gas
(GHG) emissions and identified the largest sources of emissions. The third step will be to
implement the actions specified in the state's plan.
Total GHG emissions in 1990 were 61 million metric tons of carbon dioxide equivalent
(MMTCDE).6 The greatest sources were fossil fuel combustion for transportation with 42
MMTCDE; land use (especially forest changes including land conversion and slash burns) with
38.1 MMTCDE;7 and industrial processes (especially aluminum production) with 6 MMTCDE.
The Action Plan presents strategies for reducing emissions from these sources as well as from
fossil fuel combustion in the residential, commercial, and utility sectors. Strategies addressing
sectors with the highest emissions are shown in Table 1. In order to reach the goal of returning
GHG emissions to 1990 levels, Washington would need to reduce emissions by 16.3
MMTCDE by the year 2010 (the target year for the Action Plan), in comparison with emissions
under a "business as usual" scenario.
Table 1. Highest Emission Sources and Associated Mitigation Strategies
Source of Emissions
Mitigation Strategy
Fossil Fuel Combustion for
Transportation
Increased Parking Fees
Tire Pressure Check
Gasoline Tax
Feebate
More Efficient Airplane Engines
Land Use: Forest Changes
Afforestation
Industrial Processes: Aluminum
Production
Aluminum Manufacturing Process Improvements
The Action Plan also identified the effects that climate change could have on Washington.
State officials are primarily concerned with potential effects of sea-level rise, especially for the
central-south Puget Sound and central coastal areas.
State Mitigation Strategies
Washington evaluated more than 35 GHG mitigation strategies for fossil fuel combustion,
industrial processing, and land use sectors, as outlined in Table 2. It should be noted that the
potential programs identified in this report did not undergo highly detailed review and the
6 This value is from the summary of the Washington greenhouse gas inventory.
7 These land use emissions are offset by 46.4 MMTCDE sequestered through Washington's net annual
forest growth.
Appendix 1-25
-------
estimated emission reductions and costs only identify the most promising programs. Flexibility,
economic efficiency, and feasibility were considered in determining promising programs. One
of the criteria for selecting mitigation strategies was cost-effectiveness: actions with costs
higher than $100 per metric ton of GHG controlled were rejected. The GHG reductions
expected from each strategy, and associated costs, are shown in Table 2. It is very important
to note that in terms of greenhouse gas emissions, there is often overlap between sectors. For
example, little is gained from reduced residential electricity use if the electricity displaced is
from a renewable resource. Therefore, the emission reduction estimates presented herein can
not be added across sectors. Washington's GHG strategies are summarized below.
Fossil Fuel Combustion
Residential
Existing Home Retrofits: Potentially, large reductions of GHG emissions may result from
efficiency measures, conservation, and fuel switching in existing homes. Washington has a
large inventory of homes built before 1970 which lack adequate insulation. These homes
provide a great opportunity for energy savings; it is cost effective to retrofit insulation in the
ceiling and crawl space to an R-19 level and in exterior walls to an R-11 level. Other
possibilities for reductions include: converting to electric space and/or water heating to natural
gas, installing low-flow shower heads, and installing compact fluorescent light bulbs. A
program aimed at replacing incandescent bulbs with fluorescent bulbs could result in as much
as a 130 megawatt reduction in the state's average electricity demand.
New Building Practices: Upgrading the residential energy codes to class 35 windows (e.g.,
windows with an insulation value of U-3.5) for new construction is one cost-effective option to
reduce GHG emissions through energy conservation, because the energy savings exceed the
cost of the upgraded windows. In addition, emission reductions can be obtained through
upgrading the residential energy codes for insulation used in new construction (see Table 2).
Commercial
Food Refrigeration Efficiency Improvements: Several measures for commercial food
refrigeration systems offer large energy savings. For example, multiple compressors in parallel
reduce energy use 13 to 27 percent, and glass doors for supermarket display cases lower
energy use 30 to 60 percent.
Fluorescent Lighting Retrofits: Implementing commercially available lighting technologies
could lower lighting electrical use by 40 percent. Potential efficiency improvements include:
fluorescent lamps, ballasts, lighting fixtures, and lighting control switches.
Improvements for Public Buildings: There is the potential for improving the energy efficiency of
many public buildings, such as schools, recreational facilities, prisons, etc. Conservation
measures would include lighting (e.g., controls that reduce hours of operation), heating,
ventilating and air conditioning systems (e.g., improved controls and operation), building
envelopes (higher insulating windows), and improved appliances (e.g., low-flow faucets).
Transportation
More Efficient Airplane Engines: Commercial jet fuel is one of the fastest growing areas of
fossil fuel consumption. Between 1990 and 2010 consumption in Washington is projected to
Appendix 1-26
-------
almost double and carbon dioxide emissions are estimated at over 17.2 MMTCDE. The
Ultrahigh bypass high-efficiency, unducted fan engine is one way to reduce these emissions.
Table 2. Greenhouse Gas Mitigation Strategies3
Sector
Strategy/Action
Potential Annual
Emission
Reductions
(MTCDE) in 2010
Cost per MTCDE
Fossil Fuel
Residential
Existing Home Retrofits
Install Fluorescent Lighting
417,312
not estimated
Hot Water Tank Upgrade
3,629
$3
Direct Use of Natural Gas
226,800
cost savings
R-19 Attic Insulation, Electrically Heated Homes
189,605
cost savings
R-11 Wall Insulation
102,514
cost savings
R-19 Floor Insulation for Natural Gas Homes
105,000
cost savings
R-30 Attic Insulation for Natural Gas Homes
13,608
cost savings
Low Flow Shower Heads
6,350
cost savings
R-11 Duct Insulation for Natural Gas Homes
9,979
$18
Caulking Joints in Natural Gas Homes
4,536
$3
New Building Practices
Class 35 Windows Code
96,163
cost savings
R-30 Floor Insulation Code for Natural Gas Homes
15,422
$65
R-38 Attic Insulation Code for Natural Gas Homes
5,443
$82
R-21 Wall Insulation Code
22,680
$86
Subtotal
1,219,042
insufficient data
Commercial
Fluorescent Lighting Retrofits
4,898,880
cost savings
Food Refrigeration Efficiency Improvements
498,960
cost savings
Improvements for Public Buildings
397,354
cost savings
Subtotal
5,795,194
cost savings
Transportation
More Efficient Airplane Engines
725,760
cost savings
Tire Pressure Check
31,752
cost savings
Parking Restrictions
not estimated
not estimated
FeeBate ($100/MPG off baseline)
3,991,680
$0
Gas Tax ($1.00/gallon)
7,711,200
$17
Vehicle Mileage Tax (0.04/mile)
7,439,040
$50
Diesel to Electric Train Conversion
199,584
not estimated
Truck to Train Mode Shift
1,524,096
not estimated
Subtotal
21,623,112
insufficient data
Utility
Chemical Boiler Cogeneration
371,952
cost savings
Landfill Gas Combustion
448,157
$0
Animal Manure
9,979
$2
Wood Waste Combustion
136,080
$88
Agricultural Waste Combustion
255,830
$103
Wind
408,240
not estimated
Nuclear Power
2,685,312
$28
Subtotal
4,315,550
insufficient data
Industrial
Petroleum Refining Process Improvements
121,565
not estimated
Pulp and Paper Process Improvements
95,165
not estimated
Aluminum Process Improvements
1,074,125
not estimated
Subtotal
1,290,855
not estimated
Land Use - Forest
Afforestation
4,989,600
$4
Total"
39.233.352
insufficient data
Appendix 1-27
-------
a Please note that the estimates in the table are given in metric tons of carbon dioxide equivalent.
b Please note that the emission reduction estimates are not additive. See text for further explanation.
Appendix 1-28
-------
Given the mobile nature of airplanes and interstate commerce issues, the Action Plan noted
that an individual state can do little to promote acquisition and use of these engines. Progress
will depend upon federal action.
Increased Parking Fees: Many commuters do not bear the full costs of parking and, as a
result, drive more frequently than is socially optimal. Increasing the cost of employee parking to
reflect its full costs would correct this inefficiency. However, it will be difficult to persuade
commuters who currently receive free parking to accept this change. Unless other salary or
benefit adjustments were made, commuters would bear the costs while employers would reap
the benefits. Under one option, the state could require employers to pay a parking fee for
every employee using a single occupant vehicle to get to work.
Tire Pressure Check: A slight modification of the Inspection and Maintenance (l&M) program
could improve automobile efficiency. At any given time, approximately half the motor vehicles
have under-inflated tires. These vehicles suffer an efficiency loss of about one mile per gallon.
Incorporating tire check/inflation into the l&M procedure would reduce gasoline consumption
and carbon dioxide emissions.
Gasoline Tax: Higher fuel prices due to a gasoline tax would result in improved vehicle
efficiency and lower vehicle miles traveled. Commuters would acquire more fuel efficient
vehicles and adopt behaviors which lower transportation demand, such as moving closer to
work or using alternatives to single occupancy vehicles. The reduction in travel and the
improvement in fuel efficiency could save 900 million gallons of gasoline.
FeeBate: A feebate system sets a standard level of motor vehicle efficiency against which
each new motor vehicle is compared. A fee is charged to purchasers of vehicles below the
efficiency standard and a rebate is awarded to those who purchase vehicles above the
standard.
Vehicle Mileage Tax: A vehicle mileage tax raises travel costs in order to reduce vehicle miles
traveled. Data from the Washington State Department of Transportation suggest that a $0.04
per mile tax could lower vehicle travel by approximately 18.6 billion miles in the year 2010. This
would result in a reduction of 866 million gallons of gasoline and thus would lower GHG
emissions.
Diesel to Electric Train Conversion: In Washington, trains consume significant quantities of
energy. Electric trains emit 15 percent less carbon dioxide per ton-mile than do diesel trains.
Thus, conversion of diesel trains to electric trains would reduce GHG emissions.
Truck to Train Mode Shifts: Trains consume much less energy per ton-mile than trucks.
Assuming a conservative in-use energy consumption truck-to-train ratio of 3:1, approximately
330 pounds of carbon dioxide emissions are reduced for every 1,000 ton-miles of freight
diverted from trucks to trains. The feasibility of such a shift depends on both the proximity of
current rail facilities to cargo origination and destination points, and the capacity of rail facilities
to absorb the new load. Absorbing the new load does not appear to pose a problem because
the national rail network operates at about 20-25 percent of capacity. However, the extent to
which truck cargo may be diverted to trains is uncertain.
Utility
Chemical Boiler Cooeneration: Washington has 19 paper mills, nine of which have chemical
recovery boilers. Chemical recovery boilers recycle chemicals used to pulp wood into fiber,
reduce wastewater discharges, and create excess steam which is used to produce electricity.
Washington State Energy Office (WSEO) estimates that upgrades to four boilers along with
Appendix 1-29
-------
new generating equipment at five other boilers would increase the electricity generating
capacity in this sector to over 203 aMW (average megawatt).
Landfill Gas Combustion: Landfills in Washington are projected to produce 369,775 metric
tons of methane in 2010. WSEO projects that a collection system will capture about 75 percent
or 277,331 metric tons of methane. At a conversion rate of 9.4 MW/trillion Btu for internal
combustion engines, landfill methane could produce about 140 aMW of electricity in 2010.
Animal Manure: Dairy cows provide the major recoverable animal manure resource in
Washington. In 1992, the manure generated by about 242,000 dairy cows had the potential to
produce 26 aMW of electric power. A cost per kWh of 0.039 and 0.041 is estimated for herd
sizes of 1500 and 750 head, respectively. Assuming a size cut off of 750 head, a 5.5 aMW
generation potential exists from manure methane recovery and electricity generation. The
climate change benefits of this strategy not only include the displacement of electricity from
other generating sources, but also includes a reduction in methane emissions.
Wood Waste Combustion: Woody residues include two potential biomass fuels forest
residues and mill residues. Forest residues include material left after a timber harvest, stagnant
and dying timber, hardwood stand conversions, and pre-commercial thinnings. Washington
projects that 2,350 Mbtu of forest residues will be economically available for energy production
each year beginning in 2010. Mill residues are generated when timber is converted into lumber
and plywood. A projected 5,500 Mbtu of mill residues are assumed to be economically
available to produce electricity in 2010. Alternative wood-fired power plants could supply
approximately 43.5 aMW of electricity in 2010.
Agricultural Waste Combustion: Crop residue burning as a source of electricity generation in
Washington has the potential to offer important GHG reduction benefits. Approximately 50,000
MBtu of residues are annually left on Washington fields. Washington does not currently
practice agricultural waste combustion to produce power, however other areas such as
California do utilize this resource.
Wnd: Using current wind turbines, Washington's estimated wind resources are approximately
900 MW. The potential for wind energy in Washington State is limited by the windiness of an
area, competing land uses, and the cost of project development. The intermittent nature of
wind gives rise to concerns about its ability to supply base-load needs. However, for
Washington, it is an attractive complement to the regional hydroelectric energy system.
Nuclear Power: There is one nuclear powered electricity generation facility operating in
Washington, WNP-2. In 1994, it operated at a capacity factor of 71.8 percent and generated
about 840 aMW of electricity. Because no fossil fuel was combusted, the 840 megawatts
generated by WNP-2 reduced GHG emissions by 2.69 MMTCDE.8
Industrial Processes
Petroleum Refining Process Improvements: The adoption of available state-of-the-art
technologies can reduce energy consumption in the petroleum sector by about one-third. For
example, improvements could be made to the distillation method which is one of the most
energy-intensive steps in the refining process. Distillation is the primary process for breaking
down crude oil into its constituent hydrocarbons. Technologies such as vapor recompression,
staged crude preheating, and air condensers can reduce energy use in distillation by 55
percent.
8 Note that the Action Plan takes no position on the environmental issues surrounding nuclear power.
Appendix 1-30
-------
Pulp and Paper Process Improvements: The adoption of state-of-the-art technologies by the
pulp and paper industry could reduce energy consumption by 29 percent below that of current
average practices. For example, improvements could be made to drying and stock preparation
which are the most energy-intensive activities of paper production. Modern technologies such
as top-wire formers and improved mechanical and thermal water removal techniques can
reduce the energy use of this stage by approximately 32 percent.
Aluminum Process Improvements: The adoption of state-of-the-art technologies in the
aluminum industry would reduce energy consumption by 16 percent below that of current
average practices. Smelting consumes about 65 percent of the energy used in aluminum
production. Using the latest technology for smelters would result in a 11 to 18 percent
efficiency improvement.
Land Use
Forest Changes
Afforestation: This strategy will sequester carbon dioxide by planting idle cropland with trees.
The 1992 Department of Commerce Agricultural Census reports approximately 450,000 acres
of idle cropland in Washington. A study cited in the Action Plan estimates that newly planted
Pacific coast forests sequester 12.2 tons of carbon dioxide per acre.
Recommendations for Federal Action
Washington's Action Plan emphasized that major progress in reducing GHG emissions in
many of the areas of the transportation sector depends on action by the federal government.
Several of the state's recommendations for federal action follow.
~ Washington suggested that the federal government implement more stringent
standards for motor vehicle fuel efficiency. The U.S. government is the sole regulator of
motor vehicle fuel efficiency and federal statutes prohibit states from establishing
motor vehicle efficiency standards. Federal regulation began in 1976 through Corporate
Average Fuel Efficiency (CAFE) standards. Proponents of fuel efficiency standards
argue that currently available technologies could markedly improve motor vehicle
efficiency. The Congressional Office of Technology Assessment (OTA) projected that
regulatory pressure could raise average new car fuel efficiency by about 13 percent in
2000 and 22 percent by 2005.
~ The federal government could support FeeBate programs. The U.S. Department of
Transportation (DOT) blocked Maryland's effort to enact a FeeBate program. DOT held
that fuel economy incentive programs are preempted by federal statute. Maryland's
Attorney General, while conceding that certain aspects of the Maryland law violated the
federal preemption, otherwise affirmed the state's right to enact a FeeBate. Presently,
the legality of a feebate based on fuel efficiency is uncertain.
~ Washington can do little to promote acquisition and use of the Ultrahigh bypass high-
efficiency airplane engine because of the mobile nature of airplanes and interstate
commerce issues. Progress in the adoption of this engine technology depends upon
federal action.
~ Federal government policies could directly promote rail transportation in the form of
subsidies or tax breaks.
Appendix 1-31
-------
Recommendations
The Washington Action Plan offers the following framework for policy-makers developing a
response to global climate change:
1. Actively pursue those mitigation strategies that are cost effective for reasons other than their
greenhouse gas reduction benefits.
2. Efforts to reduce greenhouse gas emissions are investments in the future of the state and
nation. As an investment, the mitigation program must compete with other claims on state
resources (e.g., education, welfare programs, police and fire protection, etc.).
3. The use of cost effectiveness criteria to develop a mitigation program is essential. The cost
of changing energy, industrial, land use, agriculture, and forestry practices range from cost
savings to very expensive. Obtaining the largest emission reduction at the lowest cost is
sensible.
4. The expected consequences of global climate change should drive the scope and
stringency of a mitigation program.
5. Any mitigation program should consist of a diverse portfolio of programs to protect against
unexpected economic and emission effects.
6. Given the uncertainties surrounding climate change, the state should consider carbon
dioxide controls as insurance against as yet unknown consequences.
7. The state should commit to better understand the effects of climate change and to further
develop greenhouse gas mitigation options. A better understanding of climate change reduces
the need to hedge against the uncertainty and improved GHG mitigation technologies will
enhance our ability to deal with surprises should they occur.
8. With regard to specific concerns within Washington, perhaps the best policy-makers can do
is to identify and develop response plans for those activities/environments most sensitive to
climate change. In this way the state can help minimize adverse climate change consequences
should they occur.
Appendix 1-32
-------
Estimating GHG Reductions From State Actions to Improve Solid Waste Management
Practices
This appendix contains three sections: (1) Background. (2) A Life Cycle Approach: Evaluating
and Incorporating Solid Waste Management Actions in a Statewide GHG Mitigation Plan, and (3)
Example Plan for Waste Management Mitigation Actions. The background section sketches some national
trends in solid waste management actions, identifies solid waste management actions which max yield GHG
reductions, and discusses the importance of integrating solid w aste management actions into a statew ide
GHG mitigation action plan. The next section discusses the importance of using a life cycle approach for
evaluating the GHG impacts of current and future solid w aste management actions. In the last section of
this appendix, an example MSW management scenario is presented for a hypothetical state looking to
evaluate its current and future solid waste management actions from a GHG perspective. The example
establishes a baseline scenario of solid w aste management actions and compares it to a future scenario; the
future scenario uses solid waste management as part a statew ide GHG mitigation action plan.
Background
To achieve statewide source reduction and recycling goals, many states and municipalities develop
municipal solid w aste (MSW) management plans w hich include a variety of measures such as curbside
collection and recycling programs, recycling drop-off centers, and yard trimmings composting facilities.
According to a recent nationw ide survey. 45 states have waste reduction and/or recycling goals in place.'
Nationw ide, approximately 51% of the US population has access to curbside recycling, and the number of
drop-off recycling programs continues to grow."
Additional MSW management measures provide opportunities for states to meet and exceed their
source reduction and recycling goals. Such measures include introducing "Pay As You Throw " (PAYT)
pricing for w aste collection, increasing the sen ice area or improving collection efficiency of curbside
recycling programs, increasing commercial sector recycling, and banning landfilling of organic w astes such
as yard trimmings. Note that in most states, the role of state government is to develop plans and standards;
local governments implement solid waste policy. Thus, any state actions addressing solid waste should
start with full coordination and consultation with local officials.
Manx states are in the process of reevaluating their MSW management goals. This revaluation
process provides the opportunity for state and local authorities to consider the GHG reduction benefits of
different MSW management strategies currently in place, and identify opportunities to further achieve
GHG reductions in the MSW sector. Viewing MSW management actions from a GHG perspective
provides the basis for including and integrating these management actions into a statewide GHG mitigation
action plan.
A Life Cycle Approach: Evaluating and Incorporating MSW Management Actions in a Statewide
GHG Mitigation Plan
To incorporate MSW management actions into a statewide GHG mitigation action plan, one must
first identify the impacts of MSW management actions on GHG emissions. Heretofore, most of the focus
on GHG emissions associated with waste management has been on methane emissions from landfills.
' BioCvclc. The state of garbage in America. April. 1997.
: Ibid.
Appendix 2-1
-------
There are. however, many emissions and sinks upstream of the point of disposal that are affected by MSW
management. A life cycle approach provides an analytic framework for evaluating the full range of GHG
emissions and sinks. Major GHG sources associated with MSW include carbon dioxide from fossil fuel
burning associated with raw material extraction manufacturing processes, and transportation; process non-
energy emissions; landfill methane; and waste combustion. These emissions are offset to some degree by
energy recovery at municipal waste combustors and landfill gas collection systems, and enhanced carbon
sequestration by forests and landfills.
For MSW management. EPA has conducted a streamlined life cycle inventory (LCI) focusing on
the GHG impacts of ten MSW components (e.g.. paper, plastics, metals) in various ways. The EPA draft
w orking paper (ireenhouse (ias Emissions from Municipal ant! Solid Waste Management1 and the EPA's
Waste Reduction Model (WARM)4 provide GHG emission factors, for waste stream components, that are
based on an LCI framew ork. EPA"s research indicates that for many materials, the effect of recycling or
source reduction on net GHG emissions is more closely related to upstream energy emissions and forest
carbon sinks than to landfill methane emissions, and so a life cycle approach is able to capture the benefits
of solid w aste management options in a more holistic way.
EPA recognizes that LCIs have limitations. Data vary with respect to quality, quantity, validity,
and robustness. For example, data may vary seasonally, regionally, and locally as a result of changes in
economic activity, demographics, different state and local waste regulations, or different waste accounting
practices. When state or local data are not available, it is possible to use averaged national data.
Application of averaged national data may not accurately reflect state or local conditions. However, in the
absence of state or local data, averaged national data are a good proxy. The EPA research to date, has
very wide error bounds and is based on average national conditions; nevertheless, the information it
provides on GHG emissions from w aste management is suitable for estimating the impacts of voluntary
GHG reduction activities.
Example Plan for Waste Management Mitigation Actions
The objective of this example is to demonstrate to developers of State Action Plans the value of
incorporating waste management activities in their plans. This example uses averaged national data to
estimate GHG emissions resulting from the baseline and future MSW management scenarios for a
hypothetical state. The initial (baseline) scenario is based on some simple assumptions about MSW
management activities in the current year. This baseline scenario provides the starting point from which to
consider future changes in MSW management actions. The future scenario is based on the successful
implementation of a variety of waste management activities which result in increases in overall recovery
and a reduction in GHG emissions.
The hypothetical scenarios focus on a set of ten materials" present in the MSW stream for which
EPA has estimated GHG emission factors. EPA is conducting research to develop emission factors for
additional materials such as glass and wood.
3 EPA 530-R-97-010. March 1997. USEPA Office of Solid Waste and Emergency Response.
1 Available through the USEPA Office of Solid Waste.
" These materials include paper (office paper, newsprint, cornigatcd cardboard), metals (aluminum cans, steel
cans), plastics (HDPE. LDPE. and PET), food scraps, and yard trimmings.
Appendix 2-2
-------
Methodological Approach and Assumptions
To establish a baseline and future scenario for the hypothetical state, the following assumptions
were made.
Waste Generation'.
Total w aste generation is the product of the per-capita w aste generation rate and the state
population. In both the baseline and future scenarios, this analysis assumes a state population of 5 million
people and a per-capita waste generation rate of 4.3 pounds of waste/person/day."
Baseline Scenario Assumptions:
The baseline scenario assumes the state currently landfills most of its w aste, and also uses w aste-
to-energy as a management option. Recycling actions include curbside recycling programs in major
residential areas, some recycling collection centers, some yard waste composting facilities, and a limited
industrial/commercial recycling program. These assumptions are based largely on BioCycle "v "The State
of Garbage In America" w hich reported the number and types of MSW management programs in place for
each state (April. 1997).7
The baseline scenario assumes these programs reflect common MSW management actions at the
state and local level w ithin the US. and that these actions result in a recovery rate of 27 percent, a
combustion rate of 15 percent and a landfill rate of 58 percent.s The baseline data are presented in Table 1.
The baseline scenario assumes 20 percent of the w aste destined for landfills is managed in landfills
w ith landfill gas (LFG) recovery systems, and that these systems have a LFG collection efficiency of 75
percent. In addition, the baseline scenario assumes an overall waste-to-energy (WTE) efficiency rate (i.e..
electrical energy output divided by energy value of waste inputs) of 17 percent.
Future Scenario Assumptions-.
The future scenario assumes the state implements a set of MSW management activities designed to
achieve a higher total recovery rate by the year 2005 in response to state solid waste recovery goals (see
Exhibit 1). The future scenario assumes these MSW management activities result in a waste recovery rate
of 50 percent, a combustion rate of 15 percent, and a landfill rate of 35 percent. The future scenario data
are presented in Table 2.
'' Calculated based on an estimated total US population of 260 million and a total amount of waste generated as
reported in Characterization of MSW in the I nited States 1996 I pdate. EPA530-R-97-015.
BioCycle reported approximately 49 of 51 states have curbside recycling programs. 40 of 51 states hu e recycling
drop-off sites, and 48 of 51 states have yard waste composting facilities (for reporting purposes the District of
Columbia was counted as a state).
x The total and material specific generation, recovery, and disposal rates arc comparable to the national average
rates for 1995 reported in EPA's Characterization of Municipal Solid Haste in the ( nited States: 1996 ( pdate.
Appendix 2-3
-------
Exhibit 1
Example of Future Scenario MSW Management Goals and Activities
Future Goals
Future Activities
Increase newspaper recovery rate to 67
percent.
Increase collection efficiency of curbside collection.
Increase office paper and coraigated
cardboard recovery rates to 67 percent.
Expand the commercial collection of mixed paper and
coraigated cardboard.
Increase yard trimmings recovery rate to 40
percent.
Promote the benefits of composting.
Create yard w aste drop-off centers in addition to offering
seasonal curbside collection of yard w aste.
Ban vard waste from landfills.
Increase food waste diversion rate to 25
percent.
Expand the commercial and institutional collection of
food waste discards.
Specifically, the future scenario assumes a statew ide recovery rate of 67 percent for newspaper,
office paper, and coraigated cardboard; 25 percent for food scraps; and a landfill ban on yard trimmings.
The material-specific recovery rates for the remaining materials w ere adjusted upw ard to achieve a total
recovery rate of 50 percent.
The future scenario assumes 60 percent of the w aste destined for landfills is managed in landfills
w ith landfill gas (LFG) recovery systems, and that these systems have a LFG collection efficiency of 85
percent. In addition, the future scenario assumes the overall waste-to-energy (WTE) efficiency rate
improves to 19 percent.
In an actual state report, the future scenario for the total and material-specific recovery,
combustion, and landfill rates would be based on the state's MSW management goals and activities.
The Waste Reduction Model (WARM)
WARM, an EPA software model for estimating GHG emissions from the waste management
sector, w as used to estimate GHG emissions for this analysis. Table 3 presents the GHG emission
estimates for the baseline scenario, and Table 4 presents the GHG emissions for the future scenario. Table
5 compares the estimates from the two scenarios.
Results of Example Analysis and Relationship to Other Mitigation Activities
WARM estimates of annual GHG emissions in the baseline and future scenarios are summarized in
columns "b". "c". and "d" of Table 5. The estimated GHG emissions are 1.5 million MTCDE per year in
the baseline scenario and 930.000 MTCDE per year in the future scenario. The future scenario thus
reduces emissions by about 600.000 MTCDE per year.
The largest reductions in GHG emissions were for office paper (224.000 MTCDE per year),
coraigated boxes (153.000 MTCDE per year), new spaper (1 14.000 MTCDE per year), and food w aste
(103.000 MTCDE per year). Most of the reductions are attributable to reduced energy-related carbon
Appendix 2-4
-------
dioxide emissions, reduced landfill methane emissions, and increased forest carbon sequestration. (Exhibit
2)"
Exhibit 2: GHG Emission Reductions by Source
200
180
<£ _ 160
u O 140
* ?
C CO
O (A
II
hi
120
100
Energy C02
Landfill Methane
Forest Carbon
Other Sources
The estimated 600.000 MTCDE emission reduction predicted in this exercise is comparable in
magnitude to some of the most significant tools available to states for reducing GHG emissions. For
comparison, examples of policy and technology options that reduce GHG emissions by similar levels are
found in several state action plans. One such option can be found in Illinois" action plan, which estimated
that efficiency improvements to hot water heaters and residential furnaces have the potential to reduce
GHG emissions by approximately 582.000 and 514.000 MTCDE. respectively, by the year 2000. In
Oregon, improved natural gas efficiencies have the potential to reduce GHG emissions by approximately
655.000 MTCDE by the year 2010. Washington estimates that improved food refrigeration may reduce
GHG emissions by approximately 500.000 MTCDE by the y ear 2010.
MSW management options thus represent significant opportunities for states to further reduce their
GHG emissions. Because these options have other environmental benefits as well, they deserve careful
consideration in Action Plans.
' Potential exhibit comparing the "breakout" by source for the baseline and future scenarios.
Appendix 2-5
-------
Table 1
Baseline Scenario for the Management of Municipal Solid Waste in the Current Year for a State "Mock-Up"
Baseline Scenario Assumptions
Percent of Landfilled
Annual MSW
Percent of Total
Percent of
Percent of
Waste Managed at
Collection
Conversion Efficiency of
State's
Generation1
MSW
Total MSW
Total MSW
Landfills with LFG
Efficiency of
Waste-to-Energy (WTE)
Population
(tons)
Recovered
Combusted
Landfilled
Systems
LFG Systems
Systems
5,000,000
4,015,000
27%
15%
58%
20%
75%
17%
Generation and Management of MSW in Current Year
Current Waste Generation
Current Waste Recovery
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
Percentage of
Amount of
Percentage of
Amount of
Amount of
Amount of Waste
Amount of Waste
MSW
Waste
Waste
Waste
Amount of Waste
Waste
Landfilled with no LFG
Landfilled with
Generation2
Generated3
Recovered4
Recovered
Discarded5
Combusted
System
LFG System
Material
(by weight)
(tons)
(by weight)
(tons)
(tons)
(tons)
(tons)
(tons)
Newspaper
6.3%
252,945
53.0%
134,061
118,884
24,428
75,565
18,891
Office Paper
3.3%
132,495
44.3%
58,695
73,800
15,164
46,908
11,727
Corrugated
Cardboard
13.8%
554,070
64.2%
355,713
198,357
40,758
126,079
31,520
Aluminum
Cans
0.8%
32,120
62.7%
20,139
11,981
2,462
7,615
1,904
Steel Cans
1.3%
52,195
56.8%
29,647
22,548
4,633
14,332
3,583
HDPE
1.9%
76,285
10.8%
8,239
68,046
13,982
43,251
10,813
LDPE
2.7%
108,405
1.7%
1,843
106,562
21,896
67,733
16,933
PET
0.5%
20,075
22.7%
4,557
15,518
3,189
9,863
2,466
Food Scraps
6.7%
269,005
4.1%
11,029
257,976
53,009
163,974
40,993
Yard
Trimmings
14.3%
574,145
30.3%
173,966
400,179
82,229
254,360
63,590
SUBTOTAL
51.6%
2,071,740
38.5%
797,889
1,273,851
261,750
809,681
202,420
Other Materials
48.4%
1,943,260
14.7%
286,161
1,657,099
340,500
1,053,279
263,320
TOTAL
100.0%
4,015,000
27.0%
1,084,050
2,930,950
602,250
1,862,960
465,740
1 Assuming 5 million people generate 4.4 lbs of waste/person/day.
2 Franklin Associates, Ltd. Characterization of Municipal Solid Waste in the United States: 1996 Update, EPA 530-R-97-015.
3 The product of total MSW generation and percent of MSW generation for each material. For example, 4,015,000 tons/yr x 0.063 = 252,945 tons/yr of newspaper.
4 Percentage recovery for each material based on national average from Franklin Associates, Ltd., EPA 530-R-97-015. Yard waste recovery means back yard composting.
5 The difference between the amount of waste generated and the amount of waste recovered.
Appendix 2-6
-------
Table 2
Future Scenario for the Management of Municipal Solid Waste by Year 2005 for a State "Mock-Up": Assuming Increased Material Recovery
Future Scenario Assumptions
Percent of Landfilled
Annual MSW
Percent of Total
Percent of
Percent of
Waste Managed at
Collection
Conversion Efficiency of
State's
Generation1
MSW
Total MSW
Total MSW
Landfills with LFG
Efficiency of
Waste-to-Energy (WTE)
Population
(tons)
Recovered
Combusted
Landfilled
Systems
LFG Systems
Systems
5,000,000
4,015,000
50%
15%
35%
60%
85%
19%
Generation and Management of MSW in Year 2005
Future Waste Generation
Future Waste Recovery
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
Percentage of
Amount of
Percentage of
Amount of
Amount of
Amount of Waste
Amount of Waste
MSW
Waste
Waste
Waste
Amount of Waste
Waste
Landfilled with no LFG
Landfilled with LFG
Generation2
Generated3
Recovered4
Recovered
Discarded5
Combusted
System
System
Material
(by weight)
(tons)
(by weight)
(tons)
(tons)
(tons)
(tons)
(tons)
Newspaper
6.3%
252,945
67.0%
169,473
83,472
25,042
23,372
35,058
Office Paper
3.3%
132,495
67.0%
88,772
43,723
13,117
12,243
18,364
Corrugated
Cardboard
13.8%
554,070
67.0%
371,227
182,843
54,853
51,196
76,794
Aluminum
Cans
0.8%
32,120
65.0%
20,878
11,242
3,373
3,148
4,722
Steel Cans
1.3%
52,195
60.0%
31,317
20,878
6,263
5,846
8,769
HDPE
1.9%
76,285
15.0%
11,443
64,842
19,453
18,156
27,234
LDPE
2.7%
108,405
5.0%
5,420
102,985
30,895
28,836
43,254
PET
0.5%
20,075
25.0%
5,019
15,056
4,517
4,216
6,324
Food Scraps
6.7%
269,005
25.0%
67,251
201,754
60,526
56,491
84,737
Yard
Trimmings
14.3%
574,145
40.0%
229,658
344,487
51,673
9,646
14,468
SUBTOTAL
51.6%
2,071,740
48.3%
1,000,458
1,071,282
321,385
299,959
449,939
Other Materials
48.4%
1,943,260
51.8%
1,007,042
936,218
280,865
262,141
393,211
TOTAL
100.0%
4,015,000
50.0%
2,007,500
2,007,500
602,250
562,100
843,150
1 Assuming the state population of 5 million people and the waste generation rate of 4.4 lbs of waste/person/day have not changed by the year 2005.
2 Franklin Associates, Ltd. Characterization of Municipal Solid Waste in the United States: 1996 Update, EPA 530-R-97-015.
3 The product of total MSW generation and percent of MSW generation for each material. For example, 4,015,000 tons/yr x 0.063 = 252,945 tons/yr of newspaper.
4 Assuming these are the recovery rate goals achieved by the year 2005. Yard waste recovered includes back yard and centralized composting.
^he difference between the amount of waste generated and the amount of waste recovered.
Appendix 2-7
-------
e
n of
I
,945
,495
,070
,120
,195
,285
,405
,075
,005
,145
,740
Table 3
Estimated GHG Emissions from MSW Management Actions in the Baseline Scenario
(Estimated Using WARM)
(d)
Annual GHG
Emissions
from
Recycling
(MTCDE)
(e)
Estimated
Landfilling
(Tons)
(0
Annual GHG Emissions from Landfilling
(MTCDE)
(g)
Estimated
Combustion
(Tons)
(h)
Annual GHG
Emissions from
Combustion
(MTCDE)
Estimated
Composting
(Tons)
Annual GHG
Emissions from
Composting
(MTCDE)
Total Annual
GHG
Emissions
(MTCDE)
LFs without
LFG recovery
-185,829
-52,950
-405,678
112,359
59,380
10,230
2,705
9,087
0
0
94,456
58,635
157,599
9,519
17,915
54,064
84,666
12,329
204,967
317,950
107,922
280,253
301,554
153,774
59,866
116,933
230,652
43,149
142,889
22,122
LFs with LFG
recovery
11,639
25,656
22,292
38,444
14,967
29,233
57,663
10,787
-7,334
-32,603
Total
119,561
305,908
323,846
192,218
74,833
146,166
288,315
53,937
135,555
-10,480
24,428
15,164
40,758
2,462
4,633
13,982
21,896
3,189
53,009
82,229
33,254
26,154
42,499
49,764
19,416
59,954
109,256
18,023
-2,212
-5,694
0
0
0
0
0
0
0
0
11,029
173,966
-450,696
1,012,101
1,459,114
170,744
1,629,858
261,750
350,414
184,995
Appendix 2 - 8
-------
e
n of
il
,945
,495
,070
,120
,195
,285
,405
,075
,005
,145
,740
Table 4
Estimated GHG Emissions from MSW Management Actions in the Future Scenario
(Estimated Using WARMI)
(d)
Annual GHG
Emissions
from
Recycling
(MTCDE)
(e)
Projected
Landfilling
(Tons)
(0
Annual GHG Emissions from Landfilling
(MTCDE)
(g)
Projected
Combustion
(Tons)
(h)
Annual GHG
Emissions
from
Combustion
(MTCDE)
Projected
Composting
(Tons)
Annual GHG
Emissions from
Composting
(MTCDE)
Total Annual
GHG
Emissions
(MTCDE)
LFs without
LFG recovery
-234,916
-80,082
-423,372
116,481
62,726
14,208
7,956
10,008
0
0
58,430
30,606
127,990
7,869
14,615
45,390
72,089
10,539
141,228
24,114
33,380
73,143
122,450
63,563
24,419
49,086
98,195
18,442
49,227
839
LFs with LFG
recovery
21,435
39,770
53,558
95,345
36,628
73,628
147,293
27,664
-15,677
-8,676
Total
54,815
112,913
176,008
158,908
61,046
122,714
245,488
46,106
33,550
-7,837
25,042
13,117
54,853
3,373
6,263
19,453
30,895
4,517
60,526
51,673
32919
22098
54924
68182
26255
81274
150763
25273
-3369
-4429
0
0
0
0
0
0
0
0
67,251
498,358
-526,991
532,871
532,744
470,968
1,003,711
269,712
453,890
565,609
Appendix 2 - 9
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Table 5
Comparison of Total Estimated GHG Emissions For the Baseline and Future Scenarios
(a)
(b)
(c)
(d)
Difference
Between Baseline
Baseline
and Future
Scenario:
Future Scenario:
Scenario
Estimated Total
Estimated Total
Estimates of
Annual GHG
Annual GHG
Annual GHG
Emissions*
Emissions**
Emissions
Material
(MTCDE)
(MTCDE)
(MTCDE)
Newspaper
-33,014
-147,183
-114,169
Office Paper
279,113
54,930
-224,183
Corrugated Boxes
-39,334
-192,439
-153,106
Aluminum Cans
354,341
343,571
-10,770
Steel Cans
153,629
150,027
-3,602
HDPE
216,351
218,196
1,846
LDPE
400,275
404,207
3,932
PET
81,047
81,387
340
Food Waste
133,343
30,181
-103,162
Yard Waste
-16,175
-12,266
3,909
Total
1,529,576
930,610
-598,966
* These data were copied directly from Table 3, column k.
** These data were copied directly from Table 4, column k.
Appendix 2-10
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