Use of Renewables in U.S. Would Save $ Billions

A minimal use of renewable energy in the United States could help that country to reduce its energy consumption by 11 percent within a decade.

WASHINGTON, DC, US, 2001-07-24 [SolarAccess.com] A minimal use of renewable energy in the United States could help that country to reduce its energy consumption by 11 percent within a decade. The U.S. could save $50 billion a year by 2010 and $135 billion annually by 2020 if it were to implement the Kyoto Protocol on global warming, says the World Wildlife Fund. Its report, ‘The American Way to Kyoto,’ rejects the claim that the treaty would hurt the American economy. “Far from being the economically crippling burden that the Bush Administration alleges, U.S. efforts to reach a binding emissions reduction target could initiate a national technological and economic renaissance with cleaner energy, industrial processes and products in the coming decades,” says Jennifer Morgan of WWF. “If the Bush Administration were to choose to seriously address climate change and energy policy, the Kyoto Protocol is the way to go.” The report uses models developed by the government’s energy department to quantify the impact of minimum renewable energy production standards, co-generation, new appliance standards, a carbon emissions permit auction, tax credits, increased fuel economy of passenger vehicles and increased use of high-speed rail. It concludes that the U.S. could reduce its energy consumption by 11 percent by 2010 and by 30 percent by 2020, and it could stem the rise in carbon emissions to 2.5 percent above 1990 levels by 2010. If no action is taken, carbon emissions would rise by 35 percent by 2010, while the Kyoto treaty would require the U.S. to reduce carbon emissions by 7 percent by 2012, compared with 1990 emissions. The report encourages the adoption of Renewable Portfolio Standards to provide “strong incentives” for suppliers to design reliable renewable electricity projects at low cost, and to identify niche applications where the projects have greatest value. The use of RPS also accelerates the deployment of renewable technologies, as well as the economies of scale that allow renewables to become increasingly competitive with conventional technologies. “This is particularly important, as the demands of climate stabilization in coming decades will require more renewable energy than we can deploy in the next two decades,” notes the report. The study assumes a RPS that starts at 2 percent next year and grows to 10 percent by 2010 and 20 percent in 2020. It excludes municipal solid waste from the category due to concerns about toxic emissions and also excludes large-scale hydro as a renewable energy technology for the environmental concerns over large dams and says that it “need not be treated as an emerging energy technology as it already supplies nearly 10 percent of the nation’s electricity supply.” Under a base case scenario, use of non-hydro renewable energy increases by less than 50 percent by 2010 while, under the ‘climate protection case,’ it triples. If all policies are adopted, use of renewables in the U.S. would double relative to the base case and would account for 10 percent of total primary energy supplies in 2010. When the electric sector RPS is combined with the strong energy efficiency policies of this study, the absolute amount of renewables does not increase substantially between 2010 and 2020 because the percentage targets in the electric sector have already been met. A more aggressive renewables policy by 2010 could be considered, and energy-related carbon emissions would be more dramatic than the reductions in energy consumption, because of the shift toward lower-carbon fuels and renewable energy. The WWF also suggests a subsidy for grid-connected solar photovoltaic panels, which would “introduce a small amount of this technology so that it can play a role in the generation mix, seeking to induce technology learning, performance improvement and scale economies, and ultimately increased fuel diversity and another zero emissions option for the longer term.” The level is kept small so that costs and price impacts are minimal. The report also examines the potential contribution from renewables if the world promotes the Clean Development Mechanisms of the Kyoto treaty, and concludes that a carbon price of $20 per tonne of carbon equivalent would induce only 3 megatonne of carbon equivalent per year of new renewable energy project activity by 2010. If the price goes to $100/tCe, renewables would jump to 18 MtCe/year. The report concludes that national savings in energy bills would exceed the amount spent on investments in efficient technologies and expenditures for low carbon fuels. By 2010, the average savings would exceed the additional costs of new equipment by $13 billion per year, or nearly $113 per household. When costs and savings of all policies are combined, they yield cumulative net savings of $105 billion in 2010, and $576 billion in 2020, says the report. Added benefits include a 40 percent reduction of sulfur emissions by 2010, a decrease in fine particle matter and a decrease in mercury emissions. Representatives from 160 countries will meet in Germany next week to finalize the rules for the Kyoto Protocol. The Bush Administration will attend the meeting, but WWF questions if the United States will try to block agreement on the rules by other countries or allow them to move ahead with the Kyoto Protocol. “Energy-related carbon emissions are the predominant source of U.S. greenhouse gas emissions for the foreseeable future, and their reduction is the central challenge for protecting the climate,” says the report. “However, because the U.S. has made only minimal efforts to reduce emissions since it ratified the United Nations Framework Convention on Climate Change, it may not be able to meet it’s Kyoto obligation with net economic benefits based solely on reductions in energy-related carbon dioxide emissions.” “In order to achieve these reductions, policies should be implemented as soon as possible to accelerate the shift away from carbon-intensive fossil fuels and towards energy efficient equipment and renewable sources of energy,” it concludes. “While implementing this set of policies and additional non-energy related measures is an ambitious undertaking, it represents an important transitional strategy to meet the long-term requirements of climate protection.” “This report makes a strong case that the U.S. can achieve the Kyoto Protocol without damaging the economy,” explains Morgan. “There is no need for the Bush administration to reject this important effort to address global warming.”
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