Integrating Climate, Energy, and Air Pollution Policies

3. US Climate Policy

3 Climate change requires a global policy response but US climate policy plays a critical international role for several reasons. The United States has been the major emitter of GHGs and its cumulative emissions tower over those of other nations. If the United States does not curtail its emissions , other countries will resist taking action, fearing that it will do little good. The pressure, then, is on the United States to take the necessary actions now to begin to cut emissions through dramatic investments in energy efficiency, conservation, and existing renewable energy technologies . The policy challenges represented by the threat of climate change are unprecedented and require a tremendous commitment of resources, political will, policy-making creativity, technological innovation, and policy integration and coordination. The chapter begins with an overview of US greenhouse gas emissions and trends and then examines the evolution of the climate policy debate. The chapter then turns to a discussion of carbon taxes and cap-and-trade programs, the two climate policy options that in the United States have received the most serious consideration. US Greenhouse Gas Emissions In 2009, total US emissions of greenhouse gases were 6,633 teragrams of carbon dioxide equivalent (Tg CO2 Eq.). Emissions increased by 7.3 percent between 1990 and 2009 but actually fell in 2008 and 2009. Lower emissions in those years were the result of decreased energy consumption from the deep recession that began in 2008 and a decrease in the carbon intensity of fuels used to generate electricity; higher coal prices and lower natural gas prices led utilities to switch fuels (US EPA 2011e). Emission trends between 1990 and 2009 are illustrated in figure 3.1. US Climate Policy 42 Chapter 3 Figure 3.2 illustrates the contribution of the primary greenhouse gases to total US emissions. Carbon dioxide currently accounts for 83 percent of total US GHGs. Methane, emanating primarily from natural gas production, livestock, and the decomposition of waste in landfills, is responsible for 10.3 percent of total emissions. Nitrous oxide emissions, primarily from agricultural practices and motor vehicles, now account for 4.5 percent of the total; since 1990, though, nitrous oxide emissions have declined more than 6 percent. Emissions of hydrochlorofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6) represent 2.2 percent of total emissions. HFCs, which are substitutes for ozone-depleting substances, are the primary component of fluorinated gas emissions, and have increased by 240 percent since 1990. PFCs are a consequence of semiconductor manufacturing and aluminum production, and SF6 releases occur primarily through electrical distribution and transmission systems. These last three substances, although emitted in relatively small quantities, have extremely high global warming potential and, in some cases, long atmospheric lifetimes, which magnifies their impact. Global warming potential (GWP) compares the ability of 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 TgCO 2 Eq. 6,182 6,142 6,244 6,367 6,466 6,551 6,767 6,807 6,850 6,916 7,113 7,039 7,065 7,175 7,214 7,167 7,263 7,061 6,999 6,633 Methane Carbon dioxide HFCs, PFCs, and SF6 Nitrous oxide Figure 3.1 US Greenhouse Emissions by Gas, 1990–2009 Source: US EPA 2011e, ES-4. US Climate Policy 43 each greenhouse gas to trap heat in the atmosphere relative to another gas. Table 3.1 shows the global warming potential of the major greenhouse gases. Carbon Dioxide Emissions As noted, CO2 emissions comprise the bulk of US GHG emissions and are thus a key target in climate policy. Fossil fuel combustion was Table 3.1 Global Warming Potentials of Greenhouse Gases Gas Global warming potential (100-year time horizon) CO2 1 CH4 21 N2O 310 HFCs 140–11,700 PFCs 6,500–9,200 SF6 23,900 Source: US EPA 2011e, ES-7. N2O 4.5% CH4 10.3% CO2 83.0% HFCs, PFCs, and SF6 2.2% Figure 3.2 Greenhouse Gas Emissions by Gas (percents based on Tg CO2 Eq.). Source: US EPA 2011e, ES-7. 44 Chapter 3 responsible for nearly 95 percent of carbon dioxide emissions in 2009, with the bulk of emissions coming from the electricity generation, transportation, industrial, residential, and commercial sectors (see figure 3.3). In 2009, electricity...