How Ambitious Are the EPA’s Proposed Carbon Dioxide Reductions?

Everything Depends on Your Assumptions About the Future

The Obama administration’s proposed carbon dioxide reductions are larger than what the government's Energy Information Administration (EIA) predicts would happen without regulations, and similar to reductions that would be achieved if the carbon intensity of the power sector declines at the same pace it did between 2005 and 2013, a new Breakthrough Institute analysis finds.

Between 2005 and 2013, carbon emissions from the power sector declined by 15 percent. This decline was due mostly to two factors: the economic recession, when businesses cut back electricity consumption, and cheap natural gas allowing for the shuttering of coal plants.

Without new regulations, the EIA, which is part of the Department of Energy (DOE), predicts that carbon emissions will rise 6 percent between 2014 and 2030.

If the carbon intensity of the American economy continues to decline at the same rate it declined between 2005 to 2013, in 2020 power sector emissions would be 16 percent lower than they were in 2005. By 2030, power sector emissions would be 20 percent lower than they were in 2005. The new proposed EPA emissions targets are 25 percent below 2005 levels by 2020 and 30 percent below 2005 levels by 2030.

Directly measuring the carbon intensity of electricity (CO2/electricity) enables a more precise comparison than measuring the carbon intensity of the economy. By calculating carbon intensity of the electric power sector, we can control for economic growth and absolute electricity consumption. At this rate, power sector emissions reductions in 2020 would be 19 percent lower than 2005 power sector emissions, and in 2030 would be 25 percent lower than 2005 emissions.

Breakthrough Institute used EIA data and projections for this analysis. To develop our projection of power sector carbon emissions based on CO2/GDP trends, we calculated the compound annual growth rate (CAGR) of carbon intensity changes in the power sector over 2005-2013. Then we applied this rate of change to future trends, determining future carbon emissions assuming carbon intensity trends continue. Similarly, we also calculated the CAGR in carbon intensity of electricity (CO2/electricity) over 2005-2013, and applied this rate to make projections through 2040. We used carbon emissions, electricity consumption, and GDP projections used in the EIA’s Annual Energy Outlook 2014.