33 ELR 10033 | Environmental Law Reporter | copyright © 2003 | All rights reserved


Sustainable Production and Consumption of Energy: Developments Since the 1992 Rio Summit

Lynn Price and Mark D. Levine

[Editors' Note: In June 1992, at the United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro, the nations of the world formally endorsed the concept of sustainable development and agreed to a plan of action for achieving it. One of those nations was the United States. In August 2002, at the World Summit on Sustainable Development, these nations gathered in Johannesburg to review progress in the 10-year period since UNCED and to identify steps that need to be taken next. Prof. John C. Dernbach has edited a book, Stumbling Toward Sustainability, that assesses progress made by the United States on sustainable development in the past 10 years and recommends next steps. The book, published by the Environmental Law Institute in July 2002, is comprised of chapters on various subjects by experts from around the country. This Article appears as a chapter in that book. Further information on Stumbling Toward Sustainability will be available at www.eli.org or by calling 1-800-433-5120 or 202-939-3844.]

Lynn Price is a Scientist and Deputy Group Leader in the International Energy Studies Group, Energy Analysis Department of the Environmental Energy Technologies Division at the Lawrence Berkeley National Laboratory. She can be contacted at 1 Cyclotron Rd., MS 90-4000, Berkeley CA 94720, USA. Mark Levine is Division Director of the Environmental Energy Technologies Division at the Lawrence Berkeley National Laboratory. He can be contacted at 1 Cyclotron Rd., MS 90-3026, Berkeley CA 94720, USA. The authors would like to acknowledge the significant assistance of Michal Landau, a 2001 summer student at Berkeley lab, in gathering data and information for this Article.

[33 ELR 10033]

Introduction

Energy is a fundamental component of myriad services and benefits to humanity in pursuit of a healthy and productive life, including production of food and other essential goods; provision of buildings for housing, education, health care, and commerce; and provision of transportation for goods and people. However, production and consumption of fossil fuel-based energy, which accounts for approximately 85% of total energy consumption in the United States1 can also result in scarring or pollution of the environment during extraction of the fuels and contributes to local air pollution and smog formation, regional acid rain production, and global warming as the fuels are burned. Further, continued large-scale consumption of nonrenewable energy sources will eventually lead to depletion of these resources and future generations will need to rely on alternative sources of energy. Thus, the significant characteristics of sustainable development for the energy sector include more efficient use of nonrenewable fossil fuel-based energy resources, development of technologies to significantly reduce local and global pollutants from fossil fuels, and increased development and use of renewable energy resources.

This Article looks at the characteristics of sustainable development vis-a-vis energy consumption and production, reviews the laws and policies enacted in the United States that could contribute to more sustainable energy consumption and production, and evaluates actual achievements in three areas that measure sustainability of energy consumption and production. We find that although there are many guiding principles relevant to energy sustainability and there have been numerous energy-related laws and policies enacted both prior to and after the 1992 Rio Declaration on Environment and Development,2 growth in fossil fuel-based energy use as well as in energy-related greenhouse gas (GHG) emissions was more rapid—and thus less sustainable—in the eight years after 1992 than in the two decades prior to Rio. We recommend a comprehensive package of policies and measures that includes carbon fees, increased research and development (R&D), expanded efficiency standards, building codes, tax credits for energy efficiency and renewable energy investments, expanded government procurement programs, negotiated agreements with industries to improve energy intensity of manufacturing, increased information dissemination, promotion of combined heat and power, increased fuel efficiency standards for vehicles, etc. A recent study that analyzed the combined impact of this comprehensive package found that, if very aggressive policies were introduced in all sectors and significant research and development breakthroughs occurred in the transportation sector, it might be possible to reduce energy-related carbon dioxide (CO2) emissions to 1990 levels by 2020.

Characteristics of Sustainable Development Related to Production and Consumption of Energy

The 1992 United Nations Conference on Environment and Development (UNCED)

The Rio Declaration on Environment and Development's overarching principle is that "human beings are … entitled to a healthy and productive life in harmony with nature."3 Energy is a fundamental component of myriad services and benefits to humanity in pursuit of this healthy and productive life, including production of food and other essential goods; provision of buildings for housing, education, health care, and commerce; and provision of transportation for goods and people. However, production and consumption of fossil fuel-based energy, which accounts for approximately 85% of total energy consumption in the United States4 can also result in scarring or pollution of the environment during extraction of the fuels and contributes to local [33 ELR 10034] air pollution and smog formation, regional acid rain production, and global warming as the fuels are burned. Further, continued large-scale consumption of nonrenewable energy sources will eventually lead to depletion of these resources and future generations will need to rely on alternative sources of energy.

This fundamental characteristic of today's energy production and consumption patterns—the predominate reliance on polluting, nonrenewable energy resources—is unsustainable in terms of resource depletion and, using present technologies, the environmental burden it puts on this and future generations. Thus, the significant characteristics of sustainable development for the energy sector include more efficient use of nonrenewable fossil fuel-based energy resources, development of technologies to significantly reduce local and global pollutants from fossil fuels, and increased development and use of renewable energy resources.5

Many of the key principles of the Rio Declaration are relevant to the energy sector. Principle 8 provides the most direct guidance by declaring that "states should reduce and eliminate unsustainable patterns of production and consumption …."6 Agenda 21 of the UNCED elaborates on this topic vis-a-vis energy use by noting that "much of the world's energy … is currently produced and consumed in ways that could not be sustained if technology were to remain constant and if overall quantities were to increase substantially."7 Agenda 21 recommends that governments encourage greater efficiency in the production, transmission, distribution, and consumption of energy, explaining that "reducing the amount of energy and materials used per unit in the production of goods and services can contribute both to the alleviation of environmental stress and to the greater economic and industrial productivity and competitiveness."8 Agenda 21 guides governments to intensify efforts to use energy in an economically efficient and environmentally sound manner through promotion of research, development, transfer, and use of energy-efficient and environmentally sound technologies and practices as well as the environmentally sound use of new and renewable sources of energy.9

Principle 4 of the Rio Declaration addresses integrated decisionmaking, stating that "environmental protection shall constitute an integral part of the development process and cannot be considered in isolation from it."10 This principle is important because decisions related to energy production and consumption have often been made in a manner that does not integrate other social, economic, and environmental goals. Agenda 21 elaborates by providing guidance related to integrating environment and development at the policy, planning, and management levels, explaining the importance of incorporating efficiency criteria in decisions.11 Making more balanced decisions regarding energy production and consumption has been the focus of utility integrated resource planning (IRP) and demand-side management (DSM) programs, which will be discussed later in this Article.

The "polluter-pays" principle, as outlined in the Rio Declaration in Principle 16, requires states to "promote the internalization of environmental costs and the use of economic instruments, taking into account the approach that the polluter should, in principle, bear the cost of pollution …."12 This principle is relevant to the energy sector because energy-related environmental cleanup and pollution-related health care costs are typically borne by society. Inclusion of the costs of these "environmental externalities" in energy production costs was pioneered by a number of electric utility regulatory commissions in the United States in the late 1980s and early 1990s.13

The precautionary approach outlined in Principle 15 of the Rio Declaration states that "where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation."14 This principle can be applied to decisions regarding energy production and consumption in terms of implementing socalled no regrets energy efficiency investments that are not only cost-effective at current energy prices, but which often increase productivity, reduce pollution, and have other ancillary benefits.

Intergenerational equity, which is based on the concept that "the right to development must be fulfilled so as to equitably meet developmental and environmental needs of present and future generations," is outlined in Principle 3.15 This is especially relevant to the consumption of many nonrenewable energy sources which, at current extraction rates, will be depleted during the 21st century. Using these resources more efficiently while transitioning to renewable energy resources will address the principle of intergenerational equity by conserving the valuable nonrenewable energy sources for the use of future generations.

[33 ELR 10035]

The 1997 Programme for Further Implementation of Agenda 21

The Programme for Further Implementation of Agenda 21 ("the Programme"), adopted by the United Nations General Assembly five years after the Rio Convention, reinforced these key principles and provided further detailed guidance related to energy production and consumption.16 The Programme found that some progress had been made in the area of energy efficiency, particularly related to nonrenewable energy resources, but that "overall trends remain unsustainable." Regarding consumption and production patterns, the Programme called for industrialized countries to take the lead in promoting international and national programs for energy and material efficiency17 and went on to explicitly address the need for more efficient use of nonrenewable fossil fuel-based energy resources along with increased development and use of renewable energy resources.

Regarding fossil fuel-based energy resources, the Programme noted that

fossil fuels (coal, oil and natural gas) will continue to dominate the energy supply situation for many years to come in most developed and developing countries. What is required then is to reduce the environmental impact of their continued development and to reduce local health hazards and environmental pollution….18

The Programme suggests using "lower-pollutant sources of energy such as natural gas," "cleaner fuel technologies, including fossil fuel technologies, and to improve efficiency in energy production, distribution and use and in other industrial production processes that are intensive users of energy."19

Beyond this, though, the Programme explained that there is a need for "a movement toward sustainable patterns of production, distribution and use of energy"20 stating that countries need to promote research and development of renewable energy technologies while systematically increasing "the use of renewable energy sources according to their specific social, economic, natural, geographical and climatic conditions."21

Importance of Achieving Sustainable Development in Energy Production and Consumption for the United States

Achieving sustainable levels of energy production and consumption can have a large positive impact on many aspects of life in the United States and the world. Energy sustainability implies reduced pollution, improved economic efficiency, and slowing of global climate change caused by energy-related GHG emissions. In the United States, the President's Council on Sustainable Development (PCSD), which was established following the 1992 UNCED, set up a Task Force on Energy and Transportation that specifically addressed energy and sustainable development in its first set of recommendations. The PCSD's first report explained that "decisions on energy production, distribution, and use can have important effects on the [United States] and global environment, the prices of most basic goods and services, international competitiveness, and national and economic security."22 The task force found that "despite the progress made in the past 25 years and the potential contributions of laws enacted but not yet fully implemented, many existing patterns of energy production and consumption deplete natural resources, degrade ecosystems, and create significant amounts of solid waste, water pollution, and atmospheric pollution."23

Thus, actions that improve how efficiently fossil fuel-based energy resources are used will address these important issues as well as improve economic efficiency since inefficient practices imply that resources are being wasted. The PCSD noted that national competitiveness and social well-being could be enhanced through changes in technology and behavior such as making cost-effective investments in energy efficiency.

One of the task force's key goals was to "improve the economic and environmental performance of U.S. energy supply and use, while ensuring that all Americans have access to affordable energy services and increasing the competitiveness of American business."24 The Task Force clearly explains why sustainable development in energy production and consumption is important for the United States:

Energy efficiency and waste generation are linked. Pollution and waste are inefficiencies. More efficient industrial processes and technologies will increase productivity and produce less waste and pollution. Cost-effective approaches to increase end-use efficiencies will have benefits in all three dimensions of sustainability:

. Reducing energy costs to consumers provides equity benefits.

. Reduced energy costs for manufacturers benefits the economy, thereby increasing international competitiveness. By lowering waste production, increased efficiency also leads to lower regulatory compliance costs.

. Increased efficiencies translate into fewer environmental impacts from pollution and waste.25

The PCSD made a number of recommendations related to removing institutional, economic, and regulatory barriers that hinder meeting sustainable development goals in the energy sector. These recommendations included using energy efficiency as a means to accomplish pollution prevention and waste minimization goals, shifting tax policies, reforming subsidies, and making greater use of market incentives.

[33 ELR 10036]

Developments in U.S. Laws and Policies Related to Sustainable Development in Energy Production and Consumption Prior to Rio

At the time of the UNCED, there were numerous laws and policies already established in the United States related to sustainable development in energy production and consumption, including the National Energy Policy and Conservation Act (NEPCA) of 197526; the National Energy Act of 1978,27 which included the Energy Tax Act,28 the National Energy Conservation Policy Act (NECPA),29 and the Public Utility Regulatory Policies Act (PURPA)30; and the National Appliance Energy Conservation Act (NAECA) of 1987.31 Also, following the Rio Convention, the Energy Policy Act32 was passed at the end of 1992. These laws contained many provisions that addressed the need for more efficient use of nonrenewable fossil fuel-based energy resources along with increased development and use of renewable energy resources.

The NEPCA of 1975, which focused on the issue of oil supply and dependence in response to the recent Arab oil embargoes, established the Corporate Average Fuel Economy (CAFE) standards for automobiles, outlined labeling rules and directed the U.S. Department of Energy (DOE) to develop mandatory energy efficiency standards for 13 home appliances, required states to set energy conservation goals by 1980, established a program to promote increased energy efficiency by industry including establishment of voluntary energy efficiency improvement targets for the 10 most energy-consumptive industries, and initiated the development of mandatory standards related to energy conservation and energy efficiency in federal government procurement and decisionmaking.33

In 1978, in response to reduced oil exports to the United States by oil-producing nations from the Organization of the Petroleum Exporting Countries, the National Energy Act was passed. This Act included five different statutes, three of which directly addressed energy efficiency and renewable energy: the Energy Tax Act, the NECPA, and PURPA.34 The Energy Tax Act used tax credits to encourage investments in cogeneration equipment and solar and wind technologies. The Act also provided a federal energy tax credit for residential investments in solar space and water heating, weatherization, insulation, and other energy conservation efforts.35 The Act further established the "gas guzzler tax" on the sale of new vehicles whose fuel economy falls below certain statutory levels in an effort to discourage production and purchase of inefficient vehicles.36

PURPA was enacted in an effort to reduce dependence on imported oil, to promote renewable energy and energy efficiency, and to diversify energy sources used to generate electricity. PURPA required utilities to purchase power from non-utility power producers, which were often using renewable energy sources, at prices equivalent to the cost of power that the utility would otherwise generate. It is estimated that up to 12,000 megawatts of nonhydroelectric renewable generation capacity was developed in response to this law. In addition, natural gas-fired cogeneration plants have also been constructed as a result of PURPA requirements.37

Two of the purposes of the NECPA of 1978 were to reduce the growth in demand for energy and to conserve nonrenewable energy resources without inhibiting beneficial economic growth. The Act required utility regulatory authorities, nonregulated utilities, and home heating suppliers to develop and implement residential energy conservation plans such as on-site energy audits; expanded the low-income weatherization program38; established loans for purchasing energy-conserving improvements and solar energy systems; increased appropriations for new building performance standards39; established energy conservation programs for schools, hospitals, and buildings owned by local governments; directed the Secretary of Energy to establish energy efficiency standards for specified household appliances and to study and prescribe energy efficiency standards for classes of industrial equipment; required mandatory [33 ELR 10037] labeling of industrial equipment subject to federal standards; required the Secretary to establish targets for increased energy efficiency in the metals and metal products, paper and allied products, textile mill products, and rubber industries; established a federal demonstration program for solar heating and cooling technology; established energy performance targets for federal buildings; and established a photovoltaic energy commercialization program.40

In the 1980s and early 1990s, following the enactment of PURPA and the NECPA in 1978, interest grew in utility DSM programs and IRP. DSM programs, which were initially conceived in California and Wisconsin in the mid-1970s,41 are defined as "a variety of utility activities designed to change the level or timing of customers' electricity demand."42 These programs began in earnest following the NECPA directive for utilities to develop and implement residential energy conservation plans, and were seen as a way for utilities to manage the high costs of producing electricity that they were experiencing in the late 1970s and early 1980s due to the dramatic rise in world oil prices, increased regulation of air emissions from electricity generation, and price increases associated with construction and operation of nuclear power plants.43 DSM programs also fit well into the least-cost planning or IRP process, which was "based on the perception that alternatives to new power plant construction—especially those available from managing customers' energy demands—could meet customers' energy service needs as lower cost."44 By the late 1980s, IRP was being used in a number of states throughout the United States45 Spending on DSM programs grew rapidly in the early 1990s, from $ 0.9 billion in 1989 to a peak of $ 2.7 billion in 1993 and 1994.46 An evaluation of a sizeable fraction of these programs found energy savings at a cost of 3.2 cents per kilowatt hour (kwh); this is highly cost-effective compared to the costs to produce the equivalent amount of power that were originally assumed when utilities were designing the programs.47

In 1987, the NAECA was enacted in response to the proliferation of diverse state appliance efficiency standards. California initiated appliance efficiency standards in 1974 and imposed standards on 15 products by 1979.48 Throughout the 1980s, California updated its standards and a number of other states such as Connecticut, Florida, Massachusetts, and New York adopted appliance efficiency standards.49 The NAECA amended the 1978 NEPCA standards and superceded requirements established by individual states. The law sets energy efficiency standards for 12 residential appliances, influencing about 80% of the source energy in the United States residential sector.50 A schedule of updates to the original standards was included, with the responsibility of updating delegated to the DOE.

Developments in U.S. Laws and Policies Related to Sustainable Development in Energy Production and Consumption Since Rio

In 1992, the U.S. Congress enacted the Energy Policy Act (EPAct), which made significant changes in the U.S. energy laws and addressed a number of areas related to sustainable development in energy production and consumption.51 For renewable energy resources, EPAct established a program within DOE to demonstrate and commercialize new renewable energy and energy efficiency technologies. For energy efficiency, EPAct established new standards, rating systems, and demonstration programs to promote increased energy efficiency in buildings; outlined voluntary guidelines and provided grants to industry for energy efficiency improvements; outlined new standards and labeling programs for appliances and equipment; directed all utilities to use IRP in making power plant investment decisions; provided loans and training for state and local energy conservation programs; set goals and requirements to stimulate implementation of conservation measures in federal buildings; and authorized increased spending for energy efficiency research, development, and demonstration.

The EPAct of 1992 outlined updates to the NAECA appliance energy efficiency standards and added new minimum efficiency standards for lamps, electric motors, commercial heating and cooling equipment, and plumbing products.52 Table 1 provides a list of the appliances included in the NAECA and EPAct and their updates as well as the effective dates of the original standard and the updates.

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Table 1. Appliance Energy Efficiency Standards Under the National Appliance Energy Conservation Act and the Energy Policy Act, Including a Schedule of Updates53

Appliance(NEW COLUMN)Original(NEW COLUMN)First Update:(NEW COLUMN)Second

(NEW COLUMN)Standard:(NEW COLUMN)(NEW COLUMN)Update:

(NEW COLUMN)Effective(NEW COLUMN)Effective Date(NEW COLUMN)Effective

(NEW COLUMN)Date(NEW COLUMN)(NEW COLUMN)Date

Refrigerators and freezers(NEW COLUMN)1990(NEW COLUMN)1993(NEW COLUMN)2001

Room air conditioners(NEW COLUMN)1990(NEW COLUMN)2000(NEW COLUMN)Future

Central air conditioners/heat pumps(NEW COLUMN)1992(NEW COLUMN)In limbo under(NEW COLUMN)Future

(NEW COLUMN)(NEW COLUMN)new

(NEW COLUMN)(NEW COLUMN)administration

Clothes dryers(NEW COLUMN)1988(NEW COLUMN)1994(NEW COLUMN)Future

Clothes washers(NEW COLUMN)1988(NEW COLUMN)1994(NEW COLUMN)2004/2007

Dishwashers(NEW COLUMN)1988(NEW COLUMN)1994(NEW COLUMN)Future

Water heaters(NEW COLUMN)1990(NEW COLUMN)2004(NEW COLUMN)Future

Gas/oil furnaces and boilers(NEW COLUMN)1992(NEW COLUMN)2012(NEW COLUMN)Future

Ranges and ovens(NEW COLUMN)1990(NEW COLUMN)Electric - no

(NEW COLUMN)(NEW COLUMN)update

(NEW COLUMN)(NEW COLUMN)Gas - Future

Fluorescent lamp ballasts(NEW COLUMN)1990(NEW COLUMN)2005

Showerheads and faucets(NEW COLUMN)1994(NEW COLUMN)Future(NEW COLUMN)Future

Toilets and urinals(NEW COLUMN)1994(NEW COLUMN)Future

Electric motors(NEW COLUMN)1997(NEW COLUMN)Undecided(NEW COLUMN)Undecided

Commercial heating(NEW COLUMN)1994(NEW COLUMN)2003 *(NEW COLUMN)2008-2010 **

Commercial cooling(NEW COLUMN)1994(NEW COLUMN)2003 *(NEW COLUMN)2008-2010 **

In contrast to the 1970s, when federal energy legislation played a major role in supporting sustainable energy, there has been less activity since EPAct was enacted in 1992. Overall, EPAct has had impacts on energy use in buildings and lesser impacts on industrial energy use. A major omission from EPAct, and from all other energy legislation since 1975, has been any requirement for vehicles to achieve higher fuel economy. The vehicle fuel efficiency levels mandated in 1975 were met in the 1980s. In spite of the very substantial improvements in automotive technology—and the ability to manufacture for the mass market vehicles of high energy efficiency—a decline in the efficiency of the sales weighted average of new vehicles sold in the United States has occurred since 1992. Superior technology (improved engines and reduced vehicle drag) have been more than offset by increased engine power and vehicle weight.

The most significant provisions of EPAct—and those with the greatest implementation—were in the buildings sector. Establishment of state-level residential building codes jumped from 16 before EPAct to 30 after its enactment and 28 states have implemented the commercial code requirement.54 The U.S. Department of Housing and Urban Development also issued new energy standards for manufactured housing. Standards for electric motors, lamps, and commercial heating and cooling equipment written into the law are now in place and generally functioning well. An energy-efficient mortgage pilot program was launched. However, a critical prerequisite for large-scale implementation of energy-efficient mortgages—home energy rating guidelines—has not been achieved.

As noted, with the exception of the buildings sector, EPAct has had lesser impact. Grants to smaller industrial associations have been issued; grants were also issued to states to promote process-oriented energy efficiency. DOE has promoted an industrial "best-practices" program, and has had impact on such important end uses as motor and pump systems in industry. Voluntary audit and insulation guidelines were well conceived and implemented but with dissemination somewhat limited to date.

In contrast to the 1980s, when funding for energy-related R&D was cut substantially, R&D on energy-efficient technologies has increased somewhat since 1992. Effects of R&D are felt over a longer time period, but there is already some evidence of returns on these R&D investments. Examples include improved lighting technologies, advances in hybrid and diesel engine technology for automobiles, and new tools to assess and increase energy efficiency in industry. Renewable energy R&D has shown significant results, particularly in reducing costs of electricity from wind and photovoltaics.55

[33 ELR 10039]

Utility DSM programs have diminished greatly since 1992, due in large part to the expectation of deregulation of utilities. Utilities have prepared for this deregulation by cutting costs. In many states, the incentive regulations for DSM have become inapplicable or rendered moot. The result has been a marked reduction in both utility DSM programs from a peak of $ 2.74 billion/year in 199356 to $ 1.4 billion/year in 199957 and a dramatic reduction in utility R&D expenditures.58

Finally, during the period since Rio, there have been a number of Executive Orders directed toward energy efficiency. Between 1993 and 2001, the following Executive Orders have been issued: Requiring Agencies to Purchase Energy Efficient Computer Equipment59; Energy Efficiency and Water Conservation at Federal Facilities60; Greening the Government Through Efficient Energy Management61; Developing and Promoting Biobased Products and Bioenergy62; Greening the Government Through Federal Fleet Transportation Efficiency63; Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use64; Actions to Expedite Energy-Related Projects65; and Energy Efficient Standby Power Devices.66

Key Trends in Indicators of Sustainable Development in Energy Production and Consumption

The essential characteristics of sustainable development for the energy sector are more efficient use of nonrenewable fossil fuel-based energy resources and increased development and use of renewable energy resources. Numerous indicators can be used to gauge the degree to which the United States has made progress toward these goals. We propose three different measures of this progress. The first two measures relate to energy use, as designed by the PCSD in 199667:

. Energy Intensity: reduction in the amount of energy consumed per dollar of gross domestic product (GDP)68; and

. Share of Renewable Energy: increase in the share of renewable energy consumption in the United States.

A useful way to look at these two indicators is that the first is generally revealing of the near-term dynamics of the energy system toward sustainability; the second reveals the longer term trend toward several of the most important environmentally favorable energy sources.

The first indicator is also a measurement of progress in instituting integrated decisionmaking, where improvements in energy intensity are considered alongside increases in supply. The degree to which so-called no-regrets energy efficiency measures that characterize the precautionary principle have been adopted is also measured by this indicator. Both indicators measure progress in instituting the "polluter-pays" principle in which externality costs are assigned to various energy sources. This principle, if correctly applied, would send consumers the signal to reduce consumption of polluting, fossil fuel-based energy sources either by using them more efficiently or by switching to renewable resources. Finally, intergenerational equity can also be measured by both indicators, since efficient use of the existing fossil fuels combined with a move toward use of more renewable resources will preserve some amount of fossil fuels for future generations while reducing the level of negative environmental effects of these fuels and thus providing future generations with a cleaner environment.

The third indicator that we propose measures GHG emissions that are derived largely from the combustion of fossil fuel. Energy-related carbon emissions in the form of CO2 account for more than two-thirds of all GHG emissions. These emissions can be reduced by improving energy intensity and increasing the share of renewable energy used, as measured by the first two indicators. Thus, this indicator provides a measurement of the combined efforts that are evaluated separately in the first two indicators. Viewing the reduction of the threat of climate change that results from GHG emissions as a key aspect of sustainable energy use, our third indicator of U.S. progress toward sustainability is:

. Energy-Related CO2 Emissions (measured in millions of tonnes of carbon (MtC)).

This indicator is similar to the criteria used in establishing the Kyoto Protocol in 1997.69 It provides an absolute measure of the progress made in moving toward a target concentration of GHGs in the atmosphere, regardless of whether the target is 450, 550, 650, or another concentration of atmospheric GHGs in parts per million by volume.

[33 ELR 10040]

Once we have assessed these various measures of progress, we then delve into energy use in the United States in more depth. Changes in energy intensity, renewable energy use, and GHG emissions associated with the end-use sectors (residential and commercial buildings, industry, and transportation) and with energy supply (coal, natural gas, oil, nuclear, and renewable energy) of primary interest.70

Sustainability can also be measured by reference to achievements of other nations at a comparable level of economic development. Such a measure adds a form of reality check to the assessment. If progress is demonstrated in other advanced economies and less so in ours—or vice versa—it will be useful to understand reasons for such differences. We compare the United States with other countries later in the Article.

The overall trends indicate that energy consumption and production in the United States has achieved fewer of the goals of sustainability since 1992 than before. This can be attributed to a variety of factors. Until recently the U.S. economy has been vibrant, and has grown at high levels since 1992. Even though the energy intensity of the U.S. economy continued to decline after 1992, the absolute level of both energy use and CO2 emissions were driven up by increased economic activity. This, combined with relatively low energy prices and an absence of strong legislation—as occurred in earlier periods—has led to the approximately 20% increase in primary energy use and 10% increase in energy-related CO2 emissions from 1992 to 2000.

Primary Energy Consumption and Energy Intensity

In 1992, the United States consumed about 90 exajoules (EJ) of primary energy (see Table 2).71 By 2000, primary energy consumption was 108 EJ, an increase from 1992 levels of an annual average rate of 2.4%, much higher than the annual average growth rate of 0.8% for the previous two decades. By this measure, U.S. energy growth was more rapid—and thus less sustainable—in the eight years after 1992 than in the two decades prior to that year.

Table 2. U.S. Primary Energy Use, 1972-200072

(NEW COLUMN)1972(NEW COLUMN)1992(NEW COLUMN)2000(NEW COLUMN)AAGR(NEW COLUMN)AAGR

(NEW COLUMN)(NEW COLUMN)(NEW COLUMN)(NEW COLUMN)1972-1992(NEW COLUMN)1992-2000

Energy Use (EU):

Residential buildings(NEW COLUMN)15.7(NEW COLUMN)17.7(NEW COLUMN)21.5(NEW COLUMN)0.6(NEW COLUMN)2.5

Commercial buildings(NEW COLUMN)9.7(NEW COLUMN)13.5(NEW COLUMN)17.9(NEW COLUMN)1.7(NEW COLUMN)3.6

Transportation(NEW COLUMN)18.7(NEW COLUMN)23.7(NEW COLUMN)28.1(NEW COLUMN)1.2(NEW COLUMN)2.2

Industry(NEW COLUMN)32.7(NEW COLUMN)35.0(NEW COLUMN)40.9(NEW COLUMN)0.4(NEW COLUMN)2.0

Total Energy Use(NEW COLUMN)76.8(NEW COLUMN)89.9(NEW COLUMN)108.4(NEW COLUMN)0.8(NEW COLUMN)2.4

AAGR = Average Annual Growth Rate (%)

Figure 1 shows this growth in primary energy, but also shows that the United States experienced significant progress related to our first indicator, economic energy intensity. Annual GDP increase from 1992 to 2000 was 50% higher than during the period 1972 to 1992. As a result, primary energy use per dollar GDP declined from 19.7 megajoules per dollar of GDP (MJ/$ GDP)73 in 1972 to 13.1 MJ/$ GDP in 1992 to 11.2 MJ/$ GDP in 2000. The decline has been an almost steady 2% per year from 1972 to 2000.

[33 ELR 10041]

Figure 1. Energy Consumption per Dollar of Gross Domestic Product: 1970-200074

[SEE FIGURE IN ORIGINAL]

Share of Renewable Energy

Another measure of sustainability of energy use is the growth in renewable energy consumption relative to total energy consumption. Table 3 shows that between 1972 and 1992, total renewable energy consumption grew from 4.72 EJ to 6.47 EJ, at an average rate of 1.6% per year. Between 1992 and 2000, total renewable energy consumption grew to 7.2 EJ, at a slightly slower rate of 1.3% per year. The share of renewable energy in total consumption also dropped during the 1990s; in 1992, 7.2% of total energy consumption was from renewable sources but by 2000 this had dropped to 6.9%. Most of the growth in renewable energy sources has been seen in the area of biomass, with smaller growth in geothermal, solar, and wind resources. Hydroelectric power grew overall between 1972 and 2000, but dropped in share of total energy consumption as the other renewable energy sources increased their shares.

Table 3. U.S. Renewable Energy Consumption, 1972-2000

(NEW COLUMN)*3*Energy Consumption (EJ)(NEW COLUMN)*3*Share of Total (%)

(NEW COLUMN)1972(NEW COLUMN)1992(NEW COLUMN)2000(NEW COLUMN)1972(NEW COLUMN)1992(NEW COLUMN)2000

Hydroelectric(NEW COLUMN)3.11(NEW COLUMN)2.97(NEW COLUMN)3.28(NEW COLUMN)4.0%(NEW COLUMN)3.3%(NEW COLUMN)3.2%

Biomass(NEW COLUMN)1.59(NEW COLUMN)3.00(NEW COLUMN)3.45(NEW COLUMN)2.1%(NEW COLUMN)3.3%(NEW COLUMN)3.3%

Geothermal(NEW COLUMN)0.03(NEW COLUMN)0.39(NEW COLUMN)0.34(NEW COLUMN)0.0%(NEW COLUMN)0.4%(NEW COLUMN)0.3%

Solar(NEW COLUMN)0.00(NEW COLUMN)0.07(NEW COLUMN)0.07(NEW COLUMN)0.0%(NEW COLUMN)0.1%(NEW COLUMN)0.1%

Wind(NEW COLUMN)0.00(NEW COLUMN)0.03(NEW COLUMN)0.05(NEW COLUMN)0.0%(NEW COLUMN)0.0%(NEW COLUMN)0.1%

Total Renewables(NEW COLUMN)4.72(NEW COLUMN)6.47(NEW COLUMN)7.20(NEW COLUMN)6.2%(NEW COLUMN)7.2%(NEW COLUMN)6.9%

Nuclear(NEW COLUMN)0.62(NEW COLUMN)6.97(NEW COLUMN)8.45(NEW COLUMN)0.8%(NEW COLUMN)7.7%(NEW COLUMN)8.1%

Fossil Fuels(NEW COLUMN)71.42(NEW COLUMN)76.91(NEW COLUMN)88.48(NEW COLUMN)93.0%(NEW COLUMN)85.2%(NEW COLUMN)85.1%

Total Consumption(NEW COLUMN)76.76(NEW COLUMN)90.22(NEW COLUMN)103.92

GHG Emissions

Energy-related CO2 emissions rose from 1224 MtC in 1972 to 1359 MtC in 1992 to 1562 MtC in 2000. Thus it is clear that the United States has not stabilized energy-related carbon emissions; on the contrary, the growth of these emissions has accelerated from an annual 0.5% in the two decades prior to 1992 to an annual rate of 1.8% since then.

[33 ELR 10042]

Table 4. Energy-Related CO2 Emissions From Fossil Energy Consumption: 1972-200075

(NEW COLUMN)1972(NEW COLUMN)1992(NEW COLUMN)2000(NEW COLUMN)AAGR(NEW COLUMN)AAGR

(NEW COLUMN)(NEW COLUMN)(NEW COLUMN)(NEW COLUMN)1972-1992(NEW COLUMN)1992-2000

*2*CO2 Emissions from Energy (MtC):

Residential buildings(NEW COLUMN)243.1(NEW COLUMN)261.8(NEW COLUMN)313.4(NEW COLUMN)0.4%(NEW COLUMN)2.3%

Commercial buildings(NEW COLUMN)156.9(NEW COLUMN)210.8(NEW COLUMN)267.8(NEW COLUMN)1.5%(NEW COLUMN)3.0%

Transportation(NEW COLUMN)486.3(NEW COLUMN)431.1(NEW COLUMN)514.8(NEW COLUMN)1.2%(NEW COLUMN)2.2%

Industry(NEW COLUMN)337.4(NEW COLUMN)455.1(NEW COLUMN)465.7(NEW COLUMN)-0.3%(NEW COLUMN)0.3%

Total CO2 Emissions from Energy(NEW COLUMN)1223.7(NEW COLUMN)1358.8(NEW COLUMN)1561.7(NEW COLUMN)0.5%(NEW COLUMN)1.8%

AAGR = Average Annual Growth Rate (%)

A Deeper Look at Energy Trends

It is useful to delve deeper into the underlying trends to get a clearer picture of the progress made toward more sustainable energy consumption patterns and to identify areas where increased attention is needed. We do this by looking at overall trends and specific indicators for the buildings, transport, and industrial sectors of the U.S. economy.

In 2000, industry accounted for 38% of total energy consumption, buildings (residential and commercial) accounted for 36%, and transport accounted for 26%. All sectors experienced steady rise in primary energy consumption between 1992 and 2000. The most rapid increase was seen in commercial and institutional buildings which grew at an average rate of 3.6% per year. The other sectors followed with average annual increases of 2.5% for residential buildings, 2.2% for transport, and 2.0% for industry.

Buildings

The substantial growth in primary energy use in commercial buildings was due to the economic boom that began in the mid-1990s and the associated increased commercial activity. While the energy intensity (energy use per square meter) of heating for commercial office space decreased during this period; the decline was more than offset by the rapid growth in electricity use. The amount of electricity used per square meter of commercial space jumped by 14% between 1988 and 1998, primarily due to the increase in the number of computers and other electronic office equipment.

Energy use in residential buildings grew from 17.7 EJ in 1992 to 21.5 EJ in 2000. This growth is tied to the almost 10% increase in population between 1990 and 2000 as well as to the trend toward larger homes filled with energy-consuming devices.76 By 1998, for example, on average all households owned at least one refrigerator, 77% of U.S. homes had clothes washers, 55% had clothes dryers, 72% had air conditioners, and 51% had dishwashers.77 Space heating was the single largest residential energy end-user, accounting for over one-half of all home energy consumption during this period. Space heating intensity declined substantially during the period, as a result of the increasing saturation of efficient heating equipment and improvements in thermal performance (including reductions in air infiltration) of windows, walls, and roofs of residential buildings. However, this improvement was more than offset by the increase in the energy used by other appliances, reflecting the growing areas of residential buildings and the increase in plug loads (computers and many electronic equipment, including equipment that consumes electricity even while not performing any useful function (so-called energy vampires)). The energy intensity of many individual appliances declined during this period due to technological advances and the NAECA appliance energy efficiency standards. Table 5 shows the energy intensity of major household appliances (measured as unit energy consumption in kwh/year), indicating that the largest savings came from improvement in refrigerators and freezers. Overall, despite improvements in energy efficiency, population growth combined with the trend toward larger, more energy-consuming homes and the proliferation of electricity using/wasting plug loads (electronic equipment, inefficient instant-on devices, battery rechargers of various types) are driving continued increases in residential energy consumption.

[33 ELR 10043]

Table 5. Unit Energy Consumption in kwh/yr

Appliance(NEW COLUMN)*2*Unit Energy Consumption

(NEW COLUMN)1988(NEW COLUMN)1998

Refrigerators(NEW COLUMN)1212(NEW COLUMN)917

Freezers(NEW COLUMN)1108(NEW COLUMN)680

Washers(NEW COLUMN)105(NEW COLUMN)102

Dryers(NEW COLUMN)957(NEW COLUMN)898

Dishwashers(NEW COLUMN)166(NEW COLUMN)148

Air conditioners(NEW COLUMN)1771(NEW COLUMN)163

Transportation

Energy used for both passenger travel and movement of freight grew from 23.7 EJ in 1992 to 28.1 EJ in 2000. Passenger transport is dominated by the use of personal automobiles and light trucks (including minivans and sport utility vehicles), which account for slightly over 80% of all kilometers (km) traveled, followed by airplanes which are responsible for about 15%. Almost all of the remaining km (4.5%) were mass transit buses and trains (both intra- and inter-city).

The growth in energy use for personal transport is due to both increasing vehicle miles traveled and the increase in the number, size, and weight of light trucks in the fleet. The popularity of sport utility vehicles increased throughout the 1990s, and has only recently shown signs of diminishing. In 1988, 30% of all new passenger vehicles purchased in the United States were light trucks. This grew to 45% in 1998. As a result of these trends, and the lack of any regulation to increase auto fuel economy during the period, average fuel economy for new passenger vehicles (autos plus light trucks) increased from 9.05 to 9.75 liters/100 km from 1988 to 1998.78

Energy use for transporting freight grew the fastest of all end-uses due to rapid growth in the volume of freight shipped in the United States as well as a shift toward more energy-intensive trucking. In 1988, freight was transported by trucks (33%), rail (35%), ship (32%), and air (less than 0.5%). By 1998, transport using trucks and rail grew to about 40% each, shipping dropped to about 20%, and air remained the same. For trucks, energy use per vehicle kilometer dropped from 9.3 megajoule per vehicle kilometer (MJ/vkm) to 8.4 MJ/vkm, but the average number of tonnes transported remained roughly steady. For rail, energy use per rail car kilometer (ckm) remained at about 10MJ/ckm, but the average load per car increased from 34.3 to 38.6 tonnes. These offsetting trends in the main methods of freight transport meant that the growth in total freight shipped was the main determinant of the growth of freight energy use during this period.

Industry

The industrial sector is extremely diverse and includes agriculture, mining, construction, energy-intensive manufacturing and nonenergy-intensive manufacturing. Industrial energy use grew at an average of 2% per year from 35 EJ in 1992 to 41 EJ in 2000. Energy used to produce bulk chemicals and for nonenergy-intensive manufacturing made up the largest share of industrial energy consumption in 1997 (14% each), followed by petroleum refining, mining, paper, metals-based durables, construction, steel, food, agriculture, cement, aluminum, and glass, respectively.79 There was a significant increase in industrial production following the end of the recession in 1992. Manufacturing value added, for example, increased 34% between 1992 and 1998.80 At the same time, there was a shift away from energy-intensive industries toward light manufacturing due to strong growth in the electronics industry. Even so, the growth in production outweighed savings due to structural shifts away from energy-intensive industries and ultimately drove the increase in overall industrial energy consumption experienced during the 1990s.

Comparison With Other Industrialized Countries

It is interesting to compare recent trends in energy consumption in the United States to those of other industrialized countries. Figure 2 shows the growth in primary energy in the United States and the total for 23 industrialized countries81 from 1972 to 1998. Over the entire period, the growth in energy use in the combined grouping of other industrialized countries was slightly higher than that in the United States; however, from 1992 to 1998, average annual growth in energy use in the United States was slightly higher at 1.8% per year compared with the 1.6% per year experienced in the other industrialized countries. Even so, the United States showed more rapid reduction in energy intensity, defined as primary energy use per 1995 $ of GDP (in purchasing power parity), dropping at a rate of about 2% per year between 1972 and 1998 which was almost double that of the other industrialized countries (see Figure 3). Since 1992, energy intensity declines in other industrialized countries slowed dramatically to—0.4% per year in contrast with U.S. improvements at a rate of—1.7% per year. The drop in economic energy intensity in the United States, especially during the 1990s, can be explained by the combination of rapid economic growth (3.7% per year average increases in GDP from 1992-1998) and the shift toward a less energy-intensive, more service-oriented economy that occurred with the rapid expansion of the telecommunications and computer-related industries. Even with the dramatic drop, though, the United States is more energy-intensive than the other industrialized countries, averaging 11.1 MJ/1995$ [33 ELR 10044] (purchasing power parity) in 1998 compared with 8.0 MJ/1995$.

Energy-related CO2 emissions grew sporadically and more slowly than primary energy use in the United States and industrialized countries since 1972 (see Figure 4), averaging 0.8% and 0.6% per year, respectively. However, the United States saw rapid growth in these CO2 emissions during the 1990s, averaging almost 2.0% per year between 1992 and 1998—more than double the growth in CO2 emissions in the other industrialized countries. By 1998, total CO2 emissions from the United States were virtually the same as total emissions from all 23 other industrialized countries combined. Figure 5 shows that since 1972, decarbonization—the reduction in the amount of CO2 emitted per unit of primary energy consumed—occurred in other industrialized countries as well as in the United States. However, the rate of decarbonization was much more rapid in the other industrialized countries, which had a higher ratio of CO2 emissions to energy use in 1972 than the United States, but by 1998 these countries combined emitted 13.5 million metric tons of carbon per exajoule (MtC/EJ) compared to emissions of 15.2 MtC/EJ in the United States.

Figure 2. Trends in Primary Energy Consumption in the United States and 23 Other Industrialized Countries, 1972-199882

[SEE ILLUSTRATION IN ORIGINAL]

Figure 3. Trends in Primary Energy Intensity (Energy Use per 1995 US$ GDP, PPP) in the United States and 23 Other Industrialized Countries, 1972-199883

[SEE FIGURE IN ORIGINAL]

[33 ELR 10045]

Figure 4. Trends in Energy-Related CO2 Emissions in the United States and 23 Other Industrialized Countries, 1972-199884

[SEE FIGURE IN ORIGINAL]

Figure 5. Trends in Decarbonization in the United States and 23 Other Industrialized Countries, 1972-199885

[SEE FIGURE IN ORIGINAL]

Recommendations

It is relatively easy to specify in a general way the goals for increasing sustainability of energy production and consumption that one may wish to achieve—e.g., reduction in energy intensity or increase in renewable energy supply by a certain percent in a given year; maintenance of energy-related carbon emissions at levels of a given year by a defined data. It is quite another matter to describe the measures necessary to achieve such goals. The difficulty in describing such measures is in at least two major areas. First, estimating the impacts of policies requires a complex analysis. Second, it is not possible to know what measures are either politically or institutionally feasible.

Thus, we rely on an in-depth analysis of the topic presented in the Scenarios for a Clean Energy Future (CEF) report.86 This report represents the combined efforts of scientists from five DOE National Laboratories "to examine the potential for public policies and programs to foster efficient and clean energy technology solutions to … energy-related challenges."87 Since the efficiency of energy consumption, at the sector level and in conversion, e.g. electricity production, [33 ELR 10046] combined with the share of renewable energy sources used both directly affect total U.S. energy-related CO2 emissions, we focus on this third indicator in this section.

Scenarios for a CEF analyzed three future scenarios for both 2010 and 2020: a Business-as-Usual scenario which assumes continuation of current energy policies and a steady but modest pace of technological progress, as well as Moderate and Advanced scenarios that are "defined by policies that are consistent with increasing levels of public commitment and political resolve to solving the nation's energy-related challenges."88 The Advanced scenario resulted in projected energy-related carbon emissions in the United States in 2020 equal to emissions in 1990 (see Figure 6). Admittedly, the Advanced scenario will be very difficult to achieve, in terms of major challenges in enacting policies and especially in realizing technology breakthroughs in the transport sector. We view this case as illustrative of goals of sustainable energy in keeping with the Rio Declaration and Agenda 21. One could propose higher or lower carbon emissions and for earlier or later years. In our view, the case illustrated in Figure 6 represents a major step toward energy sustainability and one that would be very difficult to attain by 2020, much less before. But the date of achievement or even the precise numbers in the figure are not the key point. The important issue is that these "goals," whether or not they are accepted, can serve as a basis for defining policies. In particular, we define a set of policies that, if implemented, could produce the results shown in Figure 6.

Figure 6. Carbon Emissions Reductions by Sector in the CEF Advanced Scenario

[SEE FIGURE IN ORIGINAL]

The policies described represent one set that could achieve this objective. There are other sets as well. The set chosen is based in large measure on the judgment of the two imponderables described above: the impact of the policies and their political acceptability.

Achieving the results shown in Figure 6 involves different actions for individual sectors, as well as two major actions that cut across all sectors. A summary of these measures is presented below.

[33 ELR 10047]

Cross-Cutting Policy Measures

Carbon Fee and Emissions Trading

In the CEF Advanced scenario, a carbon emissions trading system was established with the fee for carbon starting at lower levels and reaching a stable level of $ 50/tonne of carbon (about 12% increase in the cost of energy at current prices). It was calculated that this fee would generate about $ 75 billion/year, which could be returned to the taxpayer if the desire were to keep program revenue neutral or a portion of the fee could be used to support sustainable energy programs. Such a fee, which could also be implemented as a carbon tax, would represent a move toward implementing the "polluter-pays" principle since it would be applied on a per tonne of carbon basis.

Increased R&D

The CEF Advanced scenario also assumes a doubling of federal energy efficiency and renewable energy R&D, from $ 1.4 billion/year to $ 2.8 billion/year as well as an increased participation in the R&D by the private sector. Such an increase in R&D could lead to development of more efficient technologies that will contribute to reduced local and global pollutants from burning fossil fuels, to improved efficiency in using fossil fuels, and to reduced costs and improved reliability of renewable resources.

Policies for Energy Efficiency in Buildings

Expanded and Strengthened Appliance Efficiency Standards

The CEF Advanced scenario assumes tighter standards for residential clothes washers, water heaters, heat pumps and central air conditioners along with a revised standard for fluorescent lamp ballasts.

Expanded Voluntary Programs

The CEF Advanced scenario expands existing voluntary programs such as Energy Star, Building America, and Rebuild America, which provide information to consumers on products that achieve high efficiency levels.

Increased Building Codes

A new, nonprescriptive commercial building standard is developed and adopted that includes a 15% whole building energy consumption reduction target.

Tax Credits for Energy Efficiency and Renewable Energy Investments

As described in President Clinton's Climate Change Technology Initiative, tax credits would be expanded to include efficient natural gas water heaters, electric central air conditioners, electric heat pumps, residential-sized heat-pump water heaters, natural gas heat pumps, fuel cells, new homes with efficiencies that significantly exceed current buildings standards (at least 30% more energy efficient than the International Energy Conservation Code),89 rooftop photovoltaic systems and solar water heating systems.

State Market Transformation Programs

Increased funding for state energy efficiency programs, including those focused on new buildings and retrofits, will be financed through electricity line charges (aka public benefits charges).

Expanded Government Procurement for Energy-Efficient Products

Government procurement programs at the national, state, and local levels that encourage or require purchase of energy efficient devices are treated as key enabling programs under the CEF Advanced scenario.

Policies for Energy Efficiency in Industry

Voluntary Sector Agreements

For the industrial sector, voluntary agreements that outline a commitment by an industrial company or association to achieve a specified energy efficiency improvement goal, e.g., to achieve 2% per year reduction in energy intensity, are assumed to be established in all major industrial sectors.

Expansion of Existing Voluntary Programs

The Advanced scenario assumes expansion, often including financial incentives, of the "Challenge" programs (Motor Challenge, Compressed Air Challenge, and Steam Challenge), the Energy Star Buildings and Green Lights programs (assuming a doubling of industrial floorspace included in these programs), U.S. Environmental Protection Agency (EPA) Pollution Prevention programs such as Waste Wise, and the number of sectors included in the Energy Star and Climate Wise90 programs.

Expansion of Investment Enabling Programs

Increased funding for state industrial energy efficiency programs is assumed to include expansion of technology demonstration, dissemination, and auditing; new technology demonstrations are included in expanded Clean Air Partnership programs; expanded utility and energy service company-type programs are assumed to provide increased financial incentives for investments in energy efficiency; tax rebates for specific industrial technologies such as industrial cogeneration (aka combined heat and power or CHP), black liquor gasification (paper industry), and near net [33 ELR 10048] shape casting (steel industry); and an investment tax credit will be offered for cogeneration systems.

Regulations for Energy-Efficient Motors, Fans, and Pumps

The moderate scenario mandates the upgrade of all motor systems to EPAct standards by 2020, and extends the standards to motors not currently governed by EPAct. The scenario also promotes a national repair standard, the institution of certification and licensing of rewind shops, and improved rewind practices by 2004. Specifications for motor purchases and energy-efficiency requirements are increased to EPAct standards. The advanced scenario also extends standards to all motor systems, enforcing to 100% compliance by 2020, and mandates certification and licensing of repair shops, and a national repair standard into law by 2004.

Policies for Energy Efficiency in Transportation

Increased Fuel Economy in New Vehicles

The European automobile manufacturers' association and the European Union have a voluntary agreement to cut CO2 from car exhausts by 25% per vehicle over 10 years. Some subsidiaries of American car manufacturers have agreed to this, which would increase average new car fuel efficiency from 30.6 miles per gallon (mpg) today to 40.7 mpg by 2008. The advanced scenario assumes that all light- and heavy-duty vehicle manufacturers commit to voluntary standards to increase fuel economy to 40 mpg in 2010 and 50 mpg in 2020 for cars, and 26 mpg in 2010 and 33 mpg in 2020 for light trucks. The scenarios assume that trading of mpg credits among companies is permissible.

Tax Credits for Very Efficient Vehicles

A set of tax credits ranging from $ 1,000 to $ 4,000 has been proposed for purchasers of high-efficiency vehicles, such as gasoline hybrid, diesel-electric, gasoline and methanol fuel cell, and hydrogen fuel cell. The credit varies with the increase in mpg, and would be phased out as sales increase beyond 50,000 units per year.

Accelerate Air Traffic Management Improvements

EPA and the Federal Aviation Administration (FAA) have a joint program known as Communications, Navigation, and Surveillance/Air Traffic Management (CNS/ATM) aimed at improving air traffic management to reduced time spent waiting on line on the ground and circling while waiting for landing slots. The program involves changes in flight procedures coupled with installation of a network of ground and airborne technologies to more efficiently manage air traffic. A recent FAA analysis estimate up to 6% savings in energy use for North America. There is currently no formal mechanism for implementing this program.

R&D and Promotion of Investment in Cellulosic Ethanol Production

The use of cellulosic ethanol in vehicles produces between 10 to 20% of the GHG emissions associated with an equivalent use of gasoline. DOE has a research program to develop commercializable processes for ethanol production from energy crops, forest and agricultural residues, and municipal wastes. Cellulosic ethanol would be used primarily as a blending agent with gasoline, and as an octane enhancer and oxygenate. Current market incentives for ethanol use include exemption on most federal taxes for gasoline for gasoline/ethanol blends, mandated oxygenate levels in federal reformulated gasoline, alternative fuel fleet requirements mandated by EPAct, and CAFE credits associate with the sale of alternative fuel vehicles.

Strengthened Government Fleet Program Promoting Alternative Fuels and Efficiency

EPAct regulations require federal and state vehicle fleets and some private fleets to introduce alternative fuel vehicles on a rigorous schedule. While these fleets are behind schedule in compliance, the EIA Annual Energy Outlook for 1999 assumes that a shift in government policy will allow full compliance.

Pay-at-the-Pump (PATP) Automobile Insurance

PATP automobile insurance represents an effort to transfer the incidence of a fixed motor vehicle operation cost to a variable cost. If one-fourth of the total cost of automobile insurance were variabilized via a tax on gasoline, gasoline prices would increase between 25 and 50 cents per gallon. Since at least some of the risk drivers impose on other drivers is proportional to miles driven, PATP could effectively internalize a portion of this public safety externality, thereby increasing economic efficiency. While PATP is imprecise due to variable fleet efficiency, it eliminates part of the problem of uninsured drivers.

Intelligent Traffic Systems Controls

Intelligent traffic systems controls, including intelligent roadway signing, staggered freeway entry, and electronic toll collection, are being introduced into U.S. cities. In the Advanced scenario, increased R&D and government investment leads to a wide range of available systems and rapid expansion of their use.

Telecommunications Programs

Over 50% of U.S. jobs (70 million) could theoretically be candidates for telecommuting. U.S. Department of Transportation (DOT) projections indicate there could be as many as 50 million telecommuters by 2020. A 1994 DOE study estimated that telecommuting could save about 1% of total motor fuel use by 2020, though as much as one-half of the potential savings could be offset by increases in travel demand due to improved traffic flow, and the travel impacts of increased urban sprawl caused by telecommuting.

Policies for Energy Efficiency in Electricity Generation

Wind Deployment Facilitation

Current wind facility siting on federal land requires avian, archeological, and flora/fauna studies. All wind facilities can possibly be subject to criminal charges for the deaths of [33 ELR 10049] endangered avian species. Modifying siting and liability policies for wind facilities could aid in wind deployment. Policy aimed at the design of independent system operator protocols to accommodate wind intermittency, such as establishment of a trading market to firm up intermittent power sources, would also aid in wind deployment.

Production Tax Credit for Wind and Biomass Power

The CEF study proposed a 1.5 cents per kwh tax credit for the first 10 years of operation for wind and biomass power installed over the next 4 or 5 years, in order to speed up commercialization of these near-commercial technologies. It also proposed a 1 cent per kwh credit for biomass co-firing (with fossil fuels).

Renewable Portfolio Standard

In April 1999, the president's proposed legislation on competition in the electric sector included a mandate to generate 7% of all electricity sales from either wind, biomass, solar, or geothermal for the years 2010-2015. A cap of 1.5 cents per kwh on the price premium was established, which could lower the portfolio percentage to less than 7.5%.

Net Metering

This policy assumes a minimum level of net metering in the United States. It is applicable only to systems of 20 kw or less in residential and commercial applications. Net metering is the process of feeding excess on-site generation into the grid at values equal to the purchase price, which can result in higher efficiencies and reduced transmission and distribution requirements.

Conclusion

We have discussed energy sustainability in terms of three major operational factors: energy efficiency, renewable energy use, and GHG emissions. Our main observations are that the period since 1992 has shown lesser achievements in all three factors than the two decades that preceded 1992. This is true for the United States and for other industrialized countries. In fact, in terms of reductions in energy intensity, the United States appears to have performed better than other industrialized countries. However, other industrialized countries have been more successful in turning to lower carbon fuel during the past decade and before.

Any of the measures of sustainability indicate that all of the industrialized countries have a long way to go before they can achieve the goals that have been espoused in the Rio Declaration. If past history is a guide, it will be extremely difficult to enhance progress in this regard. An international agreement with universal support would be very helpful, but the real results need to come from individuals, industries, and governments working in concert to support the specific goals of sustainable development.

1. U.S. ENERGY INFORMATION ADMINISTRATION (U.S. EIA), ANNUAL ENERGY REVIEW: 1998 (1998) [hereinafter ANNUAL ENERGY REVIEW 1998].

2. Rio Declaration on Environment and Development, U.N. Conference on Environment and Development (UNCED), U.N. Doc. A/CONF.151/5/Rev. 1, 31 I.L.M. 874 (1992) [hereinafter Rio Declaration].

3. Id. princ. 1.

4. ANNUAL ENERGY REVIEW 1998, supra note 1.

5. In this Article, we do not explicitly address nuclear power, either as a contributor to or a detractor from sustainable energy production and consumption. The authors believe that with the current inability to assure long-term storage of high-level radioactive waste, nuclear energy does not presently fit the Rio definition of sustainability. Whether nuclear power will in the future be a sustainable energy technology depends, in the view of the authors, on (1) solution of the storage problem, (2) the type of nuclear energy technology used, and (3) the institutional safeguards and safety provisions in place, especially in developing or politically unstable countries.

6. Rio Declaration, supra note 2, princ. 8.

7. UNCED, Agenda 21, ch. 9, U.N. Doc. A/CONF.151.26 (1992) [hereinafter Agenda 21]. Note that this section addresses Protection of the Atmosphere and explains that "the need to control atmospheric emissions of greenhouse and other gases and substances will increasingly need to be based on efficiency in energy production, transmission, distribution and consumption, and on growing reliance on environmentally sound energy systems, particularly new and renewable sources of energy." This Article focuses on energy production and consumption exclusively and does not address the issue of energy-related greenhouse gas (GHG) emissions, which are covered in a separate Article.

8. Id. P4.18.

9. Id. ch. 4.

10. Rio Declaration, supra note 2, princ. 4.

11. Agenda 21, supra note 7, P8.

12. Rio Declaration, supra note 2, princ. 16.

13. RICHARD L. OTTINGER, MAJOR ISSUES IN VALUING AND INCORPORATING ENVIRONMENTAL EXTERNALITIES, PROCEEDINGS OF THE 1993 EUROPEAN COUNCIL FOR AN ENERGY-EFFICIENT ECONOMY SUMMER STUDY (1993), available at http://www.eceee.org/library_links/proceedings/1993/pdf93/932027.PDF (last visited Apr. 4, 2002).

14. Rio Declaration, supra note 2, princ. 15.

15. Id. princ. 3.

16. Programme for the Further Implementation of Agenda 21, U.N. GAOR, 19th Special Sess., Annex, U.N. Doc. A/S-19-29, P9 (1997), available at http://www.un.org/documents/ga/res/spec/aress19-2.htm (last visited Apr. 2, 2002).

17. Id. P28.

18. Id. P42.

19. Id. P46.

20. Id.

21. Id. P28.

22. PRESIDENT'S COUNCIL ON SUSTAINABLE DEVELOPMENT (PCSD), SUSTAINABLE AMERICA: A NEW CONSENSUS FOR PROSPERITY, OPPORTUNITY, AND A HEALTHY ENVIRONMENT FOR THE FUTURE ch. 2 (1996), available at http://clinton2.nara.gov/PCSD/Publications/TF_Reports/amer-top.html.

23. Id.

24. PCSD, TASK FORCE REPORT: ENERGY AND TRANSPORTATION preface (1996), available at http://clinton2.nara.gov/PCSD/Publications/TF_Reports/energy-top.html (last visited Apr. 2, 2002).

25. Id. at ch. 2.

26. Pub. L. No. 94-163, 89 Stat. 871.

27. Pub. L. No. 95-617, 92 Stat. 3117; Pub. L. No. 95-621, 92 Stat. 3350.

28. Pub. L. No. 95-618, 92 Stat. 3174 (1978).

29. Pub. L. No. 95-619, 92 Stat. 3206 (1978).

30. Pub. L. No. 95-617, 92 Stat. 3117 (1978).

31. Pub. L. No. 100-12, 100 Stat. 103.

32. Pub. L. No. 102-486, 106 Stat. 2776 (1992) (codified at 42 U.S.C. §§ 13211-13219).

33. See Energy Policy and Conservation Act, at http://thomas.loc.gov/cgi-bin/bdquery/z?d094:SN00622;@@@LITOM:/bss/d094query.html (last visited Apr. 2, 2002).

34. The National Energy Act of 1978 was signed into law in November 1978 and includes five different statutes: PURPA; the Energy Tax Act; the NECPA; the Powerplant and Industrial Fuel Use Act of 1978, Pub. L. No. 95-620, 92 Stat. 3318 (codified at 42 U.S.C. § 8301); and the Natural Gas Policy Act of 1978, Pub. L. No. 95-621, 92 Stat. 3387 (codified at 15 U.S.C. §§ 3341-3348). The general purpose of the National Energy Act was to ensure sustained economic growth while also permitting the economy time to make an orderly transition from the past era of inexpensive energy resources to a period of more costly energy. See Kanner & Associates, Federal Energy Law Summaries, at http://www.kannerandassoc.com/energy%20laws.html (last visited Apr. 2, 2002). The Natural Gas Policy Act set ceiling prices for natural gas and partially deregulate wellhead prices. The Powerplant and Industrial Fuel Use Act limits use of natural gas in electric generation (repealed 1987).

35. See Andrea L. Murphy, Energy Tax Credits, at http://www.colby.edu/personal/t/thtieten/ener-west.html (last visited Apr. 2, 2002). The tax incentives were eliminated in the mid-1980s as a result of tax reform legislation that stemmed from the philosophy that prevailed during President Ronald Reagan's Administration of having market conditions determine energy conservation decisions.

36. See U.S. Department of Energy, What Is the Gas Guzzler Tax?, at http://www.fueleconomy.gov/feg/info.shtml#guzzler (last visited Apr. 2, 2002). The Gas-Guzzler Tax, which first took effect in 1980, specifies a sliding tax scale for new passenger cars with fuel efficiency. There is no comparable tax for light trucks. The miles per gallon (mpg) level at which the tax takes effect has increased from 14.5 mpg in 1980 to 22.5 mpg today, and the size of the tax has increased substantially. Today, the tax on a new passenger car achieving between 22 and 22.5 mpg is $ 1,000, increasing to $ 7,700 for a car with a fuel economy rating under 12.5 mpg. In 1975, 80% of new cars sold achieved less than 21 mpg, and 10% achieved less than 12 mpg. In 2000, only 1% of all cars sold achieved less than 21.4 mpg. The tax, which applies only to new automobiles, has provided a disincentive to produce inefficient automobiles and played a role, in addition to the CAFE standards, in the downsizing of the passenger car fleet. The absence of a similar tax for light trucks (which includes minivans and sport utility vehicles) has almost certainly exacerbated the disparities between the two vehicle types.

37. Union of Concerned Scientists, Briefing: Public Utility Regulatory Policies Act, at http://www.ucsusa.org/energy/brief.purpa.html (last visited Apr. 2, 2002).

38. The low-income weatherization program was initially established in the Energy Conservation in Existing Buildings Act of 1976, 42 U.S.C. §§ 6851-6881.

39. New buildings performance standards were initially established in the Energy Conservation Standards for New Buildings Act of 1976, 42 U.S.C. §§ 6831-6840.

40. Pub. L. No. 95-619, 92 Stat. 3206 (codified at 42 U.S.C. §§ 8251-8261).

41. JOSPEH ETO, THE PAST, PRESENT, AND FUTURE OF U.S. UTILITY DEMAND-SIDE MANAGEMENT PROGRAMS (1996) (Lawrence Berkeley National Laboratory LBNL-39931).

42. J.H. BROEHL ET AL., DEMAND-SIDE MANAGEMENT, EVALUATION OF ALTERNATIVES (1984).

43. ETO, supra note 41.

44. Amory Lovins, Energy Strategy: The Road Not Taken?, 55 FOREIGN AFF. 65-96 (1976).

45. ETO, supra note 41. The 1992 Energy Policy Act, discussed below, required all U.S. utilities to use IRP.

46. 2 U.S. EIA, ELECTRIC POWER ANNUAL: 1996 (1998) (DOE/EIA-0348(96)/2), available at http://tonto.eia.doe.gov/FTPROOT/electricity/0348962.pdf (last visited Apr. 3, 2002).

47. JOSEPH ETO ET AL., WHERE DID THE MONEY GO? THE COST AND PERFORMANCE OF THE LARGEST COMMERCIAL SECTOR DSM PROGRAMS (1995) (Lawrence Berkeley National Laboratory LBNL-38021).

48. Warren-Alquist Act of 1974, CAL. PUB. RES. CODE ANN. § 250000 et seq.; HOWARD GELLER, AMERICAN COUNCIL FOR AN ENERGY EFFICIENT ECONOMY, NATIONAL APPLIANCE EFFICIENCY STANDARDS: COST-EFFECTIVE FEDERAL REGULATIONS (1995).

49. GELLER, supra note 48.

50. James E. McMahon et al., Impacts of U.S. Appliance Standards to Date, in 2ND INTERNATIONAL CONFERENCE ON ENERGY EFFICIENCY IN HOUSEHOLD APPLIANCES AND LIGHTING, NAPLES, ITALY, SEPT. 27-29 (Italian Association of Energy Economists eds. 2000).

51. Energy Policy Act of 1992, Pub. L. No. 102-486, 106 Stat. 2776 (codified at §§ 13211-13219).

52. AMERICAN COUNCIL FOR AN ENERGY-EFFICIENT ECONOMY & ALLIANCE TO SAVE ENERGY, MISSING THE MARK: FIVE-YEAR REPORT CARD ON THE ENERGY EFFICIENCY PROVISIONS OF THE ENERGY POLICY ACT (1997).

53. McMahon et al., supra note 50. See also ClaspOnline, Standards and Labels, Programs by Country: USA, at http://www.clasponline.org/standard-label/programs/country1.php3 (last visited Apr. 2, 2002).

* Ashrae Standard 90.1-1999 levels adopted for 18 product classes

** 15 additional product classes under consideration for increased efficiency levels beyond Ashrae 90.1-1999

54. AMERICAN COUNCIL FOR AN ENERGY-EFFICIENT ECONOMY & ALLIANCE TO SAVE ENERGY, supra note 52.

55. Wind systems are now competitive with conventional electricity sources in many parts of the United States, with costs on the order of 5 cents per kwh. Photovoltaics still have a long way to go to be competitive with conventional sources (they cost on the order of 40 cents per kwh), but their costs have declined significantly and continuously over the past decades and they are cost effective in many places of the world for remote applications, with the result that production has increased at a rapid rate. Increased production is a necessity for manufacturing cost savings.

56. 2 U.S. EIA, supra note 46.

57. 2 U.S. EIA, ELECTRIC POWER ANNUAL: 1999 (2000) (DOE//EIA-0348(99)/2), available at http://tonto.eia.doe.gov/FTPROOT/electricity/0348992.pdf.

58. U.S. GENERAL ACCOUNTING OFFICE (GAO), CHANGES IN ELECTRICITY-RELATED R&D FUNDING (1996) (GAO-RCED-96-203). Electric Utility Restructuring—Implications for Electricity R&D: Testimony Before the Subcomm. on Energy & Environment of the House Comm. on Science, 105th Cong. (1998) (statement of Victor S. Rezendes, Director, Energy, Resources, and Science Issues, Resources, Community, and Economic Development Division) (GAO/T-RCED-98-144), available at http://www.gao.gov/ (last visited Apr. 24, 2002).

59. Exec. Order No. 12845, 53 Fed. Reg. 21887 (Apr. 21, 1993), ADMIN. MAT. 45056.

60. Exec. Order No. 12902, 59 Fed. Reg. 11463 (Mar. 8, 1994).

61. Exec. Order No. 13123, 64 Fed. Reg. 30851 (June 8, 1999), ADMIN. MAT. 45107.

62. Exec. Order No. 13134, 64 Fed. Reg. 44139 (Aug. 16, 1999).

63. Exec. Order No. 13149, 65 Fed. Reg. 24607 (Apr. 26, 2000), ADMIN. MAT. 45124.

64. Exec. Order No. 13211, 66 Fed. Reg. 28355 (May 18, 2001), ADMIN. MAT. 45140.

65. Exec. Order No. 13212, 66 Fed. Reg. 28357 (May 22, 2001), ADMIN. MAT. 45141.

66. Exec. Order No. 13221, 66 Fed. Reg. 40571 (July 31, 2001).

67. PCSD, supra note 22, at ch. 2. The World Bank has developed similar indicators (purchasing power parity dollar per kilogram of oil equivalent and share of hydro in electricity production). WORLD BANK, WORLD DEVELOPMENT INDICATORS: 2001 (2001).

68. Also referred to as economic energy intensity. Physical energy intensity is measured as energy use per unit of physical output, e.g. ton of steel.

69. Kyoto Protocol to the United Nations Framework Convention on Climate Change, Dec. 10, 1997, U.N. Doc. FCCC/CP/197/L. 7/Add. 1, reprinted in 37 I.L.M. 22 (1998).

70. Helio International is a research-oriented, nonprofit, international, nongovernmental organization that, in the absence of an energy chapter in Agenda 21, has undertaken to assess and monitor the contribution of energy systems to an improved quality of life. Helio International has devised five simple sustainability progress indicators: (1) trends in energy intensity including changes in the level of energy-using economic activity, changes in the distribution of energy-using activities, and changes in product energy efficiency, (2) changes in the mix of supply-side energy sources from more to less GHG emitting, (3) progress in implementing national climate change programs, (4) trends in transport, and (5) trends in energy efficiency in industry and in the commercial and residential sectors. See Helio International, Sustainable Energy Watch, at http://www.helio-international.org/ (last visited Apr. 23, 2002).

71. Primary energy is calculated using a conversion rate from final to primary electricity of 3.08, reflecting the difference between an average power plant heat rate of 10,500 British thermal unit (Btu)/kwh and a site rate of 3,412 Btu/kWh, including transmission and distribution, U.S. DOE, U.S. EIA, OFFICIAL ENERGY STATISTICS (2001), available at http://www.eia.doe.gov/ (last visited Apr. 3, 2002).

72. U.S. EIA, ANNUAL ENERGY REVIEW: 2000 (2001), available at http://www.eia.doe.gov/aer/enduse.html (last visited Apr. 4, 2002).

73. EIA uses chained 1996 dollars. Chained dollars are based on the average weights of goods and services in successive pairs of years. They are "chained" because the second year in each pair, with its weights, becomes the first year of the next pair. U.S. EIA, ANNUAL REVIEW OF ENERGY: 2000 glossary (2001), available at http://www.eia.doe.gov/emeu/aer/pdf/pages/sec19.pdf (last visited Apr. 3, 2002).

74. U.S. EIA, supra note 72.

75. U.S. EIA, EMISSIONS OF GREENHOUSE GAS EMISSIONS IN THE U.S. 2000 (Table E3. Total Energy-Related CO2 Emissions by End-Use Sector and the Electric Power Sector by Fuel Type, 1949-2000), available at http://www.eia.doe.gov/oiaf/1605/ggrpt/tble3.html (last visited Apr. 24, 2002).

76. In 1997, U.S. dwelling size per capita was 58 square meters (sq. m), compared to 54 sq. m in Sweden, 41 sq. m in Canada, 35 sq. m in France, and the United Kingdom, and 33 sq. m in Japan. S. MURTISHAW & L. SCHIPPER, UNTANGLING RECENT TRENDS IN U.S. ENERGY USE (2000). Primary energy use per person increased slightly from 70 EJ/capita in 1992 to 74 EJ/capita in 1997.

77. Id.

78. Id. Average new passenger car fuel economy was slighter lower in 1998 at 8.20 1/100 km compared to 8.17 1/100 km in 1988. The average fuel economy for light trucks, however, increased from 11.05 1/100 km in 1988 to 11.26 1/100 km in 1998.

79. INTERLABORATORY WORKING GROUP, SCENARIOS FOR A CLEAN ENERGY FUTURE (2000) (Working group consisting of members of Oak Ridge National Laboratory and Lawrence Berkeley National Laboratory) (ORNL/CON-476 and LBNL-44029), available at http://www.ornl.gov/ORNL/Energy_Eff/CEF.htm (last visited Apr. 3, 2002).

80. MURTISHAW & SCHIPPER, supra note 75.

81. The industrialized countries in this comparison are Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, and the United Kingdom. The grouping represents member countries of the Organization for Economic Cooperation and Development (OECD) as of 1992 and does not include the following countries which joined the OECD after 1992: Czech Republic (1995), Hungary (1996), Mexico (1994), Poland (1996), the Slovak Republic (2000), and South Korea (1996). See OECD, Membership, at http://www1.oecd.org/about/general/member-countries.htm (last visited Apr. 3, 2002).

82. INTERNATIONAL ENERGY AGENCY, ENERGY STATISTICS OF OECD COUNTRIES (2001).

83. Id.

84. INTERNATIONAL ENERGY AGENCY, CO2 EMISSIONS FROM FUEL COMBUSTION (2001).

85. Id.

86. INTERLABORATORY WORKING GROUP, supra note 78. The authors of this Article were directly involved in the preparation of the Scenarios for a CEF report. Mark Levine was one of three principal authors of the overall report along with Marilyn Brown of Oak Ridge National Laboratory and Walter Short of the National Renewable Energy Laboratory. Lynn Price, along with Ernst Worrell, was responsible for the section on industrial energy use.

87. Id. at ES.1.

88. Id. at ES.2.

89. INTERNATIONAL CODE COUNCIL, INTERNATIONAL ENERGY CONSERVATION CODE (2000). This comprehensive code establishes minimum regulations for energy-efficient buildings using prescriptive and performance-related provisions. The International Energy Conservation Code addresses the design of energy-efficient building envelopes and the installation of energy-efficient mechanical, lighting and power systems through requirements emphasizing performance. It makes possible the use of new materials and innovative techniques that conserve energy.

90. Since publication of the CEF, the U.S. EPA Climate Wise program has been discontinued and the participating industries are now part of the Energy Star program.


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