DOE/EA-1774 

Environmental Assessment 

for 

10 CFR Part 431 Energy Conservation Standards: Energy 

Conservation Standards for Residential Water Heaters, Direct 

Heating Equipment, and Pool Heaters 

March 2010
 16-i 

CHAPTER 16. ENVIRONMENTAL IMPACTS ANALYSIS 

TABLE OF CONTENTS 

16.1 INTRODUCTION ......................................................................................................... 16-1

16.2 AIR EMISSIONS ANALYSIS ...................................................................................... 16-1

16.2.1 Air Emissions Descriptions.......................................................................... 16-1

16.2.2 Air Quality Regulation ................................................................................. 16-4

16.2.3 Global Climate Change ................................................................................ 16-5

16.2.4 Analytical Methods for Air Emissions ........................................................ 16-9

16.2.5 Effects on Power Plant Emissions ............................................................. 16-10

16.2.6 Effects on Site Emissions........................................................................... 16-13

16.2.7 Effects on Upstream Fuel-Cycle Emissions .............................................. 16-17

16.3 SOCIAL COST OF CARBON DIOXIDE EMISSIONS ............................................ 16-18

16.3.1 Monetizing Carbon Dioxide Emissions ..................................................... 16-19

16.3.2 Social Cost of Carbon Values Used in Past Regulatory Analyses............. 16-21

16.3.3 Approach and Key Assumptions ............................................................... 16-22

16.4 WETLAND, ENDANGERED AND THREATENED SPECIES, AND 

CULTURAL RESOURCES ........................................................................................ 16-23

16.5 SOCIOECONOMIC IMPACTS .................................................................................. 16-23

16.6 ENVIRONMENTAL JUSTICE IMPACTS ................................................................ 16-23

16.7 NOISE AND AESTHETICS ....................................................................................... 16-24

16.8 SUMMARY OF ENVIRONMENTAL IMPACTS ..................................................... 16-24

LIST OF TABLES 

Table 16.2.1 Impact of Residential Heating Products Efficiency Standards on 

Cumulative Energy-Related Emissions of CO2 between 2015 and 2045 

(Million Metric Tons of CO2) ............................................................................ 16-8

Table 16.2.2 Power Sector Emissions Forecast from AEO2009 Reference Case ................. 16-10

Table 16.2.3 Power Sector Emissions Impact Forecasts for Water Heaters ......................... 16-11

Table 16.2.4 Power Sector Emissions Impact Forecasts for Direct Heating Equipment ...... 16-12

Table 16.2.5 Power Sector Emissions Impact Forecasts for Pool Heaters ........................... 16-13

Table 16.2.6 Change in Site Emissions for Water Heaters ................................................... 16-15

Table 16.2.7 Change in Site Emissions from Direct Heating Equipment ............................. 16-16

Table 16.2.8 Change in Site Emissions from Pool Heaters .................................................. 16-17

Table 16.2.9 Estimated Upstream Emissions of Air Pollutants as a Percentage of Direct 

Power Plant Combustion Emissions ................................................................ 16-18

Table 16.3.1 Social Cost of CO2, 2010 – 2050 (in 2007 dollars) ......................................... 16-19

Table 16.8.1 Environmental Impact Analysis Results Summary for Water Heaters ............ 16-25

Table 16.8.2 Environmental Impact Analysis Results Summary for Direct Heating 

Equipment ........................................................................................................ 16-25

Table 16.8.3 Environmental Impact Analysis Results Summary for Pool Heaters .............. 16-26
 16-1 

CHAPTER 16. ENVIRONMENTAL IMPACTS ANALYSIS 

16.1 INTRODUCTION 

 This chapter describes potential environmental effects that may result from amended 

energy conservation standards for residential heating products. The U.S. Department of Energy 

(DOE)’s energy conservation standards are not site-specific, and would apply to all 50 States and 

U.S. territories. Therefore, none of the standards would impact land uses, cause any direct 

disturbance to the land, or directly affect biological resources in any one area. 

 All of the trial standard levels (TSLs) are expected to reduce energy consumption in 

comparison to the base case. These changes in energy consumption are the primary drivers in 

analyzing environmental effects. The estimates of source energy savings that serve as inputs to 

the environmental assessment (EA) can be found in the utility impact analysis in chapter 13 of 

this technical support document (TSD). 

 The primary impact of the TSLs is on air emissions resulting from power plant operations 

and from the residential heating products themselves. Therefore, much of this chapter describes 

the air emissions analysis, and the latter part of the chapter describes potential impacts to other 

environmental resources. 

16.2 AIR EMISSIONS ANALYSIS 

 A primary focus of the environmental analysis is the impact on air emissions of amended 

energy conservation standards for residential heating products. The outcomes of the 

environmental analysis are largely driven by changes in power plant types and quantities of 

electricity generated under each of the alternatives. Changes in generation are described in the 

utility impact analysis in chapter 13. 

16.2.1 Air Emissions Descriptions 

 For each of the TSLs, DOE calculated total power-sector emissions based on output from 

the NEMS-BT model (see chapter 13 for description of the model). This analysis considers three 

pollutants: sulfur dioxide (SO2), nitrogen oxides (NOX), and mercury (Hg). An air pollutant is 

any substance in the air that can cause harm to humans or the environment. Pollutants may be 

natural or man-made (i.e., anthropogenic) and may take the form of solid particles (i.e., 

particulates or particulate matter), liquid droplets, or gases.a

 This analysis also considers carbon 

dioxide (CO2). 

 Sulfur Dioxide. Sulfur dioxide, or SO2, belongs to the family of sulfur oxide gases 

(SOx). These gases dissolve easily in water. Sulfur is prevalent in all raw materials, including 

 

a

 More information on air pollution characteristics and regulations is available on the U.S. Environment Protection 

Agent (EPA)’s website at www.epa.gov. 
 16-2 

crude oil, coal, and ore that contains common metals like aluminum, copper, zinc, lead, and iron. 

SOx gases are formed when fuel containing sulfur, such as coal and oil, is burned, and when 

gasoline is extracted from oil, or metals are extracted from ore. SO2 dissolves in water vapor to 

form acid, and interacts with other gases and particles in the air to form sulfates and other 

products that can be harmful to people and their environment.1

DOE has determined that SO2 emissions from affected Electric Generating Units (EGUs) 

are subject to nationwide and regional emissions cap and trading programs that create 

uncertainty about the standards’ impact on SO2 emissions. Title IV of the Clean Air Act sets an 

annual emissions cap on SO2 for all affected EGUs. SO2 emissions from 28 eastern States and 

the District of Columbia (D.C.) are also limited under the Clean Air Interstate Rule (CAIR, 

published in the Federal Register on May 12, 2005. 70 FR 25162 (May 12, 2005), which creates 

an allowance-based trading program that will gradually replace the Title IV program in those 

States and D.C. (The recent legal history surrounding CAIR is discussed below.) The attainment 

of the emissions caps is flexible among EGUs and is enforced through the use of emissions 

allowances and tradable permits. Under existing EPA regulations, any excess SO2 emission 

allowances resulting from the lower electricity demand caused by the imposition of an efficiency 

standard could be used to permit offsetting increases in SO2 emissions by any regulated EGU. 

However, if the standard resulted in a permanent increase in the quantity of unused emission 

allowances, there would be an overall reduction in SO2 emissions from the standards. While 

there remains some uncertainty about the ultimate effects of efficiency standards on SO2 

emissions covered by the existing cap and trade system, the NEMS-BT modeling system that 

DOE plans to use to forecast emissions reductions currently indicates that no physical reductions 

in power sector emissions would occur for SO2. 

Even if there is no significant reduction in the overall emissions of SO2 that results from 

the standard, there may still be some economic benefit from reduced demand for SO2 emission 

allowances that is not fully reflected in the cost savings experienced by individual consumers. 

Electricity savings that decrease the overall demand for SO2 emissions allowances could lower 

allowance prices and thereby result in some economic benefits for all electricity consumers, not 

just those that reduced their electricity use as a result of an efficiency standard. DOE does not 

plan to monetize this particular benefit because the effect on the SO2 allowance price from any 

single energy conservation standard is likely to be small and highly uncertain. 

 Nitrogen Oxides. Nitrogen oxides, or NOX, is the generic term for a group of highly 

reactive gases, all of which contain nitrogen and oxygen in varying amounts. Many of the 

nitrogen oxides are colorless and odorless. However, one common pollutant, nitrogen dioxide 

(NO2), along with particles in the air can often be seen as a reddish-brown layer over many urban 

areas. NO2 is the specific form of NOX reported in this document. NOX is one of the main 

ingredients involved in the formation of ground-level ozone, which can trigger serious 

respiratory problems. It can contribute to the formation of acid rain, and can impair visibility in 

areas such as national parks. NOX also contributes to the formation of fine particles that can 

impair human health.1

 Nitrogen oxides form when fossil fuel is burned at high temperatures, as in a combustion 

process. The primary manmade sources of NOX are motor vehicles, electric utilities, and other 
 16-3 

industrial, commercial, and residential sources that burn fossil fuels. NOX can also be formed 

naturally. Electric utilities account for about 22 percent of NOX emissions in the United States.2

 Mercury. Coal-fired power plants emit mercury (Hg) found in coal during the burning 

process. While coal-fired power plants are the largest remaining source of human-generated Hg 

emissions in the United States, they contribute very little to the global Hg pool or to 

contamination of U.S. waters.1

 U.S. coal-fired power plants emit Hg in three different forms: 

oxidized Hg (likely to deposit within the United States); elemental Hg, which can travel 

thousands of miles before depositing to land and water; and Hg that is in particulate form. 

Atmospheric Hg is then deposited on land, lakes, rivers, and estuaries through rain, snow, and 

dry deposition. Once there, it can transform into methylmercury and accumulate in fish tissue 

through bioaccumulation. 

 

 Americans are exposed to methylmercury primarily by eating contaminated fish. Because 

the developing fetus is the most sensitive to the toxic effects of methylmercury, women of 

childbearing age are regarded as the population of greatest concern. Children exposed to 

methylmercury before birth may be at increased risk of poor performance on neurobehavioral 

tasks, such as those measuring attention, fine motor function, language skills, visual-spatial 

abilities, and verbal memory.3

 

 Carbon Dioxide. Carbon dioxide (CO2) is not a criteria pollutant (see below), but it is of 

interest because of its classification as a greenhouse gas (GHG). GHGs trap the sun’s radiation 

inside the Earth’s atmosphere and either occur naturally in the atmosphere or result from human 

activities. Naturally occurring GHGs include water vapor, CO2, methane (CH4), nitrous oxide 

(N2O), and ozone (O3). Human activities, however, add to the levels of most of these naturally 

occurring gases. For example, CO2 is emitted to the atmosphere when solid waste, fossil fuels 

(oil, natural gas, and coal), wood, and wood products are burned. In 2007, over 90 percent of 

anthropogenic (i.e., human-made) CO2 emissions resulted from burning fossil fuels.4

 Concentrations of CO2 in the atmosphere are naturally regulated by numerous processes, 

collectively known as the “carbon cycle.” The movement of carbon between the atmosphere and 

the land and oceans is dominated by natural processes, such as plant photosynthesis. While these 

natural processes can absorb some of the anthropogenic CO2 emissions produced each year, 

billions of metric tons are added to the atmosphere annually. In the United States, in 2007, CO2

emissions from electricity generation accounted for 39 percent of total U.S. GHG emissions.4

Particulate Matter. Particulate matter (PM) also known as particle pollution, is a 

complex mixture of extremely small particles and liquid droplets. Particle pollution is made up 

of a number of components, including acids (such as nitrates and sulfates), organic chemicals, 

metals, and soil or dust particles. 

 PM impacts are of concern due to human exposures that can impact health. Particle 

pollution - especially fine particles - contains microscopic solids or liquid droplets that are so 

small that they can get deep into the lungs and cause serious health problems. Numerous 

scientific studies have linked particle pollution exposure to a variety of problems, including: 
 16-4 

increased respiratory symptoms, such as irritation of the airways, coughing, or difficulty 

breathing, for example; decreased lung function; aggravated asthma; development of chronic 

bronchitis; irregular heartbeat; nonfatal heart attacks; and premature death in people with heart or 

lung disease. 

 Power plant emissions can have either direct or indirect impacts on PM. A portion of the 

pollutants emitted by a power plant are in the form of particulates as they leave the smoke stack. 

These are direct PM emissions. Meanwhile other pollutants such as SO2 and NOX interact with 

other elements in the atmosphere to produce PM at some distance from the power plant. 

 In general, the relative impacts of direct PM emissions reduction compared to other 

pollutants on PM exposures are much more difficult to estimate than other emissions reductions. 

This is due to the complex interactions between PM, other power plant emissions, meteorology 

and atmospheric chemistry that impact human exposure to particulates. Human exposure to PM 

usually occurs at a significant distance from the power plants that are emitting particulates and 

particulate precursors. When power plant emissions travel this distance they undergo highly 

complex atmospheric chemical reactions and the proportion of impacts and exposures 

attributable to different emissions can vary dramatically for different emissions sources and types 

of particulate precursors. These variations in emissions impacts depend on the distance to the 

source, land use and land cover, and the local and regional meteorology responsible for pollutant 

transport, deposition and atmospheric chemistry. 

 The Environmental Protection Agency (EPA) has compiled and summarized technical 

studies regarding PM source apportionment.5 In this compilation of studies, sources are 

classified into seven categories: (1) Secondary sulfate/coal, (2) Secondary organic matter/mobile 

sources, (3) Nitrate dominated sources, (4) Biomass burning, (5) Industrial, (6) Crustal and salt 

(7) Other. In these studies, the PM exposures attributed to coal power plants are not 

disaggregated between direct particulate emissions and SO2 emissions from these power plants. 

This is because both SO2 and direct PM emissions aggregate and interact with water droplets and 

emissions from other sources to create final particulates that are a complex mixture of different 

constituents. Both the SO2 and direct PM are emitted from the power plant at the same time and 

if the final aerosol particle contains both sulfur compounds and other PM components it is not 

possible to attribute that aerosol particle to one source or the other. Therefore, DOE is not 

currently able to perform modeling that can make reliable estimates of the impact of direct PM 

emissions on air quality at this time. 

16.2.2 Air Quality Regulation 

 The Clean Air Act Amendments of 1990 list 188 toxic air pollutants that EPA is required 

to control.6

 EPA has set national air quality standards for six common pollutants (also referred to 

as “criteria” pollutants), two of which are SO2 and NOX. Also, the Clean Air Act Amendments of 

1990 gave EPA the authority to control acidification and to require operators of electric power 

plants to reduce emissions of SO2 and NOX. Title IV of the 1990 amendments established a capand-trade program for SO2 intended to help control acid rain.6

 This cap-and-trade program serves 

as a model for more recent programs with similar features. 
 16-5 

 In 2005, EPA issued the Clean Air Interstate Rule (CAIR) under sections 110 and 111 of 

the Clean Air Act (40 CFR Parts 51, 96, and 97).7 b CAIR will permanently cap emissions of SO2

and NOX in eastern States of the United States. CAIR achieves large reductions of SO2 and/or 

NOX emissions across 28 eastern States and the District of Columbia. States must achieve the 

required emission reductions using one of two compliance options: 1) meet an emission budget 

for each regulated state by requiring power plants to participate in an EPA-administered 

interstate cap-and-trade system that caps emissions in two stages, or 2) meet an individual state 

emissions budget through measures of the state’s choosing. Phase 1 caps for NOX have been in 

place since 2009. Phase 1 caps for SO2 are to be in place beginning in 2010. The Phase 2 caps for 

both NOX and SO2 are due in 2015. 

 Also in 2005, EPA issued the final rule entitled “Standards of Performance for New and 

Existing Stationary Sources: Electric Steam Generating Units,” under sections 110 and 111 of 

the Clean Air Act (40 CFR Parts 60, 63, 72, and 75) 8

. This rule, called the Clean Air Mercury 

Rule (CAMR), was closely related to the CAIR and established standards of performance for Hg 

emissions from new and existing coal-fired electric utility steam generating units. The CAMR 

regulated Hg emissions from coal-fired power plants. 

 

 On February 8, 2008, the U.S. Court of Appeals for the District of Columbia Circuit 

(D.C. Circuit) issued its decision in State of New Jersey, et al. v. Environmental Protection 

Agency,

c

 in which the Court, among other actions, vacated the CAMR referenced above. 

On July 11, 2008, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. 

Circuit) issued its decision in North Carolina v. Environmental Protection Agency, which 

vacated the CAIR issued by the U.S. Environmental Protection Agency on March 10, 2005.d

CAIR was the vehicle for capping NOX emissions.

e

 On December 23, 2008, the D.C. Circuit 

decided to allow CAIR to remain in effect until it is replaced by a rule consistent with the court’s 

earlier opinion. North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008) (remand of vacatur).f

 

16.2.3 Global Climate Change 

 Climate change has evolved into a matter of global concern because it is expected to have 

widespread, adverse effects on natural resources and systems. A growing body of evidence 

points to anthropogenic sources of greenhouse gases, such as carbon dioxide (CO2), as major 

contributors to climate change. Because this Rule, if finalized, will likely decrease CO2 emission 

rates from the fossil fuel sector in the United States, the Department here examines the impacts 

 

b

 See http://www.epa.gov/cleanairinterstaterule/. 

c

 517 F.3d 574, 583 (D.C. Cir. 2008). 

d

 See http://www.epa.gov/cleanairinterstaterule/. 

e See id. at 903. 

f

 State of North Carolina, et al. v. Environmental Protection Agency, 550 F.3d 1176 (D.C. Cir. 2008). 
 16-6 

and causes of climate change and then the potential impact of the Rule on CO2 emissions and 

global warming. 

 Impacts of Climate Change on the Environment. Climate is usually defined as the 

average weather, over a period ranging from months to many years. Climate change refers to a 

change in the state of the climate, which is identifiable through changes in the mean and/or the 

variability of its properties (e.g., temperature or precipitation) over an extended period, typically 

decades or longer.9 

 The World Meteorological Organization and United Nations Environment Programme 

(UNEP) established the Intergovernmental Panel on Climate Change (IPCC) to provide an 

objective source of information about climate change. According to the IPCC Fourth Assessment 

Report (IPCC Report), published in 2007, climate change is consistent with observed changes to 

the world’s natural systems; the IPCC expects these changes to continue.9

 Changes that are consistent with warming include warming of the world’s oceans to a 

depth of 3000 meters; global average sea level rise at an average rate of 1.8 mm per year from 

1961 to 2003; loss of annual average Arctic sea ice at a rate of 2.7 percent per decade, changes in 

wind patterns that affect extra-tropical storm tracks and temperature patterns, increases in intense 

precipitation in some parts of the world, as well as increased drought and more frequent heat 

waves in many locations worldwide, and numerous ecological changes.9

 Looking forward, the IPCC describes continued global warming of about 0.2 °C per 

decade for the next two decades under a wide range of emission scenarios for carbon dioxide 

(CO2), other greenhouse gases (GHGs), and aerosols. After that period, the rate of increase is 

less certain. The IPCC Report describes increases in average global temperatures of about 1.1 °C 

to 6.4 °C at the end of the century relative to today. These increases vary depending on the model 

and emissions scenarios.9

 The IPCC Report describes incremental impacts associated with the rise in temperature. 

At ranges of incremental increases to the global average temperature, IPCC reports, with either 

high or very high confidence, that there is likely to be an increasing degree of impacts such as 

coral reef bleaching, loss of wildlife habitat, loss to specific ecosystems, and negative yield 

impacts for major cereal crops in the tropics, but also projects that there likely will be some 

beneficial impacts on crop yields in temperate regions. 

 Causes of Climate Change. The IPCC Report states that the world has warmed by about 

0.74 °C in the last 100 years. The IPCC Report finds that most of the temperature increase since 

the mid-20th century is very likely due to the increase in anthropogenic concentrations of CO2

and other long-lived greenhouse gases such as methane and nitrous oxide in the atmosphere, 

rather than from natural causes. 

 Increasing the CO2 concentration partially blocks the earth’s re-radiation of captured 

solar energy in the infrared band, inhibits the radiant cooling of the earth, and thereby alters the 

energy balance of the planet, which gradually increases its average temperature. The IPCC 
 16-7 

Report estimates that currently, CO2 makes up about 77 percent of the total CO2-equivalentg

global warming potential in GHGs emitted from human activities, with the vast majority (74 

percent) of the CO2 attributable to fossil fuel use.10 For the future, the IPCC Report describes a 

wide range of GHG emissions scenarios, but under each scenario CO2 would continue to 

comprise above 70 percent of the total global warming potential.10

 Stabilization of CO2 Concentrations. Unlike many traditional air pollutants, CO2 mixes 

thoroughly in the entire atmosphere and is long-lived. The residence time of CO2 in the 

atmosphere is long compared to the emission processes. Therefore, the global cumulative 

emissions of CO2 over long periods determine CO2 concentrations because it takes hundreds of 

years for natural processes to remove the CO2. Globally, 49 billion metric tons of CO2 –

equivalent of anthropogenic (man-made) greenhouse gases are emitted every year. Of this annual 

total, fossil fuels contribute about 29 billion metric tons of CO2.

11 h

 

 

 Researchers have focused on considering atmospheric CO2 concentrations that likely will 

result in some level of global climate stabilization, and the emission rates associated with 

achieving the “stabilizing” concentrations by particular dates. They associate these stabilized 

CO2 concentrations with temperature increases that plateau in a defined range. For example, at 

the low end, the IPCC Report scenarios target CO2 stabilized concentrations range between 350 

ppm and 400 ppm (essentially today’s value)—because of climate inertia, concentrations in this 

low-end range would still result in temperatures projected to increase 2.0 °C to 2.4 °C above preindustrial levelsi

 (about 1.3 °C to 1.7 °C above today’s levels). To achieve concentrations 

between 350 ppm to 400 ppm, the IPCC scenarios present that there would have to be a rapid 

downward trend in total annual global emissions of greenhouse gases to levels that are 50 to 85 

percent below today’s annual emission rates by no later than 2050. Since it is assumed that there 

would continue to be growth in global population and substantial increases in economic 

production, the scenarios identify required reductions in greenhouse gas emissions intensity 

(emissions per unit of output) of more than 90 percent. However, even at these rates, the 

scenarios describe some warming and some climate change is projected due to already 

accumulated CO2 and GHGs in the atmosphere.12

 The Beneficial Impact of the Rule on CO2 Emissions. It is anticipated that the Rule will 

reduce energy-related CO2 emissions, particularly those associated with energy consumption in 

buildings. The U.S. Energy Information Administration (EIA) reports in its 2009 Annual Energy 

Outlook (AEO2009)

13 that U.S. annual energy-related emissions of CO2 in 2006 were about 6.0 

billion metric tons, of which 1.2 billion tons were attributed to the residential buildings sector 

 

g GHGs differ in their warming influence (radiative forcing) on a global climate system due to their different 

radiative properties and lifetimes in the atmosphere. These warming influences may be expressed through a common 

metric based on the radiative forcing of CO2, i.e., CO2-equivalent. CO2 equivalent emission is the amount of CO2

emission that would cause the same- time integrated radiative forcing, over a given time horizon, as an emitted 

amount of other long- lived GHG or mixture of GHGs.

h

 Other non-fossil fuel contributors include CO2 emissions from deforestation and decay from agriculture biomass; 

agricultural and industrial emissions of methane; and emissions of nitrous oxide and fluorocarbons. 

i

 IPCC Working Group 3 Table TS 2 
 16-8 

(including related energy–using products such as residential heating products). Most of the 

greenhouse gas emissions attributed to residential buildings are emitted from fossil fuel-fired 

power plants that generate electricity used in this sector. In the AEO2009 Reference Case, EIA 

projected that annual energy-related CO2 emissions would grow from 5.7 billion metric tons in 

2010 to 6.2 billion metric tons in 2030, an increase of 8 percent (see AEO2009), while residential 

emissions would grow to from 1.2 billion metric tons to 1.3 billion metric tons, an increase of 5 

percent. 

 The estimated cumulative CO2 emission reductions from a residential heating product 

efficiency standard (shown as a range of alternative TSLs) during this same 30-year period are 

indicated in Table 16.2.1. Estimated CO2 emission reductions in Table 16.2.1 come from two 

sources: electricity generation (i.e., power plants) and fossil fuel-fired appliances. The estimated 

CO2 emission reductions from electricity generation are calculated using the NEMS-BT model. 

The estimated CO2 emission reductions from fossil fuel-fired appliances (i.e., gas heating 

products) are derived from emissions factors for residential natural gas combustion. 

Table 16.2.1 Impact of Residential Heating Products Efficiency Standards on 

Cumulative Energy-Related Emissions of CO2 between 2015 and 2045 

(Million Metric Tons of CO2) 

Trial Standard Levels 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 TSL8 

Water Heaters* -74.30 -121.67 -130.54 -137.25 -154.2 -209.5 -608.8 -1,001 

 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 

Direct Heating Equipment* -8.25 -8.84 -9.31 -17.95 -20.24 -49.94 

Pool Heaters* -0.41 -0.75 -1.72 -2.38 -3.61 -8.89 

Total* -82.96 -131.3 -141.6 -157.6 -178.0 -268.3 

Percent of Total Cumulative 

Emissions Reduction compared 

with the AEO2009 Reference 

Case in 2015-2045 

-0.108 -0.171 -0.184 -0.205 -0.231 -0.349 

* All results in million metric tons, equivalent to 1.1 short tons; negative values refer to a reduction 

compared with the base case. 

 The Incremental Impact of the Rule on Climate Change. It is difficult to correlate 

specific emission rates with atmospheric concentrations of CO2 and specific atmospheric 

concentrations with future temperatures because the IPCC Report describes a clear lag in the 

climate system between any given concentration of CO2 (even if maintained for long periods) 

and the subsequent average worldwide and regional temperature, precipitation, and extreme 

weather regimes. For example, a major determinant of climate response is “equilibrium climate 

sensitivity”, a measure of the climate system response to sustained radioactive forcing. It is 

defined as the global average surface warming following a doubling of carbon dioxide 
 16-9 

concentrations. The IPCC Report describes its estimated, numeric value as about 3 °C, but the 

likely range of that value is 2 °C to 4.5 °C, with cloud feedbacks the largest source of 

uncertainty. Further, as illustrated above, the IPCC Report scenarios for stabilization rates are 

presented in terms of a range of concentrations, which then correlates to a range of temperature 

changes. Thus, climate sensitivity is a key uncertainty for CO2 mitigation scenarios that aim to 

meet specific temperature levels. 

 

 Because of how complex global climate systems are, it is difficult to know to what extent 

and when particular CO2 emissions reductions will impact global warming. However, as Table 

16.2.1 indicates, the rule is expected to reduce CO2 emissions associated with energy 

consumption in buildings. 

16.2.4 Analytical Methods for Air Emissions 

 NEMS-BT incorporates capabilities to assess compliance with SO2 restrictions specified 

in the Clean Air Act and its amendments. Clean Air Act provisions include New Source 

Performance Standards, and Revised New Source Performance Standards. The version of 

NEMS-BT in 2008 included provisions for the CAIR, which imposes stricter restrictions on SO2

and NOX for some states, and the CAMR, which imposed a national Hg constraint. As discussed 

earlier is section 16.2.2, on December 23, 2008, the D.C. Circuit decided to allow CAIR to 

remain in effect until it is replaced by a rule consistent with the court’s earlier opinion. Carolina 

v. Environmental Protection Agency, 550 F.3d 1176 (D.C. Cir. 2008) (remand of vacatur). But , 

EPA has not promulgated a rule to replace CAMR, which the D.C. Circuitvacated in 2008 . 

Thus, the version of NEMS-BT used in this analysis does not include provisions for the CAMR. 

 Coal-fired electric generation is the single largest source of electricity in the United 

States. Because the mix of coals used significantly affects the emissions produced, the model 

includes a detailed representation of coal supply. The model considers the rank of the coal as 

well as the sulfur contents of the fuel used when determining optimal dispatch.14

 Within the NEMS-BT model, planning options for achieving emissions restrictions in the 

Clean Air Act Amendments include installing pollution control equipment on existing power 

plants and building new power plants with low emission rates. These methods for reducing 

emission are compared to dispatching options such as fuel switching and allowance trading. 

Environmental regulations also affect capacity expansion decisions. For instance, new plants are 

not allocated SO2 emissions allowances according to the Clean Air Act Amendments. 

Consequently, the decision to build a particular capacity type must consider the cost (if any) of 

obtaining sufficient allowances. This could involve purchasing allowances or over complying at 

an existing unit. 

DOE’s analysis assumed the presence of nationwide emission caps on SO2 and caps on 

NOX emissions in the 28 States covered by the CAIR. The NEMS-BT modeling system that 

DOE plans to use to forecast emissions reductions currently indicates that no physical reductions 

in power sector emissions would occur for SO2. However, remaining uncertainty prevents DOE 

from estimating or reporting SO2 reductions from energy conservation standards at this time. It 
 16-10 

should be noted that the standards could put slight downward pressure on the prices of emissions 

allowances in cap-and-trade markets. 

 In contrast to the modeling forecasts of NEMS-BT that SO2 emissions reductions will 

remain at the cap, during the years 2007 and 2008, SO2 emissions have been below the trading 

cap. The difference between the emissions levels that NEMS-BT forecasts and those that EPA 

forecasts is an indicator of the uncertainties associated with long-range energy sector forecasts. 

Because of such uncertainties, DOE is unable to estimate the economic and physical benefit from 

SO2 emissions reductions at this time. 

 As noted in chapter 13, NEMS-BT model forecasts end in year 2030. Emissions impacts 

beyond 2030 were assumed to be equal to the impacts in 2030. 

16.2.5 Effects on Power Plant Emissions 

 Table 16.2.2 shows AEO2009 reference case power plant emissions in selected years. 

The Reference Case emissions are the emissions shown by the NEMS-BT model to result if none 

of the TSLs are promulgated (the base case). 

Table 16.2.2 Power Sector Emissions Forecast from AEO2009 Reference Case 

NEMS-BT Results* 

 2005 2010 2015 2020 2025 2030

CO2 (Million metric tons/year)** 2,397 2,343 2,381 2,466 2,535 2,636

NOX (Million metric tons/year)† 3.30 2.08 1.87 1.88 1.88 1.91

Hg (metric tons/year)† 51.5 43.8 29.5 28.9 29.3 28.7

* All results in metric tons, equivalent to 1.1 short tons and negative values refer to a reduction compared with 

the Base Case 

** Comparable to Table A17 of AEO2009: Electric Generators 

†

 Comparable to Table A8 of AEO2009: Emissions 

 Table 16.2.3 through Table 16.2.5 show the estimated changes in power plant emissions 

in selected years for each of the TSLs. Changes in CO2, NOX, and Hg emissions from power 

plants are shown in these tables. 
 16-11 

Table 16.2.3 Power Sector Emissions Impact Forecasts for Water Heaters 

NEMS-BT Results* Difference from AEO2009 Reference Case

Total

2015 2020 2025 2030 2035 2040 2044 2015-2045

Standard Level 1

CO2 (Mt/a) -0.112 -0.804 -1.368 -1.474 -1.474 -1.474 -1.474 -37.2

NOx (kt/a) -0.088 -0.612 -1.013 -1.065 -1.065 -1.065 -1.065 -27.3

Hg (t/a) 0.000 0.000 -0.003 0.002 0.002 0.002 0.002 -0.056

Standard Level 2

CO2 (Mt/a) -0.182 -1.294 -2.195 -2.359 -2.359 -2.359 -2.359 -59.6

NOx (kt/a) -0.143 -0.985 -1.626 -1.705 -1.705 -1.705 -1.705 -43.7

Hg (t/a) 0.000 0.000 -0.005 0.003 0.003 0.003 0.003 -0.090

Standard Level 3

CO2 (Mt/a) -0.207 -1.479 -2.512 -2.699 -2.699 -2.699 -2.699 -68.2

NOx (kt/a) -0.163 -1.126 -1.861 -1.951 -1.951 -1.951 -1.951 -50.0

Hg (t/a) 0.000 0.000 -0.006 0.004 0.004 0.004 0.004 -0.103

Standard Level 4

CO2 (Mt/a) -0.227 -1.624 -2.760 -2.965 -2.965 -2.965 -2.965 -74.9

NOx (kt/a) -0.178 -1.237 -2.044 -2.143 -2.143 -2.143 -2.143 -54.9

Hg (t/a) 0.000 0.000 -0.007 0.004 0.004 0.004 0.004 -0.113

Standard Level 5

CO2 (Mt/a) 0.985 -2.026 -4.192 -4.769 -4.769 -4.769 -4.769 -111

NOx (kt/a) 0.773 -1.543 -3.105 -3.447 -3.447 -3.447 -3.447 -81.0

Hg (t/a) -0.010 -0.016 -0.026 -0.009 -0.009 -0.009 -0.009 -0.553

Standard Level 6

CO2 (Mt/a) 1.27 -2.59 -5.34 -6.07 -6.07 -6.07 -6.07 -141

NOx (kt/a) 0.99 -1.97 -3.96 -4.39 -4.39 -4.39 -4.39 -103

Hg (t/a) -0.013 -0.020 -0.033 -0.012 -0.012 -0.012 -0.012 -0.704

Standard Level 7

CO2 (Mt/a) 4.08 -8.46 -17.60 -20.10 -20.10 -20.10 -20.10 -467

NOx (kt/a) 3.20 -6.44 -13.04 -14.53 -14.53 -14.53 -14.53 -341

Hg (t/a) -0.042 -0.067 -0.110 -0.039 -0.039 -0.039 -0.039 -2.32

Standard Level 8

CO2 (Mt/a) 6.38 -13.13 -27.21 -31.01 -31.01 -31.01 -31.01 -721

NOx (kt/a) 5.00 -10.00 -20.16 -22.41 -22.41 -22.41 -22.41 -526

Hg (t/a) -0.066 -0.103 -0.171 -0.061 -0.061 -0.061 -0.061 -3.59

*All results in metric tons (t), equivalent to 1.1 short tons

Extapolation
 16-12 

Table 16.2.4 Power Sector Emissions Impact Forecasts for Direct Heating Equipment 

NEMS-BT Results* Difference from AEO2009 Reference Case

Total

2013 2014 2015 2020 2025 2030 2035 2040 2042 2013-2043

Standard Level 1

CO2 (Mt/a) 0.003 0.024 0.024 0.043 0.107 0.139 0.139 0.139 0.139 2.93

NOx (kt/a) 0.003 0.021 0.019 0.033 0.080 0.100 0.100 0.100 0.100 2.15

Hg (t/a) 0.001 0.000 0.001 0.001 0.000 0.001 0.001 0.001 0.001 0.012

Standard Level 2

CO2 (Mt/a) 0.004 0.026 0.026 0.046 0.116 0.149 0.149 0.149 0.149 3.15

NOx (kt/a) 0.003 0.023 0.020 0.035 0.086 0.108 0.108 0.108 0.108 2.31

Hg (t/a) 0.002 0.000 0.001 0.001 0.000 0.001 0.001 0.001 0.001 0.013

Sandard Level 3

CO2 (Mt/a) 0.004 0.028 0.027 0.049 0.122 0.158 0.158 0.158 0.158 3.32

NOx (kt/a) 0.003 0.024 0.022 0.037 0.090 0.114 0.114 0.114 0.114 2.43

Hg (t/a) 0.002 -0.001 0.001 0.001 0.000 0.001 0.001 0.001 0.001 0.014

Standard Level 4

CO2 (Mt/a) 0.005 0.054 0.065 0.090 0.263 0.329 0.329 0.329 0.329 6.84

NOx (kt/a) 0.004 0.047 0.051 0.069 0.195 0.237 0.237 0.237 0.237 5.01

Hg (t/a) 0.003 -0.001 0.000 0.000 -0.004 0.001 0.001 0.001 0.001 -0.029

Standard Level 5

CO2 (Mt/a) 0.005 0.061 0.074 0.102 0.297 0.369 0.369 0.369 0.369 7.69

NOx (kt/a) 0.005 0.053 0.058 0.078 0.220 0.267 0.267 0.267 0.267 5.63

Hg (t/a) 0.003 -0.001 0.000 0.000 -0.005 0.002 0.002 0.002 0.002 -0.033

Standard Level 6

CO2 (Mt/a) 0.013 0.155 0.188 0.260 0.754 0.939 0.939 0.939 0.939 19.6

NOx (kt/a) 0.012 0.134 0.148 0.198 0.559 0.679 0.679 0.679 0.679 14.3

Hg (t/a) 0.008 -0.003 0.000 0.000 -0.012 0.004 0.004 0.004 0.004 -0.084

*All results in metric tons (t), equivalent to 1.1 short tons

Extapolation
 16-13 

Table 16.2.5 Power Sector Emissions Impact Forecasts for Pool Heaters 

16.2.6 Effects on Site Emissions 

 For residential heating products, DOE also accounts for impacts from household 

emissions at the site (i.e., the residential building). NEMS-BT does not account for these 

emissions at the site. The estimates given here are based on exogenous emissions factors for 

residential natural gas combustion derived by the EPA’s AP-42 report, in conjunction with the 

site energy savings predicted by the national impacts analysis (NIA) model.15

 The emissions factors DOE used are derived from what is reported in the AP-42 for 

residential water heaters because no explicit listing was provided for the other heating products. 

Given that emissions rates from end-use combustion are small compared to other emissions 

NEMS-BT Results* Difference from AEO2009 Reference Case

Total

2013 2015 2020 2025 2030 2035 2040 2042 2013-2043

Standard Level 1

CO2 (Mt/a) 0.000 0.001 0.003 0.005 0.006 0.006 0.006 0.006 0.133

NOx (kt/a) 0.000 0.001 0.002 0.004 0.005 0.005 0.005 0.005 0.098

Hg (t/a) 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

Standard Level 2

CO2 (Mt/a) 0.000 0.002 0.005 0.009 0.011 0.011 0.011 0.011 0.241

NOx (kt/a) 0.000 0.002 0.003 0.007 0.008 0.008 0.008 0.008 0.177

Hg (t/a) 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 -0.001

Sandard Level 3

CO2 (Mt/a) 0.000 0.005 0.010 0.020 0.025 0.025 0.025 0.025 0.540

NOx (kt/a) 0.000 0.004 0.008 0.015 0.018 0.018 0.018 0.018 0.396

Hg (t/a) 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 -0.001

Standard Level 4

CO2 (Mt/a) 0.000 0.006 0.009 0.020 0.027 0.027 0.027 0.027 0.570

NOx (kt/a) 0.000 0.005 0.007 0.015 0.019 0.019 0.019 0.019 0.418

Hg (t/a) 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

Standard Level 5

CO2 (Mt/a) 0.000 0.009 0.014 0.031 0.041 0.041 0.041 0.041 0.869

NOx (kt/a) 0.000 0.007 0.010 0.023 0.029 0.029 0.029 0.029 0.636

Hg (t/a) 0.001 0.000 0.000 0.000 0.001 0.001 0.001 0.001 0.000

Standard Level 6

CO2 (Mt/a) 0.001 0.023 0.034 0.077 0.101 0.101 0.101 0.101 2.16

NOx (kt/a) 0.001 0.018 0.026 0.057 0.073 0.073 0.073 0.073 1.58

Hg (t/a) 0.001 0.001 0.000 -0.001 0.002 0.002 0.002 0.002 -0.001

*All results in metric tons (t), equivalent to 1.1 short tons

Extapolation
 16-14 

sources, it is not uncommon to see emissions factors from residential end uses reported in one 

general rate.16 For these reasons, the Department opted to simply use the water heating emissions 

factor for all of the heating products. It acknowledges that these estimates are only general 

approximations. 

 Tables 16.2.6 through 16.2.8 show the estimated changes in site emissions in selected 

years for each of the water heater, direct heating equipment, and pool heater TSLs. 
 16-15 

Table 16.2.6 Change in Site Emissions for Water Heaters 

NEMS-BT Results*

Total

2015 2020 2025 2030 2035 2040 2044 2015-2045

Standard Level 1

CO2 (Mt/a) -0.128 -0.759 -1.285 -1.547 -1.547 -1.547 -1.547 -37.10

NOx (kt/a) -0.105 -0.619 -1.047 -1.261 -1.261 -1.261 -1.261 -30.25

Hg (t/a) -0.004 -0.027 -0.045 -0.053 -0.053 -0.053 -0.053 -1.27

Standard Level 2

CO2 (Mt/a) -0.217 -1.277 -2.152 -2.582 -2.582 -2.582 -2.582 -62.04

NOx (kt/a) -0.177 -1.041 -1.755 -2.106 -2.106 -2.106 -2.106 -50.58

Hg (t/a) -0.008 -0.048 -0.081 -0.096 -0.096 -0.096 -0.096 -2.32

Standard Level 3

CO2 (Mt/a) -0.218 -1.283 -2.162 -2.594 -2.594 -2.594 -2.594 -62.32

NOx (kt/a) -0.178 -1.046 -1.763 -2.115 -2.115 -2.115 -2.115 -50.81

Hg (t/a) -0.011 -0.067 -0.112 -0.132 -0.132 -0.132 -0.132 -3.20

Standard Level 4

CO2 (Mt/a) -0.218 -1.283 -2.162 -2.594 -2.594 -2.594 -2.594 -62.32

NOx (kt/a) -0.178 -1.046 -1.763 -2.115 -2.115 -2.115 -2.115 -50.81

Hg (t/a) -0.011 -0.067 -0.112 -0.132 -0.132 -0.132 -0.132 -3.20

Standard Level 5

CO2 (Mt/a) -0.150 -0.887 -1.498 -1.802 -1.802 -1.802 -1.802 -43.24

NOx (kt/a) -0.123 -0.723 -1.221 -1.469 -1.469 -1.469 -1.469 -35.25

SO2 (kt/a) -0.011 -0.063 -0.106 -0.125 -0.125 -0.125 -0.125 -3.02

Standard Level 6

CO2 (Mt/a) -0.239 -1.406 -2.367 -2.838 -2.838 -2.838 -2.838 -68.20

NOx (kt/a) -0.195 -1.146 -1.929 -2.314 -2.314 -2.314 -2.314 -55.60

SO2 (kt/a) -0.011 -0.068 -0.114 -0.135 -0.135 -0.135 -0.135 -3.25

Standard Level 7

CO2 (Mt/a) -0.473 -2.839 -4.866 -5.950 -5.950 -5.950 -5.950 -141.79

NOx (kt/a) -0.386 -2.315 -3.968 -4.852 -4.852 -4.852 -4.852 -115.61

SO2 (kt/a) -0.014 -0.081 -0.137 -0.163 -0.163 -0.163 -0.163 -3.92

Standard Level 8

CO2 (Mt/a) -0.972 -5.738 -9.693 -11.662 -11.662 -11.662 -11.662 -279.84

NOx (kt/a) -0.793 -4.679 -7.904 -9.509 -9.509 -9.509 -9.509 -228.18

SO2 (kt/a) -0.027 -0.159 -0.268 -0.318 -0.318 -0.318 -0.318 -7.66

*All results in metric tons (t), equivalent to 1.1 short tons

Extrapolation
 16-16 

Table 16.2.7 Change in Site Emissions from Direct Heating Equipment 

NEMS-BT Results*

Total

2013 2015 2020 2025 2030 2035 2040 2042 2013-2043

Standard Level 1

CO2 (Mt/a) -0.04 -0.11 -0.28 -0.43 -0.47 -0.47 -0.47 -0.47 -11.18

NOx (kt/a) -0.03 -0.09 -0.24 -0.38 -0.41 -0.41 -0.41 -0.41 -9.68

SO2 (kt/a) 0.00 0.00 -0.01 -0.01 -0.01 -0.01 -0.01 -0.01 -0.31

Standard Level 2

CO2 (Mt/a) -0.038 -0.114 -0.301 -0.466 -0.507 -0.507 -0.507 -0.507 -11.986

NOx (kt/a) -0.033 -0.098 -0.260 -0.403 -0.439 -0.439 -0.439 -0.439 -10.362

SO2 (kt/a) -0.001 -0.003 -0.008 -0.013 -0.014 -0.014 -0.014 -0.014 -0.325

Sandard Level 3

CO2 (Mt/a) -0.040 -0.120 -0.317 -0.491 -0.535 -0.535 -0.535 -0.535 -12.631

NOx (kt/a) -0.035 -0.103 -0.274 -0.424 -0.462 -0.462 -0.462 -0.462 -10.909

SO2 (kt/a) -0.001 -0.003 -0.009 -0.013 -0.014 -0.014 -0.014 -0.014 -0.339

Standard Level 4

CO2 (Mt/a) -0.079 -0.234 -0.622 -0.964 -1.050 -1.050 -1.050 -1.050 -24.785

NOx (kt/a) -0.068 -0.203 -0.538 -0.834 -0.908 -0.908 -0.908 -0.908 -21.436

SO2 (kt/a) -0.002 -0.006 -0.017 -0.026 -0.029 -0.029 -0.029 -0.029 -0.676

Standard Level 5

CO2 (Mt/a) -0.090 -0.267 -0.705 -1.089 -1.180 -1.180 -1.180 -1.180 -27.932

NOx (kt/a) -0.078 -0.232 -0.612 -0.945 -1.024 -1.024 -1.024 -1.024 -24.247

SO2 (kt/a) -0.003 -0.008 -0.020 -0.031 -0.034 -0.034 -0.034 -0.034 -0.795

Standard Level 6

CO2 (Mt/a) -0.222 -0.661 -1.751 -2.708 -2.939 -2.939 -2.939 -2.939 -69.519

NOx (kt/a) -0.193 -0.574 -1.519 -2.349 -2.550 -2.550 -2.550 -2.550 -60.308

SO2 (kt/a) -0.006 -0.019 -0.050 -0.077 -0.083 -0.083 -0.083 -0.083 -1.964

*All results in metric tons (t), equivalent to 1.1 short tons

Extrapolation
 16-17 

Table 16.2.8 Change in Site Emissions from Pool Heaters 

16.2.7 Effects on Upstream Fuel-Cycle Emissions 

 Upstream fuel-cycle emissions refer to the emissions associated with the amount of 

energy used in the upstream production and downstream consumption of electricity, including 

energy used at the power plant.17 Upstream processes include the mining of coal or extraction of 

natural gas, physical preparatory and cleaning processes, and transportation to the power plant. 

The NEMS-BT does a thorough accounting of emissions at the power plant due to downstream 

energy consumption, but does not account for upstream emissions (i.e., emissions from energy 

losses during coal and natural gas production). Thus, this analysis reports only power plant 

emissions. 

NEMS-BT Results*

Total

2013 2015 2020 2025 2030 2035 2040 2042 2013-2043

Standard Level 1

CO2 (Mt/a) -0.002 -0.006 -0.016 -0.021 -0.022 -0.02 -0.02 -0.02 -0.55

NOx (kt/a) -0.002 -0.005 -0.014 -0.018 -0.019 -0.02 -0.02 -0.02 -0.47

SO2 (kt/a) 0.000 0.000 0.000 0.000 -0.001 0.00 0.00 0.00 -0.01

Standard Level 2

CO2 (Mt/a) -0.003 -0.011 -0.030 -0.038 -0.040 -0.040 -0.040 -0.040 -0.991

NOx (kt/a) -0.003 -0.010 -0.025 -0.033 -0.034 -0.034 -0.034 -0.034 -0.845

SO2 (kt/a) 0.000 0.000 -0.001 -0.001 -0.001 -0.001 -0.001 -0.001 -0.023

Sandard Level 3

CO2 (Mt/a) -0.007 -0.026 -0.068 -0.087 -0.091 -0.091 -0.091 -0.091 -2.263

NOx (kt/a) -0.006 -0.022 -0.058 -0.074 -0.078 -0.078 -0.078 -0.078 -1.930

SO2 (kt/a) 0.000 -0.001 -0.002 -0.002 -0.002 -0.002 -0.002 -0.002 -0.052

Standard Level 4

CO2 (Mt/a) -0.010 -0.034 -0.088 -0.114 -0.119 -0.119 -0.119 -0.119 -2.952

NOx (kt/a) -0.008 -0.029 -0.075 -0.097 -0.102 -0.102 -0.102 -0.102 -2.517

SO2 (kt/a) 0.000 -0.001 -0.002 -0.003 -0.003 -0.003 -0.003 -0.003 -0.067

Standard Level 5

CO2 (Mt/a) -0.015 -0.051 -0.134 -0.172 -0.180 -0.180 -0.180 -0.180 -4.474

NOx (kt/a) -0.013 -0.044 -0.114 -0.147 -0.154 -0.154 -0.154 -0.154 -3.815

SO2 (kt/a) 0.000 -0.001 -0.003 -0.004 -0.004 -0.004 -0.004 -0.004 -0.102

Standard Level 6

CO2 (Mt/a) -0.036 -0.127 -0.330 -0.425 -0.446 -0.446 -0.446 -0.446 -11.047

NOx (kt/a) -0.031 -0.108 -0.282 -0.362 -0.380 -0.380 -0.380 -0.380 -9.419

SO2 (kt/a) -0.001 -0.003 -0.008 -0.010 -0.010 -0.010 -0.010 -0.010 -0.252

*All results in metric tons (t), equivalent to 1.1 short tons

Extrapolation
 16-18 

 However, previous DOE environmental assessment documents have developed 

approximate estimates of effects on upstream fuel-cycle emissions. These emissions factors 

provide the reader with a sense of the possible magnitude of upstream effects. These upstream 

emissions would be in addition to emissions from direct combustion. 

 Relative to the entire fuel cycle, estimates based on the work of Dr. Mark DeLuchi, and 

reported in earlier DOE environmental assessment documents, find that an amount 

approximately equal to eight percent, by mass, of emissions (including SO2) from coal 

production are due to mining, preparation that includes cleaning the coal, and transportation from 

the mine to the power plant.18 Transportation emissions include emissions from the fuel used by 

the mode of transportation that moves the coal from the mine to the power plant. In addition, 

based on Dr. DeLuchi’s work, DOE estimated that an amount equal to approximately 14 percent 

of emissions from natural gas production result from upstream processes. 

 Emission factor estimates and corresponding percentages of contributions of upstream 

emissions from coal and natural gas production, relative to power plant emissions, are shown in 

Table 16.2.9 for CO2 and NOX. The percentages provide a means to estimate upstream emission 

savings based on changes in emissions from power plants. This approach does not address Hg 

emissions. 

Table 16.2.9 Estimated Upstream Emissions of Air Pollutants as a Percentage of 

Direct Power Plant Combustion Emissions 

Pollutant 

Percent of Coal 

Combustion Emissions 

Percent of Natural Gas 

Combustion Emissions 

CO2 2.7 11.9 

NOX 5.8 40 

16.3 SOCIAL COST OF CARBON DIOXIDE EMISSIONS 

 Under Executive Order 12866, agencies are required, to the extent permitted by law, “to 

assess both the costs and the benefits of the intended regulation and, recognizing that some costs 

and benefits are difficult to quantify, propose or adopt a regulation only upon a reasoned 

determination that the benefits of the intended regulation justify its costs.” The purpose of the 

Social Cost of Carbon (SCC) estimates presented here is to allow agencies to incorporate the 

social benefits of reducing carbon dioxide (CO2) emissions into cost-benefit analyses of 

regulatory actions that have small, or “marginal,” impacts on cumulative global emissions. The 

estimates are presented with an acknowledgement of the many uncertainties involved and with a 

clear understanding that they should be updated over time to reflect increasing knowledge of the 

science and economics of climate impacts. 

 The SCC is an estimate of the monetized damages associated with an incremental 

increase in carbon emissions in a given year. It is intended to include (but is not limited to) 

changes in net agricultural productivity, human health, property damages from increased flood 

risk, and the value of ecosystem services due to climate change. 
 16-19 

 As part of the interagency process that developed these SCC estimates, technical experts 

from numerous agencies met on a regular basis to consider public comments, explore the 

technical literature in relevant fields, and discuss key model inputs and assumptions. The main 

objective of this process was to develop a range of SCC values using a defensible set of input 

assumptions grounded in the existing scientific and economic literatures. In this way, key 

uncertainties and model differences transparently and consistently inform the range of SCC 

estimates used in the rulemaking process. 

 The interagency group selected four SCC values for use in regulatory analyses. Three 

values are based on the average SCC from three integrated assessment models, at discount rates 

of 2.5, 3, and 5 percent. The fourth value, which represents the 95th percentile SCC estimate 

across all three models at a 3 percent discount rate, is included to represent higher-than-expected 

impacts from temperature change further out in the tails of the SCC distribution. Appendix 16-A 

presents the interagency report “Social Cost of Carbon for Regulatory Impact Analysis Under 

Executive Order 12866,” which provides further information. 

Table 16.3.1 Social Cost of CO2, 2010 – 2050 (in 2007 dollars) 

Discount Rate 

5% 3% 2.5% 3% 

Year Avg Avg Avg 95th 

2010 4.7 21.4 35.1 64.9 

2015 5.7 23.8 38.4 72.8 

2020 6.8 26.3 41.7 80.7 

2025 8.2 29.6 45.9 90.4 

2030 9.7 32.8 50.0 100.0 

2035 11.2 36.0 54.2 109.7 

2040 12.7 39.2 58.4 119.3 

2045 14.2 42.1 61.7 127.8 

2050 15.7 44.9 65.0 136.2 

16.3.1 Monetizing Carbon Dioxide Emissions 

 The “social cost of carbon” (SCC) is an estimate of the monetized damages associated 

with an incremental increase in carbon emissions in a given year. It is intended to include (but is 

not limited to) changes in net agricultural productivity, human health, property damages from 

increased flood risk, and the value of ecosystem services. Estimates of the social cost of carbon 

are provided in dollars per metric ton of carbon dioxide.j

 

 

j

 In this document, DOE presents all values of the SCC as the cost per metric ton of CO2 emissions. Alternatively, 

one could report the SCC as the cost per metric ton of carbon emissions. The multiplier for translating between mass 

of CO2 and the mass of carbon is 3.67 (the molecular weight of CO2 divided by the molecular weight of carbon = 

44/12 = 3.67). 
 16-20 

 When attempting to assess the incremental economic impacts of carbon dioxide 

emissions, the analyst faces a number of serious challenges. A recent report from the National 

Academies of Science (Hidden Costs of Energy: Unpriced Consequences of Energy Production 

and Use. National Academies Press. 2009) points out that any assessment will suffer from 

uncertainty, speculation, and lack of information about (1) future emissions of greenhouse gases, 

(2) the effects of past and future emissions on the climate system, (3) the impact of changes in 

climate on the physical and biological environment, and (4) the translation of these 

environmental impacts into economic damages. As a result, any effort to quantify and monetize 

the harms associated with climate change will raise serious questions of science, economics, and 

ethics and should be viewed as provisional. 

 Despite the serious limits of both quantification and monetization, SCC estimates can be 

useful in estimating the social benefits of reducing carbon dioxide emissions. Under Executive 

Order 12866, agencies are required, to the extent permitted by law, “to assess both the costs and 

the benefits of the intended regulation and, recognizing that some costs and benefits are difficult 

to quantify, propose or adopt a regulation only upon a reasoned determination that the benefits of 

the intended regulation justify its costs.” The purpose of the SCC estimates presented here is to 

make it possible for agencies to incorporate the social benefits from reducing carbon dioxide 

emissions into cost-benefit analyses of regulatory actions that have small, or “marginal,” impacts 

on cumulative global emissions. Most federal regulatory actions can be expected to have 

marginal impacts on global emissions. 

 

 For such policies, the benefits from reduced (or costs from increased) emissions in any 

future year can be estimated by multiplying the change in emissions in that year by the SCC 

value appropriate for that year. The net present value of the benefits can then be calculated by 

multiplying each of these future benefits by an appropriate discount factor and summing across 

all affected years. This approach assumes that the marginal damages from increased emissions 

are constant for small departures from the baseline emissions path, an approximation that is 

reasonable for policies that have effects on emissions that are small relative to cumulative global 

carbon dioxide emissions. For policies that have a large (non-marginal) impact on global 

cumulative emissions, there is a separate question of whether the SCC is an appropriate tool for 

calculating the benefits of reduced emissions; we do not attempt to answer that question here. 

 An interagency group convened on a regular basis to consider public comments, explore 

the technical literature in relevant fields, and discuss key inputs and assumptions in order to 

generate SCC estimates. Agencies that actively participated in the interagency process include 

the Environmental Protection Agency, and the Departments of Agriculture, Commerce, Energy, 

Transportation, and Treasury. This process was convened by the Council of Economic Advisers 

and the Office of Management and Budget, with active participation and regular input from the 

Council on Environmental Quality, National Economic Council, Office of Energy and Climate 

Change, and Office of Science and Technology Policy. The main objective of this process was 

to develop a range of SCC values using a defensible set of input assumptions that are grounded 

in the existing literature. In this way, key uncertainties and model differences can more 

transparently and consistently inform the range of SCC estimates used in the rulemaking process. 
 16-21 

 The interagency group selected four SCC estimates for use in regulatory analyses. For 

2010, these estimates are $5, $21, $35, and $65 (in 2007 dollars). The first three estimates are 

based on the average SCC across models and socio-economic and emissions scenarios at the 5, 3, 

and 2.5 percent discount rates, respectively. The fourth value is included to represent the higherthan-expected impacts from temperature change further out in the tails of the SCC distribution. 

For this purpose, we use the SCC value for the 95th percentile at a 3 percent discount rate. The 

central value is the average SCC across models at the 3 percent discount rate. For purposes of 

capturing the uncertainties involved in regulatory impact analysis, we emphasize the importance 

and value of considering the full range. These SCC estimates also grow over time. For instance, 

the central value increases to $24 per ton of CO2 in 2015 and $26 per ton of CO2 in 2020. See 

Appendix A of this chapter for the full range of annual SCC estimates from 2010 to 2050. 

 It is important to emphasize that the interagency process is committed to updating these 

estimates as the science and economic understanding of climate change and its impacts on 

society improves over time. Specifically, the interagency group set a preliminary goal of 

revisiting the SCC values within two years or at such time as substantially updated models 

become available, and to continue to support research in this area. In the meantime, we will 

continue to explore the issues raised by this analysis and consider public comments as part of the 

ongoing interagency process. 

16.3.2 Social Cost of Carbon Values Used in Past Regulatory Analyses 

 To date, economic analyses for Federal regulations have used a wide range of values to 

estimate the benefits associated with reducing carbon dioxide emissions. In the final model year 

2011 CAFE rule, the Department of Transportation (DOT) used both a “domestic” SCC value of 

$2 per ton of CO2 and a “global” SCC value of $33 per ton of CO2 for 2007 emission reductions 

(in 2007 dollars), increasing both values at 2.4 percent per year. It also included a sensitivity 

analysis at $80 per ton of CO2. A domestic SCC value is meant to reflect the value of damages 

in the United States resulting from a unit change in carbon dioxide emissions, while a global 

SCC value is meant to reflect the value of damages worldwide. 

 A 2008 regulation proposed by DOT assumed a domestic SCC value of $7 per ton CO2

(in 2006 dollars) for 2011 emission reductions (with a range of $0-$14 for sensitivity analysis), 

also increasing at 2.4 percent per year. A regulation finalized by DOE in October of 2008 used a 

domestic SCC range of $0 to $20 per ton CO2 for 2007 emission reductions (in 2007 dollars). In 

addition, EPA’s 2008 Advance Notice of Proposed Rulemaking for Greenhouse Gases identified 

what it described as “very preliminary” SCC estimates subject to revision. EPA’s global mean 

values were $68 and $40 per ton CO2 for discount rates of approximately 2 percent and 3 

percent, respectively (in 2006 dollars for 2007 emissions). 

 In 2009, an interagency process was initiated to offer a preliminary assessment of how 

best to quantify the benefits from reducing carbon dioxide emissions. To ensure consistency in 

how benefits are evaluated across agencies, the Administration sought to develop a transparent 

and defensible method, specifically designed for the rulemaking process, to quantify avoided 

climate change damages from reduced CO2 emissions. The interagency group did not undertake 
 16-22 

any original analysis. Instead, it combined SCC estimates from the existing literature to use as 

interim values until a more comprehensive analysis could be conducted. 

 

 The outcome of the preliminary assessment by the interagency group was a set of five 

interim values: global SCC estimates for 2007 (in 2006 dollars) of $55, $33, $19, $10, and $5 per 

ton of CO2. The $33 and $5 values represented model-weighted means of the published 

estimates produced from the most recently available versions of three integrated assessment 

models—DICE, PAGE, and FUND—at approximately 3 and 5 percent discount rates. The $55 

and $10 values were derived by adjusting the published estimates for uncertainty in the discount 

rate (using factors developed by Newell and Pizer (2003)) at 3 and 5 percent discount rates, 

respectively. The $19 value was chosen as a central value between the $5 and $33 per ton 

estimates. All of these values were assumed to increase at 3 percent annually to represent 

growth in incremental damages over time as the magnitude of climate change increases. 

 These interim values represent the first sustained interagency effort within the U.S. 

government to develop an SCC for use in regulatory analysis. The results of this preliminary 

effort were presented in several proposed and final rules and were offered for public comment in 

connection with proposed rules, including the joint EPA-DOT fuel economy and CO2 tailpipe 

emission proposed rules. 

16.3.3 Approach and Key Assumptions 

 Since the release of the interim values, interagency group reconvened on a regular basis 

to generate improved SCC estimates considered for this final rule. Specifically, the group 

considered public comments and further explored the technical literature in relevant fields. 

 It is important to recognize that a number of key uncertainties remain, and that current 

SCC estimates should be treated as provisional and revisable since they will evolve with 

improved scientific and economic understanding. The interagency group also recognizes that the 

existing models are imperfect and incomplete. The National Academy of Science (2009) points 

out that there is tension between the goal of producing quantified estimates of the economic 

damages from an incremental ton of carbon and the limits of existing efforts to model these 

effects. There are a number of concerns and problems that should be addressed by the research 

community, including research programs housed in many of the agencies participating in the 

interagency process to estimate the SCC. 

 The U.S. Government will periodically review and reconsider estimates of the SCC used 

for cost-benefit analyses to reflect increasing knowledge of the science and economics of climate 

impacts, as well as improvements in modeling. In this context, statements recognizing the 

limitations of the analysis and calling for further research take on exceptional significance. The 

interagency group offers the new SCC values with all due humility about the uncertainties 

embedded in them and with a sincere promise to continue work to improve them. 

In summary, in considering the potential global benefits resulting from reduced CO2

emissions, DOE used the most recent values identified by the interagency process, adjusted to 

2009$ using the standard GDP deflator values for 2008 and 2009. For each of the four cases 
 16-23 

specified, the values for emissions in 2010 used were approximately $5, $22, $36, and $67 per 

metric ton avoided (values expressed in 2009$). To monetize the CO2 emissions reductions 

expected to result from amended standards for small electric motors in 2015–2045, DOE used 

the values identified in Table A1 of the “Social Cost of Carbon for Regulatory Impact Analysis 

Under Executive Order 12866,” which is reprinted as Appendix A to this chapter, appropriately 

escalated to 2009$. 

16.4 WETLAND, ENDANGERED AND THREATENED SPECIES, AND 

CULTURAL RESOURCES 

 Because residential heating products are not water-consuming products, more efficient 

heating would not reduce the amount of water discharged into the waste stream. As a result, 

heating product energy conservation standards do not have the effect of improving the quality of 

wetlands, nor threatened or endangered species that reside in these wetlands. This action is also 

not expected to impact cultural resources such as historical or archaeological sites. 

16.5 SOCIOECONOMIC IMPACTS 

 DOE's analysis has shown that the increase in the first cost of purchasing more efficient 

water heaters, direct heating equipment, and pool heaters at the standard levels is completely 

offset by a reduction in the life-cycle cost (LCC) of owning a more efficient product for the 

average consumer. In other words, the consumer will pay less operating costs over the life of the 

product even through the first cost increases. The complete LCC analysis and its conclusions are 

presented in chapter 8 of the TSD. 

 For subgroups of low-income and senior consumers that purchase heating products, DOE 

determined that the average LCC impact of the standards is similar to that for the full sample of 

consumers. Therefore, DOE concludes that the action would have no significant adverse 

socioeconomic impact. For a complete discussion on the LCC impacts on consumer subgroups, 

see chapter 11 of the TSD. 

16.6 ENVIRONMENTAL JUSTICE IMPACTS 

 In view of Executive Order 12898 of February 11, 1994, “Federal Actions to Address 

Environmental Justice in Minority Populations and Low-Income Populations,” DOE examined 

the effect of the energy conservation standards on low-income households. As described in the 

LCC subgroup analysis in Chapter 11 of the TSD, DOE found that there were no 

disproportionately high and adverse human health or environmental effects on low-income 

populations that would result from the energy conservation standards. 
 16-24 

16.7 NOISE AND AESTHETICS 

 Improvements in efficiency of heating products are expected to result from changes in the 

choice of components and other design features. These changes are described in chapter 5 of this 

TSD. These design changes are not expected to change noise levels in comparison to products in 

today’s market. Products that are currently manufactured in the existing market that would meet 

the standards are no louder than less efficient products. Changes to the design to improve the 

efficiency levels are not anticipated to affect the product aesthetics. 

16.8 SUMMARY OF ENVIRONMENTAL IMPACTS 

 Tables 16.8.1 through 16.8.3 summarize the estimated environmental impacts for each of 

the TSLs. The summary tables show cumulative changes in emissions for CO2, NOX, and Hg for 

2015 to 2045 for water heaters and from 2013 to 2043 for direct heating equipment and pool 

heaters. 

 For direct heating equipment and pool heaters, cumulative CO2, NOX, and Hg emissions 

from the power sector show a slight increase under some TSLs compared to the Reference case. 

This result is primarily due to an increase in electricity use at the considered TSLs. The moreefficient DHE products and pool heaters save natural gas, but they also use more electricity due 

to electronic ignition and, for some DHE TSLs, use of a fan (see section 7.3.6 and section 7.4.4 

in chapter 7). This results in higher electricity generation than in the Reference case, which leads 

to higher emissions. For CO2 and NOX, the higher emissions from the power sector are more 

than canceled out by lower household emissions from gas combustion, such that total emissions 

decrease under the considered TSLs. For Hg, this is not the case because there are no offsetting 

household emissions. 

 Upstream fuel cycle emission of CO2 and NOX are described but not quantified in section 

16.2.7. The text describes potential reductions in fuel cycle emissions as percentage of decreases 

in power plant emissions. This approach suggests that upstream fuel cycle emissions would 

decrease and provides a sense for the magnitude of effects; however DOE does not report actual 

estimates of the effects. 

 For subgroups of low-income and senior consumers that purchase heating products, DOE 

determined that the average LCC impact of the standards is similar to that for the full sample of 

consumers. Therefore, DOE concludes that the action would have no significant adverse 

socioeconomic impact. 

 No impacts are anticipated in the areas of environmental justice, wetlands, endangered 

and threatened species, and cultural resources; or noise and aesthetics. 
 16-25 

Table 16.8.1 Environmental Impact Analysis Results Summary for Water Heaters 

Environmental Effects 

Reference 

Case* 

Trial Standard Level 

1 2 3 4 5 6 7 8 

Cumulative Total Emission Reductions** 

CO2 (million metric tons) 76,950 74.30 121.67 130.54 137.25 154.2 209.5 608.8 1,001

NOX (thousand tons) 56,763 57.51 94.27 100.79 105.71 116.2 158.7 456.5 754.5

Hg (tons) 866 0.056 0.090 0.103 0.113 0.553 0.704 2.32 3.58 

Cumulative Power Sector Emission Reductions** 

CO2 (million metric tons) 76,950 37.20 59.63 68.22 74.94 111.0 141.3 467.0 721.1

NOX (thousand tons) 56,763 27.25 43.69 49.99 54.90 80.99 103.1 340.8 526.4

Hg (tons) 866 0.056 0.090 0.103 0.113 0.553 0.704 2.32 3.59 

Cumulative Household Emission Reductions** 

CO2 (million metric tons) - 37.10 62.04 62.32 62.32 43.24 68.20 141.8 279.8

NOX (thousand tons) - 30.25 50.58 50.81 50.81 35.25 55.60 115.6 228.2

* The reference case reflects total cumulative emissions (power sector only) in the absence of an amended 

energy conservation standard. 

** Cumulative total is over 2015 to 2045 for water heaters. 

Table 16.8.2 Environmental Impact Analysis Results Summary for Direct Heating 

Equipment 

Environmental Effects 

Reference 

Case* 

Trial Standard Level 

1 2 3 4 5 6 

Cumulative Total Emission Reductions** 

 CO2 (million metric tons) 76,445 8.25 8.84 9.31 17.95 20.24 49.94 

NOX (thousand tons) 57,080 7.53 8.06 8.47 16.43 18.62 45.98 

Hg (tons) 895 (0.012) (0.013) (0.014) 0.029 0.033 0.084 

Cumulative Power Sector Emission Reductions** 

 CO2 (million metric tons) 76,445 (2.93) (3.15) (3.32) (6.84) (7.69) (19.57)

NOX (thousand tons)/ 57,080 (2.15) (2.31) (2.43) (5.01) (5.63) (14.33)

Hg (tons) 895 (0.012) (0.013) (0.014) 0.029 0.033 0.084 

Cumulative Household Emission Reductions** 

 CO2 (million metric tons) - 11.18 11.99 12.63 24.79 27.93 69.52 

 NOX (thousand tons) - 9.68 10.36 10.91 21.44 24.25 60.31 

* The reference case reflects total cumulative emissions (power sector only) in the absence of an amended energy 

conservation standard. 

** Cumulative total is over 2013 to 2043 for direct heating equipment. Values in parentheses refer to emissions increase.
 16-26 

Table 16.8.3 Environmental Impact Analysis Results Summary for Pool Heaters 

Environmental Effects 

Reference 

Case* 

Trial Standard Level 

1 2 3 4 5 6 

Cumulative Total Emission Reductions** 

 CO2 (Million metric tons) 76,445 0.42 0.75 1.72 2.38 3.61 8.89 

NOX (Thousand tons) 57,080 0.37 0.67 1.53 2.10 3.18 7.84 

Hg (tons) 895 0.000 0.001 0.001 0.000 0.000 0.001 

Cumulative Power Sector Emission Reductions** 

 CO2 (Million metric tons) 76,445 (0.13) (0.24) (0.54) (0.57) (0.87) (2.16) 

NOX (Thousand tons) 57,080 (0.10) (0.18) (0.40) (0.42) (0.64) (1.58) 

Hg (tons) 895 0.000 0.001 0.001 0.000 0.000 0.001 

Cumulative Household Emission Reductions** 

 CO2 (Million metric tons) - 0.55 0.99 2.26 2.95 4.47 11.05 

 NOX (Thousand tons) - 0.47 0.85 1.93 2.52 3.82 9.42 

* The reference case reflects total cumulative emissions (power sector only) in the absence of an amended energy 

conservation standard. 

** Cumulative total is over 2013 to 2043 for pool heaters. Values in parentheses refer to emissions increase. 
 16-27 

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