The proposed RPS establishes renewable generation credits to be traded among generators or banked for future use with the value of the credits capped at 1.5 cents per kilowatthour. Because the RPS expires in 2015, it is projected to reduce emissions by only 1 million metric tons in 2020. Extending the RPS could reduce emissions by as much as 17 and 13 million metric tons in 2010 and 2020, respectively, by providing an incentive to invest in renewable facilities for a longer period of time. These estimates could double by removing the cap because, at its proposed level, it is generally cheaper to purchase the credits than to make the investments. Carbon emissions would likely be reduced by about 8 million metric tons in 2010 and by 20 to 23 million metric tons in 2020.
Economic growth is a major determinant of both energy demand and emissions.
If the economy grows at a slower rate of 1.7 percent a year, carbon emissions would be reduced by 59 million metric tons in 2010 and 128 million metric tons in 2020. In the reference case, more efficient energy-using technologies become available and penetrate the market through 2020. Technology could also develop at a slower rate than in the reference case. If the characteristics of energy-using equipment do not improve from those currently available, carbon emissions would be higher by 45 million metric tons in 2010 and by 101 million metric tons in 2020. The Annual Energy Outlook 2000 also includes the analysis of world oil markets, gasoline regulations, nuclear retirements, and competitive pricing of electricity under alternative natural gas prices and discusses recent and proposed regulatory changes in energy markets and other current energy issues.