The Effect of Criteria Pollutant and GHG Damage Based Fees on

Emissions from the US Energy System

Kristen E. Brown*, Daven K. Henze, Jana B. MilfordUniversity of Colorado Boulder Mechanical Engineering Dept.

CMAS Conference 2014

2Photo Credits: Commons.wikimedia.org/wiki/File:Air.pollution_1.jpg National Parks ServiceCommons.wikimedia.org/wiki/File:Respiratory_system.svg Drawn by Theresa Knott

Criteria Pollutant Health Damages• Fann et al. 2012– Uniform Value of Statistical Life– Krewski et al. (2009) – Laden et al. (2006)

• Muller et al. 2011– Value of Statistical Life age differentiated– Pope et al. (2002)

3Photo Credit: Drawn by Theresa Knott Commons.wikimedia.org/wiki/File:Respiratory_system.svg

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Low Fees High Fees

0.1

1.0

10.0

100.0

1000.0 Criteria Pollutant Fees

NOxSO2PM10PM2.5VOC

thou

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$/

tonn

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Muller et al. 2011 4Fann et al. 2012

5

Climate Change Damages• Social Cost of Carbon– Interagency Working Group of the US Government

• Discount Rates– Central 2 of 4 estimates in report– 3% for low– 2.5% for high

• Applied to CH4 using GWP(100) = 28 (Myhre et al. 2013)

2015 2020 2025 2030 2035 2040 2045 2050 20550

20

40

60

80

100 GHG Fees

GHG LowGHG High

$(yr

200

5)/t

on C

O2

Uranium

Fossil Fuels

OilRefining & Processing

H2 Generation

Direct Electricity Generation

BiomassCombustion-BasedElectricity Generation

Nuclear Power

Gasification

Wind, Solar, Hydro

Carbon Sequestration

Industry

Industry

Commercial

Residential

Transportation

Primary Energy

Processing and Conversion of Energy Carriers End-Use Sectors

Conversion & Enrichment

6Dan Loughlin US EPA ORD 2011

MARKAL finds least cost way to meet energy demand

MARKAL

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MARKAL updates• Results shown here use an edited version of EPAUS9R_12_v1.1• Emissions

– Upstream emissions• Better natural gas representation• Renewable technologies including biomass

– Sector specific emissions definitions– Calcination CO2 emissions from cement are included

• More industrial technologies – Solar process heat– Emissions controls (NOx, SO2, PM, CO2)– Efficiency improvements (boiler optimization)– Refinery emissions controls (SO2, PM, NOx, VOC)

• Light duty vehicle hurdle rate reduced to 18%• Coal EGU lifetime limited to 75 years from initial use

• Applicable changes made to 2012 database are currently being incorporated into 2014 release– Renewable cost projections from NREL

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Policy Implications

• Indicate energy system changes with fees

• Economically efficient emissions levels

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2010 Base

Base Crit Low

Crit High

GHG Low

GHG High

0

5

10

15

20

25

30

35

40Electric Power Fuel Use in 2040

CoalBiomassNatural GasWindGeothermalNuclearOtherHydropowerSolar

Exaj

oule

s of

Fue

lGHG fees lead to en-

ergy use changes

102010 Base

Base Crit Low

Crit High

GHG Low

GHG High

0

5

10

15

20

25

Industrial Fuel Use in 2040

ElectricityCoalCokeBiomassMet. CoalNatural GasPetcokeOilSolar HeatLPG

Exaj

oule

s of

Fue

lHigh Criteria

Pollutant fees lead to industrial

efficiency improvements

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NOx SO2 PM NOx SO2 PM NOx SO2 NOx SO2Crit Low Crit High Crit Low Crit High

Boiler Process Heat

0

500

1000

1500

2000

2500

3000

Industrial Control Technologies

Low Mid High FGD LNB LNB+SNCRESP total

PJ o

f fue

l con

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Criteria pollutant fees lead to more control devices.

122010 BaseBase

Crit Lo

w

Crit H

igh

GHG Low

GHG High

01234567

GHG Emissions in 2040

UpstreamElectricIndustrialRefineryTransportationResidentialCommercial

Gt C

O2e

Criteria pollutant fees have little effect on GHG

emissions.

132010 BaseBase

Crit Lo

w

Crit H

igh

GHG Low

GHG High

0123456789

2040 SO2 Emissions

UpstreamElectricIndustrialRefineryTransportationResidentialCommercial

Mt S

O2

GHG fees reduce GHG and criteria

pollutants.

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2010 Base

Base Crit Low

Crit High

GHG Low

GHG High

0

2

4

6

8

10

12

142040 NOx Emissions

Upstream

Electric

Industrial

Refinery

Transportation

Residential

Commercial

Mt N

Ox

Climate policy is needed to reduce

GHGs, but will have AQ co-

benefits

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Considerations• Damages fixed in space and time• Fann et al. 2012 vs. Muller et al. 2011

– Fann et al. has much larger effect on industrial technologies• GHG high vs. low

– Values closer than for criteria pol. cases• High is approx. 1.4x low ($/ton)

– Additional reduction in electric coal with high fees

Fann Mullerfee/damages 10 1indust emis 63% 7%elc emis 84% 22%fee/damages 15 1indust emis 47% 25%elc emis 87% 64%

NOx

SO2

% reduction from BAU

16

Thanks to:

• Greg Frost• Shelly Miller• Mike Hannigan• EPA for the EPA US 9-

region MARKAL database

• Dan Loughlin • Nick Flores• Garvin Heath• NASA for funding• You for your

attention

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References• Brown K.E., Henze D.K., Milford J.B., (2013): Accounting for

Climate and Air Quality Damages in Future U.S. Electricity Generation Scenarios. Environmental Science & Technology 47, pp. 3065–3072.

• Fann N., Lamson A.D., Anenberg S.C., Wesson K., Risley D., Hubbell B.J., (2012): Estimating the National Public Health Burden Associated with Exposure to Ambient PM2.5 and Ozone. Risk Analysis 32, pp. 81–95.

• Interagency Working Group on Social Cost of Carbon. (2013): Technical Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866.

• Muller N.Z., Mendelsohn R., Nordhaus W., (2011): Environmental accounting for pollution in the United States economy. American Economic Review, 101(5), pp. 1649–1675.

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SO2

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. Crit High . GHG Low

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Electric Sector Controls

LNB+SCRLNB+SNCRSNCR onlyLNBFGDFabric Filtercoal use

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