Conservation: Red States, Blue States, and the Golden State

A friend of mine based overseas recently sent me an email:

I love the Red States/Blue States trend graph of electricity consumption that you have referenced a few times. Any idea what led to California diverging so dramatically starting in the 1970s? From the graph, it appears that the other states can benefit from adopting some of the policies that proved successful in the Golden State.

My friend was referring to one of my favorite graphs, courtesy of The Economist, which illustrates the potential energy savings still available if we replicate some of California's policies across the country:


(To enlarge an image, click on it.) Amidst the tremendous interest in renewables, the importance of conservation and end-use efficiency frequently falls by the wayside. In a recent study by the Electric Power Research Institute (EPRI), end-use efficiency is projected to play a role comparable to renewables, in helping reduce CO2 emissions from electric power generation (WSJ.com, subscription required). EPRI is the research arm of the Electric Utilities. The graph below is their recent model of how CO2 emissions can be reduced to 1990 levels, by 2030:


Although these are numbers from the Electric Utilities, there is no doubt that end-use efficiency and conservation will be important pieces of any serious plan to reduce emissions. As we will see below, then California Governor Jerry Brown realized how a few simple initiatives designed to promote end-use efficiency, could dramatically halt the upward trend in per capita electricity consumption.

To come up with policies to encourage efficiency, a first step is to understand where we use the most energy. In order to approximate how a "typical" American household consumes energy, I turn to two goverment surveys (from 2001 and 2004). The Annual Buildings Energy Databook (from the DOE) has statistics on commercial and residential energy consumption, from all energy sources, including electricity, natural gas, fuel oil, etc.

Lighting (12%) is easy to address, and most countries have active programs in place. Compact Fluorescent Light Bulbs (CFL) use 2/3 less energy than a typical incandescent. The main concern with CFL's is that they contain a small amount of mercury. The Natural Resources Defense Council advises consumers that the amount of mercury in CFL's is less than the mercury needed to produce the additional electricity needed to power the equivalent incandescent.

In 2001, the Energy Information Administration (also from the DOE), released the results of a survey of residential electricity consumption:

Readers interested in regional averages can find them here. Using the 2001 survey, kitchen appliances accounted for over a quarter of household electricity consumption.

Refigerators and freezers consumed 64% of electricity attributed to Kitchen Appliances, or roughly 17% of total electricity consumption.

While solar panels may cost a homeowner $15K to $30K, switching over to the most efficient appliances costs less than $5K -- a more realistic sum for most families. Imagine if large numbers of households make this switch. In the 1970s policy-makers in California recognized the importance of electric appliances:

... In 1976, then-Gov. Jerry Brown was looking for a way to make good on his pledge to stop the construction of the proposed one-gigawatt Sundesert nuclear plant in Southern California. The answer turned out to be refrigerators - more-efficient refrigerators. Brown learned in a meeting with Rosenfeld that California's refrigerators were using the equivalent of five Sundesert plants. So the state adopted stringent appliance standards - before the federal government did - and staved off construction of the Sundesert plant. The change in California's refrigerators has saved energy equal to all the hydroelectric power produced nationwide, Rosenfeld said.

The U.S. eventually adopted national refrigeration standards, which are " ... saving more than 130,000 megawatts of electrical generating capacity".

California officials discovered that with the right public awareness campaigns, households will embrace conservation. What if the utility companies themselves are rewarded for promoting conservation?

Next, California adopted an innovative approach to utility regulation called decoupling so utilities' profits were no longer linked to simply increasing sales. California remains the only state to have adopted decoupling, though proposals are pending in seven states.

Decoupling effectively removes any disincentives, on the part of the utilities, to promote conservation:

... Here's how it works: Every few years, state regulators determine how much revenue utilities need to cover certain authorized costs. They then set electricity rates at a level that allows utilities to recover these costs, based on a forecast of sales. If actual sales are above or below this forecast, then revenues are "trued up." Over-collections are given back to consumers in the form of reduced rates, and under-collections are eliminated with modest rate increases (typically pennies a month for the average household). In 1982 California became the first state to adopt decoupling. The utility companies liked it, because it helped stabilize their financial health.

During the same period, policy makers realized the need for a comprehensive package of measures to encourage energy efficient buildings. In 1977, California introduced Title 24 (California Building Code), which mandated energy efficiency measures in all new construction:

Rosenfeld formed a group at LBL to create a computer program that modeled the energy performance of buildings. If you built, say, a 3,000-square-foot house in the mountains near Lake Tahoe and put in a big north-facing picture window, how much energy would it take to heat the house in January? What if the picture window faced south -- how much would that lower the heating bills? Now, plop the same house down in the Mojave Desert town of Barstow, California. What changes would you make to minimize the need for air-conditioning? Rosenfeld's program provided much more accurate answers, and was far more user-friendly, than a previous attempt at the same kind of modeling software.

... The commission estimated that buildings constructed under Title 24 -- and, therefore, designed using the Rosenfeld/DOE program -- eventually ramped up to energy savings of $5 billion a year. Other states followed California's lead, and Rosenfeld guesses that DOE-2 is now used in the design of 15 percent to 20 percent of all new buildings in the United States. More than 40 countries, from the northern climes of Canada and Switzerland to the tropics of Singapore, Thailand, and Indonesia, have also adopted the program.

Later events, including deregulation, prompted California officials to revisit these energy policies. The power crisis in 2001 convinced policy-makers that conservation programs needed to be strengthened, resulting in $2B of approved investments in end-use efficiency.

California's per capita electricity consumption has remained flat since the 1970s, while the national average continues its upward trend. Congress needs to take the policies that have worked in California and mandate it across the country. While climate change has Al Gore, conservation needs a celebrity advocate. We need one of the leading presidential candidates to start talking to Art Rosenfeld on a regular basis!

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U.S. CO2 Emissions by Sector and State

Lowering CO2 emissions is increasingly becoming a goal of Corporate America. The CEO's of 10 major corporations are calling on the Bush administration and Congress to pass some " ... serious global warming legislation as quickly as possible." Evangelical Christians, an important constituency inside the Republican party, are also beginning to take environmental issues more seriously. Throw in the 2008 Presidential primaries early next year, and this could be the year of serious global warming legislation.

So what are the primary sources of CO2 emissions in the U.S.? What states and regions have the highest CO2 emissions per capita? I turned to data published by the Environmental Protection Agency (EPA). The EPA data spans 1990-2003, and is broken down by "sector". While composing this post I came across similar data (Wall St. Journal, subscription required) from the International Energy Agency (IEA).

(To enlarge a particular image, click on it.) In the U.S., 33% of CO2 emissions come from the Transportation sector, world-wide, Transporation accounts for only 20%. Americans tend to drive less fuel-efficient vehicles, and tend to drive more miles. Interestingly, while the fast-growing economies of India and China are increasing their share of emissions from the Transportation sector, the U.S. seems to be trending towards less driving, and lighter and more fuel-efficient cars. With the growing popularity of hybrids, bio-diesel, and the possibility of plug-in hybrids, I expect the Transportation sector in the U.S. to see large reductions in the next decade. The other notable difference: the U.S. Residential sector accounts for about 7% of CO2 emissions, compared to 13% world-wide.

Which sectors have shown the fastest growth from 1990-2003? Again we normalize all the time-series, so they start at a common value (say 100), then use their respective year-over-year growth rates to plot the rest of the graph:

From 1990-2003, emissions from the Electric Power and Transportation sectors grew 24% and 20% respectively. Not only are these the largest sources of CO2 emissions (accounting for 71% of total emissions in 2003), they are also the fastest-growing. Policy-makers in the bellwether state of California have long focused their efforts on these sectors, and recently two key initiatives garnered bi-partisan support: utilities must produce 20% of their electricity from renewable sources by 2010 AND refineries and gas stations must reduce by 20% the carbon content of fuel they sell by 2020. As the " ... world's ninth largest emitter of the greenhouse gases that trap heat in the atmosphere", California is ground zero for innovation in renewable energy.

In the U.S., emissions from the Industrial sector declined by 5% from 1990-2003. This drop is probably a reflection of the fact that the U.S. manufacturing sector has declined significantly during that time period.

Finally we use heat maps to present state level emissions. To account for the size of a state, we compare emissions-per-capita. Our benchmark will be the U.S. per capita emissions: Green means a state has lower per capita emissions than the U.S., Red means it has higher emissions per capita.

In 2003, Wyoming had the highest TOTAL CO2 emissions per capita. The above map is somewhat reminiscent of the 2004 Presidential Electoral College map :-)

Next we examine state level emissions data for the two largest sources of CO2 emissions in the U.S. (Electric Power and Transportation).

The Western states rely more on hydro-electric power compared to the rest of the country. The "red" states are most likely those that lean heavily on coal powered plants. In a previous post, I highlighted the fact that California used the least amount of electricity per capita. In the graph below, we look at a simple linear relationship, between electricity consumption per-capita AND per capita CO2 emissions due to electric power:

WY, ND, WV are states whose per capita CO2 emissions are high relative to their per capita electricity consumption. These are states whose electric power comes largely from coal powered plants.

Turning to the Transportation sector:

We expect California (home to over 1 in 10 new cars sold in the U.S.) to be about average, and the Northeast (home to mass transit) to have less emissions per capita. In a previous post, I noted that California is among the states that used the LEAST amount of gasoline per capita (here is a map). Below is a scatterplot of 2004 Gasoline consumption per capita vs. 2003 CO2 Emissions from Transportation. Unfortunately, data for the variables represent two different years:

Using this "weak" linear relationship, we uncovered some interesing outliers: AK, WY, and to a lesser extent HI and LA. These states have CO2 emissions (from Transportation) higher than what one would expect from their repective per capita gasoline consumption. AK is a huge state, and transportation between some areas is limited: to get to the state capital you have to fly or take a ferry! I suspect that gasoline consumption-per-capita is largely based on data from gas stations, while the Transportation emissions-per-capita captures more forms of transportation.

Sound energy policy pays off relatively quickly. Consider the case of California:

Power use per person has remained roughly stable in the state since the 1970s, even as it has doubled in the rest of the country (see chart above). As a result, California's greenhouse-gas emissions per person are on a par with those of Denmark. Relative to the size of its economy, they are lower.

In the next few weeks, I will try to focus on the Transportation and Electric Utility sectors: the reasons behind the high amounts of emissions, and the solutions currently being developed.

UPDATE: The SJ Mercury News has a great article on the steps California took to become the most energy efficient state in the US.

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