01/19/2009

Iowa Climate Change Developments

Background

In 2007, the Iowa Legislature created the Iowa Climate Change Advisory Council (“ICCAC” or the “Council”).  The ICCAC consists of 23 voting members appointed by the Governor, and 4 non-voting members from the Iowa Legislature.

The Council was charged with developing scenarios to reduce state-wide greenhouse gas emissions, using 2005 as the baseline year, by 2050. The Council was to develop two scenarios: reduction of emissions by 50% by 2050, and alternatively, reduction of emissions by 90% by 2050.  The Council has completed this work and recently submitted a Report to the Governor and to the Iowa Legislature.

ICCAC Report

The key components of ICCAC’s Report are as follows:

• Emissions Inventory and Forecast.  The Iowa Greenhouse Gas (GHG) Emissions Inventory and Forecast, as prepared, outlines baseline conditions as of 2005 and projected emissions through 2025 if no changes to the business as usual reference case are made. Gross GHG emissions, under business as usual, are estimated to increase approximately 1% per year.  The largest contributors to emissions growth are electricity consumption and the transportation sector. ICCAC recommends that the GHG Emissions Inventory and Forecast be updated annually.
• Options for Emissions Reductions.  Approval of a comprehensive package of multi-sector policy options to reduce GHG emissions and address related energy and commerce issues in Iowa. After studying more than 300 options, ICCAC approved 56 policy options for inclusion in this Report. According to projections, if all 56 options are carried out, the 90% reduction scenario can be met.
• Cost Evaluation.  Evaluation of the direct costs and direct cost savings of the policy options in Iowa. The ICCAC analyzed quantitatively the direct costs or cost savings of 38 of its 56 policy options. The total net cost associated with the 38 policies analyzed is estimated at about $ 4.8 billion between 2009 and 2020.  The cost-effectiveness of the 38 policies is estimated to be approximately $8.80/per ton of carbon dioxide equivalent that is reduced.  A number of the policies are estimated to yield significant cost-saving opportunities, while other policies will incur net costs.
• Two Reduction Scenarios.  The two scenarios are:  (1) 50% reduction from 2005 emissions by 2050, with interim goals of 1% by 2012 and 11% by 2020, and (2) 90% reduction from 2005 emissions by 2050, with interim goals of 3% by 2012 and 22% by 2020.

Policy Options Summary

ICCAC has developed 56 policy options for reducing greenhouse gas emissions.  These policy options are categorized by sectors, and the sectors are as follows:

• Energy Efficiency and Conservation (“EEC”);
• Clean and Renewable Energy (“CRE”);
• Transportation and Land Use (“TLU”);
• Agricultural, Forestry, and Waste Management (“AFF”); and Cross-cutting Issues (“CC”) (i.e., issues that cut across the above-sectors).

Of the 56 policy options, ICCAC quantitatively analyzed 38, both in terms of cumulative effect of reducing greenhouse gas emissions, and in terms of costs.  The table below summarizes this analysis.

Sector	GHG Reductions (MMtCO2e)			Net Present Value 2009–2020 (Million $)	Cost- Effective-ness ($/tCO2e)
	2012	2020	Total 2009–2020
Energy Efficiency and Conservation	1.1	8.5	42.8	-$1,057	-$25
Clean and Renewable Energy	5.8	48.0	233.5	$5,921	$25
Transportation and Land Use	1.6	11.1	55.0*	-$2,219	-$59
Agriculture, Forestry, and Waste Management	11.3	37.4	233.0	$2,139	$9.2
Cross-Cutting Issues	Non-quantified, enabling options
TOTAL (includes all adjustments for overlaps)	19.9	105.1	564.3	$4,785	$8.8

 

GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalent; $/tCO2e = dollars per metric ton of carbon dioxide equivalent.

The following recaps the policy options in each one of the five categories.

Energy Efficiency and Conservation Policy Options

• Consumer Education Programs
• Demand-Side Management (DSM)/Energy Efficient Programs for
• Natural Gas
• Financial Mechanisms for Energy Efficiency
• Improved Building Codes for Energy Efficiency;
• Incentive Mechanisms for Achieving Energy Efficiency
• Promotion and Incentives for Improved Design and Construction in the Private Sector
• Training and Education for Builders and Contractors
• Focus on Specific Residential Market Segments
• Midwestern Governors Association Energy Security and Climate Stewardship Platform
• Energy Management Training/Training of Building Operators
• Rate Structures and Technologies to Promote Reductions
• Demand-Side Management (DSM)/Energy Efficiency Programs for Electricity
• Government Lead by Example: Improved Design, Construction, and Energy Operations in New and Existing State and Local Government Buildings
• More Stringent Appliance Efficiency Standards

Clean and Renewable Energy Policy Options

• Education
• Technologies Initiatives, Including Renewables
• MGA Cap and Trade, Including Offsets to Promote Renewables
• Decarbonization Fund
• Performance Standards (50% Reduction by 2050)
• Voluntary GHG Commitments
• Policies Related to Nuclear Power
• Support for Grid-Based Renewable Energy & Development (MGA Target of 20% of retail sales by 2020)
• Transmission System Upgrading
• R&D for Emerging Technologies and Corresponding Incentives
• Distributed Generation/Co-Generation
• Combined Heat and Power
• Pricing Strategies to Promote Renewable Energy and/or CHP

Transportation and Land Use Policy Options

• Smart Growth Bundle with Transit
• Expand and Improve Transit Infrastructure
• GHG Impacts for State and Local Capital Funding
• Support Passenger Rail Service in Iowa
• Distributed Workplace Models
• Light Duty Vehicles Fuel Efficiency Incentives
• Fuel Efficient Operations for Light Duty Vehicles
• New Vehicle Standards (Tailpipe GHG and Fuel Economy)
• Freight Strategies (Truck and Rail)
• Fuel Strategies (20% Low Carbon Fuel Standard

Agriculture, Forestry, and Waste Management Policy Options

• Nutrient Management
• Increase Efficiency of Fertilizer
• Seasonally Flooded Areas
• Improved Nutrient Distribution
• Wetlands and Drainage
• Expanded Use of Agriculture and Forestry Biomass Feedstocks for Electricity, Heat or  Steam Production
• Encourage Large-Scale Manure/Methane Management Capture Utilization
• Methane Management Capture Utilization
• Manure Management
• Land Management to Promote Sequestration Benefits
• Conservation Tillage
• Agriculture Land Conversion
• Afforestation
• Unmanaged Grazed Forested Land
• Urban Forestry
• Cellulosic Biofuel
• Improved On-Farm (or First Point of Purchase) Energy Use and Efficiency
• Renewable Energy
• Energy Efficiency
• Waste Management Strategies
• Landfill Methane Energy Programs

Cross-Cutting Issues Policy Options

• GHG Inventories, Forecasting, Reporting and Registry
• Statewide GHG Reduction Scenarios
• State and Local Government GHG Emissions (Lead by Example)
• Public Education and Outreach
• Tax and Cap Policies
• Seek Funding for Implementation of ICCAC Options
• Adaptation and Vulnerability
• Participate in Regional and Multistate GHG Reduction Efforts
• Encourage the Creation of a Business Oriented Organization to Facilitate Investment in Climate-Related Business Opportunities and to Share Information and Strategies, Recognize Successes, and Support Aggressive GHG Reduction Goals

Conclusion

ICCAC has made significant progress towards Iowa’s goal of reducing GHG emissions. ICCAC’s Report provides multiple options for reducing GHG emissions by 2050.  These options were evaluated both in terms of costs and savings.  What happens next will be determined by the Governor’s and Iowa Legislature’s actions in response to the Report.