Chris Granda: Good news from the Vermont Total Energy Study

This commentary is by Chris Granda, who is president of Grasteu Associates, an energy economics, policy and programs consulting firm located in Richmond. He previously worked for Vermont Energy Investment Corp. and served as a volunteer member of the State Thermal Energy Task Force. On Tuesday, he will step down from five years on the Richmond Select Board.

[T]he Vermont Legislature may be getting serious about reducing greenhouse gas emissions. Obviously, this raises questions about the means and the costs of moving away from fossil fuels. What kind of impact would changing the way we fuel our cars, heat our homes and power our businesses have on the Vermont way of life?

In 2012 the Legislature commissioned the Vermont Total Energy Study from the Public Service Department to try to answer this question. The consultant team hired to do this research, (which included the author), was asked to consider a carbon tax and a “Total Renewable and Energy Efficiency Standard” (TREES) which would require all forms of energy used in Vermont to include more renewable sources and emit fewer greenhouse gases over time. Both policies could be implemented at the state level in Vermont, and both had already been implemented in some form in North America. Neither policy dictates how to reduce greenhouse gas emissions. Both are designed to harness market forces and encourage innovation to accelerate the transition to a low-emissions economy.

The Vermont Total Energy Study used the sophisticated FACETS computer model to simulate Vermont’s entire energy economy over the next 35 years. No computer model can predict what will be, but a good model (like FACETS) can help describe what can be, and highlights the critical factors that determine the impacts of a new public policy. Key findings from the Vermont Total Energy Study include:

We’re already headed in the right direction

Many Vermonters may not be aware that not only is it technically possible to reduce greenhouse gas emissions, we’re already doing it. Before the Civil War almost all of Vermont’s energy was renewable — flowing water, animal feed, and of course wood. Cheap and plentiful coal, oil and natural gas dominated during the 20th century, fueling the industrial revolution. Now market forces are moving us to increase energy efficiency and to adopt new forms of renewable energy. As a result, we are again spending more of our energy dollars closer to home and greenhouse gas emissions are dropping.

The Total Energy Study shows that there is enough renewable energy available in our region to allow Vermont to shift almost entirely away from fossil fuels, and to meet the current state goal of reducing greenhouse gas emissions by 75 percent from energy use.

We aren’t moving fast enough

However, our research also suggests that if the Legislature does not adopt new policies to fight climate change that Vermont’s greenhouse gas emissions will decrease by only about 10 percent between today and the year 2050. The reason is that while renewable energy already competes in Vermont’s energy marketplace, the playing field isn’t level. Fossil fuels receive larger federal government subsidies than renewable energy, and the price of fossil fuels does not adequately reflect the current and future damage from associated pollution.

To avoid catastrophic climate change, Vermont (and the rest of the world) must embrace renewable energy quickly, use all energy more efficiently, and leave most of the remaining fossil fuels in the ground.

We have the right tools to get where we need to go

The Total Energy Study suggests that either a carbon tax or TREES could reduce Vermont’s greenhouse gas emissions from energy use by 75 percent by 2050, and that there are multiple ways that both policies could achieve the goal. Neither policy would force Vermonters to choose one technology over another. Investments in efficiency and different renewable energies would be determined by individual choices and prevailing prices. Many technologies could, and probably would, play a role. For example, by 2030 the typical Vermont household might own both an electric car and a bio-diesel fueled truck.

We can afford it

Another key finding is that, rather than slowing Vermont’s economy, either a carbon tax or TREES would have a mildly positive economic development effect. Cutting greenhouse gases would increase Vermont jobs and incomes. A major source of low-greenhouse gas electricity for Vermont today, and most likely in the future, is hydro-power from Quebec. However, because Vermont produces no fossil fuels, switching to renewable energy often means supporting Vermont-based businesses. The cost of both solar and wind generated electricity has dropped significantly in just the last five years. Electric cars are becoming more available and affordable. Between now and 2050 most of the boilers or furnaces in Vermont buildings will wear out and be replaced, almost certainly by more efficient models and potentially by units that burn renewable fuels. Vermont already uses more wood for heating than any other state, and an even larger role for pellets, chips, and cord wood would expand a sustainable, local industry.

We can’t afford not to

The Total Energy Study did not attempt to estimate the future cost of climate change in Vermont, but Tropical Storm Irene is an example of the economic, and human, devastation associated with the kind of extreme weather events that are a symptom of climate change. Our research suggests that adopting a carbon tax or similar policy, and further embracing energy efficiency and renewable energy, would both protect and enhance the Vermont economy and our way of life.

For more information please visit http://publicservice.vermont.gov/publications/total_energy_study