Mitigation Work Group

Mitigation Work Group
Appendix D
Maryland Climate Action Plan
Greenhouse Gas & Carbon Mitigation Working Group
Policy Option Documents
Contents
D-1 Agriculture, Forestry & Waste
D-2 Energy Supply
D-3 Residential, Commercial & Industrial
D-4 Transportation & Land Use
D-5 Cross-Cutting Issues
Maryland Climate Action Plan
Appendix D-1
Agriculture, Forestry & Waste Management
Maryland Climate Action Plan Appendix D-1
Agriculture, Forestry, and Waste Management
Introduction
The benefits of forests and trees are extensive, complex, and beyond measure. Trees remove
carbon dioxide (CO2) from the air and store carbon (C) in their trunks and branches; trees absorb
and filter nitrogen dioxide (NO2), sulfur dioxide (SO2), ozone (O3), carbon monoxide (CO), and
particulate matter; trees release oxygen and intercept rainwater and dust. The process of
evapotranspiration and shade from trees lowers summertime air and surface temperatures.
Shade and lower surface temperatures reduce the need for air conditioning in buildings, thereby
reducing the need for the production and transmission of electricity. Reduced energy production
reduces emissions of greenhouse gases (GHGs) and carbon from power plants. Shade and lower
surface temperatures reduce maintenance needs of infrastructure which, in turn, reduces the
conversion of raw materials to asphalt and concrete, which reduces the production of GHGs from
manufacturing plants, transportation, and heavy equipment. Shade and lower surface
temperatures reduce the evaporation of chemicals from car engines, and reduce the need for air
conditioning in cars. This reduces the amount of fuel burned and emissions from cars. And these
are but a few examples.
Sustainable forest and urban forest management is essential to healthy, productive forests and
trees that maximize mitigation for GHGs and carbon sequestration. Additionally, these forests
serve as the preferred land use for avoiding emissions. In the face of climate change, it is critical
that everything possible is done to increase the amount of, and enhance the condition of forests
and trees everywhere. Healthy forests and trees are our single most cost-effective tool for
mitigating for climate change.
Appendix D-1 Page 2
Maryland Climate Action Plan Appendix D-1
Summary List of Recommended Priority Policy Options for Analysis
GHG Reductions
(MMtCO2e)
Option
No.
Policy Option
2012
2020
Total
2008–
2020
Net
Present
Value
2008–
2020
(Million
$)
CostEffectiveness
($/tCO2e)
Level of
Support
AFW-1
Forest Management for Enhanced Carbon
Sequestration*
0.04
0.09
0.66
$89.10
$135
Unanimous
AFW-2
Managing Urban Trees and Forests for
Greenhouse Gas (GHG) Benefits*
0.73
1.90
13.27
–
$2,017.00
–$152
Unanimous
Afforestation
0.21
0.6
3.9
$112.70
$29
Riparian areas
0.01
0.05
0.25
$11.00
$44
1.93
$168.60
AFW-3
Afforestation, Reforestation, and Restoration
of Forests and Wetlands
Unanimous
Protection and Conservation of Agricultural
Land, Coastal Wetlands, and Forested Land
AFW-4
Agricultural land
0.11
Coastal Wetlands
N/Q
Forested land
2.2
0.28
N/Q
2.7
N/Q
30.5
N/Q
$1,128.7
$87
Unanimous
N/Q
$37
“Buy Local” Programs for Sustainable
Agriculture, Wood, and Wood Products
AFW-5
Farmers’ Market
0.01
0.03
0.20
–$33.10
Local Produce
N/Q
N/Q
N/Q
N/Q
–$167
N/Q
Locally Grown and Processed Lumber
N/Q
N/Q
N/Q
N/Q
N/Q
$12
Unanimous
Expanded Use of Forest and Farm
Feedstocks and By-Products for Energy
Production
AFW-6
Biomass (Including Agricultural Residue,
Forest Feedstocks, and Energy Crops)
0.12
0.50
2.83
$34.10
Methane (CH4) Utilization From Livestock
Manure and Poultry Litter
0.01
0.04
0.25
$0.06
Unanimous
$0.2
In-State Liquid Biofuels Production
AFW-7
Study presented for informational purposes only
Ethanol
Bio-diesel
Unanimous
0.10
0.17
1.41
$10.50
$7
AFW-8
Nutrient Trading With Carbon Benefits
0.05
0.14
0.99
–$29.70
–$30
Unanimous
AFW-9
Waste Management Through Source
Reduction (SR) and Advanced Recycling
8.80
29.27
184.00
–$1,118
–$6
Unanimous
Sector Totals
12.39
35.77
240.19
-$1643.04
–$7
5.62
7.53
83.48
–$159.96
-$2
Reductions From Recent Actions
–
–
–
–
–
Sector Total Plus Recent Actions
–
–
–
–
–
Sector Total After Adjusting for Overlaps
†
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalent; $/tCO2e = dollars per metric ton
of carbon dioxide equivalent; N/Q = not quantified; CH4 = methane; SR = source reduction.
Note that negative costs represent a monetary savings.
* With Mitigation of Forest Loss Due to Insects, Disease, Pests, and Invasive Species
†
See next page for discussion of overlap adjustments.
Appendix D-1 Page 3
Maryland Climate Action Plan Appendix D-1
Overlap Discussion
The amount of CO2 emissions reduced or sequestered in the policy options within the
Agriculture, Forestry, and Waste Management (AFW) sector overlaps with some of the
quantified benefits and costs of policy options within other sectors. Those overlaps were
identified and adjusted to eliminate double counting. The AFW sector totals were reduced
accordingly, as displayed in the Summary List above. The following overview identifies
specifically where those overlaps occurred and how they were resolved.
AFW-2 addresses planting trees in urban settings. The Residential, Commercial, and Industrial
(RCI) Sector also indirectly includes some tree planting to reduce energy use in buildings as part
of demand-side management (DSM) and other energy efficiency programs. AFW-2 addresses
urban tree canopies, existing buildings, and carbon sequestration. Only a portion of the CO2
reductions in AFW-2 is based on energy savings from shading and protection of buildings by
trees. RCI options broadly address specifically planting trees to affect energy savings in
buildings across the entire state. Therefore, only 30% of the emission reductions attributable to
energy savings were removed from the AFW quantifications as overlap. The related costs were
then adjusted accordingly.
AFW-6 outlines how biomass may be utilized for energy production. The Energy Supply (ES)
sector also quantified the use of biomass for energy production. All emission reductions and
costs associated with biomass-to-energy production have been removed from AFW sector in the
Sector Total After Adjusting for Overlaps row and are accounted for in ES.
AFW-7 focuses on biofuels. The availability of biomass in, and in proximity to Maryland was
determined and added a constraint on the amount of energy and biofuels that could be produced.
Since ethanol production is addressed in the Transportation and Land Use (TLU) sector, and
since that analysis accounts for the use of available biomass for ethanol, all quantifications for
AFW ethanol options have been eliminated from the total. Bio-diesel production benefits and
savings in AFW were reduced to the production expected from the remaining available biomass
after the TLU bio-diesel targets were met.
AFW-9 addresses reduction of waste and recycling. The raw numbers reflect the savings in all
GHG emissions and costs from raw material extraction through production as well as waste
stream. In the Inventory and Forecast (I&F), only the emissions produced from landfills, waste
combustion, wastewater treatment and residential burning were included. Therefore, the portion
of emissions and costs over and above the emissions for landfills and waste combustion were
eliminated so as to more accurately reflect the difference between Business-As-Usual (BAU)
trends as predicted in the Inventory and Forest and the implementation of this policy option.
However, addressing waste effectively creates significant emission reductions and cost savings
beyond what is now reflected in the adjusted total.
Appendix D-1 Page 4
Maryland Climate Action Plan Appendix D-1
AFW-1. Forest Management for Enhanced Carbon Sequestration
Policy Description
Healthy, sustainable, and productive forests provide a vast array of benefits. Sustainable forest
management enhances environmental benefits and increases social and economical benefits as
well. This policy enhances productivity of healthy, sustainable forests. Benefits from this option
include increased rates of CO2 sequestration in forest biomass through healthier forests,
increased amounts of carbon stored in harvested, durable wood products, and the availability of
renewable biomass for energy production.
Healthy and vigorous forests provide direct benefits to GHG reductions, as noted above, but also
serve as the preferred land-use for avoiding emissions and capturing airborne GHGs. To protect
those forests so they are able to meet the desired GHG objectives, it is incumbent upon the owner
of those forests to attend to the necessary stewardship activities needed to keep the forests
healthy and vigorous.
Practices may include supplemental planting on poorly stocked lands, age extension of managed
stands, thinning and density management, fertilization and wood waste recycling, expanded use
of short-rotation woody crops (for fiber and energy), expanded use of genetically preferred
species, modified biomass removal practices, or fire management and risk reduction.
Programs that reduce populations of invasive and damaging insects, diseases, plants, and other
pests enhance forest health and long-term sustainability. Reducing pressure from invasive
species increases benefits from forests, helps mitigate GHG emissions, and sequesters more
carbon. Threats from invasive species are increasing in number and severity, especially since
forestlands are more vulnerable due to cumulative effects of other stressors. Some native species
populations exceed the carrying capacity of the habitat, undermining regeneration efforts, and
therefore sustainability. For example, the overabundance of white-tailed deer places excessive
browse pressure on regeneration and understory plants in all forests. It is difficult to quantify the
effects of invasive species growth on emissions because the costs of implementation and the
efficacy of management strategies can vary widely.
Sustainable forest management is the practice of managing forest resources to meet the longterm forest product needs of humans while maintaining the biodiversity of forested landscapes.
The primary goal is to restore, enhance, and sustain a full range of forest values—economic,
social, and ecological.
Policy Design
Education and outreach, especially for citizens and land managers, will be an important part of
this goal to underscore the importance of forests and to teach best management practices (BMPs)
for forests.
Goals Related to Forest Management:
• Improve sustainable forest management on 25,000 acres of private land by 2020.
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Maryland Climate Action Plan Appendix D-1
•
Improve sustainable forest management on 100% of state-owned resource lands by 2020.
Goals Related to Forest Pests and Invasive Species (not quantified):
• Develop a prioritization process for invasive species, identifying species of high priority for
targeted action.
•
Shift decision-making efforts to plan ahead for invasive species problems—move towards
prevention or proactive management rather than control and reactive treatments.
Parties Involved: Maryland Department of Natural Resources (DNR), Maryland Department of
the Environment (MDE), Maryland Department of Agriculture (MDA), Maryland Department of
Transportation (MDOT), Maryland State Highway Administration (SHA), counties, Chesapeake
Bay Program, Natural Resource Conservation Service (NRCS), United States Forest Service–
State and Private Forestry (USFS-SPF), United States Fish and Wildlife Service (USFWS),
private landowners, public landowners, private sawmills, landscaping industry, nursery industry,
Maryland Cooperative Extension (MCE), master gardeners, and the artisan community.
Implementation Mechanisms
•
Provide outreach and education on best forest management practices.
•
Provide outreach and education about invasive species and control methods.
•
Revise the Forest Conservation Management Act (FCMA) to be consistent with the
recommendations contained herein.
•
Use a bona fide certification system1 with the aim of certifying all state-owned forestlands as
sustainably managed.
•
Support a Sustainable Forestry Act that encourages enhanced carbon storage in forests, use of
durable wood products, and use of wood biomass for energy, while maintaining healthy
forest ecosystems.
•
Use offset funds to enhance forest management on private lands and reduce conversion to
other land uses. See Related Polices/Programs in Place.
•
Include sustainable forest management in the Regional Greenhouse Gas Initiative (RGGI)
Model Rule.
•
Develop a mechanism to aggregate products from smaller land holdings to compete in
meaningful markets.
•
Investigate the feasibility of legislation restricting the sale of priority non-native invasive
species.
1
Forest certification is a system for identifying well-managed forestland. In this context, sustainability includes
maintenance of ecological, economic, and social components. Products from certified forestland can, through chainof-custody certification, move into production streams and in the end receive labeling that allows customers to know
the product came from a certified, well-managed forest. Fully implemented, certification will become a marketbased mechanism to reward superior forest management. The Forest Stewardship Council (FSC) is a
nongovernmental, international organization that accredits third-party certifiers and facilitates development of forest
management standards. Certifiers include Scientific Certification Systems (California), SmartWood (New York),
and regional affiliates.
Appendix D-1 Page 6
Maryland Climate Action Plan Appendix D-1
Related Policies/Programs in Place
•
FCMA
•
Incentive programs for private forestland owners (e.g., Woodland Incentive Program, Forest
Conservation and Management Agreements, Woodland Assessment Program, and the Tax
Modification for Forest Management program), which provide either cost-share funds or tax
breaks for appropriate management of their forests.
•
U.S. Department of Agriculture (USDA) programs for forests and related wetlands and
USFWS reforestation and wetlands programs for habitat improvement.
Type(s) of GHG Reductions
CO2 (quantified): Enhancement of annual carbon sequestration from forest growth and
reforestation through forestry management programs.
CO2 (not quantified): Remove fuels that contribute to wildfire emissions. Maintain carbon
sequestration through the production of durable wood products. Reduce emissions by reducing
use of fossil fuels and replace them with energy from woody biomass. Reduce emissions by
preventing the release of carbon from dead and dying trees. Reduce wildfire emissions by
maintaining healthy forests.
Estimated GHG Reductions and Net Costs or Cost Savings
Data Sources:
• Forest-type distribution in Maryland and landownership statistics from the USDA Forest
Inventory and Analysis (FIA), available at: http://fia.fs.fed.us.
•
J.E. Smith, L.S. Heath, K.E. Skog, and R.A. Birdsey. 2006. Methods for calculating forest
ecosystem and harvested carbon with standards estimates for forest types of the United
States. USDA United States Forest Service (USFS) Northern Research Station. General
Technical Report GTR-NE-343. (Also published as part of the United States Department of
Energy [US DOE] Voluntary GHG Reporting Program.) Available at http://www.treesearch.
fs.fed.us/pubs/22954 (ne_gtr343.pdf)
Quantification Methods:
While experts largely agree sustainably managed forests may store substantially more carbon on
an annual basis than forests not managed sustainably, few data are currently available to quantify
exactly what kinds of sites can store exactly how much additional carbon, and under what
silvicultural regimes. Furthermore, some existing forests are indeed being managed sustainably,
such that determining the amount of acreage available for improved forest management can be
difficult.
To calculate the effect of improved forest management on carbon sequestration in Maryland, the
additional carbon stored as a result was indexed using data on rates of carbon storage in average
loblolly-shortleaf pine stands compared with carbon storage rates in high-productivity,
intensively managed loblolly-shortleaf pine stands in the Southeast (GTR-NE-343, Tables A39
and A40). The index of incremental carbon storage was calculated over a 90-year period to
capture slowdown in forest carbon sequestration that typically occurs in maturing forest stands.
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Maryland Climate Action Plan Appendix D-1
Soil carbon was assumed to remain constant with time, because there is no change in estimates
of soil carbon pools over time in the General Guidelines for the Voluntary Reporting of
Greenhouse Gases Program (under Section 1605(b) of the Energy Policy Act of 1992). The
incremental rate of carbon storage, due to intensive management in loblolly-shortleaf pine stands
relative to average loblolly-shortleaf pine stands in the Southeast, is roughly 5% (Table I-1).
Table I-1. Carbon sequestration rates under average and intensive management
scenarios for loblolly-shortleaf pine forests in the Southeast United States following
clear-cut harvest
tC/acre
(0 year)
tC/acre
(90 year)
tC/acre/year
Loblolly-shortleaf pine stands
(GTR-NE-343, Table A39)
10.7
60.5
0.553
Loblolly-shortleaf pine on high
productivity sites under intensive
management
(GTR-NE-343, Table A40)
14.9
67.0
0.579
Forest Type
Increment in
tC/acre/year
Due to Management
5%
tC/acre = metric tons of carbon per acre.
Forests in Maryland are 63% oak-hickory, with 10% oak-pine and 11% loblolly-shortleaf pine.2
The remaining 16% of forestland area is a mixture of forest types. Coefficients for improved
productivity in oak-hickory and oak-pine stands were not available. The rate of carbon
sequestration, due to improved forest management in these forest types, was thus calculated as a
proportion of average carbon sequestration in forests under typical management, using the 5%
value calculated for incremental carbon storage in loblolly-shortleaf pine stands (Table I-2).
Table I-2. Estimated carbon sequestration rates on forestland under intensive
management
tC/acre
(0 year)
tC/acre
(65 year)
tC/acre/year
tC/acre/year
Under Intensive
Management
Oak-hickory
(GTR NE 343, Table A3)
23.0
72.7
0.765
0.800
Oak-pine
(GTR NE 343, Table A4)
25.9
63.4
0.577
0.604
Loblolly-shortleaf pine
(GTR NE343, Table A39)
10.7
51.8
0.632
0.662
Forest Type
tC/acre = metric tons of carbon per acre.
Forest carbon sequestration rates under baseline conditions (no improved forest management)
were based on published carbon stocks (tons of carbon per acre [tC/acre] in forest biomass) for
oak-hickory and oak-pine in the Northeast and for loblolly-shortleaf pine stands in the Southeast
(USFS GTR-NE-343). Annual rates of carbon sequestration (tC/acre/year) were calculated by
subtracting total carbon stocks in forest biomass of 65-year-old stands from total carbon stocks in
2
USDA USFS Northern Global Change Program, Available at http://www.fs.fed.us/ne/global/pubs/books/
epa/states/MD.htm
Appendix D-1 Page 8
Maryland Climate Action Plan Appendix D-1
forest biomass of new stands and dividing by 65. An average for 65-year-old stands was used to
reflect the typical stand age of forests in the Northeast region.
Quantification for this option was based on a combined goal of achieving enhanced forest
management on 25,000 acres of private land and 100% of state-owned forestland by 2020. Based
on 2004 FIA data, state-owned forests total 749,975 acres3 in Maryland, roughly 31.2% of the
2.4 million forested acres statewide. Other forestland ownership entities in the state include the
USFWS (42,561 acres), county and municipal government (41,148 acres) and privately owned
forests (1,567,846 acres). This acreage includes all land classified as forest by FIA and owned by
the State of Maryland, regardless of which branch of state government is currently responsible
for managing that forest.
A linear ramp-up in implementation is assumed. Thus, each year from 2008 to 2020, the analysis
assumes 1,923 acres of private land and 57,690 acres of public land are added to the land base
practicing sustainable forest management. Therefore, the effect of policy implementation is the
incremental carbon stored on these lands is over and above expectations if enhanced forest
management were not implemented. Baseline and policy implementation scenarios assume the
distribution of forests affected by the program will reflect the distribution of forests statewide:
70% oak-hickory, 15% oak-pine, and 15% loblolly-shortleaf pine. Acreage enrolled in the
program in one year is assumed to continue sequestering additional carbon in subsequent years.
Table I-3 summarizes the total carbon storage resulting from enhanced forest management.
3
USDA USFS FIA EVALIDator version 1.0. Available at http://fiatools.fs.fed.us/
Appendix D-1 Page 9
Maryland Climate Action Plan Appendix D-1
Table I-3. Additional acreage and carbon sequestration resulting from expanded land
base participating in sustainable forest management
Year
Private Land
Added to
Sustainable
Forest
Management
This Year
Added in
Prior Years
Public Land
Added
This Year
Public Land
Added in
Prior Years
Additional
Carbon Storage
(MMtCO2e/year)
2008
1,923
0
57,690
0
0.007
2009
1,923
1,923
57,690
57,690
0.014
2010
1,923
3,846
57,690
115,381
0.022
2011
1,923
5,769
57,690
173,071
0.029
2012
1,923
7,692
57,690
230,762
0.036
2013
1,923
9,615
57,690
288,452
0.043
2014
1,923
11,538
57,690
346,142
0.051
2015
1,923
13,462
5,7690
403,833
0.058
2016
1,923
15,385
57,690
461,523
0.065
2017
1,923
17,308
57,690
519,213
0.072
2018
1,923
19,231
57,690
576,904
0.080
2019
1,923
21,154
57,690
634,594
0.087
2020
1,923
23,077
57,690
692,285
0.094
Total
25,000
749,975
0.658
MMtCO2e = million metric tons of carbon dioxide equivalent.
The economic cost of implementing enhanced forest management on forest acreage is a one-time
cost (over and above the cost to implement standard management techniques) of improved forest
management practices and is estimated to be $151.50/acre. This value is an average of values
from other states where similar policy options have been quantified: Vermont, where a value of
$3/acre was used,4 and Montana, where a value of $300/acre was used.5 Clearly, there is little
consensus about what is required to implement an enhanced forest management program and, as
a result, the estimates of how much it will cost to implement these policies varies widely. Statespecific data would substantially improve the validity of the estimate of economic costs for this
option in Maryland. At $151.50/acre, and using a discount rate of 5%, the net present value
(NPV) of this option is $89.1 million (Table I-4), with an overall cost-effectiveness of $135.31
per metric ton of carbon dioxide equivalent (tCO2e) stored.
4
http://www.vtclimatechange.us
5
http://www.mtclimatechange.us
Appendix D-1 Page 10
Maryland Climate Action Plan Appendix D-1
Table I-4. Total economic costs for implementing improved forest management on
combined private and public acreage in Maryland
Year
Carbon Sequestered
(MMtCO2e/year)
2008
0.007
$9,031,439
$9,031,439
2009
0.014
$9,031,439
$8,601,371
2010
0.022
$9,031,439
$8,191,782
2011
0.029
$9,031,439
$7,801,697
2012
0.036
$9,031,439
$7,430,188
2013
0.043
$9,031,439
$7,076,369
2014
0.051
$9,031,439
$6,739,399
2015
0.058
$9,031,439
$6,418,475
2016
0.065
$9,031,439
$6,112,834
2017
0.072
$9,031,439
$5,821,746
2018
0.080
$9,031,439
$5,544,520
2019
0.087
$9,031,439
$5,280,496
2020
0.094
$9,031,439
$5,029,043
Total
0.658
$117,408,713
$89,079,360
Total Cost
Discounted Cost
MMtCO2e = million metric tons of carbon dioxide equivalent.
Key Assumptions:
• Carbon storage resulting from sustainable management of oak-hickory and oak-pine types is
indexed to incremental carbon storage in loblolly-shortleaf-pine forests, as quantified using
methods in GTR-NE-343.
•
One-time costs to implement enhanced forest management are $151.50/acre, and include
costs over and above standard costs for forest management operations.
•
Forest types added to the pool of sustainably managed forests will reflect the distribution of
forests statewide.
Key Uncertainties
GHG emissions from management activities, such as harvest, are not included in this analysis.
To provide clarity about the effects of policy implementation, it is important to quantify the
changes in emissions resulting from changes in management practices due to policy
implementation.
Additional Benefits and Costs
As markets are developed, additional biomass generated via enhanced forest management will be
used first for long-term storage in durable wood products and then for beneficial uses, such as
biofuels and energy. The biomass generated from improved management practices could be used
for durable wood products and energy production. The quantification described above assumes
additional carbon is stored in the forest.
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Maryland Climate Action Plan Appendix D-1
Forest certification will likely be necessary for participation in the RGGI market, but effects of
certification are not quantified here because effects on carbon storage are uncertain and because
the costs are difficult to quantify.
Feasibility Issues
Sustainable forest management is well researched, and offers a plethora of mandated and
voluntary BMPs. The primary hurdle remains one of education and incentives that will move
existing marginal practices or inaction to engaged, sustainable management.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-1 Page 12
Maryland Climate Action Plan Appendix D-1
AFW-2. Managing Urban Trees and Forests for Greenhouse Gas (GHG) Benefits
Policy Description
Healthy, sustainable urban forests are essential to our social, economic, and environmental
welfare. This policy option maintains and improves the health and longevity of trees in urban and
residential areas. Trees in urban areas help avoid emissions from power production, and from the
operation and maintenance (O&M) of built structures and infrastructure. Further, urban trees
contribute to lower summertime temperatures at street level. Reduced heat slows the formation
of ground-level O3, as well as the evaporation and volatilization of organic compounds from
vehicles. Trees also take in CO2 for photosynthesis, storing carbon in their biomass through
growth. Trees likewise reduce ambient concentrations of volatile organic compounds, nitrous
oxide (N2O), fine particulate matter, and other air and water pollutants.
Statewide, the urban canopy cover in Maryland is 40.1%.6 This option seeks to increase the
canopy cover of urban trees throughout the state. Planting additional trees in-state may: increase
the utilization of wood recovered from urban trees for energy production or in value-added
products for long-term carbon storage; encourage species diversity while extending survival and
longevity rates through the creation of amenable microclimates; and address insects, invasive
species, and disease in urban forest settings, though these impacts are not quantified here.
Policy Design
Educate the public and legislators on the importance of urban forests for O3 and temperature
regulation, leading to reduced energy use.
Goals:
• Enhance green infrastructure planning including tying green areas together (not quantified).
•
Develop incentives to better use urban wood recovery directed toward the highest-order
wood product (not quantified), with the remainder recovered for biomass to energy
conversion (see AFW-6).
•
Achieve urban tree canopy (UTC) goal of 50% (averaged over all urban land-use types) by
2020.
Goals Related to Forest Pests and Invasive Species (Not Quantified):
• Develop prioritization process for invasive species, identifying species of high priority for
targeted action.
•
Shift decision-making efforts to plan ahead for invasive species problems—move towards
prevention or proactive management, rather than control and reactive treatments.
Timing: See quantified goal above.
6
USDA USFS data (D. Nowak). Available at http://www.fs.fed.us/ne/syracuse/Data/State/data_MD.htm.
Appendix D-1 Page 13
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Parties Involved: DNR, MDE, MDA, MDOT, SHA, counties, municipalities, Chesapeake Bay
Program, NRCS, USFS Urban and Community Forestry, private landowners, public landowners,
private sawmills, artisan community, landscaping industry, nursery industry, arborist industry,
MCE, and master gardeners.
Implementation Mechanisms
•
Encourage the funding and expansion of planting programs in all communities, including a
replacement program for dead trees, where a tree with equal potential is planted in a site as
good as or better than the original to maximize longevity and efficacy.
•
Insert urban tree planting strategy and objectives in all comprehensive plans.
•
Encourage local counties to identify, maintain, and augment street tree populations.
•
Provide outreach and education on the significance of trees and their role in our built
environment.
•
Monitor and report plantings at the local level.
•
Provide enhanced funding from conservation programs like Program Open Space (POS) to
local jurisdictions to implement policies (e.g., wood recovery and canopy goals) and to plant
trees.
•
Implement legislation restricting sale of priority non-native invasive species.
•
Outreach and education about invasive species and control methods.
•
To strengthen, fund, and support this act, add UTC goals to the Urban Community Forest
Act.
Related Policies/Programs in Place
Urban Community Forestry Act.
Tree-mendous Maryland, a program that, for a fee, individuals can request a tree be planted as a
memorial.
Chesapeake Bay Program’s Forest Conservation Directive 2020 goals. The Governor of
Maryland committed to establishing urban canopy goals by 2020 for 50% of the area developed
before storm-water management regulations (i.e., pre-1984), among other goals.
Community Woodlands Alliance, a group of local artisans building furniture from old-growth
urban trees.
Type(s) of GHG Reductions
CO2 (quantified): Avoidance of emissions of CO2 and associated GHGs through the reduction
of heating and cooling needs in urban areas. Carbon sequestration due to tree growth.
CO2 (not quantified): Decrease in surface temperatures reducing volatilization of gases from
vehicles. Maintaining carbon sequestration by creating durable wood products. Reduce use of
fossil fuels by using wood waste for energy.
Appendix D-1 Page 14
Maryland Climate Action Plan Appendix D-1
The emissions saved as calculated under this policy option overlap with some options
recommended in the RCI Technical Work Group (TWG). These AFW policy emissions are
related only to trees in urban settings, whereas the energy-savings emission reductions are
calculated across the state under RCI. Therefore, the emission reductions that result from energy
savings for this policy option have been reduced by 30% (see Sector Total after Adjusting for
Overlap on Summary List.)
Estimated GHG Reductions and Net Costs or Cost Savings
Data Sources:
• Data about existing and potential UTC cover for Maryland from:
M.F. Galvin, J.M. Grove, and J. O’Neill-Dunne. 2006a (Jan.). A report on Baltimore
City’s present and potential urban tree canopy. Prepared for The Honorable Mayor
Martin O’Malley, City of Baltimore. Available at http://www.dnr.state.md.us
○ M.F. Galvin, J.M. Grove, and J. O’Neill-Dunne. 2006b (June). A report on Annapolis’
present and potential urban tree canopy. Prepared for The Honorable Mayor Ellen O.
Moyer, City of Annapolis. Available at http://www.dnr.state.md.us
○ M.F. Galvin, J. O’Neill-Dunne, and J.M. Grove. 2008. A report on the City of
Frederick’s existing and possible urban tree canopy. Available at
http://www.dnr.state.md.us
○
•
Information about current numbers of trees in urban forest and annual carbon storage in
urban trees in Maryland: USDA USFS Northern Research Station. Urban forest effects on
environmental quality state summary data for Maryland (2003). Available at
http://www.fs.fed.us/ne/syracuse/Data/State/data_MD.htm
•
Parameters for energy and emission savings of tree planting: E.G. McPherson and J.R.
Simpson. 1999. CO2 reduction through urban forestry: guidelines for professional and
volunteer tree planters. USDA USFS Pacific Southwest Research Station. General Technical
Report PSW-GTR-171.
•
Data on costs and benefits of tree planting: E.G. McPherson et al. 2006. Piedmont
community tree guide: benefits, costs, and strategic planting. USDA USFS Pacific Southwest
Research Station. General Technical Report PSW-GTR-200.
•
Additional data on benefits of tree canopy in Maryland: M.F. Galvin. 2007. A report on
Hyattsville’s street trees. Prepared for The Honorable William F. Gardiner, Mayor and James
Chandler, Community Development Manager. Available at http://www.dnr.state.md.us
Quantification Methods:
The following quantifies the cumulative impact on carbon sequestration and avoided fossil fuel
emissions of incrementally increasing the existing tree canopy cover in Maryland. Specifically,
AFW-2 seeks to achieve a goal of 50% urban canopy cover by 2020. Currently, Maryland’s
urban areas are 40.1% forested.7 This goal recommends a 25% increase over the existing canopy
cover by 2020. The goal of 50% is based on recent assessments of existing and potential UTC in
Maryland. For example, Baltimore currently has a canopy cover of 20%, and a goal of 46.3% is
7
USDA USFS data (D. Nowak). Available at http://www.fs.fed.us/ne/syracuse/Data/State/data_MD.htm.
Appendix D-1 Page 15
Maryland Climate Action Plan Appendix D-1
recommended as feasible within the 2030–2036 time frame (Galvin et al. 2006a). Annapolis’
urban areas are currently 41% forested, and a 50% goal is recommended within the same time
frame (Galvin et al. 2006b). Frederick is currently only 12% forested (Galvin et al. 2008), but
there appear to be no obvious barriers to increasing its UTC. While the UTC analyses cited
above recommend a longer time frame to reach the UTC targets, this analysis seeks to quantify
the effects of policy implementation within the 2008–2020 time frame described by the
Mitigation Working Group (MWG).
Currently, Maryland contains 89.4 million urban trees; this option quantifies the effect of adding
a total of 22 million new trees by 2020. The number of trees planted each year is constant at
roughly 1.7 million/year, with the target number of trees planted by 2020.
GHG benefits are twofold: direct carbon sequestration by planted trees, and avoided GHG
emissions from strategic tree planting to reduce energy demand due to heating and cooling.
A. Direct Carbon Sequestration in Urban Trees
Annual carbon sequestration per urban tree is calculated as 0.006 metric tons of carbon dioxide
equivalents per tree per year (tCO2/tree/year), based on statewide average data reported by the
USFS. This is the average annual per-tree carbon sequestration value when the total estimated
urban forest carbon accumulation in Maryland (544,000 tCO2/year) is divided by the total
number of urban trees in Maryland (89.4 million). Since trees planted in one year continue to
accumulate carbon in subsequent years, annual carbon sequestration in any given year is
calculated as the sum of carbon stored in trees planted in that year, plus the sequestration by trees
planted in prior years. Because it simply takes the difference between total live C stocks at two
points in time, this stock change approach accounts for normal tree mortality.
B. Avoided Fossil Fuel Emissions
Offsets from avoided fossil fuel use for heating and cooling are the sum of three different types
of savings: (1) avoided emissions from reduced cooling demand, (2) avoided emissions from
reduced demand for heating due to wind reduction (this benefit is only available for evergreen
trees), and (3) enhanced fossil fuel emissions needed for heat due to wintertime shading.
Calculations for avoided fossil fuel offsets are based on calculations presented by McPherson et
al. (1999) (see Table I-5). For this analysis, it was assumed half of the trees would be planted in
residential settings or close enough to buildings to result in avoided emissions. Where plantings
are assumed to provide this avoided emissions benefit, it was further assumed the trees planted
would be evenly split among residential settings with pre-1950, 1950–1980, and post-1980
homes and all planted are medium-sized evergreens. These avoided emission factors assume
average tree distribution around buildings (i.e., these fossil fuel reduction factors are average for
existing buildings, but do not necessarily assume trees are optimally placed around buildings to
maximize energy efficiency). These factors are also dependent on the fuel mix (e.g., coal,
hydroelectric, or nuclear) in the region, and thus are likely to change if the electricity mix
changes from its 1999 distribution.
Appendix D-1 Page 16
Maryland Climate Action Plan Appendix D-1
Table I-5. Factors used to calculate CO2e savings (MMtCO2e/tree/year) from reduced
need for fossil fuel for heating and cooling and from windbreak effect of evergreen trees
Fossil Fuel Offsets: Evergreen Trees (Mid-Atlantic Climate Region)
Housing Vintage
Wind–Heating
Net Effect
Shade–Cooling
Shade–Heating
Pre-1950
0.0168
–0.0315
0.1294
0.1147
1950–1980
0.0275
–0.0403
0.1555
0.1427
Post-1980
0.0232
–0.0324
0.133
0.1238
Average
0.0225
–0.0347
0.1393
0.1271
Average (MMtCO2e)
1.2707
MMtCO2e = million metric tons of carbon dioxide equivalent.
Source: McPherson et al., 1999
C. Overall GHG Benefit of Urban Tree Planting
Total GHG benefits are calculated as the sum of direct carbon sequestration plus fossil fuel offset
from reduced cooling demand and wind reduction (Table I-6).
Table I-6. Overall GHG benefit (MMtCO2e/year) of implementing AFW-2
GHG
Avoided
(MMtCO2e/year)
Overall GHG
Savings
(MMtCO2e/year)
Year
2008
1,698,440
0
0.0379
0.1079
0.1458
2009
1,698,440
1,698,440
0.0758
0.2158
0.2916
2010
1,698,440
3,396,879
0.1136
0.3237
0.4374
2011
1,698,440
5,095,319
0.1515
0.4316
0.5832
2012
1,698,440
6,793,759
0.1894
0.5395
0.7289
2013
1,698,440
8,492,198
0.2273
0.6474
0.8747
2014
1,698,440
10,190,638
0.2652
0.7554
1.0205
2015
1,698,440
11,889,078
0.3030
0.8633
1.1663
2016
1,698,440
13,587,517
0.3409
0.9712
1.3121
2017
1,698,440
15,285,957
0.3788
1.0791
1.4579
2018
1,698,440
16,984,397
0.4167
1.1870
1.6037
2019
1,698,440
18,682,836
0.4546
1.2949
1.7495
2020
1,698,440
20,381,276
0.4924
1.4028
1.8952
22,079,716
3.4471
9.8196
13.2667
Total
Trees Planted in
Previous Years
GHG
Sequestered
(MMtCO2e/year)
Trees Planted
This Year
GHG = greenhouse gas; MMtCO2e/year = million metric tons of carbon dioxide equivalent per year.
D. Cost Analysis
Economic costs of tree planting are calculated as the sum of tree planting and annual
maintenance, including the costs of program administration and waste disposal. Economic
benefits of tree planting include the cost offset from reduced energy use, as well as the estimated
economic benefits of services (e.g., provision of clean air), hydrologic benefits (e.g., storm water
control), and aesthetic enhancement.
Appendix D-1 Page 17
Maryland Climate Action Plan Appendix D-1
The cost of tree planting in Maryland was assumed to be $275/tree.8 This is a one-time cost
incurred in the year of planting. Annual maintenance costs include pruning, pest management,
administration, removal, and infrastructure repair due to damage from trees. Over a 40-year
period, these costs were estimated at $22/tree/year, based on McPherson et al. (2006). This value
assumes a medium-sized evergreen tree and is an average of trees under public and private
management. This value is consistent with annualized maintenance costs per tree published for
other states and regions. It was assumed trees planted in the first year of policy implementation
would still be living at the end of the policy implementation period; in other words, the effects of
tree mortality are not explicitly accounted for in the analysis of the numbers of trees planted to
achieve the canopy goals described above.
The economic benefit of planting urban trees includes the value of aesthetic improvement, air
and water quality improvements, stormwater management, and energy savings. Annual
economic benefit per tree was estimated at –$96.30/tree/year, using information from Galvin et
al. (2007) on the economic value of Hyattsville, Maryland’s urban forest. Consistent with
convention, the economic benefit per tree planted is a negative number since the economic
benefit outweighs the cost of the option. When the economic benefit of an option outweighs its
cost, then the resulting net economic cost is negative.
Net economic costs for this option are calculated as the difference between costs of planting and
maintenance and economic benefit realized by urban trees. Therefore, negative costs refer to net
economic benefits, where estimated benefits exceed overall costs. For this analysis, net economic
benefit per tree was estimated at –$74.30/tree/year. Discounted costs were calculated assuming a
5% discount rate (Table I-7). AFW-2 has a net economic benefit of –$152.00/tCO2e mitigated.
8
Mike Galvin, Supervisor, Urban and Community Forestry, Maryland DNR. Personal communication with J.
Jenkins, January 2008. Range of costs estimated at $250-300.
Appendix D-1 Page 18
Maryland Climate Action Plan Appendix D-1
Table I-7. Economic benefits and costs of implementing AFW-2
Year
Trees
Planted
This Year
2008
1,698,440
0
$0
$467,070,909
$467,070,909
2009
1,698,440
1,698,440
$163,559,740
$340,876,842
$324,644,611
2010
1,698,440
3,396,879
$327,119,480
$214,682,774
$194,723,605
2011
1,698,440
5,095,319
$490,679,221
$88,488,707
$76,439,872
2012
1,698,440
6,793,759
$654,238,961
–$37,705,361
–$31,020,294
2013
1,698,440
8,492,198
$817,798,701
–$163,899,428
–$128,419,491
2014
1,698,440
10,190,638
$981,358,441
–$290,093,496
–$216,472,233
2015
1,698,440
11,889,078
$1,144,918,182
–$416,287,563
–$295,847,799
2016
1,698,440
13,587,517
$1,308,477,922
–$542,481,631
–$367,172,921
2017
1,698,440
15,285,957
$1,472,037,662
–$668,675,698
–$431,034,317
2018
1,698,440
16,984,397
$1,635,597,402
–$794,869,766
–$487,981,084
2019
1,698,440
18,682,836
$1,799,157,142
–$921,063,833
–$538,526,947
2020
1,698,440
20,381,276
$1,962,716,883
–$1,047,257,901
–$583,152,386
22,079,716
$12,757,659,738
–$3,771,215,443
–$2,016,748,473
Total
Trees Planted
in Previous
Years
Total Economic
Benefit
Net Benefit
(Costs Minus Benefits)
Discounted
Net Benefits
Key Assumptions: Economic costs and benefits of urban tree cover. Feasibility of accelerated
implementation of UTC recommendations. Each community has the capacity and technical skill
to assess the appropriate species and location for trees planted.
Key Uncertainties
Cities and communities would need to conduct canopy surveys to establish a baseline of current
canopy cover. The costs of such a survey and continued monitoring are variable and may exceed
available resources. The longevity of urban trees may be affected by climate perturbations.
Additional Benefits and Costs
In addition to the numerous benefits articulated in the policy description, urban trees contribute
to improved property values, add aesthetic value for residents and visitors, provide humidity
balancing, and reduce the intensity of stormwater runoff. Sociological studies suggest that more
attractive and comfortable neighborhoods have lower crime rates.
Feasibility Issues
Ensuring a constant source of quality urban trees for achieving planting goals without incurring
excessive transportation costs is of concern.
Finding the necessary funding in a constant flow per annum is another concern.
Status of Group Approval
Approved.
Appendix D-1 Page 19
Maryland Climate Action Plan Appendix D-1
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-1 Page 20
Maryland Climate Action Plan Appendix D-1
AFW-3. Afforestation, Reforestation, and Restoration of Forests and Wetlands
Policy Description
Increasing forest and tree cover provides additional benefits for mitigation of GHGs in addition
to sequestration. This policy option promotes forest cover and associated carbon stocks by
regenerating or establishing healthy, functional forests through afforestation (on lands that have
not, in recent history, been forested, including agricultural lands) and reforestation (on lands with
little or no present forest cover) where current beneficial practices are not displaced. Successful
establishment requires commitment for as long as 20 years. Forest patches should be sufficient in
size to function as a community of trees and related species.
In addition, this policy promotes the implementation of practices, such as soil preparation,
erosion control, and supplemental planting to ensure conditions that support forest growth.
Identify areas, including all wetlands, in need of physical intervention to return forest habitats to
full vigor. Additional areas of concern are linking islands of fragmented forests to restore
function, recovering severely disturbed lands, and reversing the effects of continued toxicity on
those disturbed lands.
Policy Design
Carbon sequestration via afforestation is important, but other ancillary benefits provided by
forests, in terms of green space, quality of life, and avoided emissions are also critical and add to
the value of forestland for the community (see Introduction).
Maryland is a member of the RGGI (http://www.rggi.org), which mandates the existence of an
interstate CO2 Budget Trading Program to reduce emissions from the power sector (RGGI
applies to fossil fuel-burning plants larger than 25 megawatts [MW]). Beginning with
implementation of the CO2 Budget Trading Program on January 1, 2009, emissions entities are
permitted to use offset projects to meet up to 3.3% of their emission limitations (this could
increase to 5% and 10% in later years). Specific uses of revenues from the sale of carbon credits
are at the discretion of states.
To be eligible to participate in the Program, an offset project must submit to specific reporting
requirements as documented in the RGGI Model Rule (http://www.rggi.org/docs/
model_rule_corrected_1_5_07.pdf). In addition, to be eligible for RGGI as currently written, a
forest-offset project must
•
Be an afforestation project (i.e., land must have been in a non-forested condition for at least
10 years prior to commencement of the offset project);
•
Be protected in perpetuity via a conservation easement;
•
Commit to management in accordance with widely accepted environmentally sustainable
forestry practices designed to promote the restoration of forests by using mainly native
species and avoiding the introduction of invasive nonnative species; and
Appendix D-1 Page 21
Maryland Climate Action Plan Appendix D-1
•
If commercial timber harvest is planned, enroll in a certification program, such as those
offered by the Forest Stewardship Council (FSC), Institute for Sustainable Forestry (ISF),
American Tree Farm System® (ATFS), or other similar organizations.
Additional categories for offset projects may be added to the list of eligible projects at the
discretion of individual states. For example, reforestation projects or forest management projects
may eligible to participate in the CO2 Budget Trading Program in the future.
While the above requirements are prerequisites for participation in the RGGI offset program, all
categories of afforestation and reforestation projects will reduce the atmospheric GHG burden. In
addition, all categories of easements (in perpetuity or long-term) will have GHG benefits. Thus,
AFW-3 is not limited to projects eligible for RGGI participation, and the associated costs of
easement purchase and certification have been excluded from the quantification.
Wetlands and marshlands protection has been cited as one of the best ways to save lives and
prevent property damage in coastal areas. To ensure that wetland buffers will be available for
Maryland, current wetlands need to be able to move inland as sea level rises. Without inland
areas to which these wetlands can migrate, the Chesapeake Bay’s coastal wetlands could simply
be drowned by rising Bay waters. Acquisition of lands adjacent to existing tidal marsh in fee
simple or by conservation easements is essential for wetlands to migrate landward as sea level
rises.
Wetlands with long periods of inundation or surface saturation during the growing season are
especially effective at storing carbon in the form of peat, though there are uncertainties
associated with carbon storage in wetlands (see Key Uncertainties below). Salt marsh and
forested wetlands tend to release less methane (CH4) than freshwater marsh. Riparian wetlands
can also capture carbon washed downstream in litter, branches, and sediment. Because they
accumulate sediment and bury organic matter, floodplain and tidal wetlands are especially
effective as carbon sinks. These lands also reduce nutrient, sediment, and other pollution into the
Chesapeake Bay and other bodies of water.
Goals:
• Establish sufficient acreage in forests to offset the loss of 900 acres each month to
development, beginning in June 2008 and continuing through December 2020.
•
Establish riparian buffers at a rate of 360 miles/year (50-foot width either side of stream) to
2020 and continue until 70% of all stream miles in the state are buffered. (This goal assumes
that 40% of the 900-mile/year goal described in Chesapeake Bay Forest Conservation
Initiative of December 2007 will be met with riparian forest establishment in Maryland.)
•
Increase wetland areas where ever feasible (nonquantified goal).
Timing: See goals, above.
Parties Involved: DNR, SHA, MDA, MDE, Chesapeake Bay Program, NRCS, counties, private
landowners, U.S. Army Corps of Engineers (USACE), Port Authority, USFWS, nonprofit
conservation organizations, Baltimore (and other cities) reservoir watershed management.
Appendix D-1 Page 22
Maryland Climate Action Plan Appendix D-1
Implementation Mechanisms
•
Outreach and education.
•
Green infrastructure plans.
•
FCMA.
•
Maryland Tidal Wetlands Act, and non-tidal wetlands regulatory programs and associated
no-net loss of wetlands goals.
•
MDE–Shoreline Erosion Control Guidelines: Marsh Creation. Available at http://www.mde.
state.md.us/assets/document/wetlandswaterways/Shoreerosion.pdf
•
MDE–Water Quality Infrastructure Program, which manages federal and state grants, some
of which are directed at small creeks and estuaries restoration. Available at http://www.mde.
state.md.us/Programs/WaterPrograms/WQIP/wqip_smallcreeks.asp
•
MDE–Wetlands and Waterways Program (with targeting documents for prioritizing wetlands
for restoration, preservation, and mitigation: one for all of Maryland and one for Maryland’s
Coastal Bays’ watersheds). Available at http://www.mde.state.md.us/Programs/
WaterPrograms/Wetlands_Waterways/about_wetlands/prioritizingareas.asp
•
FCMA provides landowners with a reduction in property taxes on lands actively managed for
forest conservation, including newly planted areas.
•
Other property and inheritance tax incentives.
•
Economic incentive to private landowners, including promotion of nontraditional products
(e.g., hunting leases), and quiet recreation (e.g., photography, hiking, bird watching).
•
Review fee-in-lieu dollars (amount and use) within the FCMA. Fees should be available for
easements and set at fair market values. Fee-in-lieu should be used as a last resort and in
amounts that restore or conserve an equal amount of forests as is lost to that development.
•
Allowances from RGGI auctions should be available for reforestation and restoration.
•
Recommendation that the Maryland Commission for Climate Change (MCCC) and RGGI
increase acknowledgment and importance of forests as significant in climate change
mitigation.
•
Utility companies are not currently required to offset acres of forest lost to corridor
development. A bill was introduced into the 2008 legislature to address this issue (SB 654),
but no action was taken before the legislature adjourned. Reintroduction of this bill is
encouraged.
Related Policies/Programs in Place
FCMA: See example from Washington County in implementation of the FCMA (Forest
Conservation Ordinance, adopted in 1993).9
9
http://www.washco-md.net/washco_2/pdf_files/legal/forestcn.pdf
Appendix D-1 Page 23
Maryland Climate Action Plan Appendix D-1
Chesapeake Bay Commission 2020 goals for Maryland that the Governor committed to include
restoring an additional 25,000 acres of forest buffers or other areas of high value to water quality
outside of prime agricultural land by 2020.
The MDOT, under offset requirements, must reforest an amount of acreage equal to that
developed for major highways.
Municipal Reservoir Watershed Management Plans. (For example, Maryland Department of
Public Works [DPW] Bureau of Water and Wastewater, which operates three reservoir
watersheds: Loch Raven Reservoir, Liberty Reservoir, and Pretty Boy Reservoir for the City of
Baltimore.)
Type(s) of GHG Reductions
CO2: Increasing annual carbon sequestration from establishing forest and riparian cover.
Estimated GHG Reductions and Net Costs or Cost Savings
Data Sources:
J.E. Smith, L.S. Heath, K.E. Skog, and R.A. Birdsey. 2006. Methods for calculating forest
ecosystem and harvested carbon with standard estimates for forest types of the United States.
USDA USFS Northeastern Research Station. General Technical Report GTR-NE-343. (This
document is also published as part of the US DOE 1605(b) Voluntary GHG Reporting Program).
USDA USFS FIA data, provided by the USFS for the Maryland Forestry I&F.10
S. Walker, S. Grimland, J. Winsten, and S. Brown. 2007. Terrestrial carbon sequestration in the
Northeast: opportunities and costs part 3A: opportunities for improving carbon storage through
afforestation of agricultural lands. Report to The Nature Conservancy Conservation Partnership
Agreement by Winrock International, prepared with the support of the US DOE under Award
No. DE-FC26-01NT41151.
Quantification Methods:
A. Afforestation
1. GHG benefit
Forests planted on land not currently in forest cover will likely accumulate carbon at a rate
consistent with accumulation rates of average forest cover in the region. Therefore, carbon
sequestered by afforestation activities was assumed to occur at the same rate as carbon
sequestration in average Maryland forests. Average carbon storage was determined based on
USFS GTR-NE-343, assuming afforestation activity with a forest type distribution of 70% oakhickory, 15% oak-pine, and 15% loblolly-shortleaf pine. This distribution is reflective of the
average forest composition in Maryland and is based on USFS FIA statistics. A 45-year project
period was assumed, such that the rate of forest carbon sequestration under afforestation projects
for an average acre in Maryland was estimated at 1.2 tC/acre/year. (Table I-8). Forests planted in
10
Data set obtained from Maryland FIA data and provided to CCS for the Maryland I&F by Dr. J.E. Smith, USDA
USFS.
Appendix D-1 Page 24
Maryland Climate Action Plan Appendix D-1
one year continue to sequester carbon in subsequent years. Thus, carbon storage in a given year
is calculated as the sum of annual carbon sequestration on cumulative planted acreage.
Table I-8. Forest carbon sequestration rates for afforestation activity
Forest Type
tC/acre
(0 year)
tC/acre
(45 year)
tC/acre/year
Oak-hickory
0.8
56.2
1.2
Oak-pine
1.7
48.5
1.0
Loblolly-shortleaf pine
1.7
41.9
0.9
Weighted average
1.2
tC/acre = metric tons of carbon per acre.
The rate of afforestation was estimated at 900 acres/month, for a total of 10,800 acres afforested
annually. In 2008, it was assumed that policy implementation would only occur over 7 months
(beginning June 2008), so 6,300 acres would be afforested in that year. Between 2008 and 2020,
a total of 135,900 acres would be afforested under AFW-3, for a total of 3.9 million metric tons
of carbon dioxide equivalent (MMtCO2e) stored (Table I-9).
Table I-9. Acreage planted each year under AFW-3 and total carbon sequestered
Year
Acres Planted
This Year
Acres Planted in
Prior Years
Carbon Sequestered
(tC/year)
Carbon Sequestered
(MMtCO2e/year)
2008
6,300
0
7,256
0.027
2009
10,800
6,300
19,695
0.072
2010
10,800
17,100
32,135
0.118
2011
10,800
27,900
44,574
0.163
2012
10,800
38,700
57,013
0.209
2013
10,800
49,500
69,452
0.255
2014
10,800
60,300
81,891
0.300
2015
10,800
71,100
94,331
0.346
2016
10,800
81,900
106,770
0.391
2017
10,800
92,700
119,209
0.437
2018
10,800
103,500
131,648
0.483
2019
10,800
114,300
144,087
0.528
2020
10,800
125,100
156,527
0.574
Total
135,900
3.903
tC/year = metric tons of carbon per year; MMtCO2e = million metric tons of carbon dioxide equivalent.
2. Economic Costs
Estimated per acre costs for afforestation in Maryland were obtained from Walker et al. 2007,
who surveyed state foresters, regional foresters, or other foresters and related specialists in the
USFS, universities, and forest companies, and reported the results on a state-by-state basis. Costs
include site preparation, labor, seedlings, and herbivore protection (Walker et al. 2007). Per-acre
afforestation costs in Maryland were estimated to be $1,180 and $980 for hardwoods and
Appendix D-1 Page 25
Maryland Climate Action Plan Appendix D-1
softwoods, respectively. Following the distribution of forest types used to calculate the GHG
benefit of forest planting (see Table I-8 above), it was assumed that 70% of the planted forests
would be hardwoods, with the remainder in softwoods. Thus the weighted average cost to plant
an acre of forest in Maryland was estimated at $1,105. This is a one-time cost incurred in the
year of planting. Based on this information, the NPV for this option is $112.7 million, with a
levelized cost-effectiveness of $28.88/tCO2e (Table I-10). This analysis ignores the likely
economic benefits of afforestation, in terms of services such as clean air and clean water,
reduced flooding, aesthetic effects, and other benefits. These benefits are typically more difficult
to quantify than the tangible costs of tree planting, but they should be considered in the analysis
of economic costs and benefits of afforestation activity.
Table I-10. Economic costs of afforestation
Year
Acres Planted
Total Cost
Discounted Cost
2008
6,300
$6,961,500
$6,961,500
2009
10,800
$11,934,000
$11,365,714
2010
10,800
$11,934,000
$10,824,490
2011
10,800
$11,934,000
$10,309,038
2012
10,800
$11,934,000
$9,818,131
2013
10,800
$11,934,000
$9,350,601
2014
10,800
$11,934,000
$8,905,335
2015
10,800
$11,934,000
$8,481,271
2016
10,800
$11,934,000
$8,077,401
2017
10,800
$11,934,000
$7,692,763
2018
10,800
$11,934,000
$7,326,441
2019
10,800
$11,934,000
$6,977,563
2020
10,800
$11,934,000
$6,645,298
Total
135,900
$112,735,545
B. Riparian forest
1. GHG benefit
The annual rate of riparian forest establishment was calculated from the goals established by the
Chesapeake Bay Forest Conservation Initiative (2007),11 which describe a goal of establishing
900 miles/year of 50-foot-wide buffers by 2020, continuing until 70% of all stream miles are
buffered. It was assumed that 40% of these stream miles (360 miles/year would be buffered in
the state of Maryland. This goal corresponds to establishing 2,182 acres/year of riparian forest by
2020. A linear ramp-up toward the goal was assumed (Table I-11).
The most common species in riparian buffers statewide are loblolly pine (21% of total stocking),
green ash (10%) and sweet gum (8%). Other species in smaller proportions make up the
remainder of the trees found in riparian buffers.12 Thus it was assumed statewide that riparian
11
http://www.chesapeakebay.net/press_ec2007forests.aspx
12
Riparian Forest Buffer Survival and Success in Maryland, April 2001. Maryland DNR Forest Service Research
Report DNR/FS-01-01. Available at http://dnrweb.dnr.state.md.us/download/forests/rfb_survival.pdf
Appendix D-1 Page 26
Maryland Climate Action Plan Appendix D-1
forests would be 50% elm-ash-cottonwood and 50% loblolly-pine forest types (Table I-12). A
45-year project period was assumed, such that the rate of forest carbon sequestration in riparian
projects for an average acre in Maryland was estimated at 0.9 tC/acre/year. Forests planted in
one year continue to sequester carbon in subsequent years. Therefore, carbon storage in a given
year is calculated as the sum of annual carbon sequestration on cumulative planted acreage
(Table I-11).
Table I-11. Acres planted and carbon stored in riparian forests in Maryland
Year
Acres Planted
This Year
Acres Planted in
Prior Years
C Sequestered
(MMtCO2e/Year)
2008
168
0
0.001
2009
336
168
0.002
2010
503
503
0.003
2011
671
1,007
0.005
2012
839
1,678
0.008
2013
1,007
2,517
0.012
2014
1,175
3,524
0.015
2015
1,343
4,699
0.020
2016
1,510
6,042
0.025
2017
1,678
7,552
0.030
2018
1,846
9,231
0.036
2019
2,014
11,077
0.043
2020
2,182
13,091
0.050
Cumulative
totals
15,273
0.250
C = carbon; MMtCO2e = million metric tons of carbon dioxide equivalent.
Table I-12. Forest carbon sequestration rates for riparian forest establishment
tC/acre
(0 year)
tC/acre
(45 year)
tC/acre/year
Loblolly pine (Southeast)
(NE-GTR Table B39)
1.7
41.9
0.9
Elm-ash-cottonwood (South Central)
(NE-GTR Table B46)
1.7
41.8
0.9
tC/acre = metric tons of carbon per acre.
2. Economic Costs
Estimated per acre costs for establishment of riparian forest in Maryland were assumed to be the
same as for afforestation and were obtained from Walker et al. 2007. Costs include site
preparation, labor, seedlings, and herbivore protection (Walker et al. 2007). Per-acre
afforestation costs in Maryland were estimated to be $1,180 and $980 for hardwoods and
softwoods, respectively. Since riparian forests were assumed to be softwoods and hardwoods in
equal proportions, the weighted average cost to plant an acre of forest in Maryland was estimated
at $1,055. This is a one-time cost incurred in the year of planting. Based on this information, the
Appendix D-1 Page 27
Maryland Climate Action Plan Appendix D-1
NPV for this option is $11.0 million, with a levelized cost-effectiveness of $44.19/tCO2e (Table
I-13). As with the afforestation option above, this analysis ignores the likely economic benefits
of riparian forest establishment in terms of services, such as clean air and clean water, reduced
flooding, aesthetic effects, and other benefits. These benefits are typically more difficult to
quantify than the tangible costs of tree planting, but they should be considered in the analysis of
economic costs and benefits of riparian afforestation activity.
Table I-13. Economic costs of riparian forest establishment
Year
Acres Planted
Total Cost
Discounted Cost
2008
168
$177,064
$177,064
2009
336
$354,128
$337,265
2010
503
$531,192
$481,807
2011
671
$708,257
$611,819
2012
839
$885,321
$728,356
2013
1,007
$1,062,385
$832,406
2014
1,175
$1,239,449
$924,896
2015
1,343
$1,416,513
$1,006,690
2016
1,510
$1,593,577
$1,078,596
2017
1,678
$1,770,642
$1,141,371
2018
1,846
$1,947,706
$1,195,722
2019
2,014
$2,124,770
$1,242,309
2020
2,182
$2,301,834
$1,281,747
Total
15,273
$11,040,049
Key Assumptions:
In addition to the assumptions discussed in the narrative above, it was assumed lands that are
returned to forest are managed sustainably. Managing and maintaining forested lands is
discussed above and under AFW-1.
Key Uncertainties
The actual dollar value of economic benefits of afforestation is difficult to measure. Benefits
include ecosystems services, such as clean water, clean air, flood mitigation, aesthetic value, and
tourism; thus, these values are not included in the economic analysis that follows.
Cost of land acquisition for planting varies widely.
In North America, freshwater wetlands are complex ecosystems. Carbon storage and CH4
emissions from these freshwater wetlands are not well understood. In many cases, wetlands are a
natural sink for carbon, but can also be a source of CH4 when decomposition occurs after
extended highly anaerobic conditions. Conversely, saltwater marshes are known carbon sinks,
but emit negligible amounts of CH4; the sulfate in saline water suppresses the development of
CH4-generating organisms.
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Maryland Climate Action Plan Appendix D-1
The complexities of these ecosystems make the net carbon equivalent balance (i.e., sinks less
GHG outputs) for freshwater wetlands inherently difficult to measure. Saltwater marshes are
more straightforward. “The First State of the Carbon Cycle Report”13 identifies a mean carbon
accumulation rate for conterminous United States tidal marshes as 2.2 metric tons per hectare per
year (t/ha/year), or 0.9 metric tons per acre per year (t/acre/year).
Research is necessary to reduce the uncertainties in carbon and CH4 fluxes in wetlands to
provide better information on the appropriate management techniques and the potential for GHG
emission savings through effective management, restoration, and conservation of wetlands.
Regardless of the type of wetland or the net carbon balance, there are potential risks that
significant amounts of carbon stored could be released into the atmosphere if these areas are not
appropriately maintained. This highlights the need to preserve and restore these ecosystems,
from a GHG and local environmental perspective.
Additional Benefits and Costs
Ancillary benefits from afforestation, such as avoided costs of pollution abatement, are not
included in the cost savings. Improvements to barren lands accrued by returning to forestlands
include increased local property values due to improved aesthetics, reduced amount and speed of
runoff (reducing sedimentation, increasing water quality, and enhancing soil water retention),
and improved wildlife habitat.
Feasibility Issues
Timing of implementation depends on funds and policy changes; once trees are planted, it could
take 6 to 18 years before measurable carbon sequestration is achieved.
Concern has been expressed that there may not be sufficient acreage to meet the existing and
pending offset planting requirements.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
13
A.W. King, L. Dilling, G.P. Zimmerman, et al., eds. 2008. The first state of the carbon cycle report (SOCCR): the
North American carbon budget and implications for the global carbon cycle. A report by the U.S. Climate Change
Science Program and the Subcommittee on Global Change Research. National Oceanic and Atmospheric
Administration (NOAA), National Climatic Data Center. Available at http://www.climatescience.gov/Library/sap/
sap2-2/final-report/default.htm
Appendix D-1 Page 29
Maryland Climate Action Plan Appendix D-1
AFW-4. Protection and Conservation of Agricultural Land,
Coastal Wetlands, and Forested Land
Policy Description
Land conservation offers an important mechanism for mitigating and adapting to climate change.
Deforestation and other land-use changes account for as much as 25% of global GHG emissions.
In addition, the increasing rate of sea level rise (SLR) and associated erosion threaten
Maryland’s shoreline and associated coastal wetlands, removing another natural sink for GHGs.
For these reasons and more, it is necessary to protect Maryland’s network of natural areas (green
infrastructure), agricultural lands and coastal lands.
Maryland and its partners should map, designate, prioritize, and purchase areas or property
interests that protect green infrastructure and working landscapes, provide carbon sequestration
benefits, ensure retreat for wetlands and wildlife from rising waters, and address shoreline
erosion issues.
Policy Design
Existing green infrastructure, agricultural lands, and wetlands should be conserved to sequester
additional carbon and to avoid emissions associated with development, degradation, or clearing.
Forests and farmlands are a major carbon sink, and coastal and riverine wetlands serve as buffers
that reduce the impact of storm events and nutrient runoff. These areas should be protected as a
GHG mitigation measure.
Green infrastructure is our natural life-support system—an interconnected network of natural
areas and other open spaces that maintains fully functioning ecosystems, sequesters CO2,
sustains clean air and water, and provides a wide array of benefits to people and wildlife. These
lands include natural and managed forests. Green infrastructure planning is a systematic and
strategic approach to land conservation (similar to watershed-based planning) used to develop a
guide to an open space system.
Implementation of green infrastructure plans includes such elements as land acquisition,
conservation easements, purchase and transfer of development rights, tax credits and structures,
and zoning. The toolbox also includes refining land-use planning policies and funding programs
to allow users of these tools—governments, nongovernmental organizations, and private
citizens—to more effectively protect Maryland’s green infrastructure network.
Agricultural land provides economic and environmental benefits to the citizens of Maryland,
including carbon sequestration in the soil. Due to an alarming loss of prime farmland to
development, Maryland intends to preserve sufficient agricultural land to maintain a viable local
base of food and fiber production for the present and future citizens of Maryland. Among
agricultural practices, no-till farming, residue mulching, cover cropping, and crop rotation
enhance carbon sequestration in farm soils. The conservation toolbox for agricultural lands
includes many similar tools used for the green infrastructure conservation discussed above.
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Maryland Climate Action Plan Appendix D-1
Wetlands and marshlands protection has been cited as one of the best ways to save lives and
prevent property damage in coastal areas. To ensure wetland buffers will be available for
Maryland, current wetlands need to be able to move inland as the sea level rises. Without inland
areas to which these wetlands can migrate, the Chesapeake Bay’s coastal wetlands could simply
be drowned by rising Bay waters. Acquisition of lands adjacent to existing tidal marsh in fee
simple or by conservation easements is essential for wetlands to migrate landward as sea level
rises.
Wetlands with long periods of inundation or surface saturation during the growing season are
especially effective at storing carbon in the form of peat, though there are uncertainties
associated with carbon storage in wetlands (see Key Uncertainties below). Salt marsh and
forested wetlands tend to release less CH4 than freshwater marsh. Riparian wetlands can also
capture carbon washed downstream in litter, branches, and sediment. Because they accumulate
sediment and bury organic matter, floodplain and tidal wetlands are especially effective as
carbon sinks. These lands also reduce nutrient, sediment, and other pollution into the Chesapeake
Bay and other water bodies.
Goals: Using green infrastructure plans as a guide, leverage funds to protect agricultural lands,
forestlands, wetlands, and coastal areas.
Agriculture lands—Decrease the conversion of agriculture land to developed land through the
protection of 1.2 million acres of productive agricultural lands, to ensure no net loss by 2020.
Forestlands—Retain existing levels of forest cover in Maryland, estimated at 2.6 million acres,
past 2020 and protect an additional 250,000 acres of forest by 2020 through legal mechanisms,
with more than half in areas of high value to water quality. The acreage protected under AFW-4
is additional to acreage already slated for protection under other programs; thus AFW-4 seeks to
target upland forest areas, which are at greatest risk of conversion to developed use.
Wetlands—Assess the capacity of wetland types to sequester or release carbon, then focus
protection and restoration efforts on wetland types with the greatest capacity for CO2
sequestration. Next using geographic information system (GIS) analysis, predict losses due to
climate change and set regional goals for restoration based on predicted losses and funding
availability (not quantified).
Coastal lands—Protect priority areas designated for coastal wetland retreat and coastal
forestlands using nonstructural shore erosion controls (i.e., living shoreline), keeping pace with
wetland, forest, and critical habitat loss due to SLR (not quantified).
Timing: As described above.
Parties Involved: State and quasi-state government agencies including the Maryland
Department of Planning (MDP), nonprofit organizations, foundations, and individuals.
Other: Before colonization by Europeans, Maryland was 95% forested, the other 5% being
marsh around Chesapeake Bay.14,15 By 2000, forest had decreased to 42.8% of land cover.
14
F. W. Besley. The forests of Maryland. Maryland State Board of Forestry, Baltimore, MD. 1916.
Appendix D-1 Page 31
Maryland Climate Action Plan Appendix D-1
Similarly, Maryland has lost 50% of its pre-settlement wetlands.16 Developed land use reached
509,200 hectares in 2000. The MDP has projected that by 2020, urban land use will increase by
more than 25% from 1997 levels and that forest cover will decrease a further 9% by 2020 from
1997 levels. Agriculture has also been projected to decrease by 9% during the same period.
Approximately 31% of Maryland’s 4,360-mile coastline, which encompasses the Chesapeake
Bay, the Coastal Bays, and the Atlantic Coast, is currently experiencing some degree of erosion.
Maryland loses approximately 260 acres of tidal shoreline to erosion each year. Accelerating
rates of SLR combined with increased development along Maryland’s coastline tend to prolong
and exacerbate shore erosion problems.
Implementation Mechanisms
Land Preservation Tax Credit—Modify Existing Income Tax Credit for Preservation and
Conservation Easements (Maryland Code Ann §10-723)
• Individuals and corporations would be allowed to take a larger conservation credit for
conveying land located in Maryland for such purposes as historical preservation or
conservation, agricultural use, forest use, open space, and natural resource conservation. The
credit pool would be capped at $100 million/year, and prioritized to first accept tax credits in
coastal hazard areas.
A conservation credit is an income tax credit available to landowners who voluntarily
preserve their land through the donation of a conservation easement or fee title.
○ Landowners with little or no taxable income derive fewer benefits from tax credits than
wealthier landowners with high incomes. To address this issue, the credit should be made
transferable (not the case under existing law) to other taxpayers for use on Maryland
State income tax returns.
○
•
The maximum credit would be raised to $100,000/year with an unlimited amount eligible for
transfer and use by third parties, and could be carried forward for 15 years (as is the case
under current law).
•
The transfer of the credit must be completed before the end of the tax year in order to use the
credit for that year and must be registered with the Maryland State Department of
Assessment and Taxation (SDAT) to be valid.
•
A cap of $100 million will be placed on the first year of implementation, and will be
increased each year by the percentage the consumer price index for all urban consumers
(CPI-U) exceeds the previous year’s CPI-U.
•
A fee of 3% of the appraised value of the donated interest will be charged on the sale of land
preservation credits.
•
Funds derived from this program will cover the cost of program management up to 2% with
residual monies used for a shoreline restoration and conservation fund.
15
D. Powell, N. Kingsley, N. 1980. The forest resources of Maryland. Resource Bulletin NE-61. USDA USFS,
Northeastern Forest Experiment Station. 103 p.
16
R. W. Tiner, and D.G. Burke. 1995. Wetlands of Maryland: U.S. Fish and Wildlife Service, Ecological Services,
Region 5, Hadley, Massachusetts and Maryland Department of Natural Resources, Baltimore, Maryland, 408 p.
Appendix D-1 Page 32
Maryland Climate Action Plan Appendix D-1
CO2 Budget Trading Program
• Prioritize the sequestration of carbon through land conservation or restoration by making a
fixed percent of CO2 emissions proceeds from future Maryland carbon markets exclusively
available to land conservation projects.
•
Approve Subtitle 26.09 Maryland CO2 Budget Trading Program, with the above
modification.
Blanket Authorization for Local Bond Initiatives
• Authorize all county governments (some are presently restricted) to approve local bond
initiatives specifically for land conservation and climate change adaptation.
Program Open Space Targeting
• One of the state’s key implementation tools is POS, which provides dedicated funds for
Maryland’s state and local parks and conservation areas. Since the program began in 1969,
POS funds have never been distributed on the basis of a project’s GHG benefit. Nevertheless,
this should now be a prominent consideration when determining the use of these funds. In
addition, given the importance of this program, there should be no diversion of funding from
the POS program.
Extend the Next Generation Farmland Acquisition Program to Maryland Forestlandowners
• Through the Maryland Agriculture and Resource Based Industry Development Corporation
(MARBIDCO), provide eligible forestland-owners up to 70% of the easement value of a
property, giving the forester equity for a loan to purchase the property.
•
The forester then has the option of finding a land preservation program to buy the
development rights at a higher price within 3 years, paying back MARBIDCO and pocketing
the difference. Otherwise, the state pays back MARBIDCO’s investment (POS funds) and
takes over the easement (Maryland Environmental Trust [MET]).
Forest Conservation Easement Program
• Contribute funds to the Maryland Agricultural Land Preservation Foundation (MALPF)
specifically for the protection of forests.
•
Funding to quickly implement an aggressive initiative to sequester carbon by avoiding
deforestation and growing trees.
•
Program modeled on a 2001 effort to provide MALPF with funds to protect land within the
green infrastructure network (see HB. 1379), which worked for several years.
Others
• Encourage use of the easements mandated under the FCMA for development projects and the
Forest Legacy perpetual easements for working forests.
•
Modify income tax policy regarding land conservation credits, cap credit pool at $100
million. Maximum credit suggested is $100 thousand/year. (Concept: Update tax credit
program to be more similar to Virginia to incentivize land conservation.)
Appendix D-1 Page 33
Maryland Climate Action Plan Appendix D-1
•
Generate pool of money from industry-offset allowances; earmark a certain amount
specifically for land conservation.
•
Encourage local bond initiatives and allow them through state authorization.
•
Encourage and support the right of local governments to hold taxes specifically for
conservation.
•
Increase the transfer tax on agriculture and forestry land transfers to non-agriculture and
forestry uses. Maryland Land Preservation Taskforce suggests doubling that tax on
conversion of agricultural lands to development.
•
Reduce or eliminate transfer taxes for continued agriculture and forestry uses.
•
Encourage watershed-based planning as an important tool for accomplishing the goals above.
•
Rank POS money by GHG benefit.
•
There should be no diversion of land conservation funds from POS.
Related Policies/Programs in Place
•
DNR’s Greenprint Program.
•
MDE’s Wetlands and Waterways Program.
•
POS.
•
Rural Legacy Program.
•
MALPF.
•
MET.
•
Maryland Historical Trust.
•
Chesapeake Executive Council Forest Conservation Directive (No. 06-1), signed by
Governor O’Malley, charged the signatory states to develop quantitative goals for forest
protection. For Maryland these goals are to
Retain existing levels of forest cover in Maryland, estimated at 2.6 million acres past
2020.
○ Protect an additional 250,000 acres of forest by 2020 through legal mechanisms, with
more than half in areas of high value to water quality.
○ Produce rural and forestland retention guidelines based on watershed indicators by 2008
that can support requirements for forest and water protection in local comprehensive
plans.
○
Type(s) of GHG Reductions
CO2: Preventing release of carbon from conversion of forests, wetlands, and agricultural lands to
development. Maintain annual carbon sequestration from forest growth, thriving wetlands and
productive agricultural lands. Reduce urban sprawl, thus avoiding additional emissions from
vehicle-miles traveled.
Appendix D-1 Page 34
Maryland Climate Action Plan Appendix D-1
Estimated GHG Reductions and Net Costs or Cost Savings
Data Sources:
National Resources Inventory (NRI), Maryland. http://www.md.nrcs.usda.gov/technical/nri.html
Maryland Agricultural Land Preservation Foundation (MALPF). http://www.malpf.info
Farm and Ranch Land Protection Program (FRLPP). http://www.md.nrcs.usda.gov/programs/
frpp/frpp.html
J.E. Smith, L.S. Heath, K.E. Skog, and R.A. Birdsey. 2006. Methods for calculating forest
ecosystem and harvested carbon with standard estimates for forest types of the United States.
USDA USFS Northeastern Research Station. General Technical Report GTR-NE-343. (This
document is also published as part of the US DOE 1605(b) Voluntary GHG Reporting Program).
R.A. Birdsey and G.M. Lewis. 2002. Carbon in United States forests and wood products, 1987–
1997: state-by-state estimates. Sponsored by the U.S. Environmental Protection Agency (US
EPA), IAG DW12938264-01-0, and conducted by the USDA USFS Northern Global Change
Research Program. Available at http://www.fs.fed.us/ne/global/pubs/books/epa/index.html
Quantification Methods:
Agriculture Lands GHG Benefit
Studies are lacking on the changes in above- and belowground carbon stocks when agricultural
land is converted to developed uses. For some land-use changes, carbon stocks could be higher
in the developed use relative to the agricultural use (e.g., parks). In other instances, carbon stocks
are likely to be lower (graded and paved surfaces). The Center for Climate Strategies (CCS)
assumed that the agricultural land would be developed into typical tract-style suburban
development. It was further assumed that 50% of the land would be graded and covered with
roads, driveways, parking lots, and building pads. The final assumption was that 75% of the soil
carbon in the top eight inches of soil for these graded and covered surfaces would be lost and not
replaced. CCS assumed no change in the levels of aboveground carbon stocks.
The benefit in each year was derived by
•
Determining the amount of land protected in each year by using an estimate of the annual
rate of agricultural land lost (11,813 acres/year, determined from National Resources
Inventory (NRI) Maryland data)17 and assuming that agricultural land is protected at an
increasing rate up to 2020, when it is assumed there is no net loss of agricultural land;
•
Multiplying the soil carbon content (assumed to be 0.017 million metric tons of carbon
[MMtC] per 1,000 acres) on the protected land by 50% (representing graded and covered
areas) and by 75% (fraction of soil carbon lost); and
•
Converting the soil carbon lost to CO2 by multiplying by 44 by 12.
17
The most recent NRI data available at the detailed state level is for 1982 to 1997. It is expected that data up to
2003 will be available in 2008.
Appendix D-1 Page 35
Maryland Climate Action Plan Appendix D-1
The GHG benefits are indicated in Table I-14. Note that the GHG benefits include only the
changes to belowground soil carbon, and the quantification does not include emissions caused by
activities associated with the various land uses (e.g., emissions from tractor activities on
agriculture land or urban vehicle activity on developed land).
Agriculture Lands Cost
To estimate program costs in each year, the estimated agricultural acres protected from
development were multiplied by the conservation cost. The conservation costs were assumed to
be the average easement acquisition cost per acre by MALPF ($5,952/acre).18 This cost of
conservation is assumed to remain constant across the policy period. It is further assumed that
subsidies are available through the Farm and Ranch Land Protection Program (FRLPP)19 for a
50% cost-share. While the administrative structure between MALPF and FRLPP has changed, it
is assumed that the cost-share will continue and reduce the conservation costs by 50%.20 The
resulting cost-effectiveness is $87/ton of carbon emissions reduced. This estimate accounts only
for the direct reductions associated with soil carbon losses estimated above and does not include
potentially much larger indirect benefits associated with reductions in vehicle miles traveled
(VMT). The GHG benefits and program costs are summarized in Table I-14.
18
Average easement acquisition cost per acre in fiscal year 2007 Easements Purchased by MALPF, from MALPF
five-year Annual Report for fiscal years 2003-2007 (January 11, 2008), available at http://www.malpf.info/reports/
AR2007Distn.pdf
19
The FRLPP provides matching funds (up to 50%) to keep productive farm and ranchland in agricultural uses.
Working through existing programs, USDA partners with state, tribal, or local governments and nongovernmental
organizations to acquire conservation easements, or other interests in land from landowners.
20
Until December 31, 2005, FRLPP matched up to 50% of MALPF’s easement value. FRLPP now requires a
“before-and-after” appraisal, incorporating a new definition of fair market value that adjusts values for the impact of
the easement on adjacent parcels owned by the seller, to calculate the value of the federal match. The FRLPP
easement valuation system creates administrative problems for MALPF, but only after a third appraisal is completed
close to the time of settlement. This is because the amount of the federal match cannot be determined at the time of
the offer, increasing the difficulty of allocating funds among funding sources (MALPF five-year Annual Report for
fiscal years 2003-2007, January 11, 2008).
Appendix D-1 Page 36
Maryland Climate Action Plan Appendix D-1
Table I-14. Acreage protected annually and associated avoided emissions and costs
under policy implementation
Year
Assumed
Percentage of
Goal Achievement
Agriculture
Acres Protected
MMtCO2e
Saved
Costs
Discounted Costs
2008
8%
909
0.021
$2,704,345
$2,704,345
2009
15%
1,817
0.042
$5,408,689
$5,151,133
2010
23%
2,726
0.064
$8,113,034
$7,358,761
2011
31%
3,635
0.085
$10,817,378
$9,344,458
2012
38%
4,544
0.106
$13,521,723
$11,124,355
2013
46%
5,452
0.127
$16,226,068
$12,713,549
2014
54%
6,361
0.149
$ 8,930,412
$14,126,165
2015
62%
7,270
0.170
$21,634,757
$15,375,418
2016
69%
8,178
0.191
$24,339,102
$16,473,662
2017
77%
9,087
0.212
$27,043,446
$17,432,447
2018
85%
9,996
0.234
$29,747,791
$18,262,563
2019
92%
10,905
0.255
$32,452,135
$18,974,091
2020
100%
11,813
0.276
$35,156,480
82,693
1.93
Total
$19,576,444
$168,617,389
MMtCO2e = million metric tons of carbon dioxide equivalent.
Forestlands GHG Benefit
Carbon savings from this option were estimated from two sources: (1) the amount of carbon that
would be lost as a result of forest conversion to developed uses; and (2) the amount of annual
carbon sequestration potential maintained by protecting the forest area.
1. Maintaining Forest Carbon Sinks
Carbon savings from maintaining forests were calculated using statewide average estimates of
the total of standing-forest carbon stocks in Maryland, as provided by the USFS as part of the
I&F for Maryland (Appendix H).
Loss of forests to development results in a large one-time surge of carbon emissions. In this case,
it was assumed that 100% of the vegetation carbon stocks would be lost in the event of forest
conversion to developed uses, with no appreciable carbon sequestration in soils or biomass
following development. While soil carbon may be lost on forest conversion to developed use,
soil carbon loss was excluded from this analysis because soil carbon dynamics are not included
in the baseline calculations for the I&F. A comparison of data from the American Housing
Survey with land-use conversion data from the NRI suggests, on average, two-thirds of the land
area in residential lots is cleared during land conversion. Thus it was assumed during forest
conversion to developed use that 100% of the forest vegetation would be lost on 67% of the
converted acreage. Using the statewide average carbon densities from the USFS FIA for
Maryland results, roughly 27.9 tons of carbon emissions are avoided for every acre of forest
preserved in Maryland.
Appendix D-1 Page 37
Maryland Climate Action Plan Appendix D-1
The best currently available data on transition into and out of the forestland category are from the
FIA data set. Based on these data, between 1986 and 1999, roughly 9,643 acres of forest were
lost in Maryland annually (FIA statistics). The most recent FIA data on forestland-use transition
in Maryland are not reliable because an adequate number of plots have not yet been sampled to
provide a statistically robust sample of forestland area. Still, the most recent inventory cycle (in
2006) does suggest a continued loss of forestland in Maryland.
To reach the goal of protecting 250,000 acres by 2020 (with 96,000 acres protected by 2012), an
additional 19,200 acres would need to be protected each year between 2008 and 2012, and
19,250 acres would need to be protected between 2013 and 2020.
Table I-15 shows the annual and total acreage targeted by the program and associated avoided
emissions through the retention of forestlands that would be generated between 2008 and 2020.
Table I-15. Acreage protected annually and associated avoided emissions under policy
implementation
Avoided Emissions
(MMtCO2e)
Year
Acres Protected
2008
19,200
1.962
2009
19,200
1.962
2010
19,200
1.962
2011
19,200
1.962
2012
19,200
1.962
2013
19,200
1.967
2014
19,200
1.967
2015
19,200
1.967
2016
19,200
1.967
2017
19,200
1.967
2018
19,200
1.967
2019
19,200
1.967
2020
19,200
1.967
Total
250,000
25.545
MMtCO2e = million metric tons of carbon dioxide equivalent.
2. Annual Sequestration Potential in Protected Forests
A majority of the forests in Maryland are oak-hickory types (63%), with 11% in oak-pine and
10% in natural loblolly-shortleaf pine stands (USFS FIA). The remaining forestland is a mix of
elm-ash-cottonwood, oak-gum-cypress, maple-beech-birch, and white-red-jack pine. This
analysis assumed protected forests would occur in the three predominant forest types, following
the proportions in the existing inventory: oak-hickory (70%), oak-pine (15%), and loblollyshortleaf pine (15%). Thus, the calculations in this section of the analysis used default carbon
sequestration values for these forest types (USFS GTR-NE-343, Tables A3, A4, and A39).
Average annual carbon sequestration was calculated for stand ages between 25 and 75 years,
assuming that protected forests would span this age range. Average annual sequestration rate was
Appendix D-1 Page 38
Maryland Climate Action Plan Appendix D-1
calculated by subtracting non-soil carbon stocks in 75-year-old stands from non-soil carbon
stocks in 25-year-old stands and dividing by 50 (Table I-16). Soil carbon density was assumed to
be constant and is not included in the calculation.
Table I-16. Forest carbon sequestration rates in protected forests
tC/acre
(25 year)
tC/acre
(75 year)
tC/acre/year
Oak-hickory
(GTR NE 343 Table A3)
37.7
80.1
0.8
Oak-pine
(GTR NE 343 Table A4)
33.3
68.8
0.7
Loblolly-shortleaf pine
(GTR NE 343 Table A39)
29.1
55.6
0.5
Forest Type
tC/acre = metric tons of carbon per acre.
The results for annual sequestration potential under policy implementation are provided in Table
I-17. Forests preserved in one year continue to sequester carbon in subsequent years. Thus,
annual sequestration potential includes benefits from acres preserved cumulatively under the
program.
Table I-17. Cumulative protected acreage and annual sequestration on protected acreage
under policy implementation.
Year
Cumulative Acreage
Protected
Annual Sequestration
(MMtCO2e)
2008
19,200
0.055
2009
38,400
0.110
2010
57,600
0.165
2011
76,800
0.220
2012
96,000
0.274
2013
115,250
0.329
2014
134,500
0.384
2015
153,750
0.439
2016
173,000
0.495
2017
192,250
0.550
2018
211,500
0.605
2019
230,750
0.660
2020
250,000
0.715
250,000
5.000
Total
MMtCO2e = million metric tons of carbon dioxide equivalent.
3. Overall GHG Benefit of Avoided Land Conversion
The cumulative GHG benefit of avoided forestland conversion (including avoided emissions
from reduced conversion, as well as annual sequestration in protected forest) was calculated in
Appendix D-1 Page 39
Maryland Climate Action Plan Appendix D-1
units of MMtCO2e (Table I-18). Figure I-1 shows the relative impact of avoided emissions and
sequestration in protected acreage.
Table I-18. Combined effect of avoided land conversion and carbon storage on protected
acreage
Year
MMtCO2e/year
2008
2.017
2009
2.072
2010
2.126
2011
2.181
2012
2.236
2013
2.296
2014
2.351
2015
2.406
2016
2.461
2017
2.517
2018
2.572
2019
2.627
2020
2.682
Total
30.544
MMtCO2e = million metric tons of carbon dioxide equivalent.
Figure I-1. Relative impact of forest protection and carbon sequestration on protected
acreage
MMtCO2e/yr = million metric tons of carbon dioxide equivalent per year.
Appendix D-1 Page 40
Maryland Climate Action Plan Appendix D-1
Forestlands Cost
Economic costs of protecting forestland were assumed to be the per-acre one-time cost of
purchasing conservation easements at $5,952/acre. This estimate is the recorded average
“acquisition cost” in 2007 for easements obtained in Maryland via the MALPF (see Agriculture
Land Costs, page AFW-32).
Net economic costs of protecting forestland are presented in Table I-19. Discounted costs were
calculated using a 5% discount rate, with a total NPV of $1,128.7 million. The cost-effectiveness
of this option is $36.95/tCO2e avoided.
Table I-19. Economic costs of protecting forestland under AFW-4
Year
Total Cost
Discounted Costs
2008
$114,278,400
$114,278,400
2009
$114,278,400
$108,836,571
2010
$114,278,400
$103,653,878
2011
$114,278,400
$98,717,979
2012
$114,278,400
$94,017,122
2013
$114,576,000
$89,773,294
2014
$114,576,000
$85,498,375
2015
$114,576,000
$81,427,024
2016
$114,576,000
$77,549,547
2017
$114,576,000
$73,856,711
2018
$114,576,000
$70,339,725
2019
$114,576,000
$66,990,214
2020
$114,576,000
$63,800,204
Key Assumptions:
The cost of conservation is assumed to remain constant across the policy period.
Key Uncertainties
Carbon storage and CH4 emissions from wetlands in Maryland (and North America more
broadly) are highly uncertain in these complex ecosystems. In many cases, wetlands are a natural
sink for carbon, but can also be a source of CH4 when decomposition occurs after extended
highly anaerobic conditions. Other wetlands, such as saltwater marshes, are different; they
support carbon sequestration, but emit negligible amounts of CH4 because sulfate in saline water
suppresses the development of CH4-generating organisms.
The complexities of these ecosystems make the net carbon equivalent balance (i.e., sinks less
GHG outputs) for fresh water wetlands inherently difficult to measure. Saltwater marshes are
more straightforward and “The First State of the Carbon Cycle Report”21 identifies a mean
21
A.W. King, L. Dilling, G.P. Zimmerman, et al., eds. 2008. The first state of the carbon cycle report (SOCCR): the
North American carbon budget and implications for the global carbon cycle. A report by the U.S. Climate Change
Science Program and the Subcommittee on Global Change Research. NOAA, National Climatic Data Center.
Available at http://www.climatescience.gov/Library/sap/sap2-2/final-report/default.htm
Appendix D-1 Page 41
Maryland Climate Action Plan Appendix D-1
carbon-accumulation rate for conterminous United States tidal marshes as 2.2 million grams of
carbon per hectare per year (gC/ha/year).
Research is necessary to reduce the uncertainties in carbon and CH4 fluxes in wetlands to
provide better information on the appropriate management techniques and the potential for GHG
emission savings through effective management, restoration, and conservation of wetlands.
Regardless of the type of wetland or the net carbon balance, there are potential risks that
significant amounts of carbon stored could be released into the atmosphere if these areas are not
appropriately maintained. This highlights the need to preserve and restore these ecosystems,
from a GHG and local environmental perspective.
Additional Benefits and Costs
One highly beneficial aspect of land conservation is the protection of ecosystem services. These
services (e.g., carbon sequestration, cleaning the air, filtering and cooling water, storing and
cycling nutrients, conserving and generating soils, pollinating crops and other plants, protecting
areas against storm and flood damage, and maintaining hydrologic regimes) are all provided by
the existing expanses of forests, wetlands, and other natural lands.22 These ecologically valuable
lands also provide marketable goods and services, like forest products, fish and wildlife, and
recreation. They serve as vital habitat for wild species, maintain a vast genetic library, provide
scenery, and contribute in many ways to human health and quality of life.
When wetlands and forest are utilized for development, there are costs incurred that are typically
not accounted for in the marketplace. The losses in ecosystem services are hidden costs to
society. These services, such as cleansing the air and filtering water, meet fundamental needs for
humans and other species, but in the past, the resources providing them were so plentiful and
resilient that they were largely taken for granted. In the face of a tremendous rise in population
and land consumption, these natural or ecosystem services must be afforded greater
consideration. The breakdown in ecosystem functions causes damages that are difficult and
costly to repair, as well as taking a toll on the health of plant, animal, and human populations.23
Though difficult to calculate, ecosystem services should be part of a benefit costs analysis
because they would add significant benefit to land conservation decisions.
It is difficult to calculate the carbon benefits of coastal land conservation and retreat policies.
Nevertheless, the benefits can and should be calculated in human lives and dollars saved.
Feasibility Issues
Land conservation is a common practice in America. There is a clear role that land conservation
plays in solving the climate crisis in carbon sequestration and adaptation. Other than funding,
there are few limitations to implementation.
22
R. Costanza et.al. 1997. The value of the world’s services and natural capital. Nature 387:253-259.
23
R.J. Orth, R.A. Batiuk, P.W. Bergstrom, and K A. Moore. 2002. A perspective on two decades of policies and
regulations influencing the protection and restoration of submerged aquatic vegetation in Chesapeake Bay, USA.
Bull. Mar. Science 71 (3): 1391-1403.
Appendix D-1 Page 42
Maryland Climate Action Plan Appendix D-1
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-1 Page 43
Maryland Climate Action Plan Appendix D-1
AFW-5. “Buy Local” Programs for Sustainable Agriculture, Wood,
and Wood Products
Policy Description
Promote the sustainable production and consumption of locally produced agricultural goods,
which displace the consumption of those transported from other states or countries. GHG
reductions occur from reduced transportation-related emissions, reduced production-related
emissions, and enhanced forest health.
Using local wood for construction, furniture, or other value-added wood products will enhance
local economies, while reducing carbon emissions by lowering transportation distances and
sequestering carbon in those products.
The use of wood products displaces GHG emissions associated with processing high-energy
input materials, such as steel, plastic, and concrete.
Increased demand for local wood products increases opportunities for forest management
treatments that improve forest health and sustainability, thereby improving sequestration and
nutrient absorption.
Policy Design
Put leverage on local governments to be part of the solution by ensuring zoning does not
preclude intelligent, sustainable uses to support this objective, such as constraining local valueadd mills, or limiting location, or participation in local markets.
Goals:
Farmers’ Market—Increase the number of local farmers’ markets in Maryland 25% by 2015 and
50% by 2020.
Local Produce—Of the food Marylanders consume, 80% would be grown or produced locally by
2050.
Locally Grown and Processed Lumber—The amount of locally grown and processed lumber
would displace imported wood by 20% by 2015 and 50% by 2050.
Timing: Start up in 2009 and ramp up to higher levels in 2015 and 2020, consistent with goals.
Parties Involved: Agricultural and wood product primary producers, such as Maryland farmers,
lumber mills, farmers’ market associations and promoters; value-added producers, such as
Maryland caterers, producers of packaged food for retail, furniture makers, construction
businesses, wholesalers and retailers of construction and do-it-yourself products, architects and
designers; applicable trade associations; MDA; DNR; and Leadership in Energy and
Environmental Design (LEED) certification entities.
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Maryland Climate Action Plan Appendix D-1
Other: Identify incentives that encourage the sustainable growing and harvesting of local
agricultural and wood products.
Implementation Mechanisms
Specific incentives recommended include the following:
•
Care must be taken to ensure that the wood and agricultural products are sustainably
harvested and produced to create a net carbon sequestration and reduction in emissions.
•
Encourage the development of certification programs for sustainably harvested wood
products from state and private lands. Certification programs exist for organically produced
and raised products, but there are local certification programs that could be developed to
assure consumers that produce and animal products are sustainably raised.
•
Maryland has been a LEED (a rating and certification system for green building) leader, but
has not been given credit for wood products, especially local woods as contributing to energy
efficiency and carbon emission reductions. This is an issue in several states. Maryland should
push for LEED to include points for the use of wood, particularly local sustainably grown
wood.
•
Encourage the creation of value-added products from local woods in lieu of shipping raw
materials from long distances.
•
Provide education for producers in marketing techniques and effective local distribution.
Related Policies/Programs in Place
MDA has recently been revitalized and is actively promoting a Buy Local program.
Type(s) of GHG Reductions
CO2: Extending carbon sequestration in durable wood products and wood construction.
Maintaining carbon sequestration in healthy forests. Avoidance of emissions through reduced
transportation miles. Avoidance of emissions through reduced use of high-energy input
construction materials.
Estimated GHG Reductions and Net Costs or Cost Savings
Data Sources:
All data sources, methods, and assumptions are based on a study by Iowa State University
(ISU),24 and were scaled to Maryland using state population adjustments. The study analyzed the
feasibility and effects of shifting transportation distance and modes.
Quantification Methods:
Farmers’ Market GHG Benefits
The GHG benefits for the Maryland option are based on the ISU study that compared miles
traveled, fossil fuel used, and CO2 emitted in the transport sector of several food systems. The
24
R. Pirog. 2001 (June). Food, fuel, and freeways: an Iowa perspective on how far food travels, fuel usage, and
GHG emissions. Leopold Center for Sustainable Agriculture, ISU. Available at http://www.leopold.iastate.edu/
Appendix D-1 Page 45
Maryland Climate Action Plan Appendix D-1
study estimated the fuel use and the CO2 emissions for transporting (from farm to point of sale)
10% of 28 different fresh produce items using three different food systems: conventional,
regional, and local (which includes farmers’ markets).
This study was scaled to Maryland using state population adjustments and the relevant
percentage of produce to be sourced locally (as determined by the policy goals). This scaling is
summarized in Table I-20. The 2006 population estimates were based on U.S. Census Bureau
data for Iowa and Maryland25—2,982,085 as the population for Iowa and 5,615,727 for
Maryland.
Table I-20. Fuel consumption and emissions from the Iowa study and the assumed
scaling for Maryland
Food System and Type of Truck
Fuel Consumption
(gal/year)
CO2 Emissions
(t/year)
368,102
3,807
Iowa conventional tractor-trailer
Iowa local—Community Supported Agriculture (CSA) farmers’
market small truck (gas)
Maryland conventional tractor-trailer
Maryland local—CSA farmers market small truck (gas)
Estimated benefit of sourcing 10% locally grown fresh produce
49,359
439
693,193
7,169
92,951
826
600,242
6,343
gal/year = gallons per year; CO2 = carbon dioxide; t/year = metric tons per year.
Table I-21 presents the GHG savings from increasing the proportion of produce sold at farmers’
markets.
25
See http://quickfacts.census.gov/qfd/states/19000.html and http://quickfacts.census.gov/qfd/states/24000.html
Appendix D-1 Page 46
Maryland Climate Action Plan Appendix D-1
Table I-21. GHG savings from increasing the proportion of produce sold at farmers’
markets
Year
Increase in
Local Farmers’
Markets
2008
3%
1,982
2009
6%
3,964
2010
9%
5,946
2011
13%
7,928
2012
16%
9,910
2013
19%
11,892
2014
22%
13,874
2015
25%
15,856
2016
30%
19,028
2017
35%
22,199
2018
40%
25,370
2019
45%
28,542
2020
50%
tCO2e
31,713
Cumulative
198,205
tCO2e = metric tons of carbon dioxide equivalent.
Farmers’ Market Costs
Costs to administer this program and the possible incentives required to increase the number of
farmers’ markets in Maryland are difficult to determine, and further work in this area is required.
For the purposes of quantification, it was assumed that the program costs will be similar to those
required to implement the Farm-to-School Program.26 The breakdown of the expenditures for the
first year is presented in Table I-22.
Table I-22. Farm-to-school program future year expenditure estimates
Type of Expenditure
Positions
Costs
1.5
Salaries and fringe benefits
$82,288
Contractual services
$27,500
Equipment
$4,200
Operating expenses
$9,246
Total state expenditures
$123,234
The above estimates are based on one full-time position within the Maryland State Department
of Education (MSDE) and one and a half positions within MDA to coordinate the Farmers’
26
A fiscal and policy note on this program has recently been submitted to the Maryland General Assembly (HB
696).
Appendix D-1 Page 47
Maryland Climate Action Plan Appendix D-1
Market program, based on the costs required to implement the Farm-to-School program.27 While
the Farm-to-School Program is not identical to the Farmers’ Market program, it serves as a good
proxy for estimating the program costs—noting that other costs, such as additional costs to
incentivize local year-round production of agricultural products, as well as regional storage,
processing, packaging, and distribution, have not been included in this analysis.
In addition to the program costs and incentives required, there are also likely to be cost savings
associated with reduced fuel used in transporting non-local produce. The price of gasoline was
assumed to be $3.00 per gallon (/gal). Table I-23 summarizes the potential costs and costs
savings of the farmers’ market component.
Table I-23. Costs and savings from farmers’ market expansion under AFW-5
Year
Fuel Saved
(gal/year)
Program Costs
2008
187,576
$123,234
$562,727
–$439,493
–$398,633
2009
375,151
$134,000
$1,125,454
–$991,454
–$856,456
2010
562,727
$140,000
$1,688,182
–$1,548,182
–$1,273,693
2011
750,303
$146,200
$2,250,909
–$2,104,709
–$1,649,094
2012
937,879
$152,800
$2,813,636
–$2,660,836
–$1,985,557
2013
1,125,454
$159,676
$3,376,363
–$3,216,687
–$2,286,040
2014
1,313,030
$166,861
$3,939,090
–$3,772,229
–$2,553,193
2015
1,500,606
$174,370
$4,501,818
–$4,327,447
–$2,789,511
2016
1,800,727
$182,217
$5,402,181
–$5,219,964
–$3,204,605
2017
2,100,848
$190,417
$6,302,545
–$6,112,128
–$3,573,635
2018
2,400,969
$198,985
$7,202,908
–$7,003,923
–$3,900,046
2019
2,701,091
$207,940
$8,103,272
–$7,895,332
–$4,187,063
2020
3,001,212
$217,297
$9,003,635
–$8,786,338
–$4,437,698
28
Fuel Savings
Total
Net Costs
Discounted Costs
–$33,095,223
gal/year = gallons per year.
Note: Other costs, such as additional costs to incentivize local year-round production of
agricultural products, as well as regional storage, processing, packaging, and distribution, have
not been included in this analysis.
Locally Grown and Processed Lumber: GHG Benefits and Economic Costs
If the amount of lumber used in-state remains constant, and if there is no increase in lumber
produced from in-state sources, then a switch from imported to domestic lumber would result in
GHG benefits from transportation of domestic lumber that would otherwise have been imported.
27
Costs include salaries, fringe benefits, one-time start-up costs, and ongoing operating expenses. Future years
(2010–2013) reflect 4.4% annual increases in salaries, 3% employee turnover and 2% annual increases in ongoing
operating expenses.
28
After 2013, the program costs were assumed to increase at a rate of 4.5% per annum to account for increases to
salary expenses and operating expenses.
Appendix D-1 Page 48
Maryland Climate Action Plan Appendix D-1
Because these benefits are likely to be difficult to quantify and also quite negligible, GHG
benefits from this component of AFW-5 are not quantified.
Key Assumptions:
The assumptions and data inputs for the Iowa analysis are assumed to be the same for Maryland,
including the distance food must be transported to reach the consumer under present
(conventional) circumstances and the relative mix of food categories.
Additional costs to incentivize local year-round production of agricultural products, as well as
regional storage, processing, packaging, and distribution, have not been included in this analysis.
Key Uncertainties
•
The largest uncertainty is whether the region can supply the amount and variety of
agricultural products needed to meet the required goals. Significant work will be needed to
identify and promote products that can be regionally produced to meet the goals of this
policy.
•
The relative mix of food categories in Maryland compared with those in Iowa are not
included in this analysis.
•
There is a difference in the life cycle GHG emissions between organically grown and
chemically supported crops. Quantifications reflect an average emission reduction by crop.
•
The differences in cost of growing food locally versus elsewhere (as determined by market)
have not been incorporated.
•
Incentive system required to make producer and consumer shifts must be viable.
Additional Benefits and Costs
There is a plethora of direct and indirect social, health, and economic benefits accrued from
marketing local goods.
Modern society and technology have made it possible to live isolated lives where purchasing is
done remotely or in large impersonal stores with uniform merchandise. By creating markets and
gathering places where positive exchanges for goods and services are made face-to-face,
community contact is reestablished. These social networking opportunities foster a sense of
belonging and community pride that can lead to further local commercial engagements and
volunteerism within the community.
Shortening the chain and distance between producer and consumer puts more money directly in
the pocket of producers within the community. The community benefits from this localized
exchange by keeping dollars circulating within the community instead of being a net-exporter of
capital. Consumers are often willing to pay a small premium in exchange for fresher produce and
local hand-crafted artisan wares.
Research suggests fresh produce contains higher nutritional content than older produce, which
contributes to more robust health. Consumers concerned about food growing practices and
handling can make inquiries to the producers directly, and even ascertain and demand sustainable
harvest of wood products, which would lead to a healthier environment.
Appendix D-1 Page 49
Maryland Climate Action Plan Appendix D-1
Reductions in packaging produce significant energy, material, and waste reductions.
(Transportation saving in energy and carbon emissions has already been quantified above.)
Varieties of crops phased out of commercial production because of vulnerability to the rigors of
mechanical handling and long transports, or non-uniform appearance and size, can now be
reintroduced to the market. Expanding the gene pool and species diversity benefits producers by
reducing crop failures associated with disease and infestation of monocultures, as well as being
able to offer “boutique” lines of produce. Consumers benefit by an increase of choice and tastes,
which in turn increases consumption of fresh produce, an important part of a healthy diet.
Local producers come to know one another and can exchange production and marketing tips that
are uniquely effective under local conditions. Cooperatives may be formed to enhance marketing
through common distribution points and other economies of scale.
Greater utilization of local wood for more highly valued products encourages reduction of fuels
that could exacerbate forest fires, provides living wage jobs in the region, improves forest health,
and allows cost-effective utilization of residual biomass.
Policies that encourage institutional or commercial purchase of local food and wood products
expand the demand providing even greater financial incentives for higher production and
guaranteed revenues. Accordingly, more land will be kept in active, economically viable
agricultural and forest management, which contributes to meeting other carbon-reduction policy
options encouraging protection and conservation of these lands as an alternative to development.
Feasibility Issues
This analysis has addressed only the farmers’ market aspect of the buy local option. Other
components of this option are addressing the food system more broadly (i.e., 80% of all food
consumed in Maryland). At this stage, the information and resources available are not sufficient
to capture these benefits and costs. However, it is noted that the potential benefits are
significantly greater. The Iowa study notes that the analysis of 10% of 28 produce items
“represents less than 1% of total food and beverage per capita consumption by weight (not
including water) in Iowa.” With this in mind, a higher percentage of meats, processed foods, and
beverages grown and processed locally would result in significantly higher GHG emission
reductions from transport.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-1 Page 50
Maryland Climate Action Plan Appendix D-1
AFW-6. Expanded Use of Forest and Farm Feedstocks and By-Products
for Energy Production
Policy Description
Sustainable forest and farm practices produce by-products and feedstocks (for example, chicken
litter, CH4, slash, switchgrass, and corn stalks), which were earlier considered unsuitable for
further use. They can be sources of renewable energy. This policy option should increase the
utilization of biomass from urban and rural feedstocks, including processing by-products for
generation of electricity, thermal energy, and transportation fuels. Additionally, this option
should reduce the amount of CH4 emissions from livestock manure by installing manure
digesters and energy recovery projects.
All sources will be considered and implementation strategies will ensure the sustainability of
supply. Energy from forest and farm feedstocks and by-products are used to create heat or
power, which offsets production of fossil fuel-based energy and associated GHG emissions.
Shortfalls in biomass feedstocks may be met by municipal solid waste (MSW), such as paper,
cardboard, organics, and yard waste. Ensure that these stocks are not already being used for other
higher value products before counting all stocks as being available.
Note: This option was quantified on the basis of utilization of 25% of crop residues and 50% of
forestry residues by 2020 as a biomass energy source. AFW-7 was quantified using 100% of
available residues. AFW-7 has subsequently been dismissed as a recommended policy option
under AFW due to lack of sufficient biomass, once all food stocks as biomass were eliminated.
Policy Design
•
All biomass products will be sustainably harvested without depriving soils of important
organic components for reducing erosion, but will maintain soil nutrients and structure, and
will not deplete wildlife habitat or jeopardize future feedstocks in quantity or quality.
•
Install manure digesters and energy recovery projects in hog, dairy, and poultry operations.
Community and multi-facility digesters are far more cost-efficient than units on individual
operations.
•
The life cycle energy costs and carbon emissions for each feedstock will be evaluated.
Goals:
Agricultural Residues—Increase use of agricultural residues for electricity, steam, and heat
generation to utilize 10% of available in-state agricultural residue biomass by 2015 and 25% of
available biomass by 2020.
Forest Residues—Increase use of forest residues for electricity, steam, and heat generation to
utilize 10% of available biomass by 2015 and 25% of available in-state forest residue by 2020.
Energy Crop—Increase the use of energy crop to utilize 50% of available in-state energy crop
biomass for electricity, steam, and heat generation by 2020.
Appendix D-1 Page 51
Maryland Climate Action Plan Appendix D-1
CH4 from Livestock Manure and Poultry Litter—By 2020, utilize 50% of available CH4 from
livestock manure and poultry litter for renewable electricity, heat, and steam generation.
Timing: As described above.
Parties Involved: Maryland Energy Administration (MEA), DNR, MDE, MDA, municipalities,
power producers (such as Mirant and Constellation), local electric utilities (and distributors),
Maryland State Board of Education, energy consumers in rural communities (hospitals,
community colleges, and universities), Soil Conservation Districts.
Implementation Mechanisms
•
Provide outreach and education.
•
Change present laws to add incentives (e.g., the Maryland Clean Energy Act).
•
Increase incentives through programs (e.g., Fuels for Schools, tax-forgiveness).
•
Maryland Department of General Services (DGS) should provide equal credit to efficient
design and energy-efficiency loan programs.
•
DGS should afford equal treatment for wood-based energy systems as other renewable
energy systems.
•
Establish incentives for utilizing renewable heating fuels (e.g., tax credits similar to those
afforded electricity producers by the Maryland Clean Energy Act).
•
Acknowledge that Maryland energy policy is devoid of any discussion regarding thermal
loads, which represent 40% of Maryland’s total energy budget.
Related Policies/Programs in Place
Modify the Renewable Portfolio Standards (RPS) that requires local sources of renewable
energy.
Type(s) of GHG Reductions
CO2, N2O, CH4: Savings occur as a result of reducing CH4 emissions and the displacement of
fossil fuel use in the production of electricity or steam.
Estimated GHG Reductions and Net Costs or Cost Savings
Data Sources:
As indicated and referenced below.
Quantification Methods:
Biomass GHG Benefits
This analysis focuses on the incremental GHG benefits associated with the utilization of
additional biomass to offset the consumption of fossil fuels. The analysis assumes biomass will
replace coal. This is based on the assumption that biomass will be used to replace coal in the RCI
Appendix D-1 Page 52
Maryland Climate Action Plan Appendix D-1
and electricity sector (where coal represents the majority of electricity generated).29 While cofiring was used as a technology to provide an estimate of possible capital costs that would be
required to enable the utilization of biomass, it is recognized that other technologies (e.g.,
gasification) potentially offer more significant opportunities. (Currently, co-firing is feasible at
only two power plants in Maryland.)
With the exception of available urban wood waste, the amount of biomass available is taken
from the DNR document titled “The Potential for Biomass Co-firing in Maryland.”30 Available
agriculture biomass is indicated in Table I-24 and available biomass from forests is indicated in
Table I-25. The amount of available energy crop estimated in “The Potential for Biomass Cofiring in Maryland” assumed that 25% of idle cropland (approximately 51,307 acres in
Maryland) is used to grow switchgrass (this translates to approximately 250,000 dry tons of
switchgrass fuel).
29
Based on eGRID data: Coal 56%, Nuclear 28%, Oil 6.3%, Natural Gas 2.2%, and Biomass 1.3%.
30
Maryland DNR. 2006 (Mar.).The potential for biomass cofiring in Maryland. Prepared by Princeton Energy
Resources International, LLC and Exeter Associates Inc. for the DNR Maryland Power Plant Research Program.
Available at http://esm.versar.com/pprp/bibliography/PPES_06_02/PPES_06_02.pdf
Appendix D-1 Page 53
Maryland Climate Action Plan Appendix D-1
Table I-24. Available biomass from agriculture feedstocks
Dry Tons
Heat Content
31
(MMBtu/ton)
Estimated Heat
Input
(MMBtu)
Corn
262,866
8.3
2,181,788
Wheat
148,723
8.3
1,234,401
Winter wheat
185,903
8.3
1,542,995
Barley
25,390
8.3
210,737
Total agriculture residue
622,882
Switchgrass
251,019
Total agriculture biomass
873,901
Agriculture Feedstocks
5,169,921
14.7
3,689,979
8,859,900
MMBtu = million British thermal units.
Table I-25. Available biomass from forestry feedstocks
Forestry Feedstocks
Dry Tons
Heat Content
(MMBtu/ton)
Forest residue
136,878
Mill residue
148,754
14
2,082,556
526,713
10
5,267,132
Urban residue
32
Total forest feedstocks
812,345
9.6
Estimated Heat
input
(MMBtu)
1,314,029
8,663,717
MMBtu = million British thermal units.
Biomass is assumed to have a reduction of 0.0940 tCO2e per MMBtu, when replacing coal
combustion.
Biomass Costs
The two main components to the calculation are fuel costs and capital costs. The fuel component
is based on the difference in costs between supply of biomass fuel and the assumed fossil fuel it
is replacing (i.e., coal). The assumed costs are identified in Table I-26 and have been taken from
“The Potential for Biomass Co-firing in Maryland.”33
31
Heat content of agricultural by-products sourced from above DNR report, which references EIA (1999) Annual
Electric Generator. Heat content for switchgrass is also sourced from the DNR report, which references the EIA
Annual Energy Outlook 2005 (Feb.), Table H1.
32
Available urban wood waste is based on analysis by Daniel Rider, Maryland DNR Forest Service. Mr. Rider’s
analysis indicated that urban wood sourced from refuse (e.g., construction and demolition, pallets, landfill
segregates), arborists, and land clearing totaled approximately 810,328 tons of fresh “natural” wood each year.
Moisture content of 35% was assumed to derive the estimate of 526,713 dry tons per annum.
33
Maryland DNR. 2006 (Mar.). The potential for biomass cofiring in Maryland. Prepared by Princeton Energy
Resources International, LLC and Exeter Associates Inc. for the DNR Maryland Power Plant Research Program.
Available at http://esm.versar.com/pprp/bibliography/PPES_06_02/PPES_06_02.pdf
Appendix D-1 Page 54
Maryland Climate Action Plan Appendix D-1
Table I-26. Assumed costs of feedstocks
Cost $/Ton
Delivered
Cost $/MMBtu
Delivered
Agricultural by-products
$40.00
$4.85
Urban waste wood
$17.00
$1.70
Switchgrass
$47.00
$3.20
Mill residue (dry)
$27.00
$1.93
Forest residue
$35.00
$3.65
Bituminous coal
$33.84
$1.41
Fuel Type
$/Ton = dollars per ton; $/MMBtu = dollars per million British thermal units.
The cost is calculated by assuming the replacement of coal with biomass. The difference in cost
of supply between biomass and coal is calculated using the costs indicated in Table I-26. The
difference in costs (dollars per MMBtu [$/MMBtu]) is multiplied by the amount of coal energy
(MMBtu) being replaced by biomass. The assumed incremental capital costs are based on the
capital costs associated with retrofitting an existing 300–700 MW capacity coal-fired boiler. An
average capital cost of $180 per kilowatt (kW) was assumed, based on the range ($150–
$200/kW) provided in “The Potential for Biomass Co-firing in Maryland.” While use of biomass
may be pursued through other technology types (e.g., gasification) or end-uses (e.g., heat or
steam), the capital costs of co-firing were used to provide an estimate of possible capital costs
required to enable the utilization of biomass.34
The capital infrastructure lifespan was assumed to be 30 years, and the interest rate was assumed
to be 5%, giving a capital recovery factor of 0.065 (i.e., a $1 million plant is assumed to cost
approximately $65,000/year over the life of the project). For the purposes of this analysis, it is
assumed that biomass plants do not require additional operating and maintenance costs (e.g., no
additional emission control measures or ash disposal are required).
Table I-27 displays GHG benefits and fuel costs for agricultural residue, Table I-28 displays the
same for energy crops, and Table I-29 addresses benefits and costs for forestry feedstocks. A
summary of avoided emissions and cost for all biomass components is presented in Table I-30.
34
The capital costs associated with using biomass as an alternative to fossil-based generation are dependent on many
factors, including the end-use (i.e., electricity, heat, or steam), the design and size of the systems, the technology
employed, and the configuration specifications of the system. Each system implemented under this policy would
require a detailed analysis (incorporating specific engineering design and costs aspects) to provide a more accurate
cost estimate of the system.
Appendix D-1 Page 55
Maryland Climate Action Plan Appendix D-1
Table I-27. GHG benefits and fuel costs for agriculture residue
Year
Percent of
Utilization
Avoided
Emissions
Agriculture
Residue
(MMtCO2e)
Agriculture
Residue Biomass
(MMBtu)
Agriculture
Residue
Cost/Savings
Discounted
Cost/Savings
2008
1%
64,624
0.006
$222,307
$201,639
2009
3%
129,248
0.012
$444,613
$384,074
2010
4%
193,872
0.018
$666,920
$548,677
2011
5%
258,496
0.024
$889,226
$696,732
2012
6%
323,120
0.030
$1,111,533
$829,443
2013
8%
387,744
0.036
$1,333,840
$947,935
2014
9%
452,368
0.043
$1,556,146
$1,053,261
2015
10%
516,992
0.049
$1,778,453
$1,146,406
2016
13%
672,090
0.063
$2,311,988
$1,419,360
2017
16%
827,187
0.078
$2,845,524
$1,663,719
2018
19%
982,285
0.092
$3,379,060
$1,881,587
2019
22%
1,137,383
0.107
$3,912,596
$2,074,933
2020
25%
1,292,480
0.122
$4,446,132
Cumulative
Total
0.620
$2,245,599
$15,093,364
MMBtu = million British thermal units; MMtCO2e = million metric tons of carbon dioxide equivalent.
Table I-28. GHG benefits and fuel costs for energy crops
Year
Percent of
Utilization
Total Energy Crops
(MMBtu)
Avoided
Emissions,
Energy Crops
(MMtCO2e)
Agriculture
Residue
Cost/Savings
Discounted
Cost/Savings
2008
2%
73,800
0.007
$132,101
$119,820
2009
4%
147,599
0.014
$264,203
$228,228
2010
6%
221,399
0.021
$396,304
$326,040
2011
8%
295,198
0.028
$528,405
$414,019
2012
10%
368,998
0.035
$660,506
$492,880
2013
15%
553,497
0.052
$990,759
$704,114
2014
20%
737,996
0.069
$1,321,013
$894,113
2015
25%
922,495
0.087
$1,651,266
$1,064,421
2016
30%
1,106,994
0.104
$1,981,519
$1,216,481
2017
35%
1,291,493
0.121
$2,311,772
$1,351,645
2018
40%
1,475,992
0.139
$2,642,025
$1,471,178
2019
45%
1,660,491
0.156
$2,972,278
$1,576,263
2020
50%
1,844,990
0.173
$3,302,531
$1,668,003
Cumulative
Total
1.010
MMBtu = million British thermal units; MMtCO2e = million metric tons of carbon dioxide equivalent.
Appendix D-1 Page 56
$11,527,205
Maryland Climate Action Plan Appendix D-1
Table I-29. GHG benefits and fuel costs for forestry feedstocks
Year
Percentage
of Utilization
Forest Feedstocks
(Includes Forest
and Mill Residue
and Urban Wood
Waste)
(MMBtu)
Avoided
Emissions All
Forest Feedstocks
(MMtCO2e)
Forest
Feedstock
(Includes
Forest and Mill
Residue and
Urban Wood
Waste)
Cost/Savings
Discounted
Cost/Savings
2008
1%
108,296
0.010
$69,423
$62,969
2009
3%
216,593
0.020
$138,846
$119,940
2010
4%
324,889
0.031
$208,268
$171,343
2011
5%
433,186
0.041
$277,691
$217,578
2012
6%
541,482
0.051
$347,114
$259,022
2013
8%
649,779
0.061
$416,537
$296,025
2014
9%
758,075
0.071
$485,959
$328,916
2015
10%
866,372
0.081
$555,382
$358,004
2016
13%
1,126,283
0.106
$721,997
$443,243
2017
16%
1,386,195
0.130
$888,612
$519,553
2018
19%
1,646,106
0.155
$1,055,226
$587,589
2019
22%
1,906,018
0.179
$1,221,841
$647,968
2020
25%
2,165,929
0.204
$1,388,455
$701,264
Cumulative
Total
1.038
MMBtu = million British thermal units; MMtCO2e = million metric tons of carbon dioxide equivalent.
Appendix D-1 Page 57
$4,713,415
Maryland Climate Action Plan Appendix D-1
Table I-30. Summary of GHG benefits and costs for biomass
Year
Total Biomass
Use
(Agriculture
Residue, Forest
Feedstocks and
Energy Crops)
(MMBtu)
2008
246,720
$37,031
$423,831
$460,861
$418,015
0.023
2009
493,440
$74,061
$847,661
$921,723
$796,219
0.046
2010
740,160
$111,092
$1,271,492
$1,382,584
$1,137,455
0.070
2011
986,880
$148,123
$1,695,322
$1,843,445
$1,444,387
0.093
2012
1,233,600
$185,153
$2,119,153
$2,304,306
$1,719,509
0.116
2013
1,591,020
$238,799
$2,741,136
$2,979,935
$2,117,784
0.150
2014
1,948,439
$292,445
$3,363,118
$3,655,563
$2,474,229
0.183
2015
2,305,859
$346,090
$3,985,101
$4,331,191
$2,791,924
0.217
2016
2,905,367
$436,072
$5,015,504
$5,451,576
$3,346,795
0.273
2017
3,504,875
$526,053
$6,045,908
$6,571,961
$3,842,489
0.329
2018
4,104,383
$616,034
$7,076,311
$7,692,346
$4,283,386
0.386
2019
4,703,891
$706,016
$8,106,715
$8,812,731
$4,673,579
0.442
2020
5,303,399
$795,997
$9,137,119
$9,933,115
$5,016,898
0.499
$34,062,670
2.83
Annualized
Capital
Costs
Fuel Costs
(Agriculture
Residue,
Forest
Feedstocks
and Energy
Crops)
Total
Costs
Cumulative
Total
Discounted
Cost/Savings
Total GHG
Emissions
Avoided
(MMtCO2e)
MMBtu = million British thermal units; MMtCO2e = million metric tons of carbon dioxide equivalent.
CH4 Utilization from Livestock Manure and Poultry Litter GHG Benefits
CH4 emissions (in MMtCO2e) data from the Maryland GHG I&F35 was used as the starting point
to estimate the GHG benefits of capturing and controlling the volumes of CH4 targeted by the
policy and to include the additional benefit of electricity generation using this captured CH4
(through offsetting fossil-based generation). The first portion of GHG benefit is derived from
reduced CH4 emissions through the capture of emissions from manure and poultry litter. An
assumed collection efficiency of 75%36 was applied to CH4 emissions from manure and poultry
litter, which was then multiplied by the assumed policy target ramping up to achieve 50%
collection by 2020.
The second portion of the GHG benefit is from offsetting fossil-based electricity generation,
which was estimated by converting the CH4 captured in each year to its heat content (in British
thermal units [Btus]), and then multiplying by an energy recovery factor of 17,100 Btu per
kilowatt hour (kWh) to estimate the electricity produced (assumes a 25% efficiency for
conversion to electricity in an engine and generator set). To estimate the CO2e associated with
35
Prepared by the CCS for this report. The final version will be published as part of this report, and will be posted at
http://www.mdclimatechange.us
36
The collection efficiency is an assumed value based on engineering judgment. No applicable studies were
identified that provided information on CH4 collection efficiencies achieved using manure digesters (as it relates to
collection of entire farm-level emissions).
Appendix D-1 Page 58
Maryland Climate Action Plan Appendix D-1
this amount of electricity in each year, the kWh were converted to megawatt hours (MWh), and
this value was then multiplied by the Maryland-specific emission factor for electricity production
from the US EPA’s Emissions & Generation Resource Integrated Database (eGRID) (0.587
t/MWh).
The total GHG benefit was estimated as the sum of portions of the benefit described above and
indicated in Table I-31.
Table I-31. GHG benefits for CH4 utilization from livestock manure
Year
CH4
Emissions
From Dairy,
Swine and
Poultry
(MMtCO2e)
2008
0.090
4%
0.003
0.000
6547
225
0.003
2009
0.090
8%
0.005
0.000
13,050
448
0.006
2010
0.090
12%
0.008
0.000
19,515
669
0.008
2011
0.090
15%
0.010
0.000
25,977
891
0.011
2012
0.090
19%
0.013
0.001
32,417
1,112
0.014
2013
0.089
23%
0.015
0.001
38,837
1,332
0.017
2014
0.089
27%
0.018
0.001
45,236
1,552
0.020
2015
0.089
31%
0.021
0.001
51,613
1,770
0.022
2016
0.089
35%
0.023
0.001
57,957
1,988
0.025
2017
0.089
38%
0.026
0.001
64,276
2,205
0.028
2018
0.089
42%
0.028
0.001
70,573
2,421
0.031
2019
0.088
46%
0.031
0.001
76,846
2,636
0.033
2020
0.088
50%
0.033
0.002
83,095
2,850
0.036
Policy
Utilization
Objective
CH4
Captured
and Utilized
Under
Policy
(MMtCO2e)
MMtCH4
CH4
(MMBtu)
tCO2e Offset
as Electricity
Total
Emission
Reductions
(MMtCO2e)
GHG = greenhouse gas; CH4 = methane; MMtCO2e = million metric tons of carbon dioxide equivalent; MMtCH4 =
million metric tons of methane; MMBtu = million British thermal units; tCO2e = metric tons of carbon dioxide
equivalent.
CH4 Utilization from Livestock Manure Costs
The costs for the dairy and swine components were estimated using an NRCS analysis titled “An
Analysis of Energy Production Costs from Anaerobic Digestion Systems on U.S. Livestock
Production Facilities.”37 The production costs were assumed to be $0.11/kWh for swine
anaerobic digesters and $0.05/kWh for dairy anaerobic digesters.38 These costs are in 2006
dollars and assume a 30% thermal efficiency. The costs include annualized capital costs for the
digester, generator, and O&M costs.39 The “Availability of Poultry Manure as a Potential Bio37
J.C. Beddoes, K.S. Bracmort, R.T. Burns and W.F. Lazarus. 2007 (Oct.). An analysis of energy production costs
from anaerobic digestion systems on U.S. livestock production facilities. NRCS. Technical Note No. 1.
38
It was assumed that the technology employed for swine and dairy anaerobic digesters was covered anaerobic
lagoon. Cost was obtained from Table 1 of the NRCS paper sited above.
39
The economic analysis conducted by Beddoes et al. does not include feedstock and digester effluent transportation
costs. The technical note does not address the economics of centralized digesters where biomass is collected from
several farms and then processed in a single unit.
Appendix D-1 Page 59
Maryland Climate Action Plan Appendix D-1
Fuel Feedstock for Energy Production,” by J.R.V. Flora, and C. Riahi-Nezhad, provided the
assumed costs for the poultry component ($0.103/kWh in 2005 dollars using of Anaerobic
Digestion).40 The value of electricity produced was taken from the all-sector average projected
electricity price for the Southeastern Electric Reliability Council from the US DOE Energy
Information Administration (EIA) “2007 Annual Energy Outlook” (see http://www.eia.doe.gov/
oiaf/aeo/supplement/index.html). This price represents the value to the farmer for the electricity
produced (to offset on-farm use) and is netted out from the production costs to estimate net costs.
Total costs are indicated in Table I-32.
Table I-32. Costs for CH4 utilization from livestock manure
Year
Cost of Dairy
Technology
(2006 $)
Cost of Swine
Technology
(2006 $)
Cost of Poultry
Technology
(2006 $)
Total Costs
(2006 $)
2008
–$5,718
$1,270
$3,841
–$607
2009
–$11,469
$2,509
$7,717
–$1,243
2010
–$17,271
$3,714
$11,615
–$1,942
2011
–$21,892
$5,122
$16,059
–$710
2012
–$25,637
$6,667
$20,958
$1,988
2013
–$29,373
$8,209
$25,854
$4,690
2014
–$33,475
$9,689
$30,546
$6,759
2015
–$37,722
$11,141
$35,150
$8,568
2016
–$43,003
$12,421
$39,158
$8,577
2017
–$48,803
$13,611
$42,866
$7,675
2018
–$54,643
$14,789
$46,530
$6,677
2019
–$59,150
$16,180
$50,898
$7,928
2020
–$63,936
$17,520
$55,096
$8,680
Total
$57,041
CH4 = methane; $ = dollars.
Key Assumptions:
The fuel mix being replaced by biomass is assumed to be 100% coal. Biomass is assumed to
have a reduction of 0.0940 tCO2e/MMBtu when replacing coal combustion. CH4 utilization is
assumed to replace electricity.
While energy production from biomass may be pursued through other technology types (e.g.,
gasification) or end-uses (e.g., heat or steam), the capital costs of co-firing were used to provide
an estimate of possible capital costs required to enable the utilization of biomass. This analysis
assumes that on average the capital costs will be similar to those with retrofitted co-fired boiler
systems that have a 300–700 MW capacity.
40
J.R.V. Flora and C. Riahi-Nezhad. 2006 (Aug.). Availability of poultry manure as a potential bio-fuel feedstock
for energy production. Department of Civil and Environmental Engineering, University of South Carolina (USC).
Appendix D-1 Page 60
Maryland Climate Action Plan Appendix D-1
The capital costs associated with using biomass as an alternative to fossil-based generation are
dependent on many factors, including the end-use (i.e., electricity, heat, or steam), the design and
size of the systems, the technology employed, and the configuration specifications of the system.
Each system implemented under this policy would require a detailed analysis (incorporating
specific engineering design and costs aspects) to provide a more accurate cost estimate of the
system. Similar issues also surround the production of energy from livestock manure and poultry
litter.
Key Uncertainties
Energy crops are not widely produced in Maryland, because of the opportunity cost involved in
switching to higher-value agriculture products such as corn, wheat, and barley. “The Potential for
Biomass Cofiring in Maryland” notes “it is unlikely that a large percentage of local farmers will
switch to bioenergy crops absent a subsidy or incentive to encourage the production of energy
crops.”
The quantity of forest biomass available is more predictable, and is expected to increase over
time. However, exact values are uncertain.
Additional Benefits and Costs
The expansion of crops as an energy feedstock needs to ensure energy crops are grown on
appropriate land and in ways that do not damage terrestrial or aquatic resources, or displace food
and fiber production.
Combustion of animal wastes, rather than liquefaction and subsequent spraying on fields, will
reduce waster use, nitrogen release, and the amount of aerosols and particulates released as
pollutants.
Feasibility Issues
The feasibility of installing digesters on a small-scale farm is uncertain, and the costs may make
this unattractive. Digester facilities tend to require a critical number of animals before the
projects are feasible. Thus, implementation at the community or cooperative scale may be more
feasible and realistic.
The economical and technical feasibility of using biomass energy as a replacement for
conventional energy was not considered as a part of this analysis.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
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AFW-7. In-State Liquid Biofuels Production
Policy Description
Promote sustainable in-state production and consumption of transportation biofuels, including
ethanol and bio-diesel from agriculture or agroforestry feedstocks, to displace the use of fossil
fuels. Decrease the use of fossil fuel in the production of these biofuels, which will improve the
GHG profile of in-state liquid biofuels production and consumption. Favor the use of cellulosic
and non-food-source starches in ethanol production and monitor to ensure the sustainability of
feedstocks and soil health.
It is understood that promoting biofuel production must be coupled with strong policies to reduce
overall transportation fuel consumption, if true gains in reducing GHGs are to be achieved. Upon
successful implementation of this policy, Maryland consumption of biofuels that are produced
in-state will provide better GHG benefits than these same fuels obtained from a national market
because of lower embedded CO2 (due to transportation of bio-diesel, ethanol, other fuels, or their
feedstocks from distant sources).
Note: After lengthy discussion and full quantification, it was determined this policy option would
not include any feedstocks that could be used as food or animal feed in the total GHG emission
reductions or costs, because the unintended consequences of land conversion, food price
increases, and using feedstocks with high embodied energy or GHG emissions were deemed
counterproductive. In particular, the MCCC’s MWG determined that using food source
materials would be detrimental to consumers and to balanced and diverse crop production.
There is considerable research supporting each side of the argument with no clear conclusions.
With the elimination of food-based feedstocks, the sustainability of a massive switch to biofuels
on a commercial level appears marginal.
Note: This option is linked with TLU policy recommendation TLU-4, which focuses on the
demand-side aspects of a Low Carbon Fuels Standard (LCFS). This AFW option seeks to
achieve incremental GHG benefits from the supply side by promoting in-state production of
biofuels using feedstocks with greater GHG benefits than the likely BAU national production
methods.
Policy Design
Goals:
Gasoline displacement goals—Achieve in-state cellulosic ethanol production equivalent to
offsetting gasoline consumption in the state by 3.0% in 2015 and 3.0% in 2020.
Fossil diesel displacement goals—Increase in-state bio-diesel production from Maryland nonfood feedstocks to offset diesel consumption in the state by 2% in 2015 and 2.2% in 2020.
Timing:
Gasoline displacement goals—Incremental increases, up to achieving the full goal by 2020.
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Fossil diesel displacement goals—Incremental increases, up to achieving the full goal by 2020.
The timeline needs to allow time for permitting and construction of sufficient production
facilities to meet the goals.
Parties Involved:
Suppliers of feedstocks, ethanol producers, distributors, communities adjacent to potential
facilities, and environmental groups. Associated agencies would include DNR, MEA, MDA,
Maryland Department of Business and Economic Development (DBED), and MDE.
Other:
Currently, there is one small commercial cellulosic ethanol plant in the United States located in
Upton, Wyoming. One large plant is under construction in Georgia, one has just broken ground
in Montana, and a few others are being planned across the country, but not in Maryland. The
only ethanol plants proposed in Maryland are corn-based plants.
There are two bio-diesel plants in the state, with production totaling 5 million gallons per year
(gal/year).
Impact studies on the effects of gas specification changes, including vapor pressure and O3
emissions, are needed.
Implementation Mechanisms
Develop a state strategy for increasing production of Biofuels.
• Determine opportunities for appropriately scaled facilities that produce cellulose-based
biofuels.
•
Policy options could include
Ensuring that wood-based energy is given weight equal to wind and solar-based energy in
renewable energy credits;
○ Changing the current Renewable Fuels Incentive to include cellulosic ethanol production
specifically and give a larger incentive to it;
41
○ Establishing tax credit and grant program for E85 filling stations; and
○ Changing existing gasoline specifications in Maryland so ethanol can be blended into
conventional fuel (which represents only 15% of the Maryland fuel supply; most is
reformulated gasoline with E1042).
○
•
Integrate state strategy with regional activities to serve as a market for Maryland supply.
•
Promote the development of technologies to fractionate black liquor (from paper mills),
which can be refined into valuable products using a thermochemical or other type of process.
41
A blended fuel containing 85% ethanol and 15% gasoline.
42
A blended fuel containing 10% ethanol and 90% gasoline.
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Maryland Climate Action Plan Appendix D-1
•
Provide financial incentives to research the production of bio-oils from algae grown in
wastewater effluents.
•
Provide “bonus” renewable energy credits for fuels generated in state or from fuels derived
from in-state sources.
•
Provide access to long-term, low-interest financing for new cellulosic ethanol facilities and
supporting infrastructure.
•
Encourage tax credits and grant programs designed to reduce capital costs of new cellulosic
ethanol facilities and supporting infrastructure.
•
Foster partnerships between users, suppliers, corporations, and adjacent communities.
•
Provide incentives to communities that provide supply (e.g., woody debris) to biofuels
industries.
•
Provide reliable and predictable supply of cellulose from state lands, while ensuring
sustainable management.
•
Incentivize local production of biofuels.
Related Policies/Programs in Place
•
Renewable Fuels Incentive Act—beginning in FY 2007 and lasting 10 years—offers a
$0.20/gal credit for ethanol made from small grains and a $0.05/gal credit for ethanol from
other agricultural sources; offers a $0.20/gal credit for bio-diesel made after 2005 from soy
and a $0.05/gal credit for bio-diesel made before 2005 from any feedstock including soy.
MDE reports that of the two facilities in Maryland that have shown interest in ethanol credits,
only one has been permitted and has to produce within 18 months or will lose the permit.
(Modification of the Act to favor production feedstocks that are not used for food and animal
feed is encouraged.)
•
Cellulosic feedstock and value-added by-product study (MEA)—e.g., feasibility studies.
•
Renewable Fuels Task Force (created by statute)—a one-time task force with a single report
as a deliverable.
•
Grants for E85 refueling stations (MEA; limited funds, $50,000 total).
•
Increase E85 use in state government fleets.
•
US DOE construction grants for biofuels plants.
•
Federal loan guarantees for biofuels production.
•
Relevant 2007 Farm Bill programs.
•
Requirements for State Use of Diesel—required Maryland to purchase state equipment that
uses bio-diesel: 50% of state fleet diesel vehicles use at least a B5 blend beginning July 1,
2007; 50% of state off-road vehicles, and; heating and heavy equipment using at least a B5
blending beginning July 1, 2008.
•
MEA provided $100,000 grants for E85 infrastructure and $100,000 for two grants for biodiesel infrastructure.
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Maryland Climate Action Plan Appendix D-1
Type(s) of GHG Reductions
CO2: Life cycle emissions are reduced to the extent that biofuels are produced with lower
embedded fossil-based carbon than conventional (fossil) fuel. Feedstocks used for producing
biofuels can be made from crops or other biomass, which contain carbon sequestered during
photosynthesis (e.g., biogenic or short-term carbon).
There are two different methods for producing ethanol based on two different feedstocks. Starchbased ethanol is derived from corn or other starch or sugar crops. Cellulosic ethanol is made
from the cellulose contained in a wide variety of biomass feedstocks, including agricultural
residue (e.g., corn stover), forestry waste, purpose-grown crops (e.g., switchgrass), and MSW.
Local production of ethanol also decreases the embedded CO2e of ethanol compared with
importation from the current U.S. primary ethanol-producing regions. Current research indicates
cellulose-based ethanol production provides a 72%–85% reduction in GHGs compared with
gasoline, whereas an 18%–29% reduction is measured from starch-based ethanol production
compared with gasoline.
The primary feedstocks for bio-diesel are vegetable oils (e.g., soy, canola, sunflower, and algal),
animal fats (such as poultry) and alcohols (either methanol or ethanol). From a recent report,
“Environmental, Economic and Energetic Costs and Benefits of Bio-diesel and Ethanol
Biofuels” 43 bio-diesel from soybeans contains 91% of the usable energy of its petroleum
equivalent and reduces life cycle GHG emissions by as much as 41%. Higher oil production
potential of different feedstocks (e.g., other oil crops, algae) will likely adjust the life cycle GHG
emissions further downward as they are developed as bio-diesel sources. Local production of
bio-diesel also decreases the embedded CO e of bio-diesel compared with the importation of outof-state supplies. In this policy, only non-food bio-diesel feedstocks will be considered.
2
Estimated GHG Reductions and Net Costs or Cost Savings
Ethanol
GHG-reduction potential in 2015, 2020 (MMtCO2e): 0.85, 0.91.
Net cost per tCO2e: $80.08.
This section will focus exclusively on ethanol production from cellulosic feedstocks. Maryland is
a corn-deficit state, meaning that it has to import corn to meet its current food and feed needs.
Because of that, there is insufficient corn to consider policy incentives to promote in-state
production of corn- or starch-based ethanol.
According to studies conducted by US DOE’s Argonne National Laboratory (ANL), one of the
benefits of cellulosic ethanol is that it reduces GHG emissions by 85% over reformulated
gasoline. By contrast, starch ethanol (e.g., from corn), which most frequently uses natural gas to
provide energy for the process, reduces GHG emissions by 18% to 29% over gasoline.
43
J. Hill, E. Nelson, D. Tilman, et al. 2006. Environmental, economic, and energetic costs and benefits of bio-diesel
and ethanol biofuels. Proceedings of the National Academy of Sciences 103:11206–11210.
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Data Sources: Data from the Maryland Draft Inventory & Forecast prepared for this report were
the starting point for quantifying the benefits of offsetting fossil diesel and gasoline consumption
with bio-diesel and ethanol produced within the state (these do not incorporate future reductions
in consumption due to TLU options). Gasoline consumption estimates (under BAU) are
presented in Table I-33.
Table I-33. BAU gasoline consumption
Year
Gasoline Consumption
(million gal/year)
2015
2,989
2020
3,190
BAU = business as usual; gal/year = gallons per year.
The policy design calls for displacement of 3.0% of BAU gasoline consumption with cellulosic
ethanol by 2015 and for maintaining displacement of 3.0% BAU consumption by 2020 as
gasoline consumption increases. Ethanol has approximately 67% of the heat content of
gasoline.44 Incremental in-state ethanol production targets are presented in Table I-34.
Table I-34. Cellulosic ethanol production needed to meet policy goals
Year
BAU Gasoline
Consumption
(million gal/year)
Percentage To Be
Displaced
Ethanol Production
Needed
(million gal/year)
2015
2,989
3%
135
2020
3,190
3%
144
BAU = business as usual; gal/year = gallons per year.
In-state cellulose supply was estimated from residual biomass residues. No land conversion for
cultivation of fuel crops is assumed. The conversion factors in Table I-35 were used to estimate
ethanol from cellulose based on US DOE and National Renewable Energy Laboratory (NREL)
data.45 US DOE and NREL assume that by 2012, the ethanol yield per ton of biomass will have
improved. Estimates of biomass from crop residues, forest residues, primary and secondary mill
residues, and urban wood were obtained from a DNR study.46 This study assumes that 50% of
the crop residue will be left in the fields to maintain soil or be set aside for livestock feed. Only
excess residue that is sustainable will be used for conversion to fuel. Conservation Reserve
Program land is also not assumed to be used for fuel production. This policy assumes that 100%
of the rest of the biomass can be converted to fuel.
44
US DOE EIA. http://www.eia.doe.gov/oiaf/analysispaper/biomass.html, accessed January 9, 2008.
45
US DOE. 2006 (June). Breaking the biological barriers to cellulosic ethanol: a joint research agenda.
http://genomicsgtl.energy.gov/biofuels/2005workshop/2005low_intro.pdf, accessed December 28, 2008. Also, J.
Ashworth, NREL, personal communication, April 6, 2007.
46
Maryland DNR. 2006 (Mar.). The potential for biomass cofiring in Maryland. Prepared by Princeton Energy
Resources International, LLC and Exeter Associates Inc. for the DNR Maryland Power Plant Research Program.
Available at http://esm.versar.com/pprp/bibliography/PPES_06_02/PPES_06_02.pdf
Appendix D-1 Page 66
Maryland Climate Action Plan Appendix D-1
Table I-35. Cellulose feedstock conversion factors
Year
Ethanol Yield From
Cellulose
(gal/ton biomass)
2008
70
2012
90
2020
100
It was assumed that it would take 7 years for production to ramp up to its maximum based on
feedstock supplies. Table I-36 shows the in-state cellulosic ethanol targets based on available instate feedstock supplies. It is assumed that 100% of biomass residue is converted to cellulosic
ethanol.
Table I-36. Cellulosic ethanol annual production based on upper bound of feedstock
supplies
Year
Cellulosic Ethanol
(million gal)
% of BAU Consumption
2008
0
0%
2009
10
0.2%
2010
19
0.5%
2011
38
0.9%
2012
58
1.4%
2013
77
1.8%
2014
96
2.2%
2015
135
3.0%
2016
136
3.0%
2017
138
3.0%
2018
140
3.0%
2019
142
3.0%
2020
144
3.0%
BAU = business as usual; gal = gallons.
Emission factors from gasoline, starch-based ethanol and cellulosic ethanol are based on the
ANL Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET)
Model.47 The life cycle CO2e-emission factor used for gasoline is 11.74 t/1,000 gal, for starchbased ethanol is 9.60 t/1,000 gal, and for cellulosic ethanol is 3.28 t/1,000 gal.48 The production
cost differential for cellulosic versus starch-based ethanol was obtained from the NREL.49
47
Ibid.
48
ANL GREET model emission factor in g/mi x GREET model average fuel economy (100 mi/4.7 gal).
49
http://www.nrel.gov/technologytransfer/entrepreneurs/pdfs/19_forum/braemar_cellulosic.pdf, slide 21, accessed
December 2007.
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Maryland Climate Action Plan Appendix D-1
Quantification Methods:
GHG Reductions
The benefits for this option are dependent on developing in-state production capacity that
achieves benefits above the levels of using ethanol from starch-based production; some of this is
accounted for under the TLU policy recommendations. Overlaps have been eliminated.
Based on the emission factors listed above, the incremental benefit of the production targeted by
this policy over conventional starch-based ethanol is 6.32 t/1,000 gal, or 66%. This value was
used along with the production in each year to estimate GHG reductions.50 This analysis does not
take into account the benefits from transitioning from gasoline to corn-based ethanol.
GHG deductions in each year were estimated by multiplying production by the incremental
benefit of cellulose over corn-based ethanol.
Costs
For ethanol, costs for the incentives needed by this policy option are based on the difference in
estimated production costs between conventional starch-based ethanol and cellulosic ethanol.
Estimates taken from an NREL-sponsored industry forum estimate a production cost of $1.31/gal
for corn-based ethanol and $1.97/gal for cellulose-based ethanol, resulting in a differential of
$0.66/gal.51 These estimates include capital costs, thus additional incentives for capital and
research and development (R&D) are not included in this analysis. The incentives are considered
necessary in the near term to help commercialize technologies that produce ethanol from
cellulose. The incentives should also help establish the infrastructure to deliver biomass to biorefineries, since producers will seek the local feedstocks or renewable fuels for their operations.
By 2015, it is assumed that advances in cellulosic ethanol production (e.g., enzyme costs,
production processes) will make cellulosic ethanol production cost competitive with starch-based
production. Hence, the incentives are discontinued beginning in 2015. Note that federal
legislation has been proposed to offer cellulose an incentive of $0.765/gal, compared with the
$0.51/gal currently offered for ethanol production.52 If enacted, this $0.255/gal premium could
cover the additional incentives assumed to be needed by the State of Maryland. However, the
federal incentives do not ensure production facilities would locate in Maryland. These federal
incentives have not been factored into the cost estimates for this option.
Bio-diesel
GHG-reduction potential in 2015, 2020 (MMtCO2e): 0.14, 0.18.
Net Cost per tCO2e: $7.44.
Fossil diesel consumption estimates (under BAU) are presented in Table I-37.
50
ANL GREET model emission factor in g/mi x GREET model average fuel economy (100 mi/4.7 gal).
51
http://www.nrel.gov/technologytransfer/entrepreneurs/pdfs/19_forum/braemar_cellulosic.pdf, slide 21, accessed
December 2007.
52
D. Morris. 2007 (Jan.). Making cellulosic ethanol happen: good and not so good public policy. Institute for Local
Self-Reliance. http://www.newrules.org/agri/cellulosicethanol.pdf, accessed January 2007.
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Maryland Climate Action Plan Appendix D-1
Table I-37. BAU diesel consumption
Year
Diesel Consumption
(million gal/year)
2015
817
2020
941
BAU = business as usual; gal/year = gallons per year.
The policy design calls for displacement of 2% of diesel consumption by 2015 and 2.2% by 2020
with bio-diesel from non-food feedstocks, such as animal fats, yellow grease (also called sewer
grease or restaurant grease), and algal oil. Bio-diesel has approximately 91% of the heat content
of fossil diesel.53 In-state bio-diesel production targets are presented in Table I-38.
Table I-38. Bio-diesel production needed to meet policy goals
Year
Bio-diesel
Production Goals
(million gallons)
Fraction of
2005 Consumption
2008
4
0.5%
2009
4
0.5%
2010
8
1.0%
2011
10
1.3%
2012
14
1.7%
2013
15
1.8%
2014
16
1.9%
2015
18
2.0%
2016
19
2.0%
2017
20
2.1%
2018
21
2.1%
2019
22
2.2%
2020
23
2.2%
Table I-39 presents the existing and planned facilities and capacity in Maryland.54 Production of
bio-diesel from soybean oil will not be considered under this policy, which is designed to
incentivize production from non-food sources.
53
L. Wright, B. Boundy, B. Perlack, et al. 2006 (Sept.). Biomass energy data book. Prepared by the Oak Ridge
National Laboratory for the US DOE Office of Energy Efficiency and Renewable Energy, Office of Planning,
Budget and Analysis. ORNL/TM-2006/571. http://cta.ornl.gov/bedb/appendix_a.shtml, accessed December 28,
2008.
54
http://www.biodieselmagazine.com/plant-list.jsp, accessed January 9, 2008; http://biodieselmagazine.com/
article.jsp?article_id=1027, accessed January 9, 2008; http://biodieselmagazine.com/
article.jsp?article_id=1508&q=greenlight biofuels&category_id=19, accessed January 9, 2008
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Maryland Climate Action Plan Appendix D-1
Table I-39. Existing and planned bio-diesel facilities in Maryland
Facility
Status
Capacity
(1,000 gal)
Feedstock
Miscellaneous
Maryland
bio-diesel
In production
500
Soy, animal fat
Planned expansion will
add 0.5–1 MMgal/year
capacity; goal of
5 MMgal/year by 2008
Greenlight
biofuels
In production
4,000
Animal fat with
multi-feedstock
capacity
Potential to be expanded
to 8 MMgal/year
gal = gallons; MMgal.year = million gallons per year.
Table I-40 summarizes the upper limit of bio-diesel that could be produced from in-state
feedstock by 2015 and 2020. Animal fats available were estimated based on the ratio of
Maryland livestock and poultry slaughter and production to that of Minnesota, given that detailed
amounts of grease, lard, poultry fat, and tallow available in Minnesota are known from their
BioPower Evaluation Tool (BioPET), which identifies locations, types, and volumes of biomass
fuels.55 Yellow grease was projected based on industry estimates of 14 pounds of restaurant
grease per capita and 7.6 pounds of grease/gal using U.S. Census projections for Maryland.56 It
was assumed that by 2020, algal bio-diesel technology would progress enough to be available to
provide approximately 20% of bio-diesel production.
Table I-40. Bio-diesel potential from available feedstock
Feedstock
Animal fats
Bio-diesel
Equivalent
(1,000 gal)
5,791
Yellow grease 2015
11,780
Yellow grease 2020
12,329
Algal 2020—estimated at 20% of feedstock
5,000
Total 2015
17,571
Total 2020
23,120
gal = gallons.
The CO2e emission factor for fossil diesel used in the I&F is 10.07 t/1,000 gal. The life cycle
fossil diesel-emission factor is 12.3 t/1,000 gal.57
55
http://www.mncee.org/pdf/biomassreport.pdf, accessed January 8, 2008.
56
http://media.cleantech.com/node/376, accessed January 8, 2008; http://www.cgfa.org/news.html, under Evaluate
The Cost And Usage of Various Fuels, accessed January 8, 2008; http://www.census.gov/population/www/
projections/projectionsagesex.html, table 6, accessed December 28, 2007.
57
J. Hill, E. Nelson, D. Tilman, et al. 2006. Environmental, economic, and energetic costs and benefits of bio-diesel
and ethanol biofuels. Proceedings of the National Academy of Sciences 103:11206–11210.
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Quantification Methods:
GHG Reductions
For bio-diesel production, a new study on life cycle GHG benefits was used to estimate the CO2e
reductions for this option.58 This study covered bio-diesel production from soybean production,
which is currently the predominant feedstock source for bio-diesel production in the United
States and is assumed to remain that way for the purposes of this analysis. Life cycle CO2e
reductions (via displacement of fossil diesel with soybean-derived bio-diesel) were estimated by
this study to be 41%. This value is being used by the TLU TWG to estimate the benefit of the
bio-diesel component of the TLU biofuels option. Hence, this analysis focuses on incremental
benefits of in-state feedstocks. It does not include the benefits from transitioning from fossil fuel
to standard imported soy.
It is assumed that technology advances will occur during the policy period allowing for
commercial-scale production of algal oil to make up approximately 20% of bio-diesel production
by 2020. With sufficient technology advancement, another option could be Fischer-Tropsch biodiesel from cellulose. There is currently a similar process in place with an end product of
“renewable diesel,” but since it uses an esterification process, it is not considered bio-diesel.
For oil sources other than soybean oil, the benefit for substituting in-state bio-diesel for fossil
diesel is estimated starting with the life cycle soybean-emission factor (7,261 tCO2e/MMgal
from the same study). As mentioned previously, the benefits of the bio-diesel component of the
TLU biofuels option is based on displacement with soybean-based bio-diesel. Hence, this
analysis was designed to account for only the incremental benefit of in-state feedstock (oil)
production using GHG preferential feedstocks. For animal fats, algal oils, and yellow grease, the
CCS assumes these have negligible embedded energy. Therefore, the incremental benefit over
soy equals the soybean based the emission factor of 7,261 tCO2e/MMgal minus transportation
costs, which are assumed to average 100 miles,59 yielding a benefit of 7,207 tCO2e/MMgal for
bio-diesel over soy-based.
The mix of feedstocks assumed was based on a respective proportion of each feedstock, using
the upper bound of in-state and proximity area supply. Proximity area is defined as a 50-mile
radius that may extend beyond state boundaries, as measured from potential or existing biofuels
production sites.
GHG estimates for this scenario were calculated by multiplying new production of each oil
feedstock by the applicable incremental benefit. Total reductions in each year were estimated by
summing the incremental benefits for each oil type.
58
Ibid.
59
Maximum dimension of Maryland is approximately 200 miles; 100 miles is distance from center of the state to
border.
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Costs
For bio-diesel, costs were estimated using information from an analysis of bio-diesel production
costs from the US DOE.60 The value of incentives needed is assumed to be $0.30/gal—the value
of incentives offered in a State of Missouri incentives program.61 In October 2004, when the
$0.30 Missouri bio-diesel incentive passed, there was only one bio-diesel plant under
construction in Missouri. By the end of 2007, Bio-diesel magazine listed eight plants in operation
or under construction in the state.62 This program offers production incentives to producers of up
to 15 million gal/year. The incentive grants last for 5 years. Hence, CCS applied the incentives
costs only to the first 5 years of the policy period.
CCS assumed this would cover the costs of all grants or tax incentives associated with this policy
(all other implementation mechanisms are assumed to be achieved within existing programs).
The cost estimates are based on multiplying the amount of bio-diesel produced in each year
above BAU by the production incentive. This assumes all production occurs at production
facilities of less than 15 million gal/year. As stated, the production incentive runs out after 5
years of production.
Key Assumptions:
All available feedstock that does not serve as a food source will be used for fuel production.
(This will be adjusted to balance with the feedstock use in AFW-6)
Key Uncertainties
Cost competitiveness of biofuels will depend on the cost of oil. This analysis did not account for
the cost of oil, which is currently $95.15/barrel of crude oil,63 the cost of gasoline, which is
currently $3.16/gal, or the cost of diesel, which is currently $3.66/gal.64 However, if the price of
oil drops substantially, alternative biofuels become less cost competitive, and any incentives
outlined here may be insufficient to encourage production.
US DOE EIA has stated: “Capital costs for a first-of-a-kind cellulosic ethanol plant with a
capacity of 50 million gal/year are estimated by one leading producer to be $375 million (2005
$), as compared with $67 million for a corn-based plant of similar size, and investment risk is
high for a large-scale cellulosic ethanol production facility. Other studies have provided lower
60
A. Radich. 2004 (Aug.). Bio-diesel performance, cost and use. www.eia.doe.gov/oiaf/analysispaper/
biodiesel/index.html, accessed January 2007.
61
Information on the Missouri Program. Available at http://www.newrules.org/agri/mobiofuels.html - biodiesel,
accessed January 2007.
62
http://www.renewableenergyaccess.com/rea/news/story?id=21253, accessed January 9, 2008;
http://www.biodieselmagazine.com/plant-list.jsp?view=production&sort=state&sortdir=asc&country=USA,
accessed January 9, 2008.
63
US DOE EIA. 2008 (Feb.). Weekly petroleum status report for February 29, 2008. Available at
http://www.eia.doe.gov/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/wpsr.html
64
US DOE EIA.. 2008 (Mar.). Weekly petroleum status report for March 3, 2008. Available at
http://www.eia.doe.gov/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/wpsr.html
Appendix D-1 Page 72
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cost estimates. A detailed study by the NREL in 2002 estimated total capital costs for a cellulosic
ethanol plant with a capacity of 69.3 million gal/year at $200 million.”65
In June 2006, a U.S. Senate hearing was told that the current cost of producing cellulosic ethanol
is $2.25/gal, primarily because of the current poor conversion efficiency. At that price, it would
cost about $120 to substitute a barrel of oil (42 gallons) with cellulosic ethanol, taking into
account the lower energy content of ethanol. However, US DOE is optimistic and has requested
a doubling of research funding. The same Senate hearing was told that the research target was to
reduce the cost of production to $1.07/gal by 2012.
Transitioning to large amounts of energy crop cultivation for biofuels has the potential for a
negative impact on biodiversity.
A key uncertainty with this option is in estimating the incremental benefit above what is
achieved with the low-carbon fuel standard. To estimate benefits for in-state production of
ethanol using GHG-superior technologies and feedstocks, one must make critical assumptions
about what types of fuels will supply the low-carbon fuel standard within the policy period. For
the purposes of this analysis, CCS has assumed the primary low-carbon fuel that will be used to
lower the carbon content of gasoline-powered vehicles will be starch-based ethanol. The
incremental benefit is based on the higher GHG benefits associated with producing ethanol instate using cellulosic ethanol technology and feedstocks. To the extent this technology is widely
employed within the policy period and acts as a significant supplier of fuel to meet the lowcarbon standard, the incremental benefits estimated here could be overstated.
Additional Benefits and Costs
Potential for competition with the production of food; less impact by cellulosic ethanol than corn
ethanol on water quality (could actually reduce nutrient loads in some circumstances); permanent
new sources of income for farmers and foresters; using current waste streams to replace U.S. fuel
consumption; environmental benefits or costs; recycling money in local economies; stimulation
of potential markets for other biomass feedstocks (forest treatment biomass, MSW fiber);
increased transportation energy security with shorter transport distances and on-farm use of fuel
produced; and reduced reliance on imported petroleum.
Changes in gasoline specifications due to blending may raise vapor pressure and increase O3.
Additional information on the impacts of this type of policy is needed.
Feasibility Issues
Currently gasoline and diesel specifications are set by federal law and US EPA regulations. Any
fuels used in the State of Maryland would need to conform to federal laws.
Implementation of this option requires additional R&D in cellulosic ethanol production methods,
development of feedstock collection and delivery infrastructure, and successful negotiations with
cellulosic technology leaders to establish pilot and commercial-scale plants in the state. Sourcing
of feedstocks and the size and location of facilities (crushing and bio-diesel production) must be
65
http://www.eia.doe.gov/oiaf/analysispaper/biomass.html, accessed December 2007.
Appendix D-1 Page 73
Maryland Climate Action Plan Appendix D-1
addressed for optimization and planning. Trade-offs between food and fuel crops will be an
important issue. Full implementation of bio-diesel goals requires quick research advancement in
algal oil harvesting.
There may be an overlap among agricultural options that seek to increase or maintain crop
acreage in no-till production or in conservation management programs. This could be in conflict
with the higher levels of crop production proposed in this option.
If algal oils become commercialized, there is a possibility they could be used to meet production
goals that are much higher than currently outlined in this policy.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-1 Page 74
Maryland Climate Action Plan Appendix D-1
AFW-8. Nutrient Trading with Carbon Benefits
Policy Description
Nutrient trading, particularly trading between point sources (e.g., wastewater treatment plants)
and non-point sources (e.g., agricultural operations), provides the opportunity to create
significant carbon sequestration benefits in Maryland.
Nutrient trading is a flexible and cost-effective means of achieving water quality improvements,
while also providing significant carbon benefits. Nutrient trading is the transfer of credits created
through reduction of nutrients, specifically nitrogen and phosphorus, from one source. For
example, buyers who need to apply or release more nutrients than are currently permitted under
state law could obtain credits from sellers who have produced excess nutrient credits.
Opportunities exist to also promote and register any carbon reductions associated with nutrient
reduction practices. This policy can apply to agriculture, wastewater treatment plants, industrial
dischargers, highway contractors, and developers.
Besides creating economic benefits, nutrient trading encourages improved efficiency of fertilizer
use and other nitrogen-based soil amendments through BMPs and advanced technologies.
Advanced technologies, such as global positioning system (GPS) technology and GreenSeeker,
can help with precision application of nitrogen on crops.
Many of the BMPs that would be incentivized under the nutrient trading program would also
result in significant GHG reductions, such as no-till and conservation tillage, improved irrigation
management, conservation buffers, grassland plantings, green infrastructure, afforestation,
reforestation, and restoration of wetlands. There are a host of BMPs that would be accepted.
Implementation of this program would also result in riparian buffer planting and wetlands
restoration.
Note: Excess nitrogen not metabolized by plants can leach into groundwater or be emitted into
the atmosphere as N2O, which has 310 times the effect of one unit of CO2. Better nutrient
utilization can lead to lower N2O emissions from runoff.
Policy Design
A cap is currently under development. This is important so as not to overpromise and underdeliver. A cap will also keep costs under control and keep the focus on the real goal of reducing
GHGs rather than just trading for economic gain.
Goals:
By 2020, increase nitrogen fertilizer efficiency by 20% through the implementation of a nutrient
trading scheme.
Work Group—The Agricultural Nutrient Trading Advisory Committee was formed and convened
November 20, 2007. A draft policy on the non-point source and point source policy has been
released. (Final Draft, March 20, 2008, “Maryland Policy for Nutrient Cap Management and
Appendix D-1 Page 75
Maryland Climate Action Plan Appendix D-1
Trading in Maryland’s Chesapeake Bay Watershed” will take effect in April 2008. Phase Two,
non-point source trading will be released for review in May
Timing: Adopt policy by second quarter of 2008. Hold stakeholder meetings in spring and
finalize in June 2008.
Parties Involved: Agricultural and urban non-point sources, municipal wastewater treatment
plants, industrial and commercial dischargers, Soil Conservation Districts, MDE, and MDA.
Other: Septic system owners, other non-point sources, Chesapeake Bay Foundation (CBF),
University of Maryland (UM), World Resources Institute (WRI), Maryland Association of
Municipal Wastewater Agencies (MAMWA), Soil Conservation Service.
Implementation Mechanisms
A nutrient and carbon trading policy could be implemented through a watershed-based MDE
general permit that authorizes trading. A point and non-point source trading policy would be
developed and finalized by the MDE and MDA. Any credits produced would be certified, and
the carbon sequestered could be placed on the state registry and become eligible for sale if the
credits meet applicable standards under emerging state and federal laws and polices on GHGs.
Build on the policy document on point-source nutrient trading being developed by the MDE, and
develop a complementary agricultural non-point source policy that includes carbon and nutrients.
This can be accomplished through regulation and guidance.
Related Policies/Programs in Place
•
Chesapeake Bay Program, Nutrient Trading, Fundamental Principles and Guidance, March
2001.
•
MDE point-source trading document.
•
US EPA, Water Quality Trading Policy, 2003.
•
US EPA, Water Quality Trading Tool Kit for Permit Writers, 2007.
•
Maryland Nutrient Management Act of 1998.
•
Virginia Chesapeake Bay Watershed Nutrient Credit Exchange Program, 2005.
•
Pennsylvania Policy and Guidelines on Trading of Nutrient and Sediment Reduction Credits,
2006.
Type(s) of GHG Reductions
N2O: Reductions occur when nitrogen runoff and leaching are reduced, which leads to the
formation and emission of N2O.
CO2: Carbon is sequestered through riparian buffers, soil sequestration, and constructed
wetlands.
CH4: CH4 is reduced through agricultural BMPs or captured for renewable energy.
Appendix D-1 Page 76
Maryland Climate Action Plan Appendix D-1
Estimated GHG Reductions and Net Costs or Cost Savings
Data Sources: See reference documents in AFW 3 regarding carbon sequestration rates from
reforestation, such as the USDA FIA look-up tables, US DOE’s 1605 (b) look-up table, Winrock
carbon uptake model, and the Chapman–Richards growth model. See reference documents
regarding carbon sequestration rates from no-till practices, such as Virginia Polytechnic Institute
and State University (VT) Rainfall Simulation Research. See research analysis from the USDA
Agricultural Research Service (ARS) in Fort Collins, Colorado, which included analysis on deep
core soil samples for baseline data under Nitrate Leaching and Economic Analysis Package
(NLEAP) and CEQUESTER models.
Quantification Methods:
A N2O emission factor for fertilizer use was calculated by dividing the carbon equivalent
emissions from fertilizer use (obtained from the Maryland I&F, which is a part of this report) by
the fertilizer use for each year. Historical fertilizer use for Maryland was obtained from the MDA
(1999–2000 to 2005–2006). On the basis of this historical data, it was assumed that BAU
fertilizer use for the policy period would remain constant at 108,000 t/year (this was the average
of all years available).66 The target fertilizer efficiency improvements brought about through the
implementation of the nutrient trading program were applied to the assumed fertilizer use over
the policy period. The difference between BAU fertilizer applied and fertilizer applied under the
policy is the target fertilizer reduction, shown in Table I-41.
The average CO2e emission factor (in MMtCO2e/ton of fertilizer applied) for the years 1990–
2006 was used to calculate the avoided GHG emissions from the proposed increase in fertilizer
efficiency resulting from the implementation of the nutrient trading program. The avoided life
cycle GHG emissions (i.e., emissions associated with the production, transport, and energy
consumption during application) were taken from “A Review of Greenhouse Gas Emission
Factors for Fertiliser Production.”67 The estimate provided for the United States (taken from “A
Synthesis of Carbon Sequestration, Carbon Emissions and Net Carbon Flux in Agriculture”68)
was 857.5 grams of CO2e per kilogram of nitrogen (gCO2e/kgN)69 or 0.778 tCO2e per ton of
nitrogen (tCO2e/tN). This estimate was significantly lower than the estimates for European
fertilizers (ranging from 5,339.9 to 7,615.9 gCO2e/kgN). Wood and Cowie recognize that the
estimate for the United States is low and suggested part of this discrepancy could be explained
by the exclusion of N2O emissions from the U.S. estimate, which are a significant component of
GHG emissions.
66
No data for fiscal years 2002–2003.
67
S. Wood and A. Cowie. 2004 (June). A review of greenhouse gas emission factors for fertiliser production. State
Forests of New South Wales, R&D Division, Cooperative Research Centre for Greenhouse Accounting. Available at
http://www.ieabioenergy-task38.org/publications/GHG_Emission_Fertilizer Production_July2004.pdf
68
T.O. West, and G. Marland. 2001. A synthesis of carbon sequestration, carbon emissions and net carbon flux in
agriculture: comparing tillage practices in the United States. Agriculture, Ecosystems and Environment. Volume 91,
Issues 1-3, September 2002, Pages 217-232
69
These emission factors provide an estimate of the typical life cycle GHG emissions (including resource extraction,
the transport of raw materials and products, and the fertilizer production processes) per unit weight of fertilizer
produced (i.e., gCO2e/kg fertilizer).
Appendix D-1 Page 77
Maryland Climate Action Plan Appendix D-1
The results of the calculations detailed in the preceding discussion are displayed in Table I-41.
Note that this approach does not capture other GHG benefits associated with nutrient trading,
including enhanced soil carbon sequestration, possible forest sequestration, or other land-use
practices that may be incorporated under a nutrient trading program.
The cost savings associated with using less fertilizer was calculated by multiplying the total
fertilizer reduction in each year by the average cost of fertilizer in 2007 (Table I-41).70 The
program costs of nutrient trading were estimated as the sum of fertilizer savings (negative cost);
costs for soil testing; costs for staff, overhead, and travel; and the costs of preparing guidance
documents. Soil testing would be required for each crop field once every 4 years. The cost for
each soil test was estimated to be $10, for a total cost of $683/year for soil testing (assuming $10
per 75 acre field size). Costs for two full-time equivalents of additional staff, overhead, travel,
laboratory, and associated costs were estimated at $250,000/year, and preparation of guidance
documents was assumed to be $75,000 in the first year.71
Note: The cost estimates do not include any financial benefit that may result through the
generation of carbon credits.
Table I-41. Fertilizer reduction, GHG benefits, and costs of a nutrient trading program
Year
Policy Target
Efficiency
Improvements
Annual
Target
Cost of
Avoided GHG Fertilizer
Fertilizer
Reduction
Emissions
Programs
(short tons N) (MMtCO2e)
($MM)
Avoided
Cost of
Fertilizer
($MM)
Net Cost
Discounted
(Savings as Cost/Savings
Negative)
($MM)
2008
2%
1,662
0.01
$1.01
–$0.639
$0.37
$0.33
2009
3%
3,324
0.02
$0.683
–$1.28
–$0.60
–$0.51
2010
5%
4,986
0.03
$0.683
–$1.92
–$1.23
–$1.02
2011
6%
6,647
0.04
$0.683
–$2.56
–$1.87
–$1.47
2012
8%
8,309
0.05
$0.683
–$3.20
–$2.51
–$1.88
2013
9%
9,971
0.07
$0.683
–$3.83
–$3.15
–$2.24
2014
11%
11,633
0.08
$0.683
–$4.47
–$3.79
–$2.57
2015
12%
13,295
0.09
$0.683
–$5.11
–$4.43
–$2.86
2016
14%
14,957
0.10
$0.683
–$5.75
–$5.07
–$3.11
2017
15%
16,618
0.11
$0.683
–$6.39
–$5.71
–$3.34
2018
17%
18,280
0.12
$0.683
–$7.03
–$6.35
–$3.53
2019
18%
19,942
0.13
$0.683
–$7.67
–$6.99
–$3.71
2020
20%
21,604
0.14
$0.683
–$8.31
–$7.63
–$3.85
Total
1.0
–$29.7
GHG = greenhouse gas; N = nitrogen; MMtCO2e = million metric tons of carbon dioxide equivalent; $MM = million
dollars.
70
April 2007 data from ERS/USDA, Available at http://www.ers.usda.gov/Data/fertilizeruse/
71
B. Hurd. 2006. New Mexico State University, Agricultural Economics, personal communication with H.
Lindquist, CCS, June.
Appendix D-1 Page 78
Maryland Climate Action Plan Appendix D-1
Key Assumptions:
The quantification in this option is fully focused on fertilizers, but there are also 31 BMPs from
the Chesapeake Bay Program that have not been quantified here. Those include, but are not
limited to riparian buffer zone enhancement, wildlife habitat improvement, water quality
improvement, erosion reduction, increased biodiversity, native vegetation enhancement,
improved vegetative growth rates, and fisheries habitat improvement.
Key Uncertainties
Because of weather and drought conditions, there may be a discrepancy between estimated and
actual nutrient and GHG reductions. This poses some uncertainties in certifying credits in
advance of project construction.
This analysis neither captures other GHG benefits associated with nutrient trading (including
enhanced-soil carbon sequestration, possible forest sequestration, or other land-use practices that
may be incorporated under a nutrient trading program), nor does it incorporate any financial
benefits from the sale of credits or those accrued from being able to continue operation
efficiently by the purchase of credits.
Other uncertainties surround baseline issues (what are the minimum standards below which
credits will be generated?), timing of trading (now or in the future after implementation of
certain regulatory standards?), and the duration of trade (e.g., 10 years or life of BMP?).
Additional Benefits and Costs
Ancillary conservation benefits, wildlife corridors, enhanced biodiversity, and leveraged private
capital in ecosystem restoration projects.
Feasibility Issues
Effective implementation and participation is dependent upon clear and appropriate guidelines
and a strong outreach program that will inform potential participants of benefits and implications
of participation. Broad participation will enhance the feasibility of the system’s working
effectively and minimizing GHG emissions, while improving soil and habitat conditions.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-1 Page 79
Maryland Climate Action Plan Appendix D-1
AFW-9. Waste Management Through Source Reduction (SR)
and Advanced Recycling
Policy Description
Reduce the volume of waste from residential, commercial, and government sectors through
programs that reduce the generation of wastes and enhance reuse of product components and
manufacturer’s lifetime product responsibility. Reduction of generation at the source reduces
landfill emissions, as well as upstream production emissions. Increase recycling and reduce
waste generation in order to limit GHG emissions associated with the production of raw
materials.
Reduce CH4 emissions associated with landfilling by reducing and recycling the biodegradable
fraction of waste emplaced.
For products that cannot be reused, increase recycling programs, create new recycling programs,
provide incentives for recycling construction materials, develop markets for recycled materials,
and increase average participation and recovery rates for all existing recycling programs to
enhance and encourage up-cycling (where the remanufactured product is equal to, or higher in
quality, than the original product).
Electronics recycling and recovery of industrial gases from foam products are suggested as
policy elements, but are not included in the quantification of this option.
Policy Design
Goals: Waste stream, including diverted waste, will be reduced by 15% by 2012, 25% by 2015,
35% by 2020, and 80% by 2050. Recycling stream will increase by 10% by 2012, 20% by 2015,
30% by 2020, then gradually decrease to 10% by 2050, as more products and their components
are reused and new source use also decreases.
Timing: Start up in 2010 and ramp up to higher levels in 2012 and 2015, consistent with goals.
Parties Involved: Manufacturers, relevant trade associations, consumers’ associations, all state
and local agencies, consumers, and retail outlets.
Other: According to the “2006 Maryland Waste Diversion Activities Report,” which provides
information on the state’s recycling and source reduction (SR) activities for the 2005 calendar
year, Maryland achieved a recycling rate of 39.2% (including organics) and an overall diversion
rate of 42.6%.72 This recycling rate includes composted organics. The overall diversion rate
includes recycling, compostable organics, and SR credits. SR credits are allocated by MDE, on
the basis of approved SR programs implemented by municipalities. It is assumed these programs
reduce the overall amount of waste that must be managed. Table I-42 displays diversion data in
72
MDE. 2006. Maryland waste diversion activities report: 2006. http://www.mde.state.md.us/assets/document/
recycling/2006MWDAR.pdf, accessed on December 20, 2007.
Appendix D-1 Page 80
Maryland Climate Action Plan Appendix D-1
Maryland from 2001 through 2005. 2005, the most recent year for which reliable data are
available, will be used as the base year, rather than 2006.
Table I-42. Data from Maryland Recycling Act Annual Reports (2001–2005)73
Item
2001
2002
2003
2004
2005
MRA rate
37.0%
37.0%
36.8%
35.8%
39.2%
Waste diversion rate
39.0%
39.5%
39.6%
38.8%
42.6%
SR credit
2.0%
2.5%
2.8%
3.0%
3.4%
617,390
645,230
892,250
853,094
944,358
Glass (tons)
47,764
55,481
64,894
71,558
57,889
Metals (tons)
220,631
251,703
271,646
302,904
535,195
Paper (tons)
948,513
909,447
821,652
861,927
840,644
Plastic (tons)
23,149
35,930
24,483
30,663
36,858
547,586
558,050
518,599
561,829
518,935
Total MRA diversion, including
organics (tons)
2,405,033
2,455,841
2,593,524
2,681,975
2,933,879
Recycling, excluding organics
(tons)
1,787,643
1,810,611
1,701,274
1,828,881
1,989,521
Total MRA waste disposed in
landfills and incinerators* (tons)
4,095,056
4,181,567
4,454,096
4,809,575
4,550,506
Total MRA waste, including
recycling (tons)*
6,500,089
6,637,408
7,047,620
7,491,550
7,484,385
Compostables (tons)
Miscellaneous (tons)
Total source reduction (tons)*
Total generation, including
recycling, composting, and
source reduction (tons)*
132,655
170,190
203,018
231,697
263,426
6,632,744
6,807,598
7,250,637
7,723,248
7,747,811
2.6%
6.5%
6.5%
0.3%
% Change*
Annual generation change*
3.4%
Average annual recycling
rate*
37.2%
MRA = Maryland Recycling Act; SR = source reduction.
*Calculated from report data.
These rates are specific to what is referred to as “MRA (Maryland Recycling Act) waste”—the
definition of which aligns with the US EPA definition of MSW. This diversion rate does not take
into account waste exported to landfills in neighboring states. The “Annual Report of Solid
Waste Management in Maryland—Calendar Year 2005” reports that nearly 1.8 million tons of
waste was exported to landfills in Pennsylvania and Virginia, while Maryland landfills received
almost 0.3 million tons of waste from New York, Pennsylvania, West Virginia, and the District
73
MDE. Maryland waste diversion activities Reports: 2002–2006. Reporting data from 2001 to 2005. Available at
http://www.mde.state.md.us/Land/land_publications/index.asp
Appendix D-1 Page 81
Maryland Climate Action Plan Appendix D-1
of Columbia.74 Considering the net exports of landfill MSW in Maryland, the baseline rate for
recycling in Maryland was 31.2% (including organics), lower than the rate reported by the 2005
Maryland Recycling Act Report.75 As Table I-43 shows, the BAU composting level is projected
by assuming that 32% of total diversion is composted.76 For this analysis, all waste generated in
Maryland will be included, but not the waste imported from elsewhere.
Table I-43. BAU waste management projection for Maryland
Item
2005
2010
2012
2015
2020
Total Maryland waste generation,
including net exports (tons)
9,242,389
10,904,236
11,649,832
12,864,895
15,178,095
MSW managed in-state, 3.4%/year
growth from 2001–2005 (tons)
7,747,811
9,140,922
9,765,948
10,784,525
12,723,659
Net MSW exports (tons)
1,494,578
1,763,314
1,883,883
2,080,370
2,454,435
Maryland population, from I&F
5,561,214
5,907,575
5,989,170
6,113,680
6,326,975
1.7
1.9
2.0
2.1
2.4
2,933,879
3,583,242
3,828,252
4,227,534
4,987,674
MSW composting, 32% of MSW
recycled (tons)
938,841
1,146,637
1,225,041
1,352,811
1,596,056
MSW disposed, in-state landfills
only (tons)
3,169,045
3,617,031
3,864,352
4,267,399
5,034,708
MSW disposed in all landfills (tons)
4,949,634
5,717,783
6,108,746
6,745,881
7,958,838
WTE (incinerators), 18% of waste
generated (tons)
1,358,876
1,603,212
1,712,834
1,891,480
2,231,582
MSW generation per capita
(tons/person)
MSW diverted, including recycling
and organics, 39.2% MSW
managed in state; 2005 baseline
(tons)
BAU = business as usual; MSW = municipal solid waste; I&F = Inventory and Forecast; WTE = waste-to-energy.
Implementation Mechanisms
•
Require or encourage all government agencies to preferentially purchase goods made from
reused and recycled materials and goods from manufacturers who take “cradle-to-cradle”
responsibility for their products.
•
Identify incentives that encourage the reuse and recycling of materials and products, and
discourage single-use waste.
•
Identify incentives to reduce the amount of raw materials used.
•
Increase quality as a means to enhance product longevity with innovative programs to reward
manufacturers for quality.
74
MDE. 2006 (Sept.). Annual report: solid waste management in Maryland—calendar year 2005.
http://www.mde.state.md.us/assets/document/SW_Managed_in_MD_Report_CY_2005.pdf, accessed on December
20, 2007,
75
Calculation: (2,933,879 tons recycled)/(2,933,879 tons recycled + 1,358,876 tons incinerated + 4,949,636 tons
landfilled + 1,780,589 tons exported – 286,011 tons imported).
76
32% = 944,358 tons composted/2,933,879 tons diverted.
Appendix D-1 Page 82
Maryland Climate Action Plan Appendix D-1
•
Identify and phase out any subsidies that discourage waste reduction, reuse of components,
or improved quality and longevity of products.
•
Work with a variety of public education and outreach programs to ensure information about
recycling, waste reduction, and appropriate reuse is available and appropriately disseminated.
•
Divert compostables from landfills. Recently, an area of focus in the solid waste industry has
been to increase recycling of organic wastes (e.g., lawn and garden waste, food waste, wood,
and paper) using different conversion technologies, including composting, anaerobic
digestion, or hybrids of these technologies, which tend to be problematic and can have
negative impacts not only in smell, but also in groundwater pollution. Diverting
compostables from landfills offers a tremendous opportunity for reducing GHG emissions
due to the higher global warming potential of CH4. Therefore, these types of programs should
be included in the overall plan. However, care will be given to making sure the composting
programs of organic waste do not create additional problems, such as foul odors,
groundwater pollution, or increasing rodent populations.
•
The European Union has the Waste Electronic and Electrical Equipment (WEEE) Directive.
Manufacturers of all electronic and electrical equipment sold in Europe are required to take
back all products when they are no longer useful or desired by the purchaser. This
encourages the use of interchangeable, reusable parts; elimination of toxins and heavy
metals; and maximum recycling, which significantly reduces waste. Although this type of
program would be challenging for Maryland to implement independently, it should be
considered. At a minimum, Maryland should recommend to our national policy makers that
similar legislation be passed at the national level.
•
Implement “Resource Management (RM) Contracting.”77 RM contracting rationalizes
incentives such that the contracting waste hauler receives revenue from sorting and selling
recyclable materials. This could include the cost transfer of tipping fees to the contracting
waste hauler to provide a disincentive for the disposal of waste to a landfill or incinerator.
This provides a financial incentive to the contracting waste hauler to maintain effective
collection programs and to ensure appropriate sorting and recycling.
Related Policies/Programs in Place
There are no cradle-to-cradle programs in place, but MDE does have an aggressive e-cycling
program to deal with electronic waste.
Type(s) of GHG Reductions
CH4: CH4 reductions because of reduced volumes in landfills. Diverting biodegradable wastes
from landfills will result in a decrease in CH4 gas releases from landfills.
CO2: Upstream energy use reductions. The energy and GHG intensity of manufacturing a
product is generally less when using recycled feedstocks than when using virgin feedstocks. The
energy saved is substantial and resource reduction is gained by using less packaging, for
example, and by eliminating single-use containers.
77
For more information on RM contracting, see http://www.epa.gov/wastewise/wrr/rm.htm and http://www.epa.gov/
wastewise/pubs/rr_rm.pdf
Appendix D-1 Page 83
Maryland Climate Action Plan Appendix D-1
Estimated GHG Reductions and Net Costs or Cost Savings
GHG-Reduction Potential in 2015, 2020 (MMtCO2e): 17.0, 29.2.
Net Cost per tCO2e: –$6.
Data Sources: Baseline recycling and waste generation estimates and projections were
developed from annual reports on the waste diversion activity and solid waste management in
Maryland.78 The breakdown of the waste disposed in Maryland by type was derived from U.S.level data provided in the US EPA’s 2005 Waste Characteristics Report.79 The breakdown of
baseline-recycled waste in Maryland was derived from the 2006 Maryland Recycling Act (MRA)
Annual Report80 and the US EPA’s 2005 Waste Characteristics Report. The GHG emission
reductions were modeled using US EPA’s WAste Reduction Model (WARM).81
Information used to build the cost-effectiveness estimates was compiled from several sources.
Where available, Maryland-specific data were used. However, in many cases, the costeffectiveness quantification relies on information used by CCS in previous quantifications of
similar options in other state action plans. Maryland-specific information is from the 2006 MRA
Report82 and a case study from Montgomery County, “Composting/Grasscycling Program
Summary.” 83
78
MDE. 2006. Maryland waste diversion activities report: 2006. http://www.mde.state.md.us/assets/document/
recycling/2006MWDAR.pdf, accessed on December 20, 2007. Also MDE. 2006 (Sept.). Annual report: solid waste
management in Maryland—calendar year 2005. http://www.mde.state.md.us/assets/document/
SW_Managed_in_MD_Report_CY_2005.pdf , accessed on December 20, 2007.
79
US EPA Office of Solid Waste. 2006 (Oct.). Municipal solid waste in the United States, 2005 facts and figures.
EPA530-R-06-011. http://www.epa.gov/garbage/pubs/mswchar05.pdf, accessed on December 30, 2007.
80
MDE. 2006. Maryland waste diversion activities report: 2006. http://www.mde.state.md.us/assets/document/
recycling/2006MWDAR.pdf, accessed on December 20, 2007.
81
Version 8, May 2006. Available at http://www.epa.gov/climatechange//wycd/waste/calculators/Warm_home.html.
EPA created WARM to help solid waste planners and organizations track and voluntarily report GHG emissions
reductions from several different waste management practices. WARM is available as a Web-based calculator and
as a Microsoft Excel spreadsheet. WARM calculates and totals GHG emissions of baseline and alternative waste
management practices—SR, recycling, combustion, composting, and landfilling. The model calculates emissions in
metric tons of carbon equivalent (MtCe), metric tons of carbon dioxide equivalent (MtCO2e), and energy units
(MBtu) across a wide range of material types commonly found in MSW. For explanation of methodology, see the
EPA report “Solid Waste Management and Greenhouse Gases: A Life Cycle Assessment of Emissions and Sinks,”
EPA530-R-02-006. Available at http://epa.gov/climatechange/wycd/waste/SWMGHGreport.html
82
MDE. 2006 (Sept.). Annual report: solid waste management in Maryland—calendar year 2005.
http://www.mde.state.md.us/assets/document/SW_Managed_in_MD_Report_CY_2005.pdf, accessed on December
20, 2007.
83
DEP. Composting/grasscycling program summary. Prepared by R. Kashmanian, US EPA, in 1996 for
Montgomery County, Maryland. http://www.montgomerycountymd.gov/deptmpl.asp?url=/content/dep/composting/
summary.asp, accessed on January 11, 2008.
Appendix D-1 Page 84
Maryland Climate Action Plan Appendix D-1
Quantification Methods:
GHG Reductions
The 2005 MRA recycling rate of 39.2%, along with the reported recycling tonnage of 2,933,879
was used to calculate the quantity of MRA waste disposed: 4,550,506 tons.84 Since the
information regarding the net export of waste comes from a different document than the MRA
recycling rate, the recycling rate of 39.2% will be applied to MSW managed in-state for
consistency. Based on the total diversion rate (42.6% in 2005), the total estimated waste
generated—including tons of source material reduced—is 7,747,881 tons (shown in Table I-43
above). Data were collected from the MRA annual reports covering the calendar years 2001–
2005. The average annual generation change over this time frame is 3.36%. This historic average
is used to project future baseline generation.
Organic composting is assumed to consist of food and yard waste collected curbside and
processed at a central composting facility. While this is a part of the MRA recycling figure, yard
trimmings and food waste are treated as compostables by US EPA’s WARM. Therefore, this
analysis will separate organic composting from recycling. The cost analysis for organic
composting will differ for that of recycling as well.
SR is the process of reducing the amount of refuse that enters the waste stream. For this analysis,
the only items that are “source reduced” are those for which SR is an accepted input for WARM
(see Table I-42 for accepted inputs).
The analysis of this policy option is performed on the incremental changes in waste diversion,
based on the policy goals established by the TWG. Therefore, it is assumed that the baseline SR
is captured by the projected baseline waste generation. Exports and imports are assumed to
increase at the same rate as MSW managed in-state. The baseline—or BAU—projections for
waste generation, recycling, landfilling, exports, imports, and incineration are given in Table I43.
Table I-44 shows the projected waste generation and diversion, including recycling and SR,
through 2020. These projections are formulated by applying the goals set forth by the TWG to
the baseline projections from Table I-43. Table I-45 displays the incremental changes in waste
generation and diversion as a result of the policy goals, that is, the difference between Tables I43 and I-44.
84
Waste captured by the MRA diversion rate is determined on a county level. However, the MRA excludes scrap
metal, land-clearing debris, construction and demolition debris, sewage sludge, and hospital wastes. The waste that
is captured by the MRA is assumed to align closely with the EPA definition of MSW. This calculation is performed
utilizing the following equation: Waste Disposed=MRA Recycling * (1–Recycling %)/(Recycling %)
Appendix D-1 Page 85
Maryland Climate Action Plan Appendix D-1
Table I-44. Waste management projection for Maryland, including policy goals
Item
2005
2010
2012
2015
2020
Waste stream reduction
0%
5%
15%
25%
35%
Recycling stream increase
0%
3%
10%
20%
30%
9,242,389
10,359,024
9,902,357
9,648,671
9,865,762
MSW generation per capita
(tons/person)
1.7
1.8
1.7
1.6
1.6
MSW source reduced (tons)
—
545,212
1,747,475
3,216,224
5,312,333
Total Maryland waste
generation, including net
exports (tons)
MSW diverted (tons)
2,933,879
3,702,683
4,211,077
5,073,041
6,483,977
MSW disposed, in-state landfills
only (tons)
3,455,056
3,503,273
2,876,482
2,120,698
1,256,376
Net MSW exports, to out-ofstate landfills (tons)
1,494,578
1,675,148
1,601,301
1,560,278
1,595,383
Total MSW landfill disposal
(tons)
4,949,634
5,178,421
4,477,783
3,680,975
2,851,759
WTE, 29.7% of waste disposed
(tons)
1,358,876
1,477,920
1,213,497
894,655
530,025
2015
2020
MSW = municipal solid waste; WTE = waste-to-energy.
Table I-45. Tons of incremental diversion under policy goals
Item
2005
2010
MSW recycled, including
organic composting
—
119,441
382,825
845,507
1,496,302
MSW recycled, excluding
organic composting
—
86,834
278,313
614,681
1,087,808
MSW composted
—
32,608
104,512
230,826
408,495
MSW source reduced
—
545,212
1,747,475
3,216,224
5,312,333
MSW landfilled
—
–539,362
–1,630,963
–3,064,905
–5,107,079
MSW incinerated (WTE)
—
–125,292
–499,337
–996,825
–1,701,557
Incremental diversion (tons)
—
664,653
2,130,300
4,061,731
6,808,635
31.7%
39.0%
51.1%
64.4%
77.7%
—
6.1%
18.3%
31.6%
44.9%
Total diversion (%)
Incremental diversion (%)
2012
MSW = municipal solid waste; WTE = waste-to-energy.
The waste generated in Maryland is broken down into six main categories: paper, organics,
mixed plastic, metals, glass, and other. Where further categorization information was available,
the waste generated within each of these categories is broken down further. Table I-46 shows the
composition of waste generated in Maryland.
Of the six categories displayed in the breakout in Table I-46, paper, organics, mixed plastic, and
metals may be categorized further with the information currently available. Glass is considered
to be its own category within WARM, and it is assumed that “other” is represented by the
WARM category of “mixed recyclables.” Table I-47 shows the breakdown of waste disposed in
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Maryland Climate Action Plan Appendix D-1
landfills or incinerator facilities in the BAU and policy scenarios. The baseline waste breakdown
for each waste type is calculated from the amount of the waste type disposed and the total
amount disposed in each category.85
The share of total waste generated for each category is multiplied by the total waste landfilled to
determine the baseline quantity of waste landfilled for each category. The categories for which
further categorization information is available (all except glass and other) are further broken out
by multiplying the total quantity of waste landfilled for each category by the share of disposal for
each waste type. For example, the baseline landfill disposal projection for 2020 is 7,958,838
tons. To estimate the tons of corrugated cardboard landfilled under the BAU scenario, multiply
this number by 34.2% and multiply the result of this product by 21.0% (Table I-47). The result is
the projected amount of corrugated cardboard landfilled in 2020 under the baseline scenario
(571,604 tons). The process for estimating the characterization of waste incinerated is identical
to the methodology used to estimate the characterization of waste landfilled (Table I-47).
85
MDE. 2006 (Sept.). Annual report: solid waste management in Maryland—calendar year 2005.
http://www.mde.state.md.us/assets/document/SW_Managed_in_MD_Report_CY_2005.pdf, accessed on December
20, 2007.
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Maryland Climate Action Plan Appendix D-1
Table I-46. Waste generation characteristics86
Category
Baseline
Composition
(BAU)
Paper
34.2%
Organics
25.0%
Mixed plastic
11.8%
Metals
Glass
Other (assumed mixed recyclables)
7.6%
5.5%
15.9%
BAU = business as usual.
Table I-47. Characterization of waste disposed (landfill and waste-to-energy [WTE])87
Waste Type
BAU
% of discarded paper
Corrugated cardboard
21.0%
Magazines/third-class mail
12.6%
Newspaper
3.2%
Office paper
5.9%
Phonebooks
1.3%
Textbooks
2.0%
Other (assumed mixed paper, broad)
54.0%
% of discarded organics
Food waste
70.0%
Yard trimmings
30.0%
% of discarded plastics
HDPE
24.9%
LDPE
29.0%
PET
Other (assumed mixed plastics)
9.7%
36.4%
% of discarded metals
Aluminum cans
58.2%
Steel cans
41.8%
BAU = business as usual; % = percent; HDPE = high-density polyethylene; LDPE = low-density polyethylene; PET =
polyethylene terephthalate.
The baseline composition of recycled waste is derived from the data presented in the MRA
report on diversion activities over the 2005 calendar year (Table I-48).88 The further
86
US EPA, Office of Solid Waste. 2006 (Oct.). Municipal solid waste in the United States, 2005 facts and figures.
EPA530-R-06-011. http://www.epa.gov/garbage/pubs/mswchar05.pdf, accessed on December 30, 2007.
87
Ibid.
Appendix D-1 Page 88
Maryland Climate Action Plan Appendix D-1
characterization of waste recycled in Maryland is estimated on the basis of national data from the
US EPA’s 2005 Waste Characteristics report (Table I-49).89
The share of total waste for each category is multiplied by the total waste recycled to determine
the baseline quantity of waste recycled for each category. The categories for which further
categorization information is available (all except glass and other) are further broken down by
multiplying the total quantity of recycling for each category by the share of recycling for each
waste type. For example, the baseline recycling projection for 2020 is 4,733,201 tons. To
estimate the tons of corrugated cardboard recycled under the BAU scenario, multiply this
number by 29.0% and multiply the result of this product by 52.7%. The result is the projected
amount of corrugated cardboard recycled in 2020 under the baseline scenario (762,226 tons).
88
MDE. 2006 (Sept.). Annual report: solid waste management in Maryland—calendar year 2005.
http://www.mde.state.md.us/assets/document/SW_Managed_in_MD_Report_CY_2005.pdf, accessed on December
20, 2007.
89
US EPA, Office of Solid Waste. 2006 (Oct.). Municipal solid waste in the United States, 2005 facts and figures.
EPA530-R-06-011. http://www.epa.gov/garbage/pubs/mswchar05.pdf, accessed on December 30, 2007.
Appendix D-1 Page 89
Maryland Climate Action Plan Appendix D-1
Table I-48. Recycled waste characteristics
Baseline
Recycling (BAU)
Category
Paper
29.0%
Organics
32.0%
Mixed plastic
1.0%
Metals
18.0%
Glass
2.0%
Other (assumed mixed recyclables)
18.0%
BAU = business as usual.
Table I-49. Baseline and policy recycling characterization
Waste Type
BAU
2015 Policy
2020 Policy
Corrugated cardboard
52.7%
17.9%
7.3%
Magazines/third-class
mail
7.3%
2.6%
1.1%
Newspaper
25.5%
9.1%
3.7%
Office paper
9.8%
3.5%
1.4%
Phonebooks
1.0%
0.4%
0.1%
Textbooks
1.0%
0.4%
0.1%
Mixed paper, broad
2.7%
66.1%
86.2%
Food waste
70.0%
70.0%
70.0%
Yard trimmings
30.0%
30.0%
30.0%
HDPE
40.6%
6.6%
2.2%
LDPE
10.8%
1.8%
0.6%
PET
42.2%
6.9%
2.3%
6.4%
84.7%
94.8%
Aluminum cans
31.5%
31.5%
31.5%
Steel cans
68.5%
68.5%
68.5%
% of discarded paper
% of discarded organics
% of recycled plastics
Other (assumed mixed
plastics)
% of recycled metals
BAU = business as usual; % = percent; HDPE = high-density polyethylene; LDPE = low-density polyethylene; PET =
polyethylene terephthalate.
The limitations of WARM preclude one from applying the 35% reduction in generation by 2020
(henceforth, SR) across all waste types—WARM does not accept SR as an input for mixed
paper, food waste, yard trimmings, mixed plastics, or mixed recyclables. Therefore, it is
necessary to achieve the SR goal by assuming that only materials where SR is an acceptable
WARM input are source reduced. The application of the SR goal to the remaining waste types
results in a negative amount of waste landfilled or incinerated for many categories, which is not a
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Maryland Climate Action Plan Appendix D-1
plausible result. Thus, additional “recycling” quantities are allocated to the “mixed” waste types
to ensure the total quantity of diversion instructed by the policy option goal is entered into the
model. The composition of waste that is source reduced is shown in Table I-50.
Table I-50. Composition of waste “source reduced”
Waste Type
% of Total SR
Glass
10.7%
HDPE
5.2%
LDPE
5.8%
PET
2.2%
Corrugated cardboard
24.3%
Magazines/third-class mail
8.9%
Newspaper
7.8%
Office paper
5.6%
Phonebooks
1.0%
Textbooks
1.4%
Aluminum cans
11.9%
Steel cans
15.3%
SR = source reduction; HDPE = high-density polyethylene; LDPE = low-density polyethylene; PET = polyethylene
terephthalate.
The waste generated for each waste type under the baseline scenario is estimated by multiplying
the total generation (including net exports) by the share of generation of each category, and the
share of each category’s generation by the share of each waste type within the category (except
for glass and other, which are single-type categories). The alternate method is to sum the
calculated baseline waste landfilled, incinerated, and recycled (methods for these calculations are
listed above).
The tons of source reduced for each waste type are calculated for each waste type, where SR is a
valid WARM input. The calculation uses a multiplier (see Table I-51) derived from the total
quantity of SR divided by the total waste generation. This multiplier is used to estimate the SR
for each waste type, allocating the quantity of waste source reduced proportionally among
recycling, landfilling, and incineration.
Table I-51. Source reduction multiplier
Source Reduction Multiplier
SR as a percentage of WARM SR
categories’ BAU generation
2010
2012
2015
2020
12.3%
37.0%
61.7%
86.3%
WARM = WAste Reduction Model; SR = source reduction; BAU = business as usual.
The total tons of waste diverted for each category under the policy scenario are calculated using
a diversion multiplier (see Table I-52), which is derived in the same manner as the source
reduction multiplier. This multiplier is applied to the waste remaining after SR. The diversion is
allocated proportionally to waste that would have been headed to landfills and incinerators.
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Maryland Climate Action Plan Appendix D-1
Table I-52. Diversion multiplier
Diversion Multiplier
2010
2012
2015
2020
Incremental recycling as a percentage of
all categories’ BAU generation
1.1%
3.3%
6.6%
9.9%
BAU = business as usual.
The BAU and policy scenario waste management projections for each waste type are entered into
WARM for the years 2015 and 2020. GHG reductions are assumed to increase linearly from
2010 to 2015 and from 2015 to 2020. WARM is a static model, so only one year’s inputs may be
entered per run. Tables AFW-53 and AFW-54 show the WARM inputs for the 2020 baseline
(BAU) and policy scenarios, as they would appear in the WARM workbook.
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Maryland Climate Action Plan Appendix D-1
Table I-53. 2020 baseline WARM inputs
Material
Tons Generated Tons Recycled Tons Landfilled
Tons
Combusted
Tons
Composted
Aluminum cans
733,544
282,801
352,035
98,707
N/A
Steel cans
938,710
614,980
252,836
70,893
N/A
Copper wire
N/A
Glass
660,227
99,753
437,736
122,737
N/A
HDPE
319,665
20,250
233,847
65,568
N/A
LDPE
354,103
5,387
272,351
76,365
N/A
PET
137,688
21,048
91,097
25,543
N/A
Corrugated cardboard
1,494,142
762,266
571,604
160,272
N/A
Magazines/third-class
mail
544,715
105,589
342,962
96,163
N/A
Newspaper
480,362
368,839
87,102
24,422
N/A
Office paper
347,372
141,750
160,593
45,029
N/A
Phonebooks
59,771
14,464
35,385
9,922
N/A
Textbooks
84,167
14,464
54,438
15,264
N/A
Dimensional lumber
N/A
Medium-density
fiberboard
N/A
Food scraps
2,900,563
N/A
1,392,797
390,527
1,117,239
Yard trimmings
1,243,098
N/A
596,913
167,369
478,817
1,469,838
412,129
Grass
N/A
Leaves
N/A
Branches
N/A
Mixed paper (general)
1,921,020
39,053
N/A
Mixed paper (primarily
residential)
N/A
Mixed paper (primarily
from offices)
N/A
Mixed metals
N/A
Mixed plastics
Mixed recyclables
440,891
3,192
341,848
95,851
N/A
2,518,058
897,781
1,265,455
354,822
N/A
Mixed organics
N/A
Mixed MSW
N/A
N/A
Carpet
N/A
Personal computers
N/A
Clay bricks
N/A
N/A
N/A
Aggregate
N/A
N/A
Fly ash
N/A
N/A
N/A = not applicable; HDPE = high-density polyethylene; LDPE = low-density polyethylene; PET = polyethylene
terephthalate; MSW = municipal solid waste.
Appendix D-1 Page 93
Maryland Climate Action Plan Appendix D-1
Table I-54. 2020 policy WARM inputs
Material
Baseline
Generation
Tons Source
Reduced
Tons
Recycled
Tons
Landfilled
Tons
Combusted
Tons
Composted
Aluminum cans
733,544
633,171
42,511
45,190
12,671
N/A
Steel cans
938,710
810,264
92,445
28,117
7,884
N/A
Copper wire
N/A
Glass
660,227
569,886
14,995
58,846
16,500
N/A
HDPE
319,665
275,924
3,044
31,784
8,912
N/A
LDPE
354,103
305,650
810
37,210
10,433
N/A
PET
137,688
118,847
3,164
12,243
3,433
N/A
Corrugated cardboard
1,494,142
1,289,695
114,585
70,183
19,679
N/A
Magazines/third-class
mail
544,715
470,180
15,872
45,816
12,846
N/A
Newspaper
480,362
414,633
55,445
8,032
2,252
N/A
Office paper
347,372
299,840
21,308
20,481
5,743
N/A
Phonebooks
59,771
51,592
2,174
4,689
1,315
N/A
Textbooks
84,167
72,650
2,174
7,297
2,046
N/A
Dimensional lumber
N/A
Medium-density
fiberboard
N/A
Food scraps
2,900,563
N/A
N/A
1,169,469
327,908
1,403,185
Yard trimmings
1,243,098
N/A
N/A
501,201
140,532
601,365
Grass
N/A
N/A
Leaves
N/A
N/A
Branches
N/A
N/A
N/A
1,721,034
156,192
43,795
Mixed paper, broad
1,921,020
N/A
Mixed paper, residential
N/A
N/A
Mixed paper, office
N/A
N/A
Mixed metals
N/A
N/A
Mixed plastics
440,891
N/A
166,319
214,444
60,128
N/A
2,518,058
N/A
2,223,546
230,018
64,495
N/A
Mixed organics
N/A
N/A
Mixed MSW
N/A
N/A
Mixed recyclables
N/A
Carpet
N/A
Personal computers
N/A
Clay bricks
N/A
N/A
N/A
Aggregate
N/A
N/A
N/A
Fly ash
N/A
N/A
N/A
WARM = WAste Reduction Model; N/A = not applicable; HDPE = high-density polyethylene; LDPE = low-density
polyethylene; PET = polyethylene terephthalate.
WARM runs yielded the GHG benefits reported at the beginning of this section: 17.0 MMtCO2e
reduced in 2015 and 29.2 MMtCO2e reduced in 2020. To estimate the cumulative emissions
Appendix D-1 Page 94
Maryland Climate Action Plan Appendix D-1
through 2020, the emission reductions are assumed to increase linearly from 0 in 2009 to 17.0
MMtCO2e in 2015 and from 17.0 MMtCO2e in 2015 to 29.2 MMtCO2e in 2020. The results are
shown in Table I-55.
Table I-55. Overall policy results, GHG reductions
Year
Avoided
Emissions
(MMtCO2e)
Incremental
Waste
Diversion
(tons)
—
Incremental
Avoided
Incremental
Avoided WTE
Source
Landfill
Reduction
Recycling Emplacement Emplacement
(tons)
(tons)
(tons)
(tons)
—
Avoided
Exported
Waste
(tons)
2009
—
—
–96,742
96,742
0
2010
2.93
658,559
545,212
113,347
–589,318
–69,241
–88,166
2011
5.86
1,361,404
1,127,087
234,317
–1,114,909
–246,495
–182,260
2012
8.80
2,110,768
1,747,475
363,293
–1,675,177
–435,591
–282,582
2013
11.73
2,708,292
2,207,615
500,678
–2,121,085
–587,207
–356,991
2014
14.66
3,343,612
2,696,722
646,890
–2,595,085
–748,527
–436,084
2015
17.59
4,018,592
3,216,224
802,369
–3,098,562
–920,031
–520,093
2016
20.15
4,502,594
3,590,312
912,281
–3,460,875
–1,041,719
–580,586
2017
22.71
5,014,599
3,985,921
1,028,678
–3,844,049
–1,170,550
–644,559
2018
25.27
5,555,945
4,404,073
1,151,871
–4,249,078
–1,306,867
–712,179
2019
27.83
6,128,024
4,845,839
1,282,185
–4,676,998
–1,451,027
–783,616
2020
29.27
6,732,294
5,312,333
1,419,960
–5,128,890
–1,603,404
–859,052
Total
186.80
42,134,683
33,678,812
8,455,871
–32,650,768
–9,483,916
–5,446,169
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalent; WTE = waste-to-energy.
Cost-Effectiveness
Source Reduction. A net cost for the state to implement SR programs of $1 per capita is
assumed.90 In addition to the program costs to the state, other cost elements include the avoided
costs for collecting and transporting the waste to a landfill or other disposal site. For this
analysis, it was assumed the waste would have been landfilled. Therefore, the landfill-tipping fee
(estimated at $52/ton) is avoided.91 CCS assumed the cost for collecting the waste would not be
avoided, since weekly collection of the remaining household and business waste would still be
needed. Table I-56 provides a summary of the costs estimated for the SR element of this policy.
Cumulative reductions (estimated from WARM results) are about 164 MMtCO2e through the
policy period. A cost-effectiveness of –$7 tCO2e was calculated along with a NPV of –$1,174
million.
90
Not a Maryland-specific estimate. The SR program cost is a preliminary estimate consistent with costs assumed in
similar options considered by CCS projects in Washington and Colorado.
91
MDE. 2006 (Sept.). Annual report: solid waste management in Maryland—calendar year 2005.
http://www.mde.state.md.us/assets/document/SW_Managed_in_MD_Report_CY_2005.pdf, accessed on December
20, 2007.
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Maryland Climate Action Plan Appendix D-1
Table I-56. Cost analysis results for source reduction
Year
Tons
Reduced
Avoided
Landfill Tipping Program
Fee
Costs
(2006$MM)
(2006$MM)
Net Source
Reduction
Costs
(2006$MM)
Discounted
Costs
(2006$MM)
GHG
Reductions
(MMtCO2e)
2009
—
$0.00
$0.00
$0.00
$0.00
0.00
2010
545,212
$28.35
$5.91
–$22.44
–$21.37
2.55
2011
1,127,087
$58.61
$5.95
–$52.66
–$47.76
5.10
2012
1,747,475
$90.87
$5.99
–$84.88
–$73.32
7.65
2013
2,207,615
$114.80
$6.03
–$108.77
–$89.48
10.20
2014
2,696,722
$140.23
$6.07
–$134.16
–$105.12
12.75
2015
3,216,224
$167.24
$6.11
–$161.13
–$120.24
15.30
2016
3,590,312
$186.70
$6.16
–$180.54
–$128.31
17.62
2017
3,985,921
$207.27
$6.20
–$201.07
–$136.09
19.95
2018
4,404,073
$229.01
$6.24
–$222.77
–$143.60
22.27
2019
4,845,839
$251.98
$6.28
–$245.70
–$150.84
24.59
2020
5,312,333
$276.24
$6.33
–$269.91
–$157.81
26.24
–$1,684.03
–$1,173.95
Total
164.2
CostEffectiveness
($/tCO2e)
–$7.15
2006$MM = million 2006 dollars; MMtCO2e = million metric tons of carbon dioxide equivalent; $/tCO2e = dollars per
metric ton of carbon dioxide equivalent.
Recycling. The net cost of increased recycling rates in Maryland was estimated by adding the
increased costs of collection for two-stream recycling, revenue obtained for the value of recycled
materials, and avoided landfill tipping fees. The additional cost for separate curbside collection
of recyclables is $2.50/household/month, or $30/household/year.92 Dividing this number by the
incremental recycling per capita in 202093 times the average household size of 2.61 people94
yields the maximum collection cost of $51/ton. The capital cost of additional recycling facilities
in Maryland is $255 million.95 Annualized over the 10-year policy period at 5% interest, the
capital cost is $16.5 million/year. The avoided cost for landfill tipping is $52/ton.96 CCS also
factored in the commodity value of recycled materials at $35/ton.97 Table I-57 provides the
92
Not a Maryland-specific estimate. (T. Brownell. 2007. Eureka Recycling, personal communication with S. Roe,
CCS, 17 December 17.) This value compares favorably with data provided to the AFW TWG (T. Troolin, St. Louis
County) on recycling costs incurred by Minnesota counties.
93
Population projection for 2020 from the Maryland I&F.
94
U.S. Census Bureau. State & county QuickFacts—Maryland. http://quickfacts.census.gov/qfd/states/24000.html,
accessed on January 11, 2008.
95
Not a Maryland-specific estimate. Based upon ratio of capital cost per household used in Vermont analysis.
Vermont capital cost a result of personal communication with P. Calabrese. (P. Calabrese. 2007. Cassella Waste
Management, personal communication with S. Roe, CCS, 5 June.)
96
MDE. 2006 (Sept.). Annual report: solid waste management in Maryland—calendar year 2005.
http://www.mde.state.md.us/assets/document/SW_Managed_in_MD_Report_CY_2005.pdf, accessed on December
20, 2007.
97
Not a Maryland-specific estimate. (T. Brownell. 2007. Eureka Recycling, personal communication with S. Roe,
CCS, 17 December.) This value compares with a wide range of weighted commodity value provided by T. Troolin,
Appendix D-1 Page 96
Maryland Climate Action Plan Appendix D-1
results of the cost analysis. The analysis assumes costs begin to be incurred in 2010. The
estimated cost savings result in an NPV of –$35 million. Cumulative reductions are almost 14
MMtCO2e, and the estimated cost-effectiveness is –$2.5/tCO2e.
Table I-57. Cost analysis results for recycling
Year
2009
Annual
Annual
Annual
Recycled Landfill Tip Net Policy
Collection
Capital
Material
Fees
Cost
Tons
Cost
Cost
Avoided (Recycling)
Revenue
Recycled (2006$MM) (2006$MM) (2006$MM) (2006$MM) (2006$MM)
—
Discounted
Costs
($MM)
CostGHG
Effectiveness
Reductions
(MMt)
($/t)
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
0.00
2010
86,834
$4.22
$16.51
$3.04
$4.52
$13.17
$12.55
0.22
2011
179,506
$8.72
$16.51
$6.28
$9.33
$9.62
$8.72
0.44
2012
278,313
$13.53
$16.51
$9.74
$14.47
$5.82
$5.03
0.66
2013
383,561
$18.64
$16.51
$13.42
$19.95
$1.78
$1.46
0.88
2014
495,572
$24.09
$16.51
$17.35
$25.77
–$2.52
–$1.98
1.10
2015
614,681
$29.87
$16.51
$21.51
$31.96
–$7.09
–$5.29
1.32
2016
698,883
$33.97
$16.51
$24.46
$36.34
–$10.33
–$7.34
1.51
2017
788,053
$38.30
$16.51
$27.58
$40.98
–$13.75
–$9.31
1.71
2018
882,429
$42.89
$16.51
$30.89
$45.89
–$17.38
–$11.20
1.90
2019
982,261
$47.74
$16.51
$34.38
$51.08
–$21.21
–$13.02
2.09
2020
1,087,808
$52.87
$16.51
$38.07
$56.57
–$25.26
–$14.77
2.20
–$67.15
–$35.15
14.00
Total
–$2.50
2006$MM = million 2006 dollars; $MM = million dollars; MMt = million metric tons; $/t = dollars per metric ton.
Composting. Composting is included in the total recycling volume by the MRA Report.
However, as the WARM model considers the sole form of diversion for yard trimmings and food
waste to be composting, it is assumed that the tons of these “recycled” items are composted. The
net costs for increased composting in Maryland were estimated by adding the additional costs for
collection (same calculation as recycling) with the net costs for composting operations. The net
cost for composting operations is the sum of the annualized capital and operating costs of
composting, increased collection fees, revenue generated through the sale of compost, and the
avoided tipping fees for landfilling. Information on the capital and operating costs of composting
facilities was received from Cassella Waste Management during the seventh analysis of a similar
option in Vermont.98 These data are summarized in Table I-58.
St. Louis County. The weighted commodity value range is estimated to be about $25–$70/ton, with the higher end
representing current values. CCS selected the value of $35/ton as a conservative estimate for this analysis.
98
Not a Maryland-specific estimate. (P. Calabrese. 2007. Cassella Waste Management, personal communication
with S. Roe, CCS, 5 June.)
Appendix D-1 Page 97
Maryland Climate Action Plan Appendix D-1
Table I-58. Cost information for composting facilities
Annual Volume
(tons)
<1,500
Capital Cost
(2007 $M)
Operating Cost
($/ton)
$75
$25
$200
$50
10,000–30,000
$2,000
$40
30,000–60,000+
$8,000
$30
1,500–10,000
2007$M = thousand 2007 dollars; $/ton = dollars per ton.
CCS assumed that the composting facilities to be built within the policy period would tend to be
from the largest category (achieving the most efficient operating costs) shown in Table I-58. The
composting volumes in 2015 and 2020 shown in Table I-59 suggest the need for four large
composting operations by 2015 and another four large operations by 2020. To annualize the
capital costs for these facilities, CCS assumed a 15-year operating life and a 5% interest rate.
Other cost assumptions include an assumed landfill tipping fee of $52/ton,99 an additional
source-separated organics collection fee of $2.50/household (or $51/ton, as used above in the
recycling element), a compost facility tipping fee of $24/ton,100 and a compost value of
$10/ton.101
Table I-59 presents the results of the cost analysis for composting. GHG reductions were
assumed not to begin until 2010, and the cumulative reductions estimated were 0.50 MMtCO2e.
An NPV of $91 million was estimated along with a cost-effectiveness of $183/t.
99
MDE. 2006 (Sept.). Annual report: solid waste management in Maryland—calendar year 2005.
http://www.mde.state.md.us/assets/document/SW_Managed_in_MD_Report_CY_2005.pdf, accessed on December
20, 2007.
100
DEP. Composting/grasscycling program summary. Prepared by R. Kashmanian, US EPA, in 1996 for
Montgomery County, Maryland. http://www.montgomerycountymd.gov/deptmpl.asp?url=/content/dep/composting/
summary.asp, accessed on January 11, 2008.
NOTE: Figures originally presented in 1995$, and were converted to 2006$ by using the conversion tool at
http://www.westegg.com/inflation/.
101
Ibid.
Appendix D-1 Page 98
Maryland Climate Action Plan Appendix D-1
The overall cost analysis (Table I-60) yields an NPV of –$1,117 and a cost-effectiveness of –$6,
based on the cumulative emission reductions of 183 MMtCO2e.
Table I-60. Overall policy results—cost-effectiveness
Year
Net Program
Cost Recycling
($MM)
Net Program
Cost
Composting
($MM)
Net Program
Cost Source
Reduction
($MM)
Total Net
Program Cost
($MM)
Discounted
Cost
(2006$MM)
2009
$0.00
$0.00
$0.00
$0.00
$0.00
2010
$13.17
$2.07
–$22.44
–$7.20
–$6.86
2011
$9.62
$3.45
–$52.66
–$39.60
–$35.92
2012
$5.82
$5.69
–$84.88
–$73.37
–$63.38
2013
$1.78
$8.03
–$108.77
–$98.95
–$81.41
2014
–$2.52
$9.70
–$134.16
–$126.97
–$99.49
2015
–$7.09
$12.25
–$161.13
–$155.97
–$116.39
2016
–$10.33
$14.28
–$180.54
–$176.59
–$125.50
2017
–$13.75
$16.38
–$201.07
–$198.44
–$134.31
2018
–$17.38
$17.79
–$222.77
–$222.36
–$143.33
2019
–$21.21
$20.05
–$245.70
–$246.86
–$151.55
2020
–$25.26
$22.39
–$269.91
–$272.78
Total
CostEffectiveness
($/tCO2e)
–$159.49
–$1,117.63
–$6.11
$MM = million dollars; 2006$MM = million 2006 dollars; $/tCO2e = dollars per metric ton of carbon dioxide equivalent.
Key Assumptions: For the MSW management input data to WARM, the key assumption is that
none of the goals would be achieved via existing programs in place. To the extent that those
programs will achieve, or partially achieve, the goals of this policy, the estimated GHG
reductions would be lower. No additional expansion of the current MDE recycling and
composting campaigns has been incorporated into the BAU assumptions for this analysis.
Therefore, the most important assumption relates to the assumed BAU projection for solid waste
management. This BAU forecast is based on current practices and does not factor in the effects
of further gains in recycling or composting rates during the policy period. The BAU assumptions
are needed to tie into the assumptions used to develop the GHG forecast for the waste
management sector, which does not factor in these changes in waste management practices
during the policy period (2008–2020). To the extent that these gains in recycling and composting
would occur without this policy, the benefits and costs are overstated.
The other key assumptions relate to the use of WARM in estimating life cycle GHG benefits and
the use of the stated assumptions regarding costs for increased SR, recycling, and organics
recovery (e.g., composting) programs.
Another important assumption is that under BAU, the waste directed to landfilling would include
CH4 recovery (75% collection efficiency) and utilization. The need for this assumption is partly
based on limitations of WARM (which doesn’t allow for management of landfilled waste into
controlled and uncontrolled landfills), and is also based on the overall direction of the policy
recommendations of AFW-9.
Appendix D-1 Page 100
Maryland Climate Action Plan Appendix D-1
Additionally, transportation emissions for WARM are taken as default. This analysis has not
considered the impacts of reduced exports, as a result of the goals in the Policy Design.
The cost estimates do not include savings that would be achieved through avoiding the need for
additional waste-to-energy (WTE) plants.
In some cases, Maryland-specific information was not available, and alternative data was used as
a default:
•
The breakdown of the waste disposed in Maryland by type was derived from U.S.-level data
provided in the US EPA’s 2005 Waste Characteristics Report.
•
Information used to build the cost-effectiveness estimates was compiled from several
sources. Where available, Maryland-specific data were used. However, in many cases, the
cost-effectiveness quantification relies on alternate information.
○
○
○
○
○
A net cost for the state to implement SR programs of $1 per capita is assumed.102
The additional cost to separate curbside collection of recyclables was assumed to be
$2.50/household/month, or $30/household/year.103
The capital cost of additional recycling facilities in Maryland was assumed to be $255
million.104
Commodity value of recycled materials was assumed to be $35/ton.105
Information on the capital and operating costs of composting facilities was received from
Cassella Waste Management during the analysis of a similar option in Vermont.106
Key Uncertainties
Biomass derived from landfilled waste may be diverted for use in electricity, heat, and steam
generation facilities (see AFW-6). Such a diversion would not reduce total carbon emissions,
because the carbon in the waste biomass is biogenic. However, more of this biogenic carbon is
emitted as CH4 in landfill emissions than as biomass combustion emissions. Such a diversion
would likely reduce the overall GHG emissions from landfills in Maryland.
There are some actions that are difficult to quantify and mitigate. Examples include illegal
disposal of hydrofluorocarbons and uninformed disposal of hazardous wastes, such as paints,
102
The SR program cost is a preliminary estimate consistent with costs assumed in similar options considered by
CCS projects in Washington and Colorado.
103
T. Brownell. 2007. Eureka Recycling, personal communication with S. Roe, CCS, 17 December.
104
Based upon ratio of capital cost per household used in Vermont analysis. Vermont capital cost a result of
personal communication with P. Calabrese. (P. Calabrese. 2007. Cassella Waste Management, personal
communication with S. Roe, CCS, 5 June.)
105
T. Brownell. 2007. Eureka Recycling, personal communication with S. Roe, CCS, 17 December. This value
compares with a wide range of weighted commodity value provided by T. Troolin, St. Louis County. The weighted
commodity value range is estimated to be about $25–$70/ton, with the higher end representing current values. CCS
selected the value of $35/ton as a conservative estimate for this analysis.
106
P. Calabrese. 2007. Cassella Waste Management, personal communication with S. Roe, CCS, 5 June.
Appendix D-1 Page 101
Maryland Climate Action Plan Appendix D-1
household cleaning products, lithium batteries, electronic devices, and compact fluorescent
bulbs.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-1 Page 102
Maryland Climate Action Plan Appendix D-1
Acronyms and Abbreviations
AFW
ANL
ARS
ATFS
BAU
BioPet
BMP
Btu
C
CBF
CCS
CH4
CO
CO2
CPI-U
CSA
DBED
DEP
DGS
DNR
DPW
DSM
eGRID
EIA
ES
FCMA
FIA
FRLPP
FSC
GHG
GIS
GPS
GREET
HDPE
I&F
ISF
ISU
LCFS
LDPE
LEED
MALPF
MAMWA
Agriculture, Forestry, and Waste Management
Argonne National Laboratory
Agricultural Research Service
American Tree Farm System®
business-as-usual
PioPower Evaluation Tool
best management practice
British thermal units
carbon
Chesapeake Bay Foundation
Center for Climate Strategies
methane
carbon monoxide
carbon dioxide
consumer price index for all urban consumers
Community Supported Agriculture
[Maryland] Department of Business and Economic Development
[Maryland] Department of Environmental Protection
[Maryland] Department of General Services
[Maryland] Department of Natural Resources
[Maryland] Department of Public Works
demand-side management
Emissions & Generation Resource Integrated Database
Energy Information Administration
Energy Supply
Forest Conservation Management Act
Forest Inventory and Analysis
Farm and Ranch Land Protection Program
Forest Stewardship Council
greenhouse gas
geographic information system
global positioning system
Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation
High-density polyethylene
Inventory and Forecast
Institute for Sustainable Forestry
Iowa State University
Low Carbon Fuels Standard
Low-density polyethylene
Leadership in Energy and Environmental Design
Maryland Agricultural Land Preservation Foundation
Maryland Association of Municipal Wastewater Agencies
Appendix D-1 Page 103
Maryland Climate Action Plan Appendix D-1
MARBIDCO
MCCC
MCE
MDA
MDE
MDOT
MDP
MEA
MET
MRA
MSDE
MSW
MWG
N 2O
NLEAP
NO2
NOAA
NPV
NRCS
NREL
NRI
O3
O&M
PET
POS
R&D
RCI
RGGI
RM
RPS
SDAT
SHA
SLR
SO2
SOCCR
SR
TLU
TWG
UM
USACE
US DOE
USDA
US EPA
USFS
Maryland Agriculture and Resource Based Industry Development Corporation
Maryland Commission for Climate Change
Maryland Cooperative Extension
Maryland Department of Agriculture
Maryland Department of the Environment
Maryland Department of Transportation
Maryland Department of Planning
Maryland Energy Administration
Maryland Environmental Trust
Maryland Recycling Act
Maryland State Department of Education
municipal solid waste
Mitigation Working Group
nitrous oxide
Nitrate Leaching and Economic Analysis Package
nitrogen dioxide
National Oceanic and Atmospheric Administration
net present value
Natural Resource Conservation Service
National Renewable Energy Laboratory
National Resources Inventory
ozone
operation and maintenance
Polyethylene terephthalate
Program Open Space
research and development
Residential, Commercial, and Industrial
Regional Greenhouse Gas Initiative
Resource Management [Contracting]
Renewal Portfolio Standard
[Maryland] State Department of Assessment and Taxation
[Maryland] State Highway Administration
sea level rise (NOUN only)
sulfur dioxide
State of the Carbon Cycle Report
Source reduction
Transportation and Land Use
Technical Work Group
University of Maryland
United States Army Corps of Engineers
United States Department of Energy
United States Department of Agriculture
United States Environmental Protection Agency
United States Forest Service
Appendix D-1 Page 104
Maryland Climate Action Plan Appendix D-1
USFS-SPF
USFWS
UTC
VMT
VT
WARM
WEEE
WRI
WTE
United States Forest Service–State and Private Forestry
United States Fish and Wildlife Service
urban tree canopy
vehicle miles traveled
Virginia Polytechnic Institute and State University
WAste Reduction Model
Waste Electronic and Electrical Equipment Directive
World Resources Institute
waste-to-energy
Units of Measure
$/t
$/tCO2e
$/MMBtu
$MM
gC/ha/year
gCO2e/kgN
gal/year
kW
kWh
MMBtu
MMt
MMtC
MMtCH4
MMtCO2e
MtCe
MtCO2e
MW
MWh
t/year
tC/acre
tC/year
tCO2e
t/ha/year
tCO2e/tN
dollars per metric ton
dollars per metric ton of carbon dioxide equivalent
dollars per million British thermal units
million dollars
grams of carbon per hectare per year
grams of carbon dioxide equivalent per kilogram of nitrogen
gallons per year
kilowatt
kilowatt-hour
million British thermal units
million metric tons
million metric tons of carbon
million metric tons of methane
million metric tons of carbon dioxide equivalent
metric tons of carbon equivalent
metric tons of carbon dioxide equivalent
megawatt
megawatt hours
metric tons per year
metric tons of carbon per acre
metric tons of carbon per year
metric tons of carbon dioxide equivalent
metric tons per hectare per year
metric tons of carbon dioxide equivalent per ton of nitrogen
Appendix D-1 Page 105
Maryland Climate Action Plan Appendix D-1
Table I-59. Cost analysis results for composting
Year
Annual
Avoided
Value of
Total Annual
CostAnnual
Capital
Annualized Collection Landfill Tipping Composted
Tons of
Composting Discounted
GHG
EffectiveCost O&M
Cost
Capital Cost
Cost
Fees
Material
Waste
Cost
Costs
Reductions ness
(2006$MM) (2007$MM) (2006$MM) (2006$MM)
(2006$MM)
(2006$MM) Composted (2006$MM) (2007$MM) (MMtCO2e)
($/t)
2009
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
2010
$0.98
$8.00
$0.77
$1.58
$0.93
$0.34
2011
$2.02
$0.00
$0.77
$3.28
$1.91
$0.71
2012
$3.14
$8.00
$1.54
$5.08
$2.97
2013
$4.32
$8.00
$2.31
$7.00
2014
$5.58
$0.00
$2.31
2015
$6.92
$8.00
$3.08
2016
$7.87
$8.00
$3.85
2017
$8.88
$8.00
2018
$9.94
2019
2020
$0.00
$0.00
—
32,608
$2.07
$1.97
0.01
67,408
$3.45
$3.13
0.02
$1.10
104,512
$5.69
$4.92
0.02
$4.09
$1.51
144,035
$8.03
$6.61
0.03
$9.04
$5.28
$1.95
186,098
$9.70
$7.60
0.04
$11.22
$6.55
$2.42
230,826
$12.25
$9.14
0.05
$12.76
$7.45
$2.75
262,445
$14.28
$10.15
0.05
$4.62
$14.38
$8.40
$3.10
295,930
$16.38
$11.09
0.06
$0.00
$4.62
$16.11
$9.41
$3.48
331,371
$17.79
$11.47
0.07
$11.07
$8.00
$5.40
$17.93
$10.47
$3.87
368,859
$20.05
$12.31
0.07
$12.25
$8.00
$6.17
$19.85
$11.60
$4.29
408,495
$22.39
$13.09
0.08
$91.47
0.50
Total
—
$183.81
O&M = operation and maintenance; 2006$MM = million 2006 dollars; MMtCO2e = million metric tons of carbon dioxide equivalent; $/t = dollars per metric ton.
Appendix D-1 Page 99
Maryland Climate Action Plan
Appendix D-2
Energy Supply
Maryland Climate Action Plan Appendix D-2
Energy Supply
Summary List of Priority Policy Options Recommended for Analysis
GHG Reductions
(MMtCO2e)
Policy Option
2012
2020
Total
(2008–
2020)
ES-1
Promotion of Renewable Energy (Zoning and Siting
Incentives for Centralized Facilities)
0.2
0.5
3.3
ES-2
Technology-Focused Initiatives for Electricity Supply
(Biomass Co-Firing, Energy Storage, Fuel Cells,
Landfill Gas, Clean Energy Incentives)
U
U
U
ES-3
GHG Cap-And-Trade (C&T) (With a Hypothetical
Allowance Auction Price At $7/tCO2e); Account for All
Reduction Under an Auction-Based C&T (Note:
Quantification Represents Current Regional
Greenhouse Gas Initiative [RGGI] Program
U
U
ES-4
Combined Capture, Storage, and Reuse (CCSR)
Incentives, Requirements, and Enabling Policies
(Administration, Regulation, Liability, Incentives)
ES-5
Clean Distributed Generation (DG): Standards,
Incentives and Barrier Removal for DG, Including
Combined Heat and Power (CHP), District Heating
and Cooling, Landfill Gas, Solar, and Other Forms of
Renewable Energy
16.96
Net
CostPresent
EffectiveValue
ness
2008–
($/tCO2e)
2020
(Million $)
$100
Level of
Support
$30.3
Unanimous
U
U
Unanimous
-$235
U
Unanimous
Study presented for informational purposes only.
N/A
Unanimous
ES-5a Distributed Generation (DG)
0.3
1.1
6.7
$250
$37.5
ES-5b Combined Heat and Power (CHP)
0.3
1.0
6.3
$90
$14.4
U
U
ES-6
Integrated Resource Planning (IRP) With or Without
Re-Regulation or State Energy Plan
U
ES-7
Renewable Portfolio Standard (RPS)
5.2
13.8
100.7
ES-8
Efficiency Improvements and Repowering Existing
Plants
1.2
2.0
17.9
U
U
Unanimous
$2,589
$25.7
Unanimous
$389
$21.8
Unanimous
ES-8a Biomass Component
ES-8b Repowering Component
ES-9
Carbon Tax
ES-10
Generation Performance Standards (GPS)—1,125
pounds CO2e/MWh
Sector Total After Adjusting for Overlaps*
Study presented for informational purposes only.
N/A
Study presented for informational purposes only.
N/A
4.9
6.6
62.6
$2,659
$42.4
11.9
24.6
194.2
$5,977
$30.8
Reductions From Recent Actions
4.8
12.2
88
$2,329
$26.5
Sector Total Plus Minus Actions
7.1
12.4
106.2
$3,648
$34.3
Unanimous
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalents; $/tCO2e = dollars per ton of
carbon dioxide equivalent; U = Unquantified; N/A = not applicable; ES = Energy Supply; CO2e/MWh = carbon dioxide
equivalents per megawatt-hour.
*See explanation below:
Recent actions include those GHG reductions and costs associated with the new Maryland renewable portfolio
standard (RPS). ES-7 proposes an RPS policy that results in GHG reductions in excess of the current Maryland
RPS. The net differences between the proposed ES-7 policy and the current Maryland RPS are included in the
“Sector Totals Minus recent Actions” results.
Appendix D-2 Page 2
Maryland Climate Action Plan Appendix D-2
Overlap Discussion
The amount of carbon dioxide equivalents (CO2e) emissions reduced in the policy options within
the Energy Supply (ES) sector overlaps with some of the quantified benefits and costs of other
policy options within ES and in other sectors. Those overlaps were identified and adjusted to
eliminate double counting. The ES sector totals were reduced accordingly as shown in the chart
above.
The following overview identifies specifically where those overlaps occurred and how they were
resolved:
ES-1 addresses actions that promote the use of renewable energy sources, while ES-7 identifies a
more aggressive renewable portfolio standard (RPS) for electric generators. It is likely that the
electricity generated by the new renewable energy sources that are developed pursuant to ES-1
will be purchased by the large power producers that are required to comply with the RPS
requirement of ES-7. Therefore, all greenhouse gas (GHG) reductions resulting from ES-1 are
assumed to be captured in the ES-7 GHG-reduction calculation. As a result, 100% of the
reductions and costs that correspond to ES-1 are assumed to be captured in the GHG reduction
and cost results for ES-7.
ES-3 models the additional emissions reductions and cost savings resulting from Maryland’s
participation in the Regional Greenhouse Gas Initiative (RGGI). The emissions reductions and
savings are included as “Reductions from Recent Actions,” and not included in the “Sector
Totals After Adjusting for Overlaps.”
ES-8a evaluates the GHG reduction benefits and associated costs resulting from the increased
use of biomass at existing plants for which increased use is economical. The amount of biomass
needed to support this option may be limited by the concurrent demand for biomass associated
with AFW-6 (Expanded Use of Forest and Farm Feedstocks and By-Products for Energy
Production) in the Agriculture, Forestry, and Waste Management (AFW) Technical Work Group
(TWG). Therefore, all emission reductions and costs associated with biomass to energy
production for AFW-6 have been removed from the AFW Sector Total Minus Overlap row and
are accounted for here in ES totals.
Appendix D-2 Page 3
Maryland Climate Action Plan Appendix D-2
ES-1. Promotion of Renewable Energy (Zoning and Siting Incentives for
Centralized Facilities)
Policy Description
This policy option focuses on encouraging renewable energy development by removing
regulatory and financial barriers to large-scale centralized facilities as well as onsite generation.
It is directed primarily on revising existing statutes and regulations to:
•
Streamline and encourage, modernize zoning and siting rules, and processes;
•
Ensure that any state resource planning process includes consideration of renewable energy
projects;
•
Develop a clean energy fund to provide for revolving loans (through bonds or any other
effective financing mechanisms); and
•
Make use of long-term contracts for offshore wind and renewables.
In addition, this option would include efforts to facilitate greater use of existing state authority
for performance-based contracting of renewable energy projects. The goal of these proposals is
to encourage investment in renewable energy by helping to overcome impediments to increased
use in Maryland.
For purposes of this policy option, renewable sources include the following Tier 1 sources
defined in the Maryland Renewable Portfolio Standard (RPS): solar energy, wind energy,
qualifying biomass, methane (CH4) from the anaerobic decomposition of organic materials in a
landfill or wastewater treatment plant, geothermal energy, ocean energy (including energy from
waves, tides, current, and thermal differences), fuel cells that produce energy from designated
Tier 1 renewable energy sources, and small hydroelectric power meeting specified criteria (see
Maryland Code, Sec. 7-701).
Policy Design
Goals: This option will achieve an increase in the use of Tier 1 renewable energy alternatives
through the relaxation of zoning and siting requirements and the use of long-term contracts for
Tier 1 electricity sources. Specifically, the policy targets an increase of Tier 1 renewable energy
alternatives at the rate of 0.1% of total Maryland utility production, starting in 2009 and
extending through 2020.
Timing: This policy would be intended to come into effect in 2009 and would continue
indefinitely as an enabling mechanism for other climate-related policies.
Parties Involved: Maryland Public Service Commission (PSC), Maryland Department of
Natural Resources (DNR), and Maryland Department of Environment (MDE).
Appendix D-2 Page 4
Maryland Climate Action Plan Appendix D-2
Other: Energy service companies, financial community, renewable energy developers,
environmental community, and local government.
Implementation Mechanisms
The Mitigation Working Group (MWG) recommends the revision of local zoning laws, the
Certificate of Public Convenience and Necessity (CPCN) process before the PSC, and resource
planning procedures by the PSC (as developed by appropriate state and local agencies) as
measures to implement this policy.
In addition, the MWG recommends that the state develop model zoning ordinances and
permitting code amendments to allow local governments to begin the conversation of
establishing clean energy zones to enable streamlined planning and permitting approval.
Coordination with federal, state and local economic development authorities is needed to
prioritize clean energy in certain economic development zones.
Related Policies/Programs in Place
There are several state efforts in place that are related to this option, as follows:
•
Existing CPCN exemption for wind projects less than 25 megawatts (MW);
•
RPS that requires a certain percentage of renewable electricity to be purchased by loadserving entities (LSE); and
•
Large municipal purchases of clean energy with preferential regional purchasing clauses
(e.g., Montgomery County Wind Power Purchasing Group).
Under an Indefinite Quantity Contract (IQC) process, Maryland Department of General Services
(DGS) is currently finalizing the qualifications of a group of firms who develop renewable
energy projects—specifically solar, wind and biomass—as the state plans to enter into a long
term Power Purchase Agreement (PPA) with a successful qualified firm.
Type(s) of GHG Reductions
Renewable generation can reduce fossil fuel use in power generation and correspondingly reduce
carbon dioxide (CO2) emissions.
Estimated GHG Reductions and Net Costs or Cost Savings
GHG Reductions
(MMtCO2e)
Policy Option
ES-1
Promotion of Renewable Energy
(Zoning and Siting Incentives for
Centralized Facilities)
2012
2020
Total
(2008–
2020)
0.2
0.5
3.3
Net Present
Value
2008–2020
(Million $)
CostEffectiveness
($/tCO2e)
Level of
Support
$100
$30.3
Unanimous
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalents; $/tCO2e = dollars per ton of
carbon dioxide equivalent.
Appendix D-2 Page 5
Maryland Climate Action Plan Appendix D-2
The policy evaluated includes the increase of Tier 1 renewable energy alternatives at the rate of
0.1% of total Maryland utility production each year from 2009 through 2020. These increases are
assumed to result solely from the easing of zoning and site requirements and the use of long-term
contracts for Tier 1 electricity sources. The current analysis does not quantify the effects or costs
associated with establishing a clean energy fund. The increase in Tier 1 production is assumed to
result in a comparable reduction in electricity production from coal. Greenhouse gas (GHG)
reductions range from 0.17 million metric tons of carbon dioxide equivalents (MMtCO2e) in
2012 to 0.50 MMtCO2e in 2020, with a cumulative reduction of 3.30 MMtCO2e. The cost of
these reductions is estimated to be 27.0 2005$/tCO2e (2005 dollars per metric ton of carbon
dioxide equivalent).
Data Sources:
•
Emission projections data come from either Center for Climate Strategies inventory and
forecast studies of respective states, or publicly available data from the Energy Information
Administration (EIA) Annual Energy Outlook 2007 for states lacking detailed bottom up
assessments.
•
R.S. Means. 2007. Heavy Construction Cost Data. Kingston, MA.
•
EIA. 2007. Assumptions for the Annual Energy Outlook 2007: with Projections to 2030,
supplemental table spreadsheet “sup_t2t3.xls” for Mid-Atlantic States. Available at
http://www.eia.doe.gov/oiaf/aeo/assumption/index.html
•
Maryland Commission on Climate Change (MCCC). 2008. Draft Straw Proposals of Policy
Options. Available at http://www.mdclimatechange.us/GHG_Carbon_Mitigation_WG.cfm
•
Maryland Power Plant Research Program (PPRP). 2006. The Potential for Biomass Co-firing
in Maryland. Available at
http://esm.versar.com/PPRP/bibliography/PPES_06_02/PPES_06_02.pdf
•
EIA Report entitled: “Assumptions for the Annual Energy Outlook 2006: with projections to
2025,” 2006.
Quantification Methods:
Emissions of GHG from displaced coal power were compared with GHG emissions from Tier 1
power sources used to replace coal power. The difference in emissions is the net GHG reduction
for this policy option. Total costs are calculated from levelized net present value (NPV) costs of
power production, adjusted for Maryland construction and fuel costs.
Key Assumptions:
Tier 1 renewable energy alternatives increase linearly over time at a rate of 0.1% per year for all
in-state production.
Increases in Tier 1 renewable power displace only coal power production.
Appendix D-2 Page 6
Maryland Climate Action Plan Appendix D-2
The renewable energy alternatives were assumed to be apportioned as follows: Wind, 65%;
Landfill Gas, 10%; Biomass, 10%; Solar, 10%; and Geothermal, 5%.
Key Uncertainties
Development of financial mechanism by 2009.
Additional Benefits and Costs
Reduction in electric transmission and distribution (T&D) system; reduced air pollution; and
increased space in landfills.
Feasibility Issues
System integration of intermittent power generation; adequacy of electric transmission capacity;
restructuring of zoning and siting requirements, development of financial mechanism;
restructuring of state planning procedures.
It is likely that there are technical feasibility issues regarding the degree to which biomass cofiring would lead to the risk of wear, corrosion, slagging and fouling in the combustion system.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-2 Page 7
Maryland Climate Action Plan Appendix D-2
ES-2. Technology-Focused Initiatives for Electricity Supply (Biomass Co-Firing,
Energy Storage, Fuel Cells, Landfill Gas, Clean Energy Incentives)
Policy Description
Technology and innovation play a critical role in the development of economic processes,
including energy production and use. Major progress in climate change policy requires
improvements to technologies as well as increased rates of technology adoption and use. Trends
toward smaller scale in energy production technology, combined with the impact of automation
and remote system controls, present challenges to current business models and operational
procedures. This policy is an umbrella covering several technology-related policy options that
together can contribute to GHG emission reductions in Maryland.
Policy Design
Goals: This set of policies would provide state government and other private and public parties
with resources and incentives for analysis, targeted research and development (R&D), market
development, and adoption of GHG-reducing technologies not covered by other policies. The
overall goals would be: to position Maryland as a world leader in climate-related technology
development and deployment; to achieve actual emission reductions from technology
investments; and to develop state industries with high in-state and export capability. The policy
should specifically target landfill gas combustion for power generation, use of biomass co-firing
in existing coal fired units, energy storage, and use of fuel cells.
Timing: This policy would be intended to come into effect in 2008 and 2009 and would continue
indefinitely as an enabling mechanism for other climate-related policies.
Parties Involved: Maryland government and private and public partners on a voluntary basis.
Other: Not applicable.
Implementation Mechanisms
The MWG recommends the creation of an R&D budget line item to fund a small staff in the
appropriate state agency, most likely the Maryland Energy Administration (MEA), or an agency
to be determined. This group would follow technology trends and identify critical technology
pathways, as well as opportunities for collaboration and funding from other sources.
If the effort does not overlap with current MEA policy, the state should fund the Maryland Clean
Energy Center (MCEC) program, created by the state legislature this year to provide grants and
incentives as they are identified by the state, along with other sources of public input into the
prioritization process. Two models would be the California Public Interest Energy Research
(PIER) program and the New York Energy Research and Development Agency (NYSERDA).
Utilities would be able to apply as partners for these funds.
Finally, the state’s regulated utilities and independent power producers (IPP) would be allowed
to devote a percentage of their sales revenue to substantial R&D projects on a voluntary basis as
Appendix D-2 Page 8
Maryland Climate Action Plan Appendix D-2
part of their overall energy supply (ES) portfolios. The invested capital portion of these projects
would be given advantageous cost recovery as an incentive to carry out such projects. This
policy could be relaxed when effective climate change policy comes into effect, although there
may still be merit in continuing some level of incentive for utility R&D effort even when climate
policy is in place.
Related Policies/Programs in Place
There are several state efforts in place that are related to this option, as follows:
•
Innovation, including biotechnology, agriculture, and transportation;
•
Renewable development;
•
Tax credits and federal incentives; and
•
Technology-specific policies, such as hybrid vehicle or solar pilot programs and incentives.
Type(s) of GHG Reductions
Various, from no direct reductions to direct offset of emitting fuels and processes to actual
uptake and use of GHGs, thus removing them from the atmosphere.
Estimated GHG Reductions and Net Costs or Cost Savings
By consensus, this option was not quantified.
Data Sources: Not applicable.
Quantification Methods: Not applicable.
Key Assumptions: Not applicable.
Key Uncertainties
Funding level stability.
Ability to identify productive technology pathways.
Measures of success and program oversight.
Additional Benefits and Costs
None.
Feasibility Issues
Requires broad range of skills for effective administration.
Status of Group Approval
Approved.
Appendix D-2 Page 9
Maryland Climate Action Plan Appendix D-2
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-2 Page 10
Maryland Climate Action Plan Appendix D-2
ES-3. Greenhouse Gas (GHG) Cap-And-Trade (C&T) (With a Hypothetical
Allowance Auction Price At $7/tCO2e); Account for All Reduction Under an
Auction-Based C&T (Note: Quantification Represents Current Regional
Greenhouse Gas Initiative [RGGI] Program)
Policy Description
Use of competitive forces within a cap-and-trade (C&T) regime will provide the incentives for
economic investment and efficient technological innovations necessary to achieve the desired
environmental improvements. Under a GHG emissions trading program, the regulatory agency
sets a maximum limit or cap on the total amount of emissions (in tons) of GHGs (e.g., CO2 or
carbon dioxide equivalent [CO2e] for other covered gases). The cap limits emissions from all
covered facilities in a specific sector (e.g., electric generation). The program generally requires
that the cap will be reduced over a period of years to achieve emission reduction targets.
The regulatory agency implements an emissions trading program by creating and distributing a
specific number of allowances for use by regulated entities. An allowance represents an
authorization to emit a specific amount of a pollutant (generally measured in tons) during a
particular compliance period. The total amount of allowances cannot exceed the cap, thereby
limiting total emissions.
At the end of each compliance period, each regulated entity must demonstrate it possessed
sufficient allowances to cover all emissions of the capped pollutant. If an entity releases
emissions (for a particular compliance period) in excess of the allowances it holds, it can meet
the program requirements by buying additional allowances from entities that have excess
allowances due to reduced emissions. This exchange of allowances is called a trade. In effect,
the seller is rewarded for reducing its pollution below its number of allowances, and the buyer
must pay a premium for releasing emissions in excess of its allocated level.
Through trading, participants with lower costs of compliance can choose to over-comply and sell
their additional reductions to participants for whom compliance costs are higher. In this fashion,
overall costs of compliance are lower than they would be otherwise. Programs that sell or auction
allowances, as opposed to distributing them freely, rely less on trading since the entity that overcomplies with expected emissions reductions will avoid the cost of purchasing the allowances in
the first place. The entity that requires additional allowances can purchase them at auction or
from a secondary market. The compliance obligation for the C&T program can be imposed
“upstream” (at the fuel extraction or import level) or “downstream” (at points of fuel
consumption or points of emissions).
One key policy issue in designing a C&T program relates to the treatment of energy efficiency
and renewable energy (EERE). Unless a C&T program is well designed, it will not assure the
maximum achievable GHG reductions from EERE projects.
There are several policy options available to assure that EERE development results in overall
CO2 emission reductions under a GHG emissions trading program. For example, Maryland could
adopt a key optional section of the model rule issued by the Regional Greenhouse Gas Initiative
Appendix D-2 Page 11
Maryland Climate Action Plan Appendix D-2
(RGGI), a C&T program for large electric power plants. This optional section authorizes states to
retire allowances on behalf of voluntary purchases of renewable energy. However, if EERE
programs or projects are not accounted for under the cap (through the retirement of allowances
or in setting the level of the cap) in any future GHG emissions trading program that might be
established in Maryland, then they will not affect the overall level of CO2 emissions.
Among the other important considerations in designing a C&T program are: the geographic
scope, the sources and sectors to which it would apply; the baselines for these sources and
sectors; the level and timing of the cap; and what, if any offsets, would be allowed. Other issues
to consider include: which GHG are covered; whether there is linkage to other trading programs;
banking and borrowing of allowances; and early reduction credit.
Maryland is already a partner in the RGGI. As a result, nearly all of the questions regarding the
program design and implementation have been resolved through the RGGI process. The MWG
supports the state’s continued active involvement in RGGI and encourages consideration of the
expansion of RGGI to beyond the power sector, if the federal government fails to enact a
credible national C&T program in 2009. For the purpose of this recommendation a credible
national program must require at least a 20% reduction from current emission levels for covered
sectors by 2020.
Policy Design
Goals: Caps for electric power plants should match the RGGI goals, which are 2005 emissions
starting in 2009 through 2014, followed by a 10% reduction through 2019. Other sectors could
be included if RGGI were to expand by sector. If this were to happen the resulting reductions
should contribute to the state goal, which is anticipated to be 25% below 2006 emissions by 2020
and 90% below 2006 emissions by 2050. These caps should be revisited periodically to reflect
current scientific understanding of climate change.
Timing: The state should meet the timing requirements set by RGGI for electric power plants,
specifically the adoption of Maryland’s RGGI rule in sufficient time to allow a January 1, 2009
program start. Non-RGGI sectors should be studied for potential inclusion in RGGI and pursue
complementary policies and measures in order to meet the state goal.
Parties Involved: As a member of RGGI, Maryland must coordinate with the other members on
matters involving the electric power sector. The MWG believes that a credible national C&T
program is preferable to regional efforts like RGGI and, as stated above, encourages enactment
of such a program by Congress before the end of 2009. However, in the event this does not
happen and the RGGI members seek expansion of the program to include other sectors,
Maryland should design its program to blend into the expanded regional effort. Maryland should
advocate for expansion of RGGI to as many sources as practical, including major industrial
emitters, the transportation sector, and the buildings sector (particularly new state and university
buildings). Inclusion of sectors that are easier to regulate can begin prior to more complicated
sectors.
Other: For offsets that are a part of the C&T system, care should be taken that local jurisdictions
can apply for offsets for qualifying programs they create.
Appendix D-2 Page 12
Maryland Climate Action Plan Appendix D-2
Linkages to external comparable programs should be explored. The state should strongly
advocate links to other regional or national programs of equal strength and effectiveness.
Implementation Mechanisms
There are three key implementation mechanisms: the point of regulation (entity responsible for
compliance), initial allowance distribution, and offsets.
The first key implementation mechanism concerns the designation of the entity responsible for
acquiring and surrendering allowances for emissions, or “point of regulation.” In some sectors,
such as major industrial emissions, this is simply the in-state entity operating the facility from
which the emissions are released.
RGGI has adopted a production-based (smokestack) system for the electric power sector, but is
considering modifying this approach to incorporate greater consideration of load-based
(consumer) emissions. The Western Climate Initiative (WCI) states are considering a more loadbased approach.
If RGGI were to expand to include additional sectors, there will likely be a need to vary the
“point of regulation” depending on the sector. There are many pros and cons to each approach
that should be comprehensively fleshed out in the program development phase.
The transportation sector offers a challenge because a program requiring the surrender of
allowances from the end users of motor fuels would be complex and is generally thought to be
unworkable. Therefore, transportation sector emissions should be regulated upstream, focusing
on the entity that imports or distributes the petroleum in the state.
Natural gas (NG) also should be regulated upstream, again focusing on the entity that imports the
NG into the state. Major industrial emissions should be regulated at the point of emissions,
except to the extent emissions are associated with NG and petroleum already regulated upstream.
Emissions of certain high global-warming potential gases may also be regulated upstream of
their usage (e.g., at the distribution level) if more practical.
The second key implementation mechanism is how the state initially distributes allowances.
Allowances may be distributed by auction or given free-of-charge to covered entities. The State
of Maryland has decided to auction 100% of its RGGI allowances. Maryland may want to
consider a different allowance distribution approach for new sectors if and when they are added.
The third key implementation mechanism concerns offsets. Offsets are out-of-sector emissions
reductions or carbon sequestration projects recognized by the program as qualifying for
allowance credit. Offsets must be measures that are not required by the program and, in most
cases, cannot be required by any emissions reduction program. They provide an incentive for
low-cost investments in emissions reductions as an alternative to higher-cost in-sector reductions
or allowance purchases. Offsets should be subject to stringent standards to ensure their
environmental integrity, and should be limited to guarantee that the overwhelming majority of
emission reductions come from covered sectors. Any offsets allowed under the program should
be real, verifiable, surplus, permanent, and enforceable.
Appendix D-2 Page 13
Maryland Climate Action Plan Appendix D-2
Related Policies/Programs in Place
A Carbon Tax (ES-9) is seen as a complementary policy, applying to sectors not covered by
C&T.
Type(s) of GHG Reductions
All six statutory GHGs (CO2, CH4, nitrous oxide [N2O], hydrofluorocarbons [HFCs],
perfluorocarbons [PFCs], and sulfur hexafluoride [SF6])
Estimated GHG Reductions and Net Costs or Cost Savings
Model scenarios for the C&T policy are limited to the 10 RGGI states and the power sector.
Runs were performed assuming two initial allowance allocation strategies: (1) all allowances are
freely given to regulated sources, and (2) all allowances are auctioned. Due to the nature of some
state emission caps and the state allowance budgets in 2020, allowance prices could not be
projected to the exact dollar level. Instead, multiple runs were conducted assuming prices
ranging from $1 to $7 per tons of carbon dioxide emissions (tCO2). Given that Maryland has
decided to auction all allowances, only those results are presented. Results from the free
distribution model are given in the Annex to this report.
In the auction case with a hypothetical allowance price of $7 per ton of carbon dioxide
equivalent ($7/tCO2e), each state would utilize all its mitigation potential with a marginal cost
(MC) less than $7/tCO2e before purchasing allowances from the auctioneer. As a result, the total
emission reductions achieved by the 10 states in this case are 41.82 million metric tons of carbon
dioxide (MMtCO2). Although considerable amounts of unused mitigation potentials of some
states (i.e., Maryland and Massachusetts) in the free granting case are associated with cost
savings, the total cost savings of mitigation in the auction case (2.54 billion) are even higher than
the total mitigation cost savings in the free granting case (1.53 billion). In addition, in the auction
case many states would reduce more emissions than required by the state mitigation target. The
reason is there is a penalty for each unit of CO2 emitted even if it is below the cap—this is the
price of an auctioned permit required to emit. However, the additional reductions achieved by
these states can be saved for future use.
Comparing the two auction prices of $7 and $1, the amount states choose to reduce by mitigation
options (41.82 MMtCO2 vs. 39.98 MMtCO2, respectively) and the amount to be bought from the
auctioneer (127.44 MMtCO2 vs. 129.28 MMtCO2, respectively) differ slightly. The trend is the
higher the auction price, the more the states choose to mitigate on their own and the less they buy
from the auctioneer. The big difference of these two cases is the total auction cost, primarily due
to the difference in the two auction price levels.
At an assumed allowance price of $7/tCO2e in 2020, regulated sources within Maryland can
expect to mitigate 16.96 MMtCO2e at a total cost savings of $618 million. In addition, they will
purchase 14.83 million allowances (1 allowance mitigates 1 ton of CO2) at a total cost of $104
million. The net savings is therefore $514 million. This does not include any savings that might
be realized through the expenditure or application of auction revenues ($104 million). The costeffectiveness of the auction-based C&T is computed by dividing the total net cost (mitigation
cost plus auction cost) by all the emission reductions undertaken by MD under the C&T. The
resulting cost-effectiveness of the auction-based C&T is –$30.31/tCO2e.
Appendix D-2 Page 14
Maryland Climate Action Plan Appendix D-2
At an assumed allowance price of $1 per ton of carbon dioxide equivalent ($1/tCO2e) in 2020,
regulated sources within Maryland can expect to mitigate 16.05 MMtCO2e at a total cost savings
of $621 million. In addition, they will purchase 15.74 million allowances (1 allowance mitigates
1 ton of CO2) at a total cost of $15.74 million. The net savings is therefore $605.6 million.
Compared with the expected cost savings from mitigation without C&T ($408 million), the net
C&T program savings to Maryland is $177 million in 2020. Again, this does not include any
savings that might be realized through the expenditure or application of auction revenues ($15.74
million).
The assumption is that the cost associated with the auction of allowances is to be fully passed on
to consumers. Under Maryland’s deregulated environment, some portion of the cost may in fact
be borne by the owners and shareholders of these facilities. Any portion of the allowance cost
not passed along to consumers would represent additional savings in the cost per ton column.
Finally, no assumption is made concerning indirect impacts through the broader economy of
costs or savings resulting from this policy.
Data Sources:
•
Emission projections data come from either CCS inventory and forecast studies of respective
states, or publicly available data from EIA Annual Energy Outlook 2007 for states lacking
detailed bottom up assessments.
•
Reduction potentials and cost-effectiveness data of mitigation options for the states are used
to develop the cost curves. The data sources are:
○
Connecticut Governor’s Steering Committee (GSC) on Climate Change. 2005. 2005 CT
Climate Change Action Plan. Available at
http://www.ctclimatechange.com/‌StateActionPlan.html
○
MCCC. 2008. Maryland Climate Change Action Plan. Available at
http://www.mdclimatechange.us/index.cfm
○
Maine Department of Environmental Protection (DEP). 2004. Final Maine Climate
Action Plan 2004. Available at http://www.maine.gov/dep/air/greenhouse/
○
Center for Clean Air Policy (CCAP) and New York GHG Task Force. 2003.
Recommendations to Governor Pataki for Reducing New York State Greenhouse Gas
Emissions. Available at http://www.ccap.org/pdf/042003_NYGHG_‌Recommendations.pdf
○
Rhode Island Greenhouse Gas Process (RI GHG). 2002. Rhode Island Greenhouse Gas
Action Plan. Available at http://righg.raabassociates.org/
○
Vermont Governor’s Commission on Climate Change (GCCC). 2007. Final Report and
Recommendations of the Governor’s Commission on Climate Change. Available at
http://www.anr.state.vt.us/air/Planning/htm/ClimateChange.htm
Appendix D-2 Page 15
Maryland Climate Action Plan Appendix D-2
•
There are no direct mitigation options data for Maine, New Jersey, New Hampshire, and
Delaware. MC curves for these four states are developed based on cost curves of Rhode
Island, New York, Connecticut, and Maryland, respectively.
Quantification Methods:
In this study, a non-linear programming (NLP) model of emission allowance trading is used.
This model is based on the well-established principles of the ability of unrestricted permit trading
to achieve a cost-effective allocation of resources in the presence of externalities.1 The model
requires equalization of MC of all trading participants with the equilibrium permit price. This
ensures minimization of total net compliance costs for each state and minimization of total
abatement costs for the C&T program as a whole.2
The MC curves of the states are developed based on the reduction potential and mitigation costper-saving data of individual options that contribute to the emission reductions from the power
sector. These options not only include those designed directly for the electricity supply sector
(e.g., promotion of renewable energy utilization, repowering existing plants, generation
performance standards [GPS]), but also include options in residential, commercial, and industrial
sectors (RCI) that contribute to the reduction of electricity consumption (e.g., demand-side
management [DSM], energy-efficient appliances, building codes). The emission reduction
potentials of these options are adjusted by multiplying the percentage of electricity consumption
by the total energy consumption in RCI. Options for RCI relating entirely to reduction of other
fossil fuels consumption (e.g., gas, oil) are not included in the cost curves.
Key Assumptions:
The purpose of the simulations is to illustrate the economic impacts of the RGGI C&T program
to Maryland under particular design scenarios.
All emissions considered are production based and are gross emissions (excluding sinks).
The economic modeling conducted in this study helps to analyze the potential GHG reductions
and associated cost for Maryland under several scenarios of different design configurations using
the following variables: allocation methods (auctioning vs. free granting of permits),
hypothetical allowance prices (at the range of $1 to $7 per tCO2).
A full list of assumptions adopted in the simulation model is presented in the Annex.
Key Uncertainties
Market prices are bound to fluctuate and allowance price spikes and crashes are not uncommon
in new programs as the market gains experience. RGGI has incorporated a number of design
1
See, for example, T. Tietenberg, 1985. Emissions Trading: An Exercise in Reforming Pollution Policy,
Washington, DC, Resources for the Future.
2
See, for example, B. Stevens, and A. Rose, 2002. “A dynamic analysis of the marketable permits approach to
global warming policy: A comparison of spatial and temporal flexibility,” Journal of Environmental Economics &
Management 44(1):45–69; A. Rose, T. Peterson, and Z. Zhang, 2006. “Regional Carbon Dioxide Permit Trading in
the United States: Coalition Choices for Pennsylvania,” Penn State Environmental Law Review 14(2):203–229.
Appendix D-2 Page 16
Maryland Climate Action Plan Appendix D-2
features to mitigate these tendencies, but only actual experience after allowances are offered for
sale will prove the point. Emission reductions result when the supply of allowances is less than
the unconstrained level of emissions. The RGGI cap was set several years ago and the precise
quantity to force reduced emissions may not be found until the program has operated for one
compliance period.
Additional Benefits and Costs
Additional benefits include the apparent effect that in anticipation of the program regulated
entities are encouraged to make decisions resulting in reduced emissions before the program
starts. The successful launch of a regional C&T program to limit GHG emissions will have an
effect on policy makers in non-RGGI states and in Washington, D.C.
Feasibility Issues
Feasibility issues have been exhaustively studied through the RGGI development and design
phases and have been resolved to the satisfaction of the 10 member states. Some questions
remain, especially within the context of expansion of the program to additional sectors. The
feasibility of extending C&T to stationary sources similar to power plants has been tested in the
United States (sulfur dioxide [SO2], nitrogen oxides [NOx]), Europe and elsewhere. Application
of the approach to some other sectors remains untested, and therefore, should continue to be
studied carefully before implementation.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
NOTE: This policy is a study product and presented here for informational purposes.
Appendix D-2 Page 17
Maryland Climate Action Plan Appendix D-2
ES-4. Combined Capture, Storage, and Reuse (CCSR) Incentives, Requirements,
and Enabling Policies (Administration, Regulation, Liability, Incentives)
Policy Description
Carbon capture, storage and reuse (CCSR) for integrated gasification combined cycle (IGCC) is
being tested and shows promise as a technology for coal-fired power plants to move toward coal
use with zero or very low emissions of CO2. More recently, a new technology is being tested
which can capture CO2 from conventional coal-fired plants. IGCC involves partially combusting
coal under high pressure to produce a synthetic gas, which is then turned into electricity via
combined cycle combustion. Use of technology for existing plants could save considerable cost
by retrofitting conventional plants, as well as building new IGCC power plants.
This policy is not quantified due to the uncertainty associated with cost and efficiency of these
new technologies. However, for the purpose of illustration, the following analysis is offered
using the assumptions stated. Compared with the cost of a standard pulverized coal unit, an
IGCC with CCSR ranges from 26% to 48% more costly on a levelized basis. A single 600 MW
unit would represent approximately 12% of Maryland’s current coal capacity. The plant is
assumed to come on line in 2013. Reductions in existing sources are assumed to come
exclusively from traditional coal plants. Three carbon capture efficiencies based on analyses
presented by the IPCC in their 2007 ES report were evaluated: low (81%), medium (86%) and
high (91%). Transportation and geologic storage costs are from the range of values included in
the IPCC technical report and assume a total of 250 kilometers of transportation prior to storage.
GHG reductions ranged from 3.2 to 3.6 MMtCO2e in 2020. Cumulative GHG reductions through
2020 range from 25.8 to 28.8 MMtCO2e. Depending on the carbon capture efficiency
assumption, cost-effectiveness varies between $47.8 (2005$/tCO2e) for the low efficiency
assumption, $73.5(2005$/tCO2e) for the medium efficiency assumption, and $104.2
(2005$/tCO2e) for the high efficiency assumption. The following is offered for illustration:
GHG Reductions
(MMtCO2e)
Policy Option
ES-4
Combined Capture, Storage, and
Reuse (CCSR) Incentives,
Requirements, and Enabling
Policies (Administration,
Regulation, Liability, Incentives)
2012
2020
Total
(2008–
2020)
0.0
3.4
27.2
Net
Present
Value
2008–2020
(Million $)
CostEffectiveness
($/tCO2e)
$2,001
$73.5
Level of
Support
N/A
Low efficiency
0.0
3.2
25.8
$1,230
$47.8
Medium efficiency
0.0
3.4
27.2
$2,001
$73.5
High efficiency
0.0
3.6
28.8
$3,002
$104.2
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalents; $/tCO2e = dollars per ton of
carbon dioxide equivalent; N/A = not applicable.
Appendix D-2 Page 18
Maryland Climate Action Plan Appendix D-2
Policy Design
Goals: Encourage the replacement of an existing coal-powered station or the retrofit of an
existing plant with CCSR by 2020.
Timing: As noted above.
Parties Involved: All power producers operating qualifying facilities in Maryland, IPPs, and
state regulators. Also, recognizing that these are emerging technologies, there will be a need to
harmonize the legal and regulatory framework through coordination with other states and federal
agencies.
Other: Not applicable.
Implementation Mechanisms
The MWG recommends the following key aspects to the implementation of this option in
Maryland:
•
Require development of the legal and regulatory frameworks needed for geologic storage of
CO2—new regulations should address issues of CO2 ownership in storage and liability for the
same. State environmental agencies should develop permitting processes for underground
storage, including guidance on pipelines, drilling, storage, measurement, monitoring and
verification.
•
Support comprehensive assessments of geologic reservoirs at state and federal levels to
determine storage potential and feasibility.
•
Evaluate the feasibility of CO2 transport via pipeline and “advanced sequestration” (i.e.,
mineralization, carbon nano-fibers) if Maryland determines it does not have sufficient instate storage opportunities.
•
Provide tax incentives for CCSR and seek grants and participation from the federal
government. Joint projects should be sought with Pennsylvania and West Virginia as these
states have similar facilities and coal shafts that can be used for sequestration.
Related Policies/Programs in Place.
None.
Type(s) of GHG Reductions
CO2 from coal-fired power plants.
Estimated GHG Reductions and Net Costs or Cost Savings
This policy is presented as not quantified. Analysis presented under Policy Description is for
illustration. The Data Sources, Methods and Assumptions support the illustration.
Appendix D-2 Page 19
Maryland Climate Action Plan Appendix D-2
Data Sources:
•
Emission projections data come from either CCS inventory and forecast studies of respective
states, or publicly available data from EIA Annual Energy Outlook 2007 for states lacking
detailed bottom up assessments.
•
R.S. Means. 2007. Heavy Construction Cost Data. Kingston, MA.
•
EIA. 2007. Assumptions for the Annual Energy Outlook 2007: with Projections to 2030.
Available at http://www.eia.doe.gov/oiaf/aeo/assumption/index.html
•
MCCC. 2008. Draft Straw Proposals of Policy Options. Available at
http://www.mdclimatechange.us/GHG_Carbon_Mitigation_WG.cfm
•
Maryland PPRP. 2006. The Potential for Biomass Co-firing in Maryland. Available at
http://esm.versar.com/PPRP/bibliography/PPES_06_02/PPES_06_02.pdf
•
IPCC. 2007. 2007: Energy Supply, In Climate Change 2007: Mitigation of Climate Change.
Available at http://www.ipcc.ch/ipccreports/ar4-wg3.htm
•
IPCC. 2005. IPCC Special Report: Carbon Dioxide Capture and Storage. Available at
http://www.ipcc.ch/ipccreports/srccs.htm
Quantification Methods:
Emissions of GHG from displaced coal power were compared with GHG emissions from IGCC
units used to replace existing coal power. The difference in emissions is the net GHG reduction
for this policy option. Total costs are calculated from levelized NPV costs of power production,
adjusted for Maryland construction and fuel costs. A range of costs is provided for this option,
since it is an unproven technology and uncertainty exists with respect to actual construction and
operations costs. The final GHG reduction and cost values reported are based on central
tendency input parameter values.
Key Assumptions:
A single 600-MW IGCC plant comes on line in 2013.
Increases in IGCC power displace existing coal power production.
Recommended parameter values from the IPCC report are used to estimate costs and efficiencies
for this option.
Key Uncertainties
CCSR technologies are under development and it is not known whether the efficiencies will
ultimately fall within the IPCC projections. Likewise, the cost of these technologies may
increase if currently unforeseen obstacles to commercialization are found, or costs may decrease
if technological breakthroughs occur. Finally, while 2013 is generally believed to be a reasonable
start of operations date for the first CCSR plant in Maryland, it is possible, for the reasons just
stated and others that use of CCSR might be delayed.
Appendix D-2 Page 20
Maryland Climate Action Plan Appendix D-2
It is unclear if and how the New Source Review (NSR) provisions of the Clean Air Act would
affect the promotion of plant upgrades.
Additional Benefits and Costs
Reduced air pollution; installation of more efficient technology.
Feasibility Issues
Technology is currently in the demonstration stage.
Status of Group Approval
NOTE: This policy is a study product presented for informational purposes.
Level of Group Support
Not applicable.
Barriers to Consensus
Not applicable.
Appendix D-2 Page 21
Maryland Climate Action Plan Appendix D-2
ES-5. Clean Distributed Generation (DG): Standards, Incentives and Barrier
Removal for Distributed Generation (DG), Including Combined Heat and Power
(CHP), District Heating and Cooling, Landfill Gas, Solar, and Other Forms of
Renewable Energy
Policy Description
This policy option reflects a suite of financial incentives to encourage investment in distributed
renewables and combined heat and power (CHP). Financial incentives for distributed renewables
could include:
•
Direct subsidies for purchasing/selling distributed renewable technologies given to the
buyer/seller;
•
Tax credits or exemptions for purchasing/selling distributed renewable technologies given to
the buyer/seller;
•
Tax credits or exemptions for operating distributed renewable energy facilities;
•
Feed-in tariffs, which provide direct payments to distributed renewable generators for each
kilowatt-hour (kWh) of electricity generated from a qualifying renewable facility;
•
Tax credits for each kWh generated from a qualifying renewable facility;
•
R&D funding to support development of distributed renewable technologies;
•
Net metering;
•
Financial incentives or assurance of cost recovery for regulated utilities that make reasonable
and prudent investments in utility-owned or customer-owned distributed renewable energy
resources; and
•
A clean energy grants program.
Maryland should strive toward capital buy downs and production incentives so there is full
payback over 25 to 30 years to those who install distributed renewable options.
CHP refers to any system that simultaneously or sequentially generates electric energy and
utilizes the thermal energy normally wasted. CHP is sometimes called “recycled energy” because
the same energy is used twice. The recovered thermal energy can be used for industrial process
steam, space heating, hot water, air conditioning, water cooling, product drying, or nearly any
other thermal energy need in RCI. The end result is significantly increased efficiency over
generating electric and thermal energy separately. CHP can reduce GHG emissions by increasing
the overall efficiency of fuel use and reducing transmission line loss with the co-location of heat
and power facilities. CHP also lends itself to the use of biofuels, an important Maryland
emphasis. However, there are numerous barriers to CHP, including inadequate information,
institutional barriers, high transaction costs because of small projects, high financing costs
because of lender unfamiliarity and perceived risk, “split incentives” between building owners
Appendix D-2 Page 22
Maryland Climate Action Plan Appendix D-2
and tenants, and utility-related policies, such as interconnection requirement, high standby rates,
and exit fees. The lack of standard offer or long-term contracts, payment at avoided cost levels,
and lack of recognition for emissions reduction value provided also creates obstacles. Policies to
remove these barriers can include: improved interconnection policies, improved rates and fees
policies, streamlined permitting, recognition of the emission reduction value provided by CHP
and clean distributed generation (DG), financing packages and bonding programs, power
procurement policies, and education and outreach.
Financial incentives for CHP could include: direct subsidies for purchasing/selling CHP systems
given to the buyer/seller; tax credits, or exemptions for purchasing/selling CHP systems given to
the buyer/seller; tax credits or exemptions for operating CHP systems; feed-in tariff, which is a
direct payment to CHP owners for each kWh of electricity or British thermal unit (Btu) of heat
generated from a qualifying CHP system; and tax credits for each kWh or Btu generated from a
qualifying CHP system.
Policy Design
Goals: Undertake a concerted effort to revise its regulatory policies and remove institutional
barriers in order to allow distributed renewable and CHP to compete on a level playing field with
other sources of electric and thermal energy. Set a goal for distributed renewable generation
equal to 1% of all electricity sales in the state by 2020, with a phase-in beginning in 2010. Set a
goal for CHP equal to 15% of in-state CHP technical potential at commercial and industrial
facilities by 2020, with a phase-in beginning in 2010.
Timing: As noted above.
Parties Involved: Financial incentives would be administered by a state agency and provided to
individuals, commercial enterprises, and industrial enterprises.
Other: A source of funds to cover these financial incentives would need to be determined. It
may be possible to link incentives to (or make them conditional to) the manufacture within
Maryland of associated equipment.
Implementation Mechanisms
The MWG recommends the use of the following mechanisms as necessary to achieve the goals
stated under Policy Design above:
•
Information and education,
•
Technical assistance,
•
Financial incentives,
•
Regulatory policies, and
•
Codes and standards.
Appendix D-2 Page 23
Maryland Climate Action Plan Appendix D-2
Related Policies/Programs in Place
None.
Type(s) of GHG Reductions
Reductions in emissions of CO2 from combustion sources.
Estimated GHG Reductions and Net Costs or Cost Savings
The incentives and other mechanisms proposed in this option generally benefit two classes of
technologies: DG and CHP. These have been analyzed separately and may be aggregated to
reflect the total impact of the measures themselves. The results in the Summary table are broken
out by technology because the results from each are quite different. For example, the expected
cost per ton of CO2e mitigated for DG technologies is $37.5. This compares to a cost of $14.4
per ton mitigated for the CHP technologies. Over the study period of 2008 through 2020, CHP
incentives and measures are projected to mitigate 6.3 MMtCO2e, while DG measures are
expected to mitigate 6.7 MMtCO2e.
GHG Reductions
(MMtCO2e)
Policy Option
2012
ES-5
2020
Total
(2008–
2020)
Net
Present
Value
2008–2020
(Million $)
CostEffectiveness
($/tCO2e)
Clean Distributed Generation (DG):
Standards, Incentives and Barrier
Removal for DG, Including
Combined Heat and Power (CHP),
District Heating and Cooling,
Landfill Gas, Solar, and Other
Forms of Renewable Energy
Level of
Support
Unanimous
ES-5a Distributed Generation
(DG)
0.3
1.1
6.7
$250
$37.5
ES-5b Combined Heat and
Power (CHP)
0.3
1.0
6.3
$90
$14.4
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalents; $/tCO2e = dollars per ton of
carbon dioxide equivalent.
Data Sources:
•
Emission projections data come from either CCS inventory and forecast studies of respective
states, or publicly available data from EIA Annual Energy Outlook 2007 for states lacking
detailed bottom up assessments.
•
R.S. Means. 2007. Heavy Construction Cost Data. Kingston, MA.
•
EIA. 2007. Assumptions for the Annual Energy Outlook 2007: with Projections to 2030.
Available at http://www.eia.doe.gov/oiaf/aeo/assumption/index.html
•
MCCC. 2008. Draft Straw Proposals of Policy Options. Available at
http://www.mdclimatechange.us/GHG_Carbon_Mitigation_WG.cfm
Appendix D-2 Page 24
Maryland Climate Action Plan Appendix D-2
•
Maryland PPRP. 2006. The Potential for Biomass Co-firing in Maryland. Available at
http://esm.versar.com/PPRP/bibliography/PPES_06_02/PPES_06_02.pdf
•
IPCC. 2007. 2007: Energy Supply, In Climate Change 2007: Mitigation of Climate Change.
Available at http://www.ipcc.ch/ipccreports/ar4-wg3.htm
•
ACEEE. 2008. Maryland’s Clean Energy Future: Potential for Energy Efficiency and
Demand Response to Meet Electricity Demands in Maryland. Available at
http://www.aceee.org/pubs/e082.htm
•
NREL and GRI. 2003. Gas-Fired Distributed Energy Resource Technology
Characterizations. Available at http://www.nrel.gov/analysis/pdfs/2003/2003_gasfired_der.pdf
Quantification Methods:
Emissions of GHG from displaced coal power were compared with GHG emissions from CHP
and DG sources. The difference in emissions is the net GHG reduction for this policy option.
Total costs are calculated from levelized NPV costs of power production, adjusted for Maryland
construction and fuel costs.
Key Assumptions:
The coal replacements in CHP are assumed to be 90% NG and 10% biomass. The DG
replacements are 50% wind and 25% each of landfill gas and solar/photovoltaic (PV)
technology.
For CHP, 15% of total technical potential (613 MW of 4084 MW) could be economically
achieved.
For DG, 1% of total projected 2025 in-state energy production (495 MW) could be economically
achieved.
CHP and DG use increases linearly over a 15-year period, starting in 2010.
Existing coal is displaced by these options.
Key Uncertainties
It is unclear what level incentives need to be to encourage the installation of DG. Additionally,
information about CHP in Maryland is limited, leading to uncertainty among policy makers and
the regulated community.
Additional Benefits and Costs
Reduced dependence on fossil fuels with use of biofuels; reduced air pollution.
Feasibility Issues
Design and implementation of tax credits; decreasing real or perceived risk associated with
financing.
Appendix D-2 Page 25
Maryland Climate Action Plan Appendix D-2
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-2 Page 26
Maryland Climate Action Plan Appendix D-2
ES-6. Integrated Resource Planning (IRP) With or Without Re-Regulation
or State Energy Plan
Policy Description
Integrated Resource Planning (IRP) is a regulatory process by which alternative solutions for
reliably meeting electric demand are identified and evaluated to determine a least-cost or leastrisk approach to achieving specific goals. The goal of IRP is to evaluate the costs, benefits, and
risks of feasible options for meeting or modifying electric demand on a consistent basis.
Accomplishing this goal requires an objective review of ES options (from conventional and
renewable energy sources) and energy-efficiency options (e.g., DSM) prior to approving utility
expansions of generation or transmission. Although the PSC utilized IRP from the late 1980s
through the mid-1990s, this regulatory approach was discontinued when the state restructured its
electric markets pursuant to the Electric Customer Choice and Competition Act of 1999.
IRP can be implemented in states with traditional approaches for regulating electric utilities or in
those with market-based regulation. However, policy makers must carefully design the IRP
framework to assure its effectiveness under the existing regulatory regime.
IRP provides a state resource adequacy method that evaluates many different options for meeting
future electricity demands and selects the optimal mix of resources that minimizes the cost of
electricity supply while meeting reliability needs and other objectives, such a increasing the
state’s production of renewable energy sources. An IRP framework would strive to achieve the
following:
•
Evaluate all options, from the supply and demand sides, in a fair and consistent manner;
•
Minimize risks of cost increases to all stakeholders;
•
Consider environmental impacts (including GHG emissions from in-state and out-of-state
generation sources serving Maryland customers); and
•
Create a flexible plan that allows for uncertainty and permits adjustment in response to
changed circumstances.
The use of IRP would help to better align environmental and ES policies because it would
require consideration of more options than current law and would require the consideration of a
longer time horizon in making resource decisions. IRP could be accomplished by action on the
part of the PSC to establish a process by which the state determines energy resources needed to
meet demand and issues a competitive Request for Proposal (RFP) to meet that demand. The
PSC can determine the parameters of the RFP that meet the overall goals of the state: electricity
supply and reliability, demand reductions, and environmental protection in the most costeffective manner to the consumer. Also the PSC could direct or encourage utilities to invest in
advanced metering, information exchange infrastructure and usage control technologies to enable
customers to reduce their electricity consumption and demand.
Appendix D-2 Page 27
Maryland Climate Action Plan Appendix D-2
Moreover, in the IRP process, the PSC should consider the risk of cost increases associated with
future regulation of emissions of GHG (e.g., CO2), conventional pollutants (e.g., NOx and SO2)
and hazardous pollutants (e.g., mercury) when evaluating supply-side (e.g., new power plants)
and DS (e.g., EE) resource options. In addition, the IRP plans should evaluate a broad range of
possible fuel costs and consider the risks of fuel price increases and volatility. The plans also
should consider the risk mitigation benefits of EERE. The MWG recommends that Maryland
enact regulatory or legislative changes as needed to implement an IRP process consistent with
the Policy Design and Policy Description described here.
Policy Design
Goals: To develop a comprehensive state resource adequacy plan for Maryland to meet the
reliability, environmental, and economic policies of the state. The plan should support and
attempt to balance all three goals.
Timing: The IRP process could be implemented by 2009. The PSC can conduct a hearing and
get draft resource needs to meet LSE demand in 2008 with the first IRP plan and RFP issued by
early 2009.
Parties Involved: PSC, MEA, MDE, regulated electric utilities, environmental and consumer
advocates, renewable energy industry, EE industry, financial community.
Implementation Mechanisms
This is an option that requires changes to PSC rules or new legislation.
Related Policies/Programs in Place
The PSC is currently pursuing a number of proceedings and reports examining IRP-related issues
at policy and detailed program levels. These proceedings and reports include Docket 9111 (DSM
and EE programs), Docket 9117 (utility provision of standard offer service), and the December
2007 interim report to the legislature on electricity regulation and regulatory structure.
Numerous other states have implemented IRP and can provide examples for Maryland. Delaware
is currently working on implementation of its IRP, and its plan should be considered in
developing regulatory options. In addition, the National Action Plan for Energy Efficiency
(NEEAP), coordinated by the U.S. Department of Energy (US DOE) and the Environmental
Protection Agency (EPA), has compiled information on IRP best practices (see
http://www.epa.gov/cleanenergy/pdf/napee/napee_chap3.pdf), and the Lawrence Berkeley
National Laboratory has conducted extensive research analyzing the treatment of EERE in the
IRPs of more than a dozen western states. (See http://eetd.lbl.gov/ea/ems/rplan-pubs.html.)
Type(s) of GHG Reductions
Greater reliance on EERE would reduce dependence on electricity produced by burning coal and
other fossil fuels, thereby reducing emissions of CO2 and other GHGs.
Estimated GHG Reductions and Net Costs or Cost Savings
By consensus, this option was not quantified.
Appendix D-2 Page 28
Maryland Climate Action Plan Appendix D-2
Data Sources: Not applicable.
Quantification Methods: Not applicable.
Key Assumptions: Not applicable.
Key Uncertainties
Not applicable.
Additional Benefits and Costs
Reduced dependence on fossil fuels, reduced air pollution, and enhanced electric resource
portfolio diversity.
Feasibility Issues
Feasibility issues are focused on the ability to implement the required changes to PSC rules or
pass new legislation.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-2 Page 29
Maryland Climate Action Plan Appendix D-2
ES-7. Renewable Portfolio Standard (RPS)
Policy Description
RPS is a policy requiring investor-owned electric utilities and power importers to supply a
certain percentage of retail electricity from renewable energy sources by a stipulated date.
Utilities can satisfy the RPS requirement by generating renewable energy themselves or by
purchasing renewable energy credits from a renewable energy generator. A renewable energy
credit is equal to 1 kWh of eligible and verified renewable electricity produced. Eligible
renewable sources and EE applications are defined in the current RPS.
Currently, Maryland’s RPS includes the following components:
•
Tier 1 resources (truly clean renewables) must constitute 1% of load in 2006, increasing to
20% in 2022;
•
Tier 2 resources (which are less environmentally friendly) may currently constitute 2.5% of
load, but will decrease to 0% by 2019;
•
Solar PV must constitute 0.005% of load in 2008, increasing to 2% by 2022;
•
The alternative compliance fee (ACF) is $20/MWh for Tier 1 and $15/MWh for Tier 2. Load
associated with industrial sources has a lower ACF. The solar ACF starts at $450/MWh in
2008 and decreases to $50/MWh by 2023.
•
Renewable projects in the PJM3 region or a distribution region adjacent to the PJM region are
eligible for Maryland renewable energy credits. This stretches the geographic scope from
Illinois to New York to Virginia.
•
Maryland is the only state that allows existing hydropower in its RPS. Therefore, Maryland
ratepayer dollars are going to operators of existing hydropower dams in other states.
•
This proposed policy would increase the Tier 1 requirements from 20% in 2022 to 20% in
2020.
•
The MWG recommends the enactment of an RPS with these features and standards.
Policy Design
Structure: Strengthen the existing RPS to achieve 20% renewable energy by 2020, ramping up
from a start data of 2008. No changes are made to the Tier 2 timeline or percentages. In addition:
3
A regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts
of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania,
Tennessee, Virginia, West Virginia and the District of Columbia.
Appendix D-2 Page 30
Maryland Climate Action Plan Appendix D-2
•
Reduce the size of the geographic region to the core PJM states—Maryland, Pennsylvania,
Delaware and New Jersey;
•
Raise the ACF to $50;
•
Remove existing hydropower from the list of eligible resources; and
•
Give 10% extra credit for projects that create substantial numbers of jobs in Maryland.
Timing: As noted above.
Parties Involved: All LSEs providing electricity over utility distribution lines in Maryland. The
RPS requirement applies to electricity supplied to Maryland customers.
Other: Not applicable.
Implementation Mechanisms
This is a policy requiring a legislative act by the Maryland legislature.
Related Policies/Programs in Place
The option is a strengthened version of the existing RPS.
Type(s) of GHG Reductions
CO2 from displaced coal, natural gas combined cycle (NGCC) and combustion turbine facilities;
CH4 through the use of animal waste-to-energy (WTE) and landfill-gas-to-energy (LFGE)
resources; and aerosols from displaced coal.
Estimated GHG Reductions and Net Costs or Cost Savings
GHG Reductions
(MMtCO2e)
Policy Option
ES-7
Renewable Portfolio Standard
(RPS)
2012
2020
Total
(2008–
2020)
5.2
13.8
100.7
Net
Present
Value
2008–2020
(Million $)
CostEffectiveness
($/tCO2e)
Level of
Support
$2,589
$25.7
Unanimous
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalents; $/tCO2e = dollars per ton of
carbon dioxide equivalent.
This policy evaluates the net changes in GHG emissions as a result of the implementation of a
RPS. The requirements of the standard are outlined in the Policy Description section and
represent an increase over current legislation of 20% for Tier 1 by 2022 (see Policy Description).
The Tier 1 renewable energy alternatives are assumed to be apportioned as follows: wind, 80%;
landfill gas, 2%; biomass, 10%; and geothermal, 8%. Solar and Tier 2 sources were not
implemented, as the requirements of the policy are already met by existing hydropower.
Hydropower is assumed to go to zero in 2019, as with the current RPS. Tier 1 RPS was initiated
in 2006 and Tier 2 in 2008. Cumulative GHG reductions through the study period are estimated
to be 100.7 MMtCO2e at a cost per ton mitigated of $25.7.
Appendix D-2 Page 31
Maryland Climate Action Plan Appendix D-2
Maryland has recently updated its RPS to a new standard increasing the requirements for Tier 1
renewables in its portfolio from 9.5% to 20%, which will result in significant GHG reductions
over the long term. The difference between the current Maryland RPS and the RPS proposed in
this document is the timing of meeting the 20% Tier 1 standard. The current Maryland policy
specifies the 20% goal be met by 2022, while the policy proposed in this document sets the date
as 2020. The table below provides a quick comparison of previous and current Maryland RPS
policies with the RPS policy proposed in this document.
GHG Reductions
(MMtCO2e)
Policy Option
ES-7
Net
Present
Value
2008–2020
(Million $)
CostEffectiveness
($/tCO2e)
Level of
Support
Unanimous
2012
2020
Total
(2008–
2020)
Renewable Portfolio Standard
(RPS)
5.2
13.8
100.7
$2,589
$25.7
Previous Maryland RPS
3.0
4.6
48.4
$1,513
$31.2
Current Maryland RPS
4.8
12.2
88.0
$2,329
$26.5
Difference between Current
Maryland RPS and RPS
proposed in this document
0.4
1.6
12.7
$260.17
$0.8
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalents; $/tCO2e = dollars per ton of
carbon dioxide equivalent.
Data Sources:
•
Emission projections data come from either CCS inventory and forecast studies of respective
states, or publicly available data from EIA Annual Energy Outlook 2007 for states lacking
detailed bottom up assessments.
•
R.S. Means. 2007. Heavy Construction Cost Data. Kingston, MA.
•
EIA. 2007. Assumptions for the Annual Energy Outlook 2007: with Projections to 2030.
Available at http://www.eia.doe.gov/oiaf/aeo/assumption/index.html
•
MCCC. 2008. Draft Straw Proposals of Policy Options. Available at
http://www.mdclimatechange.us/GHG_Carbon_Mitigation_WG.cfm
•
Maryland PPRP. 2006. The Potential for Biomass Co-firing in Maryland. Available at
http://esm.versar.com/PPRP/bibliography/PPES_06_02/PPES_06_02.pdf
•
Maryland General Assembly (SB 209). 2008. RPS Percentage requirements.
Quantification Methods:
Emissions of GHG from coal were compared with GHG emissions from Tier 1 renewables used
to replace coal power production. The difference in GHG emissions from coal to renewables is
the net GHG reduction for this policy option. Total costs are calculated from levelized NPV costs
of power production, adjusted for Maryland construction and fuel costs.
Appendix D-2 Page 32
Maryland Climate Action Plan Appendix D-2
Key Assumptions:
Coal is the only power source displaced by Tier 1 renewable energy. The Tier 1 renewable
energy alternatives are assumed to be apportioned as follows: wind, 80%; landfill gas, 2%;
biomass, 10%; and geothermal, 8%. Solar and Tier 2 sources were not implemented, as the
requirements of the policy are already met by existing hydropower. Hydropower is assumed to
go to zero in 2019, as with the current RPS. Tier 1 RPS was initiated in 2006 and Tier 2 in 2008.
Key Uncertainties
Requirements for 10% extra credit, timing for legislation. The current estimates do not include
provisions of subsection (a)(2) from section 7-703 of the RPS standard. Those exclusions will
alter the total GHG reductions and associated costs.
Additional Benefits and Costs
Reduced air pollution; reduced dependence on fossil fuels.
Feasibility Issues
System integration of intermittent power generation; adequacy of electric transmission capacity.
It is likely that there are technical feasibility issues regarding the degree to which biomass cofiring would lead to the risk of wear, corrosion, slagging and fouling in the combustion system.
Status of Group Approval
Approved. NOTE: One portion (8b) of this policy is a study product and is presented here for
informational purposes.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-2 Page 33
Maryland Climate Action Plan Appendix D-2
ES-8. Efficiency Improvements and Repowering Existing Plants
Policy Description
This policy would promote the identification and pursuit of cost-effective emissions reductions
from existing generating units through improving their operating efficiency, adding biomass, or
other fuel changes. This policy would complement GPS (which applies to new plants and new
units) by addressing existing units. Given that CO2 emissions have not previously been the focus
of state regulation, and given that existing units have not been the focus of resource planning, it
is expected that there are as-yet unidentified opportunities to reduce emissions from existing
facilities that will be cost-effective, particularly once CO2 limits are in place. This policy would,
in time, result in the identification of a portfolio of technological options for reducing GHG
emissions and allow state utilities to share the opportunities they have identified.
Key aspects of the options include
•
Requiring utilities to evaluate their existing generating units for opportunities to improve
their emissions profile through efficiency improvements, the addition of biomass or other
fuel changes. This evaluation would be part of an overall plan identifying cost-effective
options for reducing system CO2 emissions on a short-term and long-term basis.
•
Requiring utilities to pursue cost-effective options for reducing their emissions profile
through measures identified above.
•
Creating financial incentives that reward such emissions reductions. The terms “costeffective” would be defined by some objective measure, such as cost per ton of carbon
equivalent.
The MWG recommends the enactment of planning and emission reduction requirements that are
consistent with this Policy Description and Policy Design.
Policy Design
Goals: The repowering option should seek to co-fire biomass at existing coal stations at a
maximum statewide average rate of 8% of total energy input by 2015. The policy would initiate
in 2010 and reach the 8% goal in 2014.
Note: An additional measure was studied in the development of this policy, but was not
recommended for adoption by the MWG. The information is retained here as a study product of
the MWG. This additional measure is identified as policy “8b” and would set a goal of
repowering 30% of eligible coal stations with NG by 2020.
Timing: As noted above.
Parties Involved: The option applies to Maryland electric LSEs.
Other: Not applicable.
Appendix D-2 Page 34
Maryland Climate Action Plan Appendix D-2
Implementation Mechanisms
The planning and emission reduction requirements would be implemented through processes
already implemented by the Public Utilities Commission (PUC).
Related Policies/Programs in Place
The option is an important counterpart to the GPS, which only covers new financial
commitments. It complements a C&T policy by ensuring that utilities pursue cost-effective
potential emission reductions, rather than the more obvious option of purchasing emission
allowances (with the projected price of allowances being a key part of the definition of “costeffective” reductions).
Type(s) of GHG Reductions
All three major GHG emissions (i.e., CO2, CH4, N2O).
Estimated GHG Reductions and Net Costs or Cost Savings
GHG Reductions
(MMtCO2e)
Policy Option
ES-8
Net
Present
Value
2008–2020
(Million $)
CostEffectiveness
($/tCO2e)
Level of
Support
2012
2020
Total
(2008–
2020)
Efficiency Improvements and
Repowering Existing Plants;
ES-8a, Biomass Component
1.2
2.0
17.9
$389
$21.8
Unanimous
ES-8b Repowering Component
0.5
2.9
15.5
$980
$63.2
N/A
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalents; $/tCO2e = dollars per ton of
carbon dioxide equivalent; N/A = not applicable.
This policy option evaluates the effect of co-firing biomass in existing coal plants. The biomass
portion of the policy assumes that biomass provides 8% of power at existing coal-fired plants.
The transition to biomass starts in 2010 and is fully implemented in 2014. The cost associated
with biomass is assumed to be $3.40 per million Btu, based on values in a 2006 biomass
feasibility report prepared for the State of Maryland, entitled “The Potential for Biomass Cofiring in Maryland” (DNR 12-2242006-107, PPES-06-02).
Total GHG reductions through the study period yield 17.8 MMtCO2e. Biomass is expected to
cost about 21.8 $/tCO2e.
The repowering portion of this policy (8b) assumes that by 2020 several coal-powered stations in
Maryland are repowered with NGCC technology. In practice, this will be a lumpy process, with
steps in GHG reductions achieved as new repowered units come online. For simplicity, the
option was modeled as NGCC performance, replacing existing coal performance at a rate of 3%
per year, starting in 2011. The conversion of coal plants to NG may reduce the effect of the
biomass option. This reduction has not been quantified.
Appendix D-2 Page 35
Maryland Climate Action Plan Appendix D-2
Data Sources:
•
Emission projections data come from either CCS inventory and forecast studies of respective
states, or publicly available data from EIA Annual Energy Outlook 2007 for states lacking
detailed bottom up assessments.
•
R.S. Means. 2007. Heavy Construction Cost Data. Kingston, MA.
•
EIA. 2007. Assumptions for the Annual Energy Outlook 2007: with Projections to 2030.
Available at http://www.eia.doe.gov/oiaf/aeo/assumption/index.html
•
MCCC. 2008. Draft Straw Proposals of Policy Options. Available at
http://www.mdclimatechange.us/GHG_Carbon_Mitigation_WG.cfm
•
Maryland PPRP. 2006. The Potential for Biomass Co-firing in Maryland. Available at
http://esm.versar.com/PPRP/bibliography/PPES_06_02/PPES_06_02.pdf
Quantification Methods:
Emissions of GHG from coal were compared with emissions from co-fired biomass with the
same heating potential. Additionally, coal GHG emissions were compared with GHG emissions
from equivalent NGCC power units for the repower portion of this policy option. The difference
in emissions from coal to biomass and NGCC is the net GHG reduction for this policy option.
Total costs are calculated from levelized NPV costs of power production, adjusted for Maryland
construction and fuel costs.
Key Assumptions:
Biomass co-firing initiates in 2010 and increases linearly over a 5-year period to a maximum of
8% of energy input at converted plants. This uniform 8% rate is an average. It is recognized that
individual coal units will have varying capabilities to cost-effectively accept biomass.
Estimated ‘Warrior Run’ conversion costs are representative of future conversion costs.
Increased demand for biomass does not alter fuel costs.
Conversion from coal to NGCC occurs at a rate of 3% per year, starting in 2010.
Existing coal power is displaced by biomass and NGCC.
The cost associated with biomass is assumed to be $3.40 per million Btu, based on values in a
2006 biomass feasibility report prepared for the State of Maryland, entitled “The Potential for
Biomass Co-firing in Maryland” (DNR 12-2242006-107, PPES-06-02).
Key Uncertainties
This analysis used a conservative set of assumptions regarding the availability of biomass
feedstock within short distances of candidate power plants. The use of this resource for this
purpose may compete with other recommendations under considerations by the MWG. These
assumptions must be reevaluated if competing uses for this resource are also recommended.
Appendix D-2 Page 36
Maryland Climate Action Plan Appendix D-2
It is unclear how the NSR provisions of the Clean Air Act would affect the promotion of plant
upgrades.
Additional Benefits and Costs
Reduced air pollution; reduced dependence on fossil fuels.
Feasibility Issues
It is likely there are technical feasibility issues regarding the degree to which biomass co-firing
would lead to the risk of wear, corrosion, slagging, and fouling in the combustion system.
Status of Group Approval
Biomass component (8a) approved. NOTE: The remainder of this policy is a study product and
presented here for informational purposes.
Level of Group Support
Biomass component - unanimous.
Barriers to Consensus
None.
Appendix D-2 Page 37
Maryland Climate Action Plan Appendix D-2
ES-9. Carbon Tax
Policy Description
A carbon tax would be a tax on fossil fuels according to the amount of CO2 emitted by their
combustion. Carbon tax and C&T systems work toward similar ends in opposite ways. With
C&T, the government sets a limit on the tons of pollution that will be released and the market
establishes the price. With a carbon tax, the government sets the price and the market drives the
level of emissions. The carbon tax and C&T programs are seen as complementary measures. One
of the benefits of the tax is it can be more easily applied across all sectors. However, the ES
Technical Work Group (TWG) recommends that the C&T program should be the primary
market mechanism, with the carbon tax used as a supplementary measure in those sectors where
transaction costs or other concerns make the use of C&T less desirable. Like most market-based
approaches, it should be applied as broadly as possible, and would be best if applied nationwide.
On the negative side, it is politically difficult to impose a new tax, particularly since other taxes
are expected to be rise to cover the Maryland budget deficit. Many economists argue the carbon
tax is the most efficient way to ensure that product prices reflect the cost of GHG emissions
generated in their manufacture and use. Administrative costs are low for the carbon tax and the
impact on prices is predictable. The tax could be imposed upstream based on, for example, the
carbon content of fuels (electricity generators or distributors) at the point of combustion and
emission or at the point of sale (gasoline, NG). Although taxed entities would pass some or all of
the cost on to consumers, there would be competitive pressure to find cost-effective ways to
lower (or offset) emissions. Consumers who see the implicit cost of GHG emissions in products
and services could adjust their behavior to lower emissions and reduce cost. Revenues collected
could offset other taxes, be applied to incentivize low emission alternatives, be directed for relief
to parties that are disproportionately impacted by the tax, or rebates could be created for CO2
controls or offsets that prevent atmospheric emissions.
It is assumed that the cost of the tax would be passed down ultimately to the consumer, such as
residential and commercial utility ratepayers for electricity. In order to achieve the stated goal,
the amount of the tax must be high enough to trigger financial and behavioral decisions toward
conservation or a shift to lower emitting fuels.
The MWG does not recommend the enactment of a carbon tax.
Policy Design
Goals: Make the cost of inefficient or higher CO2 emitting activities more expensive than
alternatives, thereby creating a financial incentive to change behavior away from activities that
result in CO2 emissions. The tax should include safety valves to reduce low-income impacts and
minimize detrimental economic consequences. One option is to make the tax “revenue neutral,”
(an equal amount of other state taxes would be reduced so the “net” to the state is zero). Another
option might be that the revenue from the tax could be used to develop or promote alternatives
that reduce CO2 emissions. The amount of the tax should be high enough to contribute to the
reduction targets specified in the C&T option (see ES-3).
Appendix D-2 Page 38
Maryland Climate Action Plan Appendix D-2
Timing: Pegged to the timing of the C&T option (see ES-3).
Parties Involved: Major payers would be refiners or distributors of transportation and heating
fuels in Maryland and commercial and industrial sources consuming energy for production or
other commercial use.
Other: The TWG recognizes more in-depth analysis of the carbon tax and its interactions with
the C&T and other policies will be required than is possible within the current process.
Therefore, it is recommended that a Technical Advisory Committee be convened to study the
proposal in greater depth, receive additional public comments, and offer recommendations on the
specifics of how a supplemental carbon tax should be enacted and applied.
Implementation Mechanisms
This option requires legislation and detailed tax collection system. Specifics of the
implementation should be developed through an in-depth investigation as recommended under
“Other” above.
Related Policies/Programs in Place
The RGGI C&T program and ES-3 are seen as complementary policies.
Type(s) of GHG Reductions
Reductions in emissions of CO2 from combustion sources.
Estimated GHG Reductions and Net Costs or Cost Savings
As explained in more detail in the Annex, Maryland can meet its state goal by using only
negative cost (cost saving) policies and measures. As a result, the incentives for additional GHG
mitigation investments provided by a carbon tax are not needed to achieve the goal in principle,
because it “pays” emitters to undertake reductions on their own. However, if there is concern
about impediments to such voluntary action or if Maryland desired to achieve additional
reductions over and above those required by the cap, and possibly through other policies
capitalizing on the existence of zero or negative mitigation cost options, a carbon tax could be
created offering the following costs and benefits.
Modeling indicates that for each dollar per ton of emissions from non-power sector sources in
Maryland, approximately 75,000 tons of CO2e will be mitigated. Assuming the state goal of 25%
below 2006 emissions is achieved in 2020, this leaves 48.3 MMtCO2e being emitted from sectors
other than the power sector. The implementation of the remaining (unused) negative cost
mitigation options beyond the accomplishment of the state goal would reduce the emissions from
the non-power sector further from 48.3 to 36.8 MMtCO2e. Therefore, a $1 per ton carbon tax
would “cost” $35.5 million (the emitters need to pay $1 tax per every ton of the remaining 36.8
MMtCO2e emissions) and yield 0.1 million tons of reduced emissions, for a cost per ton of $491.
This does not take into consideration how the State of Maryland might apply the tax revenues to
offset some of this cost.
Appendix D-2 Page 39
Maryland Climate Action Plan Appendix D-2
Data Sources:
Emission projections data come from Center for Climate Strategies’ inventory and forecast
analysis of Maryland.
Reduction potentials and cost-effectiveness data of mitigation options of Maryland non-power
sectors are used to develop the cost curves. This data is provided by other TWGs.
Quantification Methods:
The mitigation options list of the non-C&T sectors in Maryland are used in order to evaluate
•
Whether the contributions of mitigation options from all the non-C&T sectors would meet
the state goal;
•
If not, what would be the carbon tax level to non-C&T sectors to achieve the goal; and
•
If the mitigation options meet the state goal, how many incremental tons of CO2 will be
abated for each incremental dollar of carbon tax.
Some RCI sector options that completely or partially contribute to electricity consumption
reduction are included in the options list to develop the Maryland power sector mitigation cost
curve used in ES-3. To avoid double counting, the emissions mitigation potential related to
electricity consumption reduction of those options are not included in the analysis here.
Key Uncertainties
We assume all the negative cost mitigations beyond the state goal would happen without any
incentives from a carbon tax. Therefore, for the $1 carbon tax case, the non-power sectors would
choose to pay the tax rather than mitigate those emissions that would have a unit reduction cost
higher than $1 per ton. However, in practice, it is unclear how much the incentive (the tax rate)
should be to encourage all the investments in negative cost opportunities.
Additional Benefits and Costs
The availability of $36.8 million in tax revenues per dollar of tax could provide Maryland with a
range of additional benefits as a direct result of this policy. Investments in R&D that produce
technological breakthroughs might not only produce greater and more cost-effective emissions
reductions, but also pay dividends in the form of new jobs and economic growth.
Feasibility Issues
Any new tax, even if it is designed to be revenue neutral (revenues offset existing taxes),
presents a substantial political challenge, especially in a tight economy. Also, at this point no
U.S. state has enacted a carbon tax, so the effort necessary to convince affected groups would be
greater than would be the case if there were favorable experience from another U.S. jurisdiction.
Administration of the tax would not present particular challenges unless its design included
classes of entities that have not previously been subject to similar taxes.
Appendix D-2 Page 40
Maryland Climate Action Plan Appendix D-2
Status of Group Approval
This policy is a study product presented here for informational purposes.
Level of Group Support
Not applicable.
Barriers to Consensus
Not applicable.
Appendix D-2 Page 41
Maryland Climate Action Plan Appendix D-2
ES-10. Generation Performance Standards (GPS)—1,125 Pounds Carbon Dioxide
Equivalents per Megawatt-hour (CO2e/MWh)
Policy Description
A GPS is a mandate that requires LSEs to acquire electricity on an average portfolio basis, with
the portfolio meeting a per-unit emission rate below a specified standard. A GPS portfolio will
incentivize investment in new low-carbon generation with overall lower GHG emissions in
Maryland. A portfolio approach is a mechanism to control cost to the consumer as well,
balancing the ES and environmental goals of the state.
The GPS will be modeled after the existing RPS program, with the exception the GPS may rely
on a more diverse mix of replacements for coal power than the RPS. This will help encourage
renewable energy sources and will also fit well with any state resource planning process for new
generation.
The MWG recommends the enactment of a GPS with a standard of 1125 pounds of GHGs per
megawatt-hour (MWh) by 2013.
Policy Design
Goals: The general goal of the policy is to encourage the purchase of energy and capacity from
low-carbon or renewable technologies. In particular, the GPS portfolio would require that 100%
of their energy portfolio emit an average of no more than a specified number of pounds of CO2
per MWh. In response to suggestions made by the MWG, the analysis has been run using three
potential GPS standards; 1050, 1100, and 1125 pounds per MWh. The GPS would be designed to
harmonize with policies that seek to reduce GHG emissions by promoting greater use of
renewable energy sources.
Timing: The program could be implemented by 2013, so as to provide time for new sources to
be built.
Parties Involved: The program would apply to any LSE selling energy to retail consumers in the
State of Maryland, competitive and those on Standard Offer Service. PSC would need to manage
similar to the RPS obligation.
Other: Not applicable.
Implementation Mechanisms
Implementation would be through the PUC, which would develop a GPS program similar in
design to the current RPS program to ensure compliance with the GPS.
Related Policies/Programs in Place
Under ES-7 the current RPS in place in Maryland would be strengthened. The GPS, as proposed
here, would be applied separately from the RPS. In other words, the separate requirements of the
two standards would not be additive. In addition, ES-8 (Energy Efficiency Improvements and
Appendix D-2 Page 42
Maryland Climate Action Plan Appendix D-2
Repowering Coal Generation Plants) would complement this policy by reducing emissions from
existing plants.
Type(s) of GHG Reductions
Reduces CO2 emissions from fossil-fuel electric generators, and promotes low-carbon
alternatives to fossil fuel generators.
Estimated GHG Reductions and Net Costs or Cost Savings
GHG Reductions
(MMtCO2e)
Policy Option
ES-10
Generation Performance
Standards (GPS)—1,125 Pounds
of Carbon Dioxide Equivalents per
Megawatt-Hour (CO2e/MWh)
2012
2020
Total
(2008–
2020)
4.9
6.6
62.6
Net
Present
Value
2008–2020
(Million $)
CostEffectiveness
($/tCO2e)
$2,659
$42.4
Level of
Support
Unanimous
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalents; $/tCO2e = dollars per ton of
carbon dioxide equivalent.
This policy evaluates the net changes in GHG emissions as a result of the implementation of a
GPS. The replacement energy alternatives are assumed to be apportioned similarly to the RPS,
with greater reliance on lower-carbon sources than the RPS: NG, 40%; wind, 40%; landfill gas,
2%; biomass, 10%; and geothermal, 8%.
The 1,050 standard yielded 7.1 and 9.6 MMtCO2e reductions in 2012 and 2020, respectively, and
90.9 MMtCO2e cumulatively between 2008 and 2020.
The 1,100 standard yielded 5.7 and 7.6 MMtCO2e in 2012 and 2020, respectively, and 72.0
MMtCO2e cumulatively between 2008 and 2020.
The cost-effectiveness of each of these three standards is $42.4/tCO2e.
Data Sources:
•
Emission projections data come from either CCS inventory and forecast studies of respective
states, or publicly available data from EIA Annual Energy Outlook 2007 for states lacking
detailed “bottom up” assessments.
•
R.S. Means. 2007. Heavy Construction Cost Data. Kingston, MA.
•
EIA. 2007. Assumptions for the Annual Energy Outlook 2007: with Projections to 2030.
Available at http://www.eia.doe.gov/oiaf/aeo/assumption/index.html
•
MCCC. 2008. Draft Straw Proposals of Policy Options. Available at
http://www.mdclimatechange.us/GHG_Carbon_Mitigation_WG.cfm
•
Maryland PPRP. 2006. The Potential for Biomass Co-firing in Maryland. Available at
http://esm.versar.com/PPRP/bibliography/PPES_06_02/PPES_06_02.pdf
Appendix D-2 Page 43
Maryland Climate Action Plan Appendix D-2
Quantification Methods:
An analysis of the current electricity mix in Maryland indicates that the average energy intensity
is about 1,290 pounds CO2 per MWh. This policy quantifies the effect on GHG of implementing
a GPS that stipulates the average emission rate for the entire energy portfolio (in-state and
imports) be less than 1,050, 1,100 and 1,125 pounds of CO2 per MWh. GHG emissions and costs
from displaced coal were compared with emissions and costs from the mix of replacement
power. The differences between these GHG emissions and costs are the net GHG reduction and
net cost.
Key Assumptions:
This analysis does not consider the emissions associated with the marginal MWh from any one
source type or location (i.e., electricity via a dedicated power line from West Virginia).
Replacements of existing coal were assumed to be the fixed percentages discussed above. The
GPS would be implemented at a rate of 20% per year, starting in 2009, with full implementation
occurring in 2013. The GPS, as proposed here, would be applied separately from the RPS. In
other words, the separate requirements of the two standards would not be additive.
Key Uncertainties
None.
Additional Benefits and Costs
Reduced air pollution; increased renewable power produced in Maryland.
Feasibility Issues
None.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-2 Page 44
Maryland Climate Action Plan Appendix D-2
Annex
Analysis of C&T Among Power Sectors
of RGGI States and Carbon Tax in Maryland
Non-C&T Sectors in 2020
A. Free Allocation of Allowances
The NLP Model used in the study is capable of analyzing various environmental policy
instruments, including C&T, carbon taxes, and regulations, under a variety of conditions. For
example, for C&T the model can analyze free granting vs. auctioning, upper limits on permit
prices, offsets, banking, etc. In some cases, because of the extensive availability of low-cost
mitigation options, the supply of allowances in C&T would exceed the demand for allowances at
all positive allowance prices. Hence, trading would not be possible (a feasible solution for a
positive allowance price that equalizes supply and demand of allowances in the market cannot be
obtained from the model). Instead, two scenarios were analyzed with different assumptions for
allowance price levels to resolve this problem. Then the supply and demand of allowances from
each state, and the costs or savings of individual states before and after entering the C&T system
were evaluated.
Example scenario: MC = Allowance Price = $7/tCO2
•
According to the initial RGGI allowance allocation, Maryland, Maine, New Hampshire,
Vermont, and Rhode Island do not have any GHG mitigation targets, since the allocated
allowances to these states (see Column 3 of Table 1) exceed their 2020 BAU emission levels
(see Column 2 of Table 1). For the remaining five states, which have binding mitigation
goals, the reduction target (%) is computed in Column 4 of Table 1. Next, the reduction
potential level was calculated in percentage terms at MC = $7 (see Column 3 of Table 2). If
this percentage is lower than the one shown in Column 4 in Table 1, the state would be a
buyer of allowances. As shown in Column 4 of Table 2, Connecticut and New Jersey would
be the buyers. In total, the allowances demand from these two states is 5.36 MMtCO2. The
allowance-selling states would be Delaware, Maryland, Maine, New Hampshire, New York,
Vermont, Massachusetts, and Rhode Island.
•
After achieving its own reduction target (41.94% below 2020 BAU level), the total
allowances available for Delaware to sell with mitigation cost less than $7 are 0.24 MMtCO2.
Assuming the remaining RGGI allowance demand (5.36 – 0.24 = 5.12 MMtCO2) would be
provided by the other 7 allowance selling states evenly, i.e., each of the selling states would
sell 5.12/7 = 0.73 MMtCO2 in the market.
•
New York and Massachusetts do not have over-allocated allowances to sell. Therefore, they
will provide all of the 0.73 MMtCO2 allowances by autarkic (their own) mitigation actions
with costs less than $7/tCO2 (after achieving their own state mitigation targets, these two
states still have the capability to reduce emissions with cost less than $7/tCO2). Maryland,
Maine, New Hampshire, Rhode Island, and Vermont will decide how much of the allowances
they sell would come from autarkic mitigation actions and how much would come from the
Appendix D-2 Page 45
Maryland Climate Action Plan Appendix D-2
excess allowances they possess. To gain the largest profit, these five states would choose to
utilize all the cost-saving mitigation potentials inside the state first, since selling these
allowances would bring them not only the cost-savings associated with the implementation of
the mitigation options, but also the revenues from selling the allowances at the price of
$7/tCO2. After exhausting cost-saving mitigation potentials, they will next choose to sell the
excess allowances they hold, or undertake mitigation options with zero cost. They can sell
these allowances without incurring any mitigation cost. After using up the excess allowances
and zero cost options, these five states would be willing to sell those allowances they can
achieve through autarkic mitigation actions with costs less than $7/tCO2.
The simulation results of the scenario with allowance price equal to $7/tCO2 are shown in Table
3. Simulation results of the scenario that assumes allowance price to be $1/tCO2 are presented in
Table 4. In this case, Delaware would be the third buyer besides Connecticut and New Jersey,
since the state autarkic mitigation potentials with MC less than $1 fall short of meeting the state
target (though Delaware’s demand of allowance is very small [0.06 MMtCO2e] compared with
the other two buyers). Similar simulations were done with assumptions of allowance price at
$3/tCO2 and $5/tCO2. These two cases yield similar simulation results as the $7 case, with only
Connecticut and New Jersey as the buyers. From the three cases with price at the levels of $3,
$5, and $7, the results show a negative relationship between the level of allowance price and the
amount of allowances traded among the states. Approximately, allowance transactions are
reduced 11 thousand tCO2, with each increased dollar in the allowance price.
Table 1. RGGI States 2020 Emission Projections and Caps
2020 BAU Emissions
(MMtCO2)
Cap/Budget
(MMtCO2)
Reduction
Target
(%)
Allowance Beyond
BAU
(MMtCO2)
Reduction
Target
(MMtCO2)
CT
13.26
9.09
31.45%
0.00
4.17
DE
11.07
6.43
41.94%
0.00
4.65
MD
31.79
31.88
0.00%
0.09
–0.09
ME
1.90
5.06
0.00%
3.15
–3.15
NH
4.93
7.33
0.00%
2.40
–2.40
NJ
23.40
19.46
16.86%
0.00
3.95
NY
56.11
54.66
2.58%
0.00
1.45
VT
0.03
1.04
0.00%
1.01
–1.01
MA
24.97
22.66
9.26%
0.00
2.31
RI
1.78
2.26
0.00%
0.48
–0.48
169.26
159.87
5.55%
7.13
9.39
Total
BAU = business as usual; MMtCO2 = million metric tons of carbon dioxide.
*The shaded states, Maryland, Maine, New Hampshire, Vermont, and Rhode Island, have allocated allowances
higher than their projected 2020 BAU emission levels. As a result, these states have zero emission reduction targets
in their power sector. In addition, they can sell the excess allowances in the market at zero mitigation cost.
Sources: 1. RGGI States GHG Caps by Year from 2009 to 2018 are provided by Jeff Wennberg from CCS. Numbers
for 2019 and 2020 are estimated by extrapolating 2014 to 2018 numbers.
Appendix D-2 Page 46
Maryland Climate Action Plan Appendix D-2
2. RGGI states 2020 BAU emission projections are obtained from RGGI Web site http://www.rggi.org/documents.htm,
the Reference Case projections. The 2020 values are computed by interpolating 2018 and 2021 projections.
Table 2. Determination of Allowances Purchasing and Selling States
Reduction
Target
(%)
In-state Reduction Potential
with MC<= $7
(%)
Whether an
Allowance Buyer
Amount of
Allowances to Buy
3.40
CT
31.45%
5.78%
Yes
DE
41.94%
44.17%
No
MD
0.00%
53.34%
No
ME
0.00%
39.92%
No
NH
0.00%
6.78%
No
NJ
16.86%
8.49%
Yes
NY
2.58%
5.44%
No
VT
0.00%
100.00%
No
MA
9.26%
47.72%
No
RI
0.00%
62.95%
No
Total
5.55%
24.71%
—
1.96
5.36
MC= marginal cost; MC<= $7 (%) = percentage reduction potential with marginal cost less than, or equal to,
seven dollars.
Note: If the percentage in the third column is less than the reduction target, in percentage terms, in the second
column, the state would be an allowance buyer.
Table 3. Power sector C&T simulation among 10 RGGI states in Year 2020 Scenario 1:
allowance price = $7/tCO2 (million dollars or otherwise specified)
Before
Trading
Allowances
Traded
After Trading
Emission
Reduction
with Trading
Emission
Reduction
Goal
Cost
Saving
(million
tCO2)
–25.81
1,225.86
3.40
0.77
5.78
31.45
–1.70
–165.71
0.59
–0.24
4.89
44.17
41.94
–44.41
–5.12
–49.53
49.53
–0.73
0.64
2.02
0.00
0.00
–41.49
–5.12
–46.61
46.61
–0.73
0.72
38.00
0.00
NH
0.00
–25.72
–5.12
–30.84
30.84
–0.73
0.32
6.50
0.00
NJ
38.45
–313.93
13.71
–300.22
338.67
1.96
1.99
8.49
16.86
NY
–418.66
–530.22
–5.12
–535.14
116.49
–0.73
2.18
3.88
2.58
VT
0.00
–2.34
–5.12
–7.47
7.47
–0.73
0.03
100.00
0.00
MA
–235.68
–301.51
–5.12
–306.63
70.95
–0.73
3.04
12.19
9.26
0.00
–61.48
–5.12
–66.60
66.60
–0.73
1.07
60.45
0.00
419.04
–1,534.55
0.00
–1,534.55
1,953.59
15.66
9.25
9.76
State
Mitigation Mitigation
Cost
Cost
CT
1,200.05
–49.64
23.83
DE
–165.12
–164.01
MD
0.00
ME
RI
Total
Trading
Cost
Net Cost
tCO2 = tons of carbon dioxide; BAU = business as usual.
Appendix D-2 Page 47
5.36*
(million (percent
(percent
tCO2) from BAU) from BAU)
Maryland Climate Action Plan Appendix D-2
*Represents number of allowances bought or sold.
Table 4. Power sector C&T simulation among 10 RGGI states in Year 2020
Scenario 2: allowance price = $1/tCO2 (million dollars or otherwise specified)
Before
Trading
Allowances
Traded
After Trading
Cost
Saving
Mitigation
Cost
CT
1,200.05
–49.77
3.44
–46.33
1,246.38
3.44
0.73
5.54
31.45
DE
–165.12
–165.20
0.06
–165.15
0.02
0.06
4.59
41.46
41.94
MD
0.00
–47.96
–0.78
–48.75
48.75
–0.78
0.69
2.19
0.00
ME
0.00
–41.49
–0.78
–42.27
42.27
–0.78
0.72
38.00
0.00
NH
0.00
–25.72
–0.78
–26.50
26.50
–0.78
0.32
6.50
0.00
NJ
38.45
–314.07
1.99
–312.07
350.52
1.99
1.95
8.34
16.86
NY
–418.66
–535.37
–0.78
–536.15
117.49
–0.78
2.23
3.98
2.58
VT
0.00
–2.34
–0.78
–3.13
3.13
–0.78
0.03
100.00
0.00
MA
–235.68
–306.05
–0.78
–306.83
71.15
–0.78
3.10
12.40
9.26
0.00
–61.48
–0.78
–62.26
62.26
–0.78
1.07
60.45
0.00
419.04
–1,549.45
0.00
–1,549.45
1,968.48
15.45
9.13
9.76
Total
Trading
Cost
Net Cost
(million
tCO2)
Emission
Reduction
Goal
State
RI
Mitigation
Cost
Emission
Reduction
with Trading
5.49*
(million (percent
(percent
tCO2) from BAU) from BAU)
tCO2 = tons of carbon dioxide; BAU = business as usual.
*Represents number of allowances bought or sold.
B. Auction of Allowances
In the case where allowances are auctioned, the 2020 emission caps for Connecticut, Delaware,
New Jersey, New York, and Massachusetts were assumed to be the same as in the free granting
case. For Maryland, Maine, New Hampshire, Vermont, and Rhode Island, which have excess
allowances in the free granting case, it was assumed their caps in the auction case would equal
the state BAU 2020 emission levels (i.e., there is no reason to purchase any excess allowances at
auction). Table 5 shows the emission caps for the 10 RGGI states in the auction case.
Appendix D-2 Page 48
Maryland Climate Action Plan Appendix D-2
Table 5. RGGI States 2020 Emission Projections and Caps (Auction Case)
2020 BAU
Emissions
(MMtCO2)
Cap/Budget
(MMtCO2)
CT
13.26
9.09
DE
11.07
6.43
MD
31.79
31.79
ME
1.90
1.90
NH
4.93
4.93
NJ
23.40
19.46
NY
56.11
54.66
VT
0.03
0.03
MA
24.97
22.66
RI
Total
1.78
1.78
169.26
152.82
BAU = business as usual; MMtCO2 = million metric tons of carbon dioxide.
In the auction case, there would be no trading among states. According to the basic rationale for
permit trading, in equilibrium, each state would choose to mitigate emissions, as long as its
marginal abatement cost is lower than or equal to the price of allowances, and purchase the
remaining allowance (the difference between the state’s BAU level and the amount mitigated by
autarkic actions) from the auctioneer. Table 6 presents the amount of emissions that can be
reduced by each state’s autarkic mitigation actions associated with MC of $7/tCO2e. The
simulation results of the auction case with allowance price equal to $7/tCO2e are presented in
Table 7. A second simulation with the auction price assumed to be at $1/tCO2e is presented in
Table 8.
In usual C&T cases, where the equilibrium point corresponds to a positive allowance price,
auction and free granting would reach the same cost-effectiveness level, i.e., the auction price
would be at the same level as the equilibrium price in the allowance trading market, and the
collaborative CO2 reductions achieved by the partner states in these two allocation cases would
be the same and equal to the overall emission reduction target of the region. The only difference
between these two allocation cases would be that the auction can generate revenues to the state
government, which in turn can be recycled to fund R&D in such innovations as clean energy
technologies and end-use energy efficiencies, and thus, lower the impacts to the electricity
ratepayers.
However, as indicated in Section A, the supply would exceed the demand at all positive
allowance prices in RGGI’s case. Therefore, in the case of C&T with a grandfathering allocation
strategy and with the assumed market price at $7/tCO2, to ensure the balance of trade in the
market (supply equalizing demand), many states (e.g., Maryland, New York, Massachusetts)
would not use up all their mitigation potentials with MC less than $7/tCO2. Collaboratively, the
emission reductions achieved by the 10 states in the free granting case with allowance price
equal to $7/tCO2 are 15.66 MMtCO2. Beyond C&T, a state would still be willing to mitigate any
ton of GHG that would bring net cost savings. The additional cost-saving mitigation potential for
Appendix D-2 Page 49
Maryland Climate Action Plan Appendix D-2
the 10 states beyond C&T (free granting case) is 24.00 MMtCO2. In the auction case, each state
would utilize all its mitigation potential with MC less than $7/tCO2 before purchasing
allowances from the auctioneer. As a result, the total emission reductions achieved by the 10
states in this case are 41.82 MMtCO2. Since considerable amounts of unused mitigation
potentials of some states (e.g., Maryland, Massachusetts) in the free granting case are associated
with cost savings, the total cost savings of mitigation in the auction case (2.54 billion) are higher
than the total mitigation cost savings in the free granting case (1.53 billion). In addition, in the
auction case many states would reduce more emissions than required by the state mitigation
target (because it is cheaper to mitigate than to buy from the auctioneer). The additional
reductions achieved by these states can be saved for future use.
Comparing the two auction cases with auction prices at $7 and $1, the amount the states choose
to reduce by mitigation options (41.82 MMtCO2 vs. 39.98 MMtCO2) and the amount to be
bought from the auctioneer (127.44 MMtCO2 vs. 129.28 MMtCO2) differ slightly. The big
difference in total auction cost between these two cases is due primarily to the difference of the
two auction price levels.
Table 6. Mitigation potential associated with MC = $7/tCO2e
Cap/Budget
(MMtCO2)
In-state
Reduction
Potential with
MC<= $7
(%)
In-state
Reduction
Potential with
MC<= $7
(MMtCO2)
CT
9.09
5.78%
0.77
DE
6.43
44.17%
4.89
MD
31.88
53.34%
16.96
ME
1.90
39.92%
0.76
NH
4.93
6.78%
0.33
NJ
19.46
8.49%
1.99
NY
54.66
5.44%
3.05
VT
0.03
100.00%
0.03
MA
22.66
47.72%
11.92
RI
1.78
62.95%
1.12
152.82
24.71%
41.82
Total
MMtCO2 = million metric tons of carbon dioxide; MC<= $7 = marginal cost is less than or equal to seven dollars.
Appendix D-2 Page 50
Maryland Climate Action Plan Appendix D-2
Table 7. Simulation results of an auction case among RGGI states (with assumed auction
price at $7/tCO2)
Emission
Reduction
Undertaken by the
State*
Total BAU
Emissions
in 2020
(million
tCO2)
2020
Emissions
Cap/Budget
(million
tCO2)
(percent
from
BAU)
(million
tCO2)
CT
13.26
9.09
5.78
0.77
–49.64
12.50
87.47
37.83
DE
11.07
6.43
44.17
4.89
–164.01
6.18
43.28
–120.73
MD
31.79
31.88
53.34
16.96
–617.74
14.83
103.83
–513.91
ME
1.90
1.90
39.92
0.76
–41.36
1.14
8.00
–33.36
NH
4.93
4.93
6.78
0.33
–25.67
4.59
32.16
6.48
NJ
23.40
19.46
8.49
1.99
–313.93
21.42
149.92
–164.01
NY
56.11
54.66
5.44
3.05
–573.12
53.06
371.43
–201.69
VT
0.03
0.03
100.00
0.03
–2.34
0.00
0.00
–2.34
MA
24.97
22.66
47.72
11.92
–692.28
13.06
91.40
–600.88
RI
1.78
1.78
62.95
1.12
–61.32
0.66
4.61
–56.71
169.26
152.82
24.71
41.82
–2,541.43
127.44
892.09
–1,649.33
State
Total
Emission
Allowances
Mitigation Bought from
Auction
Net Cost
Cost
Auctioneer
Cost
(million $) (million tCO2) (million $)† (million $)‡
BAU = business as usual; tCO2 = tons of carbon dioxide.
* In equilibrium, each state will choose to mitigate to the level that its marginal abatement cost equals the auction
price.
† We assume the auction price is $7/tCO2 in this case.
‡ Sum of mitigation cost and auction cost.
Appendix D-2 Page 51
Maryland Climate Action Plan Appendix D-2
Table 8. Simulation results of an auction case among RGGI states (with assumed auction
price at $1/tCO2)
Emission
Reduction
Undertaken by the
State*
Total BAU
Emissions
in 2020
(million
tCO2)
2020
Emissions
Cap/Budget
(million
tCO2)
CT
13.26
9.09
5.54
0.73
–$49.77
12.53
$12.53
–$37.24
DE
11.07
6.43
41.46
4.59
–$165.20
6.48
$6.48
–$158.72
MD
31.79
31.88
50.49
16.05
–$620.34
15.74
$15.74
–$605.60
ME
1.90
1.90
38.28
0.73
–$41.49
1.17
$1.17
–$40.31
NH
4.93
4.93
6.54
0.32
–$25.72
4.61
$4.61
–$21.11
NJ
23.40
19.46
8.34
1.95
–$314.07
21.45
$21.45
–$292.62
NY
56.11
54.66
5.35
3.00
–$573.31
53.11
$53.11
–$520.20
VT
0.03
0.03
100.00
0.03
–$2.34
0.00
$0.00
–$2.34
MA
24.97
22.66
45.96
11.48
–$694.03
13.50
$13.50
–$680.54
RI
1.78
1.78
60.81
1.08
–$61.47
0.70
$0.70
–$60.78
169.26
152.82
23.62
39.98
129.28
$129.28
–$2,419.46
State
Total
(percent
from
BAU)
Emission
Allowances
Mitigation Bought from
Auction
Cost
Auctioneer
Cost
(million $) (million tCO2) (million $)†
(million
tCO2)
–$2,548.74
Net Cost
(million $)‡
BAU = business as usual; tCO2 = metric tons of carbon dioxide.
* In equilibrium, each state will choose to mitigate to the level that its marginal abatement cost equals the auction
price.
† In this case, it is assumed that the auction price is $1/tCO2.
‡ Sum of mitigation cost and auction cost.
Development of the Marginal Cost Curves of Power Sector
The MC curves of the states are developed based on the reduction potential and mitigation
cost/saving data of individual options that contribute to the emission reductions from power
sector. These options not only include those designed directly for the electricity supply sector
(e.g., promotion of renewable energy utilization, repowering existing plants, GPS), but also
include options in RCI sectors that contribute to the reduction of electricity consumption (e.g.,
DSM, energy efficient appliances, building codes). The emission reduction potentials of these
options are adjusted by multiplying the percentage of electricity consumption to total energy
consumption in the RCI sector. RCI options that relate entirely to reduction of other fossil fuels
consumption (e.g., gas, oil) are not included in the cost curve development. Table 9 presents the
list of options of Maryland used to develop the MC curve of the state.
Appendix D-2 Page 52
Maryland Climate Action Plan Appendix D-2
Table 9. Maryland Mitigation options list to develop the MC curve of power sector
Sector
Climate Mitigation Actions
Estimated
2020
Annual
GHG
Reduction
Potential
(MMtCO2e)
Estimated
Cost or
Cost
Savings
per ton
GHG
Removed
GHG
Reduction
Potential as
Percentage
of 2020
Baseline
Emissions*
Cumulative
GHG
Reduction
Potential
Weights
(add up
to 100)
RCI-7
More Stringent Appliance /
Equipment Efficiency Standards
(State-Level, or Advocate for
Regional- or Federal-Level
Standards)
0.14
–$54.00
0.42%
0.42%
0.329
RCI-4
Improved Design, Construction,
Appliances, and Lighting in New
and Existing State and Local
Government Buildings,
“Government Lead-By-Example”
0.89
–$53.00
2.80%
3.22%
2.167
RCI-10
Energy Efficiency Resource
Standard (EERS)
8.04
–$52.00
25.28%
28.50%
19.592
RCI-2
Demand-Side Management
(DSM) / Energy Efficiency
Programs, Funds, or Goals for
Electricity (Including Expansion
of Existing Programs and Peak
Load Reduction)
3.70
–$51.00
11.64%
40.14%
9.021
RCI-11
Promotion and Incentives for
Energy-Efficient Lighting
1.10
–$47.00
3.46%
43.60%
2.682
RCI-3
Low-Cost Loans for Energy
Efficiency
0.35
–$45.00
1.09%
44.69%
0.847
RCI-1
Improved Building and Trade
Codes and Beyond-Code
Building Design and
Construction
1.67
–$38.00
5.25%
49.94%
4.067
ES-5b
Clean Distributed Generation
(DG): Combined Heat and
Power (CHP)
1.00
$14.40
3.15%
53.08%
2.438
ES-8a
Efficiency Improvements and
Repowering Existing Plants—
Distributed Generation (DG)
2.00
$21.80
6.29%
59.37%
4.876
ES-7
Renewable or Environmental
Portfolio Standard (e.g., Add
CHP or EE To RPS as
Additional Tier) or Energy
Efficiency Portfolio Standard
13.80
$25.70
43.41%
102.79%
33.647
ES-1
Promotion of Renewable Energy
(Zoning, Siting, Incentives for
Centralized Facilities, LongTerm Contracting, PerformanceBased Contracting)
0.50
$27.00
1.57%
104.36%
1.219
ES-5a
Clean Distributed Generation
(DG): Distributed Generation
1.10
$37.50
3.46%
107.82%
2.682
Appendix D-2 Page 53
Maryland Climate Action Plan Appendix D-2
Sector
Climate Mitigation Actions
Estimated
2020
Annual
GHG
Reduction
Potential
(MMtCO2e)
Estimated
Cost or
Cost
Savings
per ton
GHG
Removed
GHG
Reduction
Potential as
Percentage
of 2020
Baseline
Emissions*
Cumulative
GHG
Reduction
Potential
Weights
(add up
to 100)
ES-10
Generation Performance
Standards (GPS)—1,125
Pounds Carbon Dioxide
Equivalents per Megawatt-Hour
(Co2e/MWh)
6.60
$42.40
20.76%
128.58%
16.092
RCI-8
Rate Structures and
Technologies to Promote
Reduced Greenhouse Gas
(GHG) Emissions (Including
Peak Pricing and Inverted Block
Rates)
0.14
$120.00
0.44%
129.02%
0.339
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalents; EE = energy efficiency; RPS =
renewable portfolio standard; CCSR = combined capture, storage, and reuse.
* 2020 projected production-based gross emission level is 31.79 MMtCO2e.
In Table 9, Column 3 presents the estimated 2020 annual GHG reduction potential for each
relevant option, with reduction potentials translated into percentages of the 2020 ES BAU
emissions level in Column 5. The estimated cost or cost saving per ton of GHG removed by each
option in 2020 is presented in Column 4. The options are ordered in ascending sequence in terms
of cost, beginning with the cheapest option. Column 6 calculates the cumulative GHG reduction
potentials of the first n policy options listed in the table. The last column presents the proportion
of GHG mitigation contributed by each option.
Based on the data presented in Table 9, the stepwise MC function for Maryland in 2020 is drawn
in Figure 1. The horizontal axis represents the percentage of GHG emissions reduction, and the
vertical axis represents the MC or savings of mitigation. In the figure, each horizontal segment
represents an individual mitigation option. The width of the segment indicates the GHG emission
reduction potential of the option in percentage terms. The height of the segment relative to the xaxis shows the average cost (saving) of reducing 1 ton of GHG with the application of the option.
Next, the following functional form was used to fit the smooth Maryland MC curve to be used in
our analysis:
Where, MC is the marginal cost; R is the percentage reduction of GHG emissions; a and b are
parameters.
The logarithmic functional form utilized here is consistent with theoretical expectations and
empirical findings on diminishing returns of emission control. As the emission reductions
increase along the x-axis, the cost to reduce one additional unit of emission is increasing at an
accelerating speed.
Appendix D-2 Page 54
Maryland Climate Action Plan Appendix D-2
To develop the fitted cost curve, it is forced to cross the x-axis through the point of 50%, the
same x-intercept indicated by the step function. The MC curve of Maryland has the following
specification:
Figure 1 shows the step and fitted MC curves of the Maryland power sector.
Figure 1. MC curves of Maryland power sector
$/tCO2e = dollars per metric ton of carbon dioxide equivalent; BAU = business as usual; GHG = greenhouse gas.
Appendix D-2 Page 55
Maryland Climate Action Plan Appendix D-2
Figure 2. State MC curves of power sector, 2020
$/tCO2e = dollars per metric ton of carbon dioxide equivalent; RGGI = Regional Greenhouse Gas Initiative; GHG =
greenhouse gas; MD = Maryland; ME = Maine; RI = Rhode Island; CT = Connecticut; NY = New York; MA =
Massachusetts; NJ = New Jersey; NH = New Hampshire; DE = Delaware; VT = Vermont.
Notes: Similar methods as elaborated above for Maryland are adopted to develop MC curves of Connecticut, Maine,
New York, Rhode Island, and Vermont. Data sources are listed below.
There are no direct data for Massachusetts, New Jersey, New Hampshire, and Delaware. MC curves for these four
states are developed based on cost curves of four reference states (Rhode Island, New York, Connecticut, and
Maryland, respectively). For each of the four states that lack the direct data, mitigation cost/saving data for the
reference state is adopted. Emission reduction potential data of the reference state is adjusted by the weights of
emissions from the ES and RCI sectors of the state under estimation.
Sources:
•
Connecticut GSC on Climate Change. 2005. 2005 CT Climate Change Action Plan. Available at
http://www.ctclimatechange.com/StateActionPlan.html
•
MCCC. 2008. Maryland Climate Change Action Plan. Available at http://www.mdclimatechange.us/index.cfm
•
Maine DEP. 2004. Final Maine Climate Action Plan 2004. Available at http://www.maine.gov/dep/air/greenhouse/
•
CCAP and New York GHG Task Force. 2003. Recommendations to Governor Pataki for Reducing New York
State Greenhouse Gas Emissions. Available at http://www.ccap.org/pdf/04-2003_NYGHG_Recommendations.pdf
•
RI GHG. 2002. Rhode Island Greenhouse Gas Action Plan. Available at http://righg.raabassociates.org/.
•
Vermont GCCC. 2007. Final Report and Recommendations of the Governor’s Commission on Climate Change.
Available at http://www.anr.state.vt.us/air/Planning/htm/ClimateChange.htm.
Appendix D-2 Page 56
Maryland Climate Action Plan Appendix D-2
C. Carbon Tax
In this simulation, the level of carbon tax to the non-C&T sectors will be estimated to yield the
Maryland state reduction target in year 2020—25% below 2006 levels.
Table 10. Emission reduction target by sector to achieve the Maryland state goal
2006
(MMtCO2)
2020
(MMtCO2)
Emission Cap in
2020
(25% below 2006)
(MMtCO2)
Emissions from electricity—
production based
32.2
31.8
24.1
7.7
24.1%
Emissions from electricity—
consumption based
42.7
53.4
32.1
21.4
40.0%
Emissions from nonelectricity sector
64.4
76.7
48.3
28.4
37.0%
Total gross emissions
(consumption based)
107.2
130.2
80.4
49.8
38.2%
Emission Reduction
Target
(MMtCO2)
Percentage
MMtCO2 = million metric tons of carbon dioxide.
According to the analyses in Sections A and B, the power sector in Maryland can reach the state
mitigation goal by implementing in-state policies and measures affecting the power sector and by
purchasing allowances from the RGGI C&T system. The power sector would implement in-state
mitigation options, as long as the marginal abatement cost is less than or equal to the price of the
allowance, and purchase the remaining allowances from power sector in other states (in the free
granting case) or the auctioneer (in the auction case).
Next, one needs to look at the mitigation options list of the non-C&T sectors in Maryland in
order to evaluate:
•
Whether the contributions of mitigation options from all the non-C&T sectors would meet
the state goal;
•
If not, what would be the carbon tax level to non-C&T sectors to achieve the goal; and
•
If the mitigation options meet the state goal, how many incremental tons of CO2 will be
abated for each increasing dollar of carbon tax.
Table 11 shows the options list of non-C&T sectors in Maryland. Note that some RCI sector
options that entirely or partially contribute to electricity consumption reduction are included in
the options list to develop the Maryland power-sector mitigation cost curve in Figure 1. To avoid
double counting, the part of emission mitigation potentials related to electricity consumption
reduction of those options is not included in the list in Table 11. Please also note that only
options with quantified reduction potentials and costs/savings estimated by the TWGs are
included in Table 11. Similar to Table 9, Column 3 of the table presents the estimated 2020
annual GHG reduction potential for each option, with reduction potentials translated into
percentages of the 2020 BAU emissions level in Column 5. The estimated cost or cost saving per
ton of GHG removed by each option in 2020 is presented in Column 4. The options are ordered
Appendix D-2 Page 57
Maryland Climate Action Plan Appendix D-2
in ascending sequence in terms of cost, beginning with the cheapest option. Column 6 calculates
the cumulative GHG reduction potentials of the first n policy options listed in the table. The last
column presents the proportion of GHG mitigation contributed by each option.
Table 11. Mitigation options list of non-C&T sectors in Maryland
Estimated
2020 Annual
GHG
Reduction
Potential
(MMtCO2e)
GHG
Estimated
Reduction
Cost or Cost Potential as Cumulative
Savings per Percentage of
GHG
Ton GHG
2020 Baseline Reduction
Removed
Emissions†
Potential
Sector
Climate Mitigation Actions
AFW-5
“Buy Local” Programs for Sustainable
Agriculture, Wood, and Wood Products—
a. Farmer’s Market
0.03
–$167.00
0.04%
0.04%
AFW-2
Managing Urban Trees and Forests for
Greenhouse Gas (GHG) Benefits (With
Mitigation of Forest Loss Due to Insects,
Disease, Pests, and Invasive Species)
1.90
–$152.00
2.48%
2.52%
RCI-7
More Stringent Appliance / Equipment
Efficiency Standards (State-Level, or
Advocate for Regional- or Federal-Level
Standards)
0.06
–$54.00
0.08%
2.60%
RCI-4
Improved Design, Construction,
Appliances, and Lighting in New and
Existing State and Local Government
Buildings, “Government Lead-byExample”
0.41
–$53.00
0.54%
3.14%
RCI-10
Energy Efficiency Resource Standard
(EERS)
3.86
–$52.00
5.04%
8.18%
RCI-3
Low-Cost Loans for Energy Efficiency
0.15
–$45.00
0.20%
8.37%
RCI-1
Improved Building and Trade Codes and
Beyond-Code Building Design and
Construction
0.73
–$38.00
0.95%
9.33%
AFW-8
Nutrient Trading With Carbon Benefits
0.14
$30.00
0.18%
9.51%
AFW-9
Waste Management Through Source
Reduction and Advanced Recycling
29.20
–$6.00
38.06%
47.57%
AFW-6
Expanded Use of Forest and Farm
Feedstocks and By-Products for Energy
Production—Methane (CH4) Utilization
From Livestock Manure and Poultry Litter
0.04
$0.20
0.05%
47.62%
AFW-7
In-State Liquid Biofuels Production—Biodiesel
0.17
$7.00
0.22%
47.84%
AFW-6
Expanded Use of Forest and Farm
Feedstocks and By-Products for Energy
Production—Biomass (Including
Agriculture Residue, Forest Feedstocks,
and Energy Crops)
0.50
$12.00
0.65%
48.29%
AFW-3
Afforestation, Reforestation, and
Restoration of Forests and Wetlands—
0.60
$29.00
0.78%
49.28%
Appendix D-2 Page 58
Maryland Climate Action Plan Appendix D-2
Sector
Climate Mitigation Actions
a. Afforestation
Estimated
2020 Annual
GHG
Reduction
Potential
(MMtCO2e)
GHG
Estimated
Reduction
Cost or Cost Potential as Cumulative
GHG
Savings per Percentage of
Ton GHG
2020 Baseline Reduction
Removed
Emissions†
Potential
AFW-4
Forested Land—
b. Forested Land
2.70
$37.00
3.52%
52.79%
AFW-3
Afforestation, Reforestation, and
Restoration of Forests and Wetlands—
b. Riparian Areas
0.05
$44.00
0.07%
52.86%
TLU-4*
Low Greenhouse Gas Fuel Standard
(LGFS)
1.90
$60.00
2.48%
55.34%
AFW-7
In-State Liquid Biofuels Production—
Ethanol
0.91
$80.00
1.19%
56.52%
AFW-4
Forested Land—
a. Agricultural Land
0.28
$87.00
0.36%
56.89%
RCI-8
Rate Structures and Technologies To
Promote Reduced GHG Emissions
(Including Inverted Block Rates)
0.06
$120.00
0.08%
56.97%
AFW-1
Forest Management for Enhanced
Carbon Sequestration (With Mitigation of
Forest Loss Due to Insects, Disease,
Pests, and Invasive Species)
0.09
$135.00
0.12%
57.08%
TLU-10*
Transportation Technologies
0.44
$650.00
0.57%
57.66%
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalents.
* Numbers presented in the column of “Estimated Cost or Cost Savings per Ton GHG Removed” are the average of
the high and low estimates by the TLU TWG.
† 2020 projected gross CO2 emissions from non-C&T sectors are 76.92 MMtCO2e.
From Column 6 of Table 11, the cumulative mitigation potential of options with cost savings is
around 47.57% of the non-C&T sectors’ 2020 BAU emissions level. As shown in Table 10, the
reduction goal of 25% below the 2006 level translates to 37.0% below 2020 BAU level for the
non-C&T sectors. Therefore, the state goal can be over-achieved by implementing only the costsaving mitigation options.
Thus, to achieve current 2020 goal, the carbon tax is not needed. However, one can examine the
potential of a carbon tax for additional mitigation in the following way. Fit a smooth curve
through the points of options with unit mitigation cost higher than zero (see the smooth curve in
Figure 3). Based on the curve, Table 12 presents the total reduction potentials of the non-C&T
sectors with assumed carbon tax levels at $1 to $7. Approximately, for every $1 increase in the
carbon tax, an additional 75 thousand tons of CO2 will be abated in the non-C&T sectors.
Appendix D-2 Page 59
Maryland Climate Action Plan Appendix D-2
Figure 3. MC curve of non-C&T sectors in Maryland
$/tCO2e = dollars per metric ton of carbon dioxide equivalent C&T = cap-and-trade; MD = Maryland; BAU = business
as usual; GHG = greenhouse gas.
Note: The step curve is developed based on the options data in Table 11. The horizontal axis represents the
percentage of GHG emissions reduction, and the vertical axis represents the MC or savings of mitigation. In the
figure, each horizontal segment represents an individual mitigation option. The width of the segment indicates the
GHG emission reduction potential of the option in percentage terms. The height of the segment relative to the x-axis
shows the average cost (saving) of reducing 1 ton of GHG with the application of the option. The smooth curve is
fitted through the points of options with unit mitigation cost higher than zero.
Table 12. Carbon tax level and corresponding total reduction potential in non-C&T
sectors
Total Reduction Potential
Incremental Reduction
per Dollar Increase in
the Carbon Tax
(thousand tCO2)
Carbon Tax
($/tCO2)
% 2020 BAU
level
MMtCO2
0
48.02%
36.84
1
48.12%
36.92
75.57
2
48.22%
36.99
75.43
3
48.31%
37.07
75.28
4
48.41%
37.15
75.14
5
48.51%
37.22
75.00
6
48.61%
37.29
74.86
7
48.70%
37.37
74.71
$/tCO2 = dollars per ton of carbon dioxide; BAU = business as usual; MMtCO2 = million metric tons of carbon dioxide.
Appendix D-2 Page 60
Maryland Climate Action Plan
Appendix D-3
Residential, Commercial & Industrial
Maryland Climate Action Plan Appendix D-3
Residential, Commercial, and Industrial Sector
Summary List of Recommended Priority Policy Options for Analysis
Option
No.
Net
CostPresent
EffectiveValue
Total
ness
2008–
2008–
($/tCO2e)
2020
2020 (Million $)
GHG Reductions
(MMtCO2e)
Policy Option
2012
2020
Level of
Support
RCI-1
Improved Building and Trade Codes and
Beyond-Code Building Design and
Construction in the Private Sector
0.6
2.4
13.8
–$527
–$38
Unanimous
RCI-2
Demand-Side Management (DSM) / Energy
Efficiency Programs, Funds, or Goals for
Electricity and Natural Gas (Including
Expansion of Existing Programs and Peak
Load Reduction)
1.8
4.5
35.0
–$1,898
–$54
Unanimous
RCI-3
Low-Cost Loans for Energy Efficiency
0.3
0.5
4.1
–$187
–$45
Unanimous
RCI-4
Improved Design, Construction, Appliances,
and Lighting in New and Existing State and
Local Government Buildings, Facilities and
Operations: “Government Lead-by-Example”
0.2
1.3
6.4
–$337
–$53
Unanimous
RCI-5
Energy Efficiency and Environmental Impacts
Awareness and Instruction in School
Curricula
RCI-6
Promotion and Incentives for Improved
Design and Construction (e.g., LEED™,
Green Buildings, or Minimum Percent
Improvement Better Than Code) in the
Private Sector
RCI-7
More Stringent Appliance / Equipment
Efficiency Standards (State-Level, or
Advocate for Regional- or Federal-Level
Standards)
0.1
0.2
1.2
–$63
–$54
Unanimous
RCI-8
Rate Structures and Technologies To
Promote Reduced GHG Emissions (Including
Peak Pricing and Inverted Block Rates)
0.1
0.2
2.0
$246
$120
Unanimous
RCI-9
GHG or Carbon Tax
RCI-10
Energy Efficiency Resource Standard (EERS)
2.9
11.9
71.0
–$3,670
–$52
Unanimous
RCI-11
Promotion and Incentives for Energy Efficient
Lighting
0.1
1.1
7.7
–$362
–$47
Unanimous
Sector Total After Adjusting for Overlaps*
1.1
11.2
54.1
–$5,450
–$48
Reductions From Recent Actions†
4.3
9.0
71.5
Not quantified
Sector Total Plus Recent Actions
5.4
20.2
125.5
Not quantified
Jointly considered with the CC TWG
Unanimous
Combined with RCI-1
Transferred to ES TWG
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalent; $/tCO2e = dollars per metric ton
of carbon dioxide equivalent.
* These totals account for the interaction between RCI policies. The benefits and costs of RCI policies overlap as
follows: between residential and commercial new construction in RCI-1, RCI-2, and RCI-10; between RCI–4 and
energy efficiency efforts in government and schools within RCI-2 and RCI-10; between RCI-7 and parts of RCI-2,
Appendix D-3 Page 2
Maryland Climate Action Plan Appendix D-3
RCI-4, and RCI-10; and between RCI-11 and parts of RCI-2, RCI-4, and RCI-10. Overlaps also occur between RCI
and Energy Supply (ES), to the extent that demand is reduced by RCI measures, and generation emits less GHGs
after ES policies; adjustments for overlaps between RCI and ES are quantified in the ES cumulative analysis. An
overlap with Agriculture, Forestry, and Waste Management-2 (AFW-2) has been quantified in the AFW cumulative
analysis.
† Recent actions include the Energy Independence and Security Act of 2007 Title III (Appliance and Lighting
Efficiency), Maryland Energy Efficiency Standards Act of 2007, and EmPOWER MD (HB 374).
Note: The numbering used to denote the above policy options is for reference purpose only; it does not reflect
prioritization among these important policy options.
The following policy recommendations reflect consensus positions of the RCI Technical Work
Group (TWG) and do not necessarily represent the views of the individual members.
Appendix D-3 Page 3
Maryland Climate Action Plan Appendix D-3
RCI-1. Improved Building and Trade Codes and Beyond-Code Building Design
and Construction in the Private Sector
Policy Description
Buildings are significant consumers of energy and other resources, and can contribute to local
microclimates. According to the Environmental Protection Agency (EPA), December 2004, in
the United States buildings account for 39% of the total energy use, 12% of the water
consumption, 68% of the electricity consumption, and 38% of the total carbon dioxide emissions.
Given the long lifetime of most buildings, amending state and/or local building codes to include
minimum energy efficiency requirements and periodically updating energy efficiency codes
could provide long-term GHG savings.
This policy sets a goal for reducing building energy consumption, to be achieved by increasing
standards for the minimum performance of new and substantially renovated commercial and
residential buildings through the adoption and enforcement of building and trade codes. Building
codes would be made more stringent via incorporation of aspects of advanced/next generation
building designs and construction standards, such as Leadership in Energy and Environmental
Design Green Building Rating System™ (LEED) or a comparable standard. Other aspects of the
policy design include:
•
Undertaking a comprehensive review of existing State and local building and trades codes in
Maryland to determine where increased energy efficiency can be achieved.
•
Developing a training and certification program for code officials, builders, and contractors
on energy efficiency and related Green building and trade codes, and in code enforcement.
•
Providing tools to state and local governments for measurement and tracking of cost savings.
•
Incorporating future code upgrades by reference language in the statute or regulation to avoid
having to re-open the rule each time the referenced body changes its code.
•
Targeting existing buildings for efficiency improvements during both major and minor
renovation, through application and enforcement of building codes and/or with tax rebates or
other incentives.
•
Encouraging or requiring continued high performance of buildings that receive tax rebates or
other incentives, through participation in LEED for Existing Buildings (LEED-EB) or
comparable standard.
•
Allowing compliance flexibility. New and substantially renovated buildings can utilize a
combination of increased energy efficiency, switching to low and no carbon-based fuels for
previously carbon-based end-uses, off-site purchases on grid supplied “green power” and/or
installing on-site off-grid power generating equipment.
•
Establishing specific goals for the size of building to be included, e.g., using Montgomery
County Bill 17-06 as a model.
•
Setting a cap on consumption of energy per unit area of floor space for new buildings.
Appendix D-3 Page 4
Maryland Climate Action Plan Appendix D-3
•
Requiring high-efficiency appliances in new construction and retrofits.
•
Providing incentives, such as permitting and fee advantages, tax credits, financing incentives
(such as “green mortgages”), or other inducements to encourage retrofit of existing
residential and commercial buildings or for the development of non-traditional off-grid low
and carbon-neutral energy sources. The state can work with financial institutions to develop
loan tools for these programs.
Advanced/next-generation building design requirements might include use of specific materials
(e.g., local building materials), implementation of specific technologies (e.g., energy-efficient
roofing materials and landscaping to lower electricity demand), or attainment of points under an
advanced standard (e.g., LEED or a comparable standard). Energy-reduction targets should be
periodically reassessed.
Potential measures supporting this policy can include outreach and public education, public
recognition programs, improved enforcement of building codes, encouraging or providing
incentives for energy tracking and benchmarking, performance contracting/shared savings
arrangements, technical support resources for implementation, development of a clearinghouse
for information on and access to software tools to calculate the impact of energy efficiency and
solar technologies on building energy performance.
Policy Design
Goals:
• Mandating the periodic and regular (no less than every 3 years) review and adoption of State
and local building and trades codes, particularly energy efficiency requirements, to ensure
best management practices. At least every three years, the state will review (with opportunity
for public comment) and adopt the more stringent of the International Code Council (ICC) or
American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE)
standards for energy efficiency.
•
Reduce energy consumption per square foot of floor space by 15% by 2010 and 50% by
2020.
•
Developing a training and certification program for code officials and contractors on energy
efficiency and related Green building and trade codes.
Timing: See above goals. The building and trade related code, permitting and enforcement
changes to take place during calendar year 2008.
Parties Involved: The Maryland Department of Housing and Community Development
(DHCD) and Municipal and County code officials; Maryland Municipal League (MML) and
Maryland Association of Counties (MACo); Maryland Home Builders and Realtors Associations
(MHBR); Non-affiliated private builders, engineers and tradesman; Citizen, consumer and
community organizations; Electric, water and sewer utilities; Environmental advocacy
organizations; Public Service Commission (PSC); Maryland Department of General Services
(DGS); Maryland Energy Administration (MEA); Maryland Department of the Environment
(MDE); Maryland Department of Labor, Licensing, and Regulation (DLLR); Maryland
Appendix D-3 Page 5
Maryland Climate Action Plan Appendix D-3
Department of Business and Economic Development (DBED); and the Maryland Green Building
Council.
Other: Indoor air quality standards, construction waste management and recycling plans and
heating, ventilation, and air conditioning (HVAC) and lighting standards, including but not
limited to energy efficiency and occupant health and safety, would be developed to complement
energy efficiency codes.
Implementation Mechanisms
Education, Training, Certification, and Technical Assistance: Education, training and
certification is expected to be a major component of improving building and trade codes. It will
be necessary to develop enhanced State mandated training, education and certification for code
officials, builders and tradesmen. Education and outreach are important so that consumers and
constituents understand the benefits and cost savings for these programs. The training and
certification program for code officials and contractors would be based on the State’s (MDE)
Sediment and Erosion Control “Green Card” training and certification program. It should be
designed in concert with a LEED (or comparable standard) certification program but be less
intensive and oriented towards a blue collar work force. Funding should be set aside for training
and education of building inspectors.
Review of Existing Building and Trades Codes: The state should undertake a comprehensive
review of existing State and local building and trades codes in Maryland to determine where
increased energy efficiency can be achieved.
Size-Specific Goals: Specific goals by building size can be developed. For example: a new
building with a least 10,000 square feet gross floor area (GFA); a renovation or reconstruction of
an existing building with at least 10,000 square feet GFA that alters more then 50% of the
buildings GFA; and an addition that doubles the buildings footprint and adds at least 10,000
square feet of GFA. See Montgomery County Bill 17-06. (See also State of Washington using
the threshold of 5,000 square feet).
Compliance Flexibility: The 2030 carbon-neutral goal, based on Architecture 2030, can be
reached for new and substantially renovated buildings by utilizing a combination of increased
energy efficiency, switching to low and no carbon-based fuels for previously carbon-based enduses, off-site purchases on grid supplied “green power” and/or installing on-site off-grid power
generating equipment.
Statewide Code and Inspections Program: Understanding the importance of local government
adoption and control over code enforcement, there should be a minimum standard established
statewide for related codes, permitting and inspection.
Utility Involvement and Assistance: Consider using utility resources to help implement energy
codes. This can include energy audits, reviewing and promoting energy codes, interconnection
rules, tariffs and connection charges that encourage the construction and rehabilitation of
buildings that incorporate energy efficiency.
Appendix D-3 Page 6
Maryland Climate Action Plan Appendix D-3
Permitting and Fee Advantages: Provide programs that speed the permit approval process and
reduce the permit and impact fees related to construction to provide incentives to consumers and
builders. This could include reduced building permit fees, reduced water and sewer fees and
reduced impact fees.
Rewards Programs: Develop systems and programs that reward “beyond code” energy
efficiency and emissions reduction improvements, including “green mortgages,” and additional
floor area ratio and/or zoning density for construction that meets or exceeds energy efficiency
programs. Work with financial institutions to develop loan tools for these programs, including
non-traditional off-grid low and carbon-neutral energy sources.
Property Tax Incentives: Property tax adjustments that waive or decrease a portion or all of the
taxes associated with new construction that meets or exceeds energy efficiency programs. Tax
credits for the residential sector could be effective for 2 years and based on the assessed property
value of new, private residential units that achieve the beyond code level desired in a given year.
Tax credits for the commercial sector could be capped at 10 years and based on the incremental
construction cost for new, private commercial buildings that achieve the beyond code level
desired in a given year.
High Performance Building Codes for Energy and Efficiency: These specify minimum
energy efficiency requirements for new buildings or for existing buildings undergoing a major
renovation and/or additions. The minimums specified could be updated.
Tax Rebates or Other Incentives for Ongoing Building Performance: Encourage or require
participation in LEED for Existing Buildings (LEED-EB) or a comparable standard to ensure
continued high building performance through proper building operations and maintenance.
Increased Tax Incentives: Develop incentives for building energy efficiency improvements
Empower Maryland Program: This policy could build upon this existing program (applicable
to state buildings) by encouraging private sector facilities to meet the same building design and
performance standards.
Strengthen Regional Partnerships: Such as Northeast Energy Efficiency Partnership (NEEP),
in order to assure consistency and economies of scale.
Related Policies/Programs in Place
Building Codes: Maryland has adopted the 2006 edition of the International Building Code
(IBC) and International Energy Conservation Code (IECC). Many local governments, including
the City of Annapolis, have adopted the 2006 edition of the International Energy Efficiency
Code.
Beyond Code: U.S. Green Buildings Council’s LEED™ New Construction (LEED-NC), LEEDEB, LEED Core and Shell (LEED-CS), and LEED Homes (LEED-H), EPA ENERGY STAR
and High Performance Home 100 (HPH100), Architecture 2030, and the American National
Standard Institute’s National Green Building Standard (under development).
Appendix D-3 Page 7
Maryland Climate Action Plan Appendix D-3
Legislative Action: Local governments (see Montgomery County Bill 17-06 and Green Schools
Focus, the City of Baltimore and the City of Annapolis adopted) have proposed and adopted
standards for building energy and efficiency; interest in “standard 189” code, the MEA’s
incentives for installation of certain renewable energy technologies; the PSC’s rules allowing
net-metering from qualifying self-generators of renewable energy, including photovoltaics (PV),
wind, and biomass, up to 200 kilowatts; the PSC’s Renewable Portfolio Standard, which requires
that a minimum percentage of retail energy sales be derived from renewable sources; Executive
Order 01.01.2001.02 Sustaining Maryland’s Future with Clean Power, Green Buildings and
Energy Efficiency; the Maryland Strategic Energy Investment Program (SB 268); Maryland
Energy Efficiency Standards Act of 2007; and EmPOWER MD (HB 374).
Federal Legislation: Energy Independence and Security Act of 2007 Title III (Appliance and
Lighting Efficiency) and Title IV (Energy Savings in Building and Industry).
Type(s) of GHG Reductions
Reduction in GHG emissions (largely CO2) from avoided electricity production or on-site fuel
combustion.
Estimated GHG Reductions and Net Costs or Cost Savings
Table F-1 presents the estimated GHG reductions and net costs or costs savings from
implementing RCI-1.
Table F-1. Estimated GHG reductions and net costs of or cost savings from RCI-1
GHG Reductions
(MMtCO2e)
Net
CostGross
Gross
Present
EffectiveCosts
Benefits
Value
Total
ness
2008– (Million $) (Million $) 2008–2020 ($/tCO2e)
(Million $)
2020
2012
2020
RCI–1 Total
0.6
2.4
13.8
$537
–$1,063
–$527
–$38
Residential New/Major Renovations
0.5
2.0
11.9
$476
–$913
–$437
–$37
Commercial New/Major Renovations
0.1
0.4
2.0
$61
–$150
–$89
–$45
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalent; $/tCO2e = dollars per metric ton
of carbon dioxide equivalent.
Data Sources:
• Building Codes Assistance Project (BCAP), personal communications with Aleisha Khan
•
R. Ewing, K. Bartholomew, S. Winkelman, J. Walters, and D. Chen. 2007, “Growing Cooler:
The Evidence on Urban Development and Climate Change” Urban Land Institute.
http://www.smartgrowthamerica.org/gcindex.html.
Benefits:
• BCAP Code Status Detail. Found at: http://www.bcapenergy.org/code_status.php?‌STATE_AB=MD.
•
Maryland Additional State Info. Found at:
http://www.energycodes.gov/implement/‌state_codes/state_stat_more.php?state_AB=MD
Appendix D-3 Page 8
Maryland Climate Action Plan Appendix D-3
•
R. G. Lucas of Pacific Northwest National Laboratory. “Analysis of Energy Saving Impacts
of New Residential Energy Codes for the Gulf Coast,” Table 3. Annual Energy Costs (Space
Heating and Cooling Only) of Whole Building Alternatives—House with Slab-on-Grade
Foundation, p. 5, January 2007. http://www.energycodes.gov/pdf/pnnl16265.pdf (accessed
January 2, 2008)
•
M. A. Halverson, K. Gowri, and E. E. Richman of Pacific Northwest National Laboratory.
“Analysis of Energy Saving Impacts of New Commercial Energy Codes for the Gulf Coast,”
Appendix B. Table B-1. Office Results for New Orleans, p. 33, December 2006.
http://www.energycodes.gov/pdf/pnnl16282.pdf (accessed January 6, 2008)
•
Gregory H. Kats, “Green Building Costs and Financial Benefits,” 2003, Figure 2, p. 4,
http://www.cap-e.com/ewebeditpro/items/O59F3481.pdf (accessed January 7, 2008).
Costs:
• Greg Katz and Jon Braman. Greening Buildings and Communities: Costs and Benefits. Draft
Findings on the Cost Premium, Energy and Water Savings by LEED Level. 2008.
(unpublished, under review)
•
ICC Code Website. Building Valuation Data. http://www.iccsafe.org/cs/techservices/
(accessed March 13, 2008).
Quantification Methods:
Benefits:
The timing of the implementation of future building codes was determined. Then, the percentage
of new and renovated homes and buildings that would comply with the new building codes
instead of 2006 IECC was determined. Incremental energy savings goals were also determined
based on the current energy savings trajectory for residential and commercial buildings for future
building codes. After the energy savings was broken out by fuel type, the greenhouse gas
emission reductions were calculated using emissions factors for each fuel type. The avoided
costs by fuel type were also calculated.
Costs:
Incremental construction cost percentages were multiplied by the average cost of Maryland
homes and office buildings to determine the incremental cost per building for different levels of
energy savings associated with different programs.
Key Assumptions:
While this policy applies to new structures, existing structures undergoing major renovations and
existing structures undergoing more minor renovations, the impacts from existing structures
undergoing more minor renovations were not modeled because the number of structures involved
is not known. Also, there would be a wide variety of measures implemented with a range of
possible energy savings.
The analysis of costs and GHG benefits are limited to energy efficiency measures. Alternative
means of reaching the goals (switching to low and no carbon-based fuels for previously carbonbased end-uses, off-site purchases on grid supplied “green power” and/or installing on-site offgrid power generating equipment) are not modeled.
Appendix D-3 Page 9
Maryland Climate Action Plan Appendix D-3
Analysis of GHG benefits and costs for implementing goals by size of building are not modeled.
Assuming that a portion of the new homes and buildings do not comply with the building code
upgrades, a portion of the new homes and buildings will not be upgrading to future building
codes or going beyond code.
The building code 3-year cycle will start in 2009. Incorporation of beyond-code elements into
building codes will occur starting with the second code cycle in 2012.
This analysis also assumes that improvements are incremental to a scenario where the status quo
persists. The benefits and costs for new homes are derived from the fact that these homes are
built to building codes in the future that are more stringent than the current code. The benefits
and costs for renovated homes are derived in the same way; instead of being renovated to current
code, these homes will be renovated to more stringent codes in the future.
A new building is defined as any building that is built between 2009 and 2020. A renovated
building is defined as any building that undergoes major renovations between 2009 and 2020.
For ease of analysis, Center for Climate Strategies (CCS) and the RCI TWG (collectively, “we”)
are assuming that the energy reductions from implementing 2006 IECC are similar to the energy
reductions from implementing IBC 2006. This is supported by an email from Mark Halverson of
the Pacific Northwest National Laboratory stating, “The IBC is a building code and not an
energy code. The IBC references the IECC for energy issues and so unless a state or local
jurisdiction makes modification to the IBC (which many do), they will end up with the
corresponding version of the IECC.”
Additionally, we are assuming that building codes are implemented in the same year that they are
released and adopted. Mark Halverson of the Pacific Northwest National Laboratory noted that
building codes are currently being adopted by particularly aggressive states in the year they are
released or even before they are released. Vermont is a good example of a state where this is
occurring. If builders are kept in the loop on potential updates during the course of the multi-year
planning stage and the updates are not so stringent that there are barriers to implementation,
quick implementation is possible.
Benefits: Table F-2 presents the key assumptions for the potential benefits from this policy.
Table F-2. Key assumptions for benefits from RCI-1
Assumption
Residential Sector
Commercial Sector
Number of new
homes/buildings
289,940
6,784
Scaled from regional data using
population
Ratio of new vs. renovated
homes/buildings
1.00
1.00
Placeholder assumption
Building code compliance rate
70%
70%
Placeholder assumption
Number of new and renovated
homes/buildings participating
in building code updates
405,916
9,498
Calculated assumption
Average energy use for a
44,734 Btu/sq.
65,302 Btu/sq.
Calculation of energy use divided
by projected number of square
Appendix D-3 Page 10
Notes
Maryland Climate Action Plan Appendix D-3
Assumption
new/renovated home/building
Residential Sector
ft./‌year
Commercial Sector
ft./‌year
Notes
Average square footage per
new/renovated building
1,700
11,829
Calculation of projected square
footage of buildings divided by the
projected number of buildings
Current stock vs. new stock
energy savings
20%
16%
Calculated using Gulf Coast
studies on building codes
Energy savings for new and
renovated homes/buildings
from future building codes (as
compared with 2006 IECC)
2009 IECC: 30%
2012 IECC: 35%
2015 IECC: 40%
2018 IECC: 45%
2009 IECC: 5%
2012 IECC: 30%
2015 IECC: 33%
2018 IECC: 36%
Provided by Aleisha Khan at
BCAP
Energy savings goals
2009: 30%
2012: 40%
2015: 45%
2018: 50%
2009: 15%
2012: 30%
2015: 40%
2018: 50%
Assumes more aggressive
building codes incorporating
elements of LEED or other beyond
code measures
Proportion of energy savings
by fuel type
53% Electricity
47% Natural gas
51% Electricity
49% Natural gas
Based on the breakout in the
Inventory & Forecast
Emissions factors
Electricity average (2008–2020): 0.77
tCO2e/MWh, or 224.3 (tCO2/BBtu),
Natural Gas: 54 tCO2e/BBtu
Electricity: generation-weighted
average of projected annual CO2e
emissions by utilities and nonutilities (excluding commercial and
industrial combined heat and
power [CHP]) for the marginal
fuels. Generation and emissions
projections are taken from the
Maryland GHG emissions
forecast. Coal, natural gas, and
petroleum are assumed to be on
the margin.
Natural Gas: EPA 2003 US GHG
inventory, Appendix A
Transmission and distribution
(T&D) electricity loss
10%
Placeholder assumption
Avoided energy costs
Electricity: $24,434/BBtu (2006$)
Natural Gas: $8,061/BBtu (2006$)
Maryland-specific; calculated
based on 15-year Baltimore Gas &
Electric (BGE) and 5-year
Potomac Electric Power Company
(Pepco) price schedules for
qualifying facilities purchased
power, weighed for on-peak and
off-peak usage, and for the
fraction of Maryland’s electricity
supplied by each of the three
utilities.
feet
BBtu = billion British thermal units; sq. ft. = square feet; IECC = International Energy Conservation Codes; BCAP =
Building Code Assistance Project; LEED = Leadership in Energy and Environmental Design Green Building Rating
System™; tCO2e = metric tons of carbon dioxide equivalent; MWh = megawatt-hours; GHG = greenhouse gas.
Costs: Table F-3 presents the key assumptions for the potential costs of this policy.
Table F-3. Key assumptions for costs of RCI-1
Assumption
Residential Sector
Real Discount Rate
5%
Commercial Sector
Notes
Placeholder assumption
Appendix D-3 Page 11
Maryland Climate Action Plan Appendix D-3
Capital Recovery Factor for
Levelization
6.20%
Interest rate: 5.0%
Period: 30 years
6.52%
Interest rate: 5.5%
Period: 30 years
Calculated assumption
Average Construction Cost of
a Home/Building
$187,425
$1,546,610
Based on national estimates from
the ICC
Incremental Costs from
Building Code Improvements
2009: 2%
2012: 2%
2015: 3%
2018: 4%
2009: 0.5%
2012: 2%
2015: 2%
2018: 4%
Based on the incremental costs of
LEED levels with like energy
savings
ICC = International Code Council; LEED = Leadership in Energy and Environmental Design Green Building Rating
System™.
For simplicity, every home or building, without regard for the year when it is retrofitted or built,
is assumed to achieve the energy savings goals as written. Please note that there are alternate
ways to analyze this policy, including assuming that a proportion of the homes and buildings that
participate in a given year attain energy savings that are less than the goal and the remaining
proportion exceed the goal.
It is assumed that renewable energy purchases (off-site electricity generation from renewables)
are one of the ways with which the home or building can accomplish the given goal.
Key Uncertainties
Assumptions for which there was little to no supporting data include:
•
The number of renovated homes and buildings;
•
The building code compliance rate; and
•
The cost of building code implementation.
Additionally, the cost of new construction is based on national estimates. Region-specific
estimates are not available but may be either higher or lower than these costs.
In its “Growing Cooler” report, the Urban Land Institute (ULI) predicts a reversal of 20th-century
sprawling development patterns towards increasing demand for compact development, due in
part to a relative decline in the share of households with children versus those made up of older
Americans (http://www.smartgrowthamerica.org/gcindex.html). Energy consumption in large-lot
homes is generally higher than in compact development, which tends to be more tightly built,
and for which much of the heat loss occurs into adjacent unit(s). If Maryland experiences higher
demand for compact development, as projected by ULI on a nation-wide basis, baseline energy
consumption could be lower, and hence costs of attaining a given level of energy savings under
RCI-1 would be lower. No adjustment has been made to the policy analysis or baseline, because
estimates of the energy savings associated with compact development vary widely, and data to
apply these efficiencies to the baseline in Maryland are lacking.
Estimates for the incremental cost of beyond-code improvements vary widely, and these
assumptions represent the lowest costs seen to date.
Also, there is a need to better define and distinguish major from minor renovations.
Appendix D-3 Page 12
Maryland Climate Action Plan Appendix D-3
There is a need to define the threshold that would trigger the need for a building code permit.
Additional Benefits and Costs
•
Resource conservation, including water – lower water demand leads to lower costs and
reduced energy use for water production. In the City of Annapolis, water utility and sewer
pumps account for around 23% of energy use and 30% of carbon dioxide equivalent (CO2e)
emissions.
•
Indoor comfort and air quality improvements, with related improvements in health and
productivity.
•
Savings to consumers and business on energy bills. Benefits to the low income by reducing
utility costs.
•
Electricity system benefits: reduced peak demand, reduced capital and operating costs,
improved utilization and performance of electricity system.
•
Reduced pollutants from emissions, improved health from fewer pollutants and particulates
and reduced water use for cooling.
•
Green-collar employment expansion and economic development.
•
Reduced dependence on imported fuel sources.
•
Reduced energy price increases and volatility.
Feasibility Issues
A 3-year cycle for updates could be challenging to implement given that smaller counties may
not have the administrative staff to keep up with frequent code changes. A greater number of
cycles with less substantial updates may result in a loss of attentiveness by smaller counties.
Fewer updates that are each more impactful may be more feasible for smaller counties in
particular.
The energy savings trajectory is more aggressive for the Commercial sector as compared with
the Residential sector. Because Commercial building codes are not slated to achieve the same
reductions as the Residential building codes, a greater effort must be made with regard to
increasing the stringency of these building codes such that the Commercial sector meets the same
goal as the Residential sector. However, the feasibility of the energy savings trajectory as defined
for the Commercial sector is unknown.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
Not applicable.
Appendix D-3 Page 13
Maryland Climate Action Plan Appendix D-3
RCI-2. Demand-Side Management/Energy Efficiency Programs, Funds,
or Goals for Electricity and Natural Gas (Including Expansion of
Existing Programs and Peak Load Reduction)
Policy Description
This option focuses on increasing investment in electricity and natural gas demand-side
management (DSM) programs through programs run by the MEA, energy service companies
(ESCOs), utilities, or others, in order to meet the goals of overall reduction in energy
consumption as well as a reduction in peak load demands. Decreasing consumption will have
immediate impacts on greenhouse gas emissions. DSM activities may be designed to work in
tandem with other recommended strategies that can also encourage efficiency gains.
This policy involves the creation of a Public Benefit Fund (PBF) with the goal of increasing the
funding and scope of existing energy efficiency programs. Implementation of energy efficiency
programs could also include the following elements:
•
Establishment of ongoing, high-level statewide resource planning in coordination with the
PSC.
•
Aggressive marketing of and advertisement for energy efficiency programs.
•
Scaling-up of training and education in energy efficiency measures.
•
Use of tax policy to facilitate implementation of energy efficiency measures.
•
Facilitation of the whole process of implementing energy efficiency measures by:
overcoming information hurdles; subsidizing energy auditing and implementation costs;
setting up recycling/scrapping programs of old appliances; reduction of overall transaction
costs.
RCI-2 is intended to achieve the incremental difference between the energy efficiency gains
from RCI-10 (Energy Efficiency Resource Standard [EERS]) and statewide application of the
EmPOWER Maryland goals (15% per capita electricity and natural gas use by 2015).
Policy Design
Goals:
• Together with RCI-10, achieve a 15% reduction in per capita electricity and natural gas use
by 2015. The budget for this policy shall be up to $100 million per year.
•
100% capture of achievable cost-effective energy efficiency by 2025.
•
Individual targets for different sectors to be defined in wedges, by how much each sector can
potentially contribute to the overall goal.
Timing: Early action to begin with increased funding in current state programs in 2008.
Appendix D-3 Page 14
Maryland Climate Action Plan Appendix D-3
Parties Involved: MEA, PSC, utility companies, generators and distributors, advocacy groups,
Energy Service Companies, and local governments.
Other: Supporting measures include providing training for contractors, builders, and other
specialists in expectation of increased demand (see RCI-5) and encouraging local governments to
adopt energy efficiency targets (see RCI-4).
Implementation Mechanisms
•
Establish ongoing, high-level statewide resource planning in coordination with the PSC.
•
Facilitate the whole process of implementing energy efficiency measures by overcoming
information hurdles, setting up recycling/scrapping programs for old appliances, and
reducing overall transaction costs. Invest in consumer education and program marketing.
•
Develop an administrative framework for coordination and oversight of energy efficiency
programs. MEA could be the administrative entity for the implementation of the PBF. The
administrative body would develop a transparent contracting and procurement process for the
selection of a variety of implementation contractors including energy service companies,
nonprofit agencies, utilities, and other third parties.
•
Scale up current successful energy efficiency programs to increase coverage where
appropriate rather than create redundant additional programs.
•
Expand energy audit programs for all sectors and offer incentives and assistance for building
and production facilities owners to follow up on audit recommendations. These incentives
can be tax deductions for conducted audits, days off from work for employees attending their
home energy audit, and other mechanisms that reduce transaction costs.
•
Provide incentives to address potential “lost opportunities” in new construction, equipment
and appliance replacement, and retrofits.
•
Promote the purchase of appliances, thermostats, and compact fluorescent lamps (CFLs) that
qualify for current ENERGY STAR or better. (See also RCI-7 and RCI-11.)
•
Implement energy labeling for new homes and encourage or mandate it for existing homes
for further sales or leases.
•
Review efficiency best practices for specific industries and conduct training on these
practices.
•
Promote specific technologies, including incentives for solar hot water installation. Solar hot
water systems reduce use of other fuels for water heating (largely electricity and natural gas),
thereby avoiding GHG emissions, reducing Maryland’s dependence on natural gas, and
potentially reducing the price of this fuel.
Possible funding sources would be proceeds of Regional Greenhouse Gas Initiative (RGGI)
allowance auctions, Environmental Trust Fund, or a new public benefits charge.
Related Policies/Programs in Place
The EmPOWER Maryland goal, set by Governor O’Malley in July 2007, established a statewide
goal of reducing per capita electricity consumption and peak demand by 15% by 2015. Modeled
Appendix D-3 Page 15
Maryland Climate Action Plan Appendix D-3
on the governor’s goal, SB 205/HB 374 requires electric utilities to submit plans to reduce per
capita electricity consumption by 10% by 2015.
The Maryland Energy Efficiency Standards Act of 2007 requires the MEA to adopt regulations
establishing minimum efficiency standards for a number of consumer products.
RGGI auction proceeds may be dedicated to Energy efficiency. HB 0368/SB 268 established the
Maryland Strategic Energy Investment Program and Fund, to decrease energy demand and
increase clean energy supply utilizing proceeds from the sale of RGGI allowances. This
legislation has not been reflected in the analysis that follows.
ESCOs in Maryland offer Energy Performance Contracting (EPC) to government agencies and
the commercial sector. Performance contracting is a self-financing mechanism for improvements
for energy efficiency. In the commercial sector, the money that businesses save through less
energy consumption is leveraged to pay to the ESCO for financing, installing, operating, and
maintaining the energy efficiency measures. After a predetermined period of time of paying the
ESCO via the energy bill, all of the energy savings revert to the business owner. $395 million
have been loaned since 1995. Maryland state agencies finance EPCs through a private sector
financial institution and energy savings from the installed projects are paid from state agency
operating budgets to the financial institution. ESCOs that implement state energy projects
guarantee the energy savings to the state agency.
On the industry side, MEA has provided limited free energy assessments for Maryland industries
through the Industrial Energy Assessment, in partnership with the University of Maryland and
the United States Department of Energy (DOE).
The MEA has several programs in place to help finance energy efficiency improvements (see
RCI-3).
The Energy Independence and Security Act of 2007 has three titles particularly relevant to
RCI-2: Title III (Appliance and Lighting Efficiency), Title IV (Energy Savings in Building and
Industry), and Title V (Energy Savings in Government and Public Institutions).
Type(s) of GHG Reductions
Reduction in GHG emissions (largely CO2) from avoided electricity production or on-site fuel
combustion.
Estimated GHG Reductions and Net Costs or Cost Savings
Table F-4 presents the estimated GHG reductions and net costs or costs savings from
implementing RCI-2.
Appendix D-3 Page 16
Maryland Climate Action Plan Appendix D-3
Table F-4. Estimated GHG reductions and net costs of or cost savings from RCI-2
GHG Reductions
(MMtCO2e)
Net
CostGross
Gross
Present
EffectiveCosts
Benefits
Value
Total
ness
2008– (Million $) (Million $) 2008–2020 ($/tCO2e)
(Million $)
2020
2012
2020
RCI–2 Total
1.8
4.5
35.0
$903
–$2,801
–$1,898
–$54
Electric demand-side management
1.5
3.7
28.7
$696
–$2,151
–$1,454
–$51
Natural gas demand-side management
0.3
0.8
6.3
$206
–$650
–$443
–$70
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalent; $/tCO2e = dollars per metric ton
of carbon dioxide equivalent.
Data Sources:
Energy efficiency potential:
• Maryland Public Interest Research Group (MaryPIRG) Foundation 2005. Power Plants and
Global Warming: Impacts on Maryland and Strategies for Reducing Emissions.
•
American Council for an Energy-Efficient Economy (ACEEE) 2004. The Technical,
Economic and Achievable Potential for Energy-Efficiency in the U.S. – A Meta-Analysis of
Recent Studies, available at www.aceee.org/conf/04ss/rnemeta.pdf.
•
Synapse Energy Economics 2004. A Responsible Electricity Future: An Efficient, Cleaner
and Balanced Scenario for the U.S. Electricity System.
•
ACEEE 2005. Examining the Potential for Energy Efficiency to Help Address the Natural
Gas Crisis in the Midwest.
•
Optimal Energy, Inc., et al. 2006. Natural Gas Energy Efficiency Resource Development
Potential in New York.
•
GDS Associates, Inc. 2006. The Maximum Achievable Cost Effective Potential for Gas
DSM in Utah for the Questar Gas Company Service Area.
Cost of energy efficiency measures in Maryland
• Potomac Electric Power Company (Pepco) and Baltimore Gas & Electric (BGE) filings.
Experience in other states on cost of energy efficiency:
• Bill Prindle 2007. “Energy Efficiency: The First Fuel in the Race for Clean and Secure
Energy,” Presentation at the National Action Plan for Energy Efficiency (NAPEE) Southeast
Energy Efficiency Workshop on September 28, 2007, available at
http://www.epa.gov/solar/pdf/southeast_28sep07/prindle_new_napee_presentation_atlanta_9
_28_07.pdf.
•
ACEEE 2004. Five Years In: An Examination of the First Half-Decade of Public Benefits
Energy Efficiency Policies, April 2004.
•
Gene Fry, “Massachusetts Electric Utility Energy Efficiency Database”, Massachusetts
Department of Telecommunications and Energy, 2003 edition.
Appendix D-3 Page 17
Maryland Climate Action Plan Appendix D-3
•
Heschong Mahone Group, Inc. 2005. New York Energy $martSM Program CostEffectiveness Assessment, prepared for NYSERDA, June 2005.
•
Western Governor’s Association (WGA) 2006. The Energy Efficiency Task Force Report to
the Clean and Diversified Energy Advisory Committee of the Western Governors
Association, January 2006.
•
GDS Associates, Inc. 2007. Electric Energy Efficiency Potential Study for Central Electric
Power Cooperative, Inc. Final Report. Updated September 21, 2007.
Cost of saved natural gas:
• Optimal Energy Inc. et al. 2006. Natural gas Energy Efficiency Development Potential in
New York, October 31, 2006.
•
Southwest Energy Efficiency Project 2006. Natural Gas Demand-Side Management
Programs: A National Survey, available at www.swenergy.org.
Quantification Methods:
• Develop energy savings targets for RCI-2 and RCI-10.
•
Develop a maximum achievable DSM savings scenario, which aims to attain the 15% energy
savings goal by 2015. After 2016, the maximum achievable annual savings scenario for gas
and electric DSM draws on experience in other states.
•
Estimate energy savings from RCI-2 as the difference between RCI-10 and the maximum
achievable DSM savings scenario.
•
Estimate energy reduction based on the percentage reduction goal in per capita electricity and
natural gas each year until 2015 for RCI-2 and RCI-10. (The target for RCI-2 is set to the
incremental energy savings required to achieve 15% by 2015 reduction goal, over and above
RCI-10’s contribution to the overall goal.)
•
Estimate the total cost of electricity and natural gas savings, capped at $100 million per year.
•
Estimate the GHG emissions reduction through the electric energy efficiency measures.
Key Assumptions:
• Discount rate: Same assumptions as used for RCI-1.
•
Cost of financing: 0% interest rate (DSM costs are incurred as the Systems Benefits Charge
(SBC) is collected).
•
Avoided cost of electricity and fuels: Same assumptions as used for RCI-1.
•
Maximum achievable electricity and natural gas efficiency savings, 2008 to 2015: Table F-5
presents the assumed maximum achievable electricity and natural gas efficiency savings
through 2015 for RCI-2 and RCI-10 combined.
Appendix D-3 Page 18
Maryland Climate Action Plan Appendix D-3
Table F-5. Maximum achievable electricity and natural gas efficiency savings for RCI-2
and RCI-10, 2008-2015
Year
Target
2008
1%
2009
2%
2010
3.5%
2011
5%
2012
7%
2013
9%
2014
12%
2015
15%
•
Maximum achievable electricity and natural gas efficiency savings after 2015: 1.6% per year
for electricity efficiency and 1.2% per year for natural gas efficiency based on a number of
DSM potential studies and experiences by leading electric and natural gas utilities.
•
Achievable electric efficiency potential: “The state has sufficient efficiency potential to
reduce power demand by 14 million megawatt-hours (MWh), or 16.5% of total electricity
demand projected for 2018. This would return electricity demand in 2018 to 2006 levels.”
(Source: MaryPIRG Foundation 2005).
•
Achievable natural gas potential: ACEEE 2004.
•
Cost of electric efficiency measures: 3 cents per kilowatt-hour (kWh) of saved electricity
based on experience in other states:
Table F-6. Experience in other states on the cost of saved energy (CSE)
State/Utility
CSE
($kWh)
Program Year
Source
Western utilities
0.025
1978–2004
WGA, 2006
Northwest Energy
0.02
2006
Montana PSC Docket No.: D2005.5.88, July 12, 2006
New York
0.03
2004
Heschong Mahone Group, Inc., 2005
MA IOUs
0.038
2002
Gene Fry, 2003
California
0.03
N/A
ACEEE, 2004
Connecticut
0.023
N/A
ACEEE, 2004
New Jersey
0.03
N/A
ACEEE, 2004
Vermont
0.03
N/A
ACEEE, 2004
North Carolina
0.029
2006-2017
GDS Associates, Inc., 2006
CSE = cost of saved energy; kWh = kilowatt hours; WGA = Western Governors’ Association; PSC = Public Service
Commission; N/A = not applicable; ACEEE = American Council for an Energy-Efficient Economy.
•
Cost of saved natural gas: $2.47/million British thermal units (MMBtu) based on Optimal
Energy Inc. et al. (2006), which investigated the natural gas energy efficiency potential in
downstate (urban and suburban) and upstate (predominantly rural) New York State. The
downstate cost of saved natural gas is used here, as it is assumed to be more applicable to
State of Maryland.
Appendix D-3 Page 19
Maryland Climate Action Plan Appendix D-3
•
Utility cost of saved energy: the utility cost of saved energy (including incentives, marketing
and admin) is assumed to be 60% of the total cost of energy efficiency. This cost does not
include costs paid by participants.
•
Electric efficiency measure lifetime: 13 years on average for electricity DSM.
•
Displaced emissions: Same assumptions as used for RCI-1.
Key Uncertainties
The source of funding to implement the aggressive DSM program envisioned here is uncertain.
Additional Benefits and Costs
•
Indoor comfort and air quality improvements, with related improvements in health and
productivity.
•
Savings to consumers and business on energy bills. Benefits to the low income by reducing
utility costs.
•
Electricity system benefits: reduced peak demand, reduced capital and operating costs,
improved utilization and performance of electricity system.
•
Reduced risk of power shortages.
•
Reduced pollutants from emissions, improved health from fewer pollutants and particulates
and reduced water use for cooling.
•
Green-collar employment expansion and economic development.
•
Reduced dependence on imported fuel sources.
•
Reduced energy price increases and volatility.
Feasibility Issues
None noted.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
Not applicable
Appendix D-3 Page 20
Maryland Climate Action Plan Appendix D-3
RCI-3. Low-Cost Loans for Energy Efficiency
Policy Description
Revolving loan funds are effective tools for promoting energy efficiency investment. This policy
involves the creation of revolving low-interest loan fund(s) targeting distribution service areas
that are not covered by existing utility programs, as well as expanding the scope of existing
programs in areas that are currently covered. RCI-3 is intended to complement the programs
being considered as part of RCI-2 and RCI-10.
The policy could help a variety of customer classes improve the energy efficiency of their
building or residence through one or more specific measures. While this policy does not support
comprehensive improvements for each participant, the measures that are installed would likely
be some of the most needed improvements and thus deliver significant energy savings. Measures
that are good candidates for this program would likely include appliance replacements and/or
furnace, boiler, and/or hot water heater upgrades. This policy is not intended to fund major
structural changes to residences and buildings or large-scale renovations such as replacing roofs
or windows. The action would initially be targeted at residential customers, small businesses and
low-income consumers, who often rent rather than own their property, and then expanded to
other customer classes, including larger businesses and the industrial sector.
These programs could be designed so as to offer low-income residents and other underserved
customer classes energy efficiency services with a minimum of up-front costs, and could be
marketed through an aggressive campaign of targeted outreach to these sectors. Terms of the
loan can be designed to allow loan repayment as cost savings on utility bills are realized.
Programs can be designed to work with both landlords and tenants, including small businesses.
The policy design could also complement measures or ordinances that require existing buildings
to be brought up to the current code at the point of sale, and with new buildings, especially those
built “on spec” and/or that are “flipped” to another party at the time of their sale.
Policy Design
Goals: Establish revolving loan funds for small-scale residential and commercial energy
efficiency projects. For analysis purposes, government funding will provide $15 million ($10
million for the Residential sector and $5 million for the Commercial sector), to be leveraged with
private capital ($40 million for the Residential sector and $20 million for the Commercial sector)
to create a larger fund and allow for greater participation. It may be appropriate for actual fund
levels to be higher than stated here.
Timing: Applications for loan funds will be reviewed in 2008 and allocation and use will occur
starting in 2009.
Parties Involved: Residential and commercial property owners and tenants, government housing
and other state and federal government agencies, weatherization and energy service providers,
local business associations, community action agencies/human resource development councils,
and non-governmental organizations such as Habitat for Humanity.
Appendix D-3 Page 21
Maryland Climate Action Plan Appendix D-3
Other: New programs should build on the state’s previous experience with weatherization
programs. A review of past programs should be conducted.
Implementation Mechanisms
Implement loan programs to target difficult-to-reach populations. Pay-as-you-save programs, or
other loan programs that link energy efficiency savings to the meter to pay for them over time,
should be included in the suite of loan programs. Utilities would be encouraged to submit
proposals to the PSC, which would review and have authority to approve proposals.
The program could also be first targeted to eligible homes, including those whose household
income is below 150% of the federal poverty level, and to businesses with fewer than 25
employees. Other customer sectors can be reviewed for eligibility for program in the future.
Complementary measures to target rental properties may be needed. The state should consider
the feasibility of the following measures:
•
Completing a retro-commissioning program on rental properties whose occupants have or are
expected to have long tenancies, such as housing for the elderly, low-income projects and
small businesses, to bring these units up to the latest building and appliance codes by 2014.
•
Establishing and enforcing requirements that rental properties meet energy and appliance
codes.
•
Requiring landlords to meet efficiency standards (such as current ENERGY STAR or better)
at the time the rental occupancy changes.
•
Providing income tax credits for rental property owners who weatherize rental properties to
meet energy efficiency standards set by the program.
•
Disclosing utility bills for a dwelling at the time of sale or rentalf.
•
Enact tenants’ rights laws relating to energy efficiency, possibly including tenants’ rights to
request an energy audit of their rental.
•
Benchmarking rental properties using the ENERGY STAR benchmarking program or
equivalent. Target low performing buildings, using a combination of incentive payments
from RCI-2 and financing to produce the highest possible improvements.
Related Policies/Programs in Place
The State Agency Loan Program (SALP) is a revolving loan program that provides
approximately $1 million in no-interest loans to state agencies for energy efficient
improvements.
The Community Energy Loan Program (CELP) funds the identification and implementation of
energy efficiency improvements for local governments, schools and non-profit organizations.
CELP permits borrowers to pay the loans with the cost savings generated by the improvements.
CELP funds $1.5 million in new projects every year.
Home buyers in southern Maryland are eligible for an ENERGY STAR mortgage plan offered
by the Southern Maryland Energy Cooperative if they purchase an ENERGY STAR home.
Appendix D-3 Page 22
Maryland Climate Action Plan Appendix D-3
Although the additional features of an ENERGY STAR residence increase the sale price of the
home, participating mortgage providers offer a reduction of loan origination fees, discounted
interest rates, and may include cash back at closing. While this program focuses on home
owners, it could be reviewed for its relevance, and considered for adoption/expansion for rental
properties. Some of the model programs and policies in other jurisdictions are
•
The New Hampshire “pay as you save” program and other bill financing mechanisms.
•
California’s Energy Efficiency Based Utility Allowance Schedule attempts to correct the
split incentive problem on rental properties. Eligible projects must be 15% better than code
for new projects, and 20% improvement, compared to previous baseline, for existing
projects.
•
Energy Savings Insurance (used in Canada, concept developed by Evan Mills, Lawrence
Berkeley Labs). Property owners whose buildings are some percentage (10%–20%) better
than code earn a rebate on their insurance. In another flavor, more focused on larger
buildings, an insurance policy is written to underwrite the performance of EE and guarantee
its persistence over time.
The Maryland Strategic Energy Investment Program (SB 268) will target electricity consumption
in the low- to moderate-income residential sector.
The EmPOWER Maryland goal, set by Governor O’Malley in July 2007, established a statewide
goal of reducing per capita electricity consumption and peak demand by 15% by 2015. Modeled
on the governor’s goal, SB 205/HB 374 requires electric utilities to submit plans to reduce per
capita electricity consumption by 10% by 2015.
The Maryland Energy Efficiency Standards Act of 2007 requires the MEA to adopt regulations
establishing minimum efficiency standards for a number of consumer products.
Recent federal legislation that may facilitate efforts under RCI-3 includes the Energy
Independence and Security Act of 2007, particularly Title III (Appliance and Lighting
Efficiency) and Title IV (Energy Savings in Building and Industry).
Type(s) of GHG Reductions
Reduction in GHG emissions (largely CO2) from avoided electricity production or on-site fuel
combustion.
Estimated GHG Reductions and Net Costs or Cost Savings
Table F-7 presents the estimated GHG reductions and net costs or costs savings from
implementing RCI-3.
Appendix D-3 Page 23
Maryland Climate Action Plan Appendix D-3
Table F-7. Estimated GHG reductions and net costs of or cost savings from RCI-3
GHG Reductions
(MMtCO2e)
Net
CostGross
Gross
Present
EffectiveCosts
Benefits
Value
Total
ness
2008– (Million $) (Million $) 2008–2020 ($/tCO2e)
(Million $)
2020
2012
2020
RCI–3 Total
0.3
0.5
4.1
$163
–$351
–$87
–$45
Residential
0.2
0.4
3.2
$137
–$72
–$35
–$42
Commercial
0.1
0.1
0.9
$26
–$79
–$53
–$59
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalent; $/tCO2e = dollars per metric ton
of carbon dioxide equivalent.
Data Sources:
• Cost of energy efficiency measures in Maryland: Pepco and BGE filings.
•
Experience in other states on cost of energy efficiency:
○
○
○
○
○
○
•
Bill Prindle 2007. “Energy Efficiency: The First Fuel in the Race for Clean and Secure
Energy,” Presentation at the NAPEE Southeast Energy Efficiency Workshop on
September 28, 2007, available at
http://www.epa.gov/solar/pdf/southeast_28sep07/prindle_new_napee_presentation_atlant
a_9_28_07.pdf.
ACEEE 2004. Five Years In: An Examination of the First Half-Decade of Public Benefits
Energy Efficiency Policies, April 2004.
Gene Fry, “Massachusetts Electric Utility Energy Efficiency Database”, Massachusetts
Department of Telecommunications and Energy, 2003 edition.
Heschong Mahone Group, Inc. 2005. New York Energy $martSM Program CostEffectiveness Assessment, prepared for NYSERDA, June 2005.
Western Governor’s Association (WGA) 2006. The Energy Efficiency Task Force Report
to the Clean and Diversified Energy Advisory Committee of the Western Governors
Association, January, 2006.
GDS Associates, Inc. 2007. Electric Energy Efficiency Potential Study for Central
Electric Power Cooperative, Inc. Final Report. Updated September 21, 2007.
Cost of saved natural gas: Optimal Energy Inc. et al. 2006. Natural Gas Energy Efficiency
Development Potential in New York, October 31, 2006.
Quantification Methods:
Benefits:
Assumptions about the funding pool, the percent of the funding pool that will be used to fund
measures that save electricity vs. natural gas, the cost of saved electricity and natural gas, the
average loan amount per building and the average loan payback period were made. The number
of homes and buildings that could be reached by the policy in the first year was calculated by
dividing the funding pool by the average loan amount per home or building. The number of
homes and buildings that could be reached in subsequent years was calculated by dividing the
Appendix D-3 Page 24
Maryland Climate Action Plan Appendix D-3
amount of funds that were repaid in that year by the average loan amount per home or building.
The energy savings were calculated by breakout out the funding pool into funds for electricity vs.
natural gas measures and multiplying these pools by the energy savings per dollar spent in the
first year on electricity and natural gas measures, respectively. Greenhouse gas emission
reductions were calculated using emissions factors for each fuel type. The avoided costs by fuel
type were also calculated.
Costs:
Assumptions about the difference between the interest rates for the government and participants
were developed. The government interest was calculated by multiplying the full loan amount by
the interest rate for the government for each year. The participant interest was calculated by
multiplying the loan that had not been paid off by the participant interest rate for each year. The
cost was calculated as the sum of the interest the government is paying on the loan, plus the total
loaned amount. The loan amount was calculated as the total amount lent out over the entire
period (because the loan was “re-lent” as is was repaid, subsequent “lending” of the same money
were counted).
Key Assumptions:
100% of the fund is lent out to participants in the first year. As soon as the participant repays the
loan, those funds are immediately lent out to another participant.
The interest is calculated at the end of each year based on the simple assumption that all of the
funds are lent out and paid back at the beginning of each year. No corrections for mid-year
transactions have been made. The interest was compounded over time.
Default risk, though more likely when working specifically with low-income populations, was
not assessed in this analysis.
Benefits:
Table F-8 presents the key assumptions for the potential benefits from this policy.
Appendix D-3 Page 25
Maryland Climate Action Plan Appendix D-3
Table F-8. Key assumptions for benefits from RCI-3
Assumption
Residential Sector
Commercial Sector
Notes
Loan fund
$50,000,000
$25,000,000
Placeholder assumption
Loan payback period
5 years
10 years
Placeholder assumption
Percent fund allocated to
electricity vs. natural gas
measures
68%
Based on Maryland electricity and
natural gas revenues across all
sectors
BBtu’s saved per $ spent on
electricity measures
0.01 MMBtu/$
Based on experience from
Maryland and other states
BBtu’s saved per $ spent on
natural gas measures
0.04 MMBtu/$
Based on experience from other
states
Proportion of energy savings
by fuel type, emissions
factors,T&D electricity loss,
and avoided energy costs
Same assumptions as used for RCI-1.
BBtu = billion British thermal units; MMBtu = million British thermal units; RCI = Residential, Commercial, and
Industrial.
Costs:
Table F-9 presents the key assumptions for the potential costs of this policy.
Table F-9 Key assumptions for costs of RCI-3
Assumption
Real discount rate
Residential Sector
Commercial Sector
Notes
Same assumptions as used for RCI-1.
Government interest rates
4.00%
4.00%
Used for all government policies
Participant interest rates
2.00%
2.00%
Placeholder assumption
RCI = Residential, Commercial, and Industrial.
Key Uncertainties
Many of the assumptions in this analysis are targets rather than being based on actual data from
an existing program and are therefore uncertain, including
•
The amount of the loan fund,
•
The average loan payback period, and
•
The amount of electricity and natural gas savings that can be achieved per dollar spent.
Appropriation(s) must be made for establishing the fund. The source of these funds is uncertain.
Moreover, the rate at which private funding will be available is uncertain, especially if default
risk is high.
Additional Benefits and Costs
•
Indoor comfort and air quality improvements, with related improvements in health and
productivity.
•
Savings to consumers and business on energy bills. Benefits to the low income by reducing
utility costs.
Appendix D-3 Page 26
Maryland Climate Action Plan Appendix D-3
•
Electricity system benefits: reduced peak demand, reduced capital and operating costs,
improved utilization and performance of electricity system.
•
Reduced risk of power shortages.
•
Reduced pollutants from emissions, improved health from fewer pollutants and particulates,
and reduced water use for cooling.
•
Green-collar employment expansion and economic development.
•
Reduced dependence on imported fuel sources.
•
Reduced energy price increases and volatility.
Feasibility Issues
Default risk may be an issue if low-income populations are targeted.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
Not applicable.
Appendix D-3 Page 27
Maryland Climate Action Plan Appendix D-3
RCI-4. Improved Design, Construction, Appliances, and Lighting in New and
Existing State and Local Government Buildings, Facilities and Operations:
“Government Lead-by-Example”
Policy Description
The State of Maryland and municipal and county governments can provide leadership in moving
the state forward by adopting policies that improve the energy efficiency of new and renovated
public buildings, facilities and operations. Recognizing that governments should “lead by
example” the option presented here provides energy use targets to improve the efficiency of
energy use in new and existing State and local government buildings, facilities and operations.
The proposed policy provides energy efficiency targets that are much higher than code standards
for new state-funded and other government buildings, facilities and operations. This option sets
energy-efficiency goals for the existing government building stock, as well as for new
construction and major renovations of government buildings, facilities and operations.
The following are elements of this policy:
•
Government buildings, facilities and related operations (including wastewater and water
utilities) will be in operation for many years and should be designed in a manner that meets
or exceeds private sector mandated building and trade energy efficiency. Energy savings
measures can pay for themselves through reductions in energy costs and improvements in
workforce efficiency over the lifetime of the structure. All new State buildings and facilities,
and renovations and additions shall be LEED certified at the Platinum level, or certified to a
comparable standard, and meet or exceed the energy efficiency and renewable energy goals
below stated.
•
Participation in LEED-EB or a comparable standard would be encouraged or required for
government buildings and facilities to ensure continued high performance through proper
building operations and maintenance.
•
Existing State and local government buildings shall be retrofitted for energy efficiency
achieving 100% of cost-effective energy efficiency by the year 2015. To meet this goal, the
State and local governments shall benchmark all buildings and facilities within the next 3
years.
•
Establishment of energy performance and operations baselines for both new and existing
State and other government buildings, followed by audits of these buildings. Audit results
could be used to target and prioritize investments in improving government building energy
efficiency.
•
Improvement and review of efficiency goals over time, and development of flexibility in
contracting arrangements to encourage integrated energy-efficient design and construction.
•
Recommendations that the infrastructure for implementation (e.g., meters, accounting
systems, staff) be established as soon as possible.
Appendix D-3 Page 28
Maryland Climate Action Plan Appendix D-3
•
Establishment of “retained savings” policies whereby government agencies are able to retain
funds saved by reducing energy bills for further energy efficiency/renewable energy
investments or other uses.
•
Requirement of carbon-neutral bonding for new construction and renovations and additions.
A carbon-neutral performance standard will require architects and engineers to design
buildings to meet a climate-neutral requirement and built to meet or exceed the state’s
existing sustainable building guidelines and will save the taxpayers money as life-cycle costs
will yield lower operational costs.
•
Focus incentives on specific technologies, including white roofs, rooftop gardens, and
landscaping to lower electricity demand, and solar photovoltaics to provide electricity when
demand in highest.
Potential supporting measures for this option include training and certification of building sector
professionals but could also include surveys of government energy and water use, energy
benchmarking, measurement, and tracking programs for municipal and state buildings.
Policy Design
Goals:
Reduce per-unit-floor-area consumption of carbon-based electricity by 15% by 2010, 50% by
2020 and 100%, carbon neutral, by 2030, for government owned and leased buildings. These
goals can be made by a combination of demand reduction measures, on-site carbon-neutral
generation and grid based green power purchases. Green power purchases shall exceed the
amount of green power purchases already provided by the utility
Timing: See above.
Parties Involved: State and local governments; MML and MACo; PSC; Maryland State
Contractors association and related private contractor and materials and supply providers;
Environmental Advocacy Organizations; MEA; DGS; Maryland Department of Transportation
(MDOT); the University System, St. Mary’s College, and Morgan State University.
Implementation Mechanisms
Mandates on Efficiency of Government-Owned Buildings, Including Schools and Publicly
Owned Hospitals:
•
New construction for which permits are requested between 2013 and 2020 will be required to
meet LEED Platinum or a comparable standard;
•
Buildings undergoing major renovations for which permits are requested between 2009 and
2013 will be required to meet LEED Gold or a comparable standard; and
•
Buildings undergoing major renovations for which permits are requested between 2013 and
2020 will be required to meet LEED Platinum or a comparable standard.
Consider Innovative Financing: Matthew Brown (former Energy Policy Director with National
Council for State Legislature, currently working for Governor Ritter of Colorado on energy
efficiency and renewable energy financing) offered some thoughts about how public money
Appendix D-3 Page 29
Maryland Climate Action Plan Appendix D-3
could be used to keep financing costs and risks to a minimum. More benefits could be achieved,
at potentially similar financing costs, using these principles:
•
Incoming cash flow or dedicated funds (e.g. RGGI allowance revenues) can be used as
leverage to buy down interest rates by providing a loss reserve (i.e., collateral for a loan,
which can bring down interest rates by 2% or more), while at the same time earning interest
for the state.
•
Incoming cash flow or dedicated funds can also provide support for low-cost bonds. With
this strategy, it is important not to have to “call” on funds.
•
Leveraging private capital can expand the options open to public entities. Public-private
financing is a fairly new and developing area, and existing business models are diverse.
However, there is a large amount of interest and capital being considered for such
investments (for example, Bank of America is financing $20 billion, mostly for renewable
energy, but it includes generic “green” investments that could definitely be energy
efficiency). Private investment will generally require a higher rate of return than secured
public financing, but the private rate will not necessarily be higher than the rate of return on
public, unsecured debt. If backed by public dollars to buy down the rate and establish a loss
reserve, private funding could have a low rate.
Collect Data on State and Local Government Building and Facilities Energy Use: A key
implementation mechanism for this option will be to first provide a thorough assessment of the
status and energy consumption of all existing State and local government buildings, including
establishing a database of buildings and building attributes including floor area, insulation level,
energy-using equipment, and history of energy consumption. This baseline, or “carbon
footprint,” will be used to assess program success.
Benchmark State Buildings: Benchmarking is a process of using the data on building size, use,
and energy use to quickly compare a building against others of similar size and use to get an idea
of how efficiently the building is operating. It is an important step in identifying opportunities for
savings and prioritizing work to be done.
Commission State Buildings: Building commissioning is a process of reviewing and tuning up
the operation of building systems and controls much like the tune-up of a vehicle. Potential
targets for commissioning might include commissioning of state buildings upon completion of
construction or renovation and whenever the energy use in a building shows an unexpected and
unexplained increase in energy use.
Purchase Green Power: Enter into agreements to purchase green power for a portion of the
states electricity needs. Increase purchases over time until 100% of power needs are met through
direct use of renewable energy or green power purchased by 2030.
Energy Use Targets: Set targets for energy use in the operation of state buildings, potentially
including capping state and local building and facilities energy use per square foot. Motion
sensors are a specific technology for reducing lighting energy use in government buildings that
may have broad application in Maryland.
Appendix D-3 Page 30
Maryland Climate Action Plan Appendix D-3
Renovate State and Local Buildings and Facilities Through a Buildings and Facilities
Energy Program: Renovate all state and local buildings and facilities with more than 5,000
square feet and smaller buildings identified through energy benchmark process as having a high
potential for energy savings within 5 years. The State and locals buildings and facilities energy
program will provide funds for energy audits, engineering analyses, and renovation costs.
Develop and Use Renewable Energy Resources: Evaluate the potential for direct use of solar,
wind, biomass, geothermal, and hydro power to meet the needs of state government operations.
Take advantage of these renewable resources whenever it is cost-effective to do so, and as a
means to lead by example in investing in these systems when it is practical to do so.
Carbon-Neutral Bonding: Climate-neutral bonding will require that any building projects
financed with the issuance of state, county, or local/municipal bonds result in no net increase in
GHG emissions. If a new construction project is projected to result in an emissions increase,
there must be GHG emissions offsets within the state or particular jurisdiction. Offsets could
include onsite renewable energy development, renewable energy purchases, energy efficiency (in
existing state buildings), carbon sequestration (tree planting), and switching to cleaner or
renewable fuels. Any GHGs emitted after the bond-financed project becomes operational will
have to be offset. The new buildings could also offset their emissions by purchasing renewable
electricity from their local utility. Paying a premium for what is known as “green pricing”
electricity will usually be a more expensive offset option than energy efficiency. A community
or state could install their own renewable energy project as a way to offset heir GHG emissions.
Monitoring and Verification: conduct periodic reviews of building energy use over time.
Related Policies/Programs in Place
•
Maryland State Buildings Council Program to set energy efficiency programs for State
buildings.
•
State buildings required to reduce energy use by 15% by 2015 per the EmPOWER Maryland
goal, set by Governor O’Malley in July 2007.
•
Montgomery County Government and Board of Education, Bill 17-06 and Green School
Focus.
•
In April 2008, the legislature passed SB 208, consistent with Maryland Green Building
Council recommendations for a high performance green building program. SB 208 requires
capital projects that are funded solely with state funds for the construction or major
renovation of buildings 7,500 square feet or greater to meet standards for a high performance
building (as defined in the legislation), unless a waiver is granted. Because of when this
legislation was passed, it has not been reflected in the analysis of RCI-4 that follows.
•
Title V of the Energy Independence and Security Act of 2007 targets energy savings in
government and public institutions.
Type(s) of GHG Reductions
Reduction in GHG emissions (largely CO2) from avoided electricity production or on-site fuel
combustion.
Appendix D-3 Page 31
Maryland Climate Action Plan Appendix D-3
Estimated GHG Reductions and Net Costs or Cost Savings
Table F-10 presents the estimated GHG reductions and net costs or costs savings from
implementing RCI-4.
Table F-10. Estimated GHG reductions and net costs of or cost savings from RCI-4
GHG Reductions
(MMtCO2e)
Net
CostGross
Gross
Present
EffectiveCosts
Benefits
Value
ness
(Million $) (Million $) 2008–2020
($/tCO2e)
(Million $)
2012
2020
Total
2008–
2020
RCI–4 Total
0.2
1.3
6.4
$147
–$484
–$337
–$53
Government Buildings
0.2
1.1
5.6
$130
–$425
–$295
–$52
Schools
0.0
0.2
0.8
$17
–$60
–$42
–$54
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalent; $/tCO2e = dollars per metric ton
of carbon dioxide equivalent.
Data Sources:
• U.S. Energy Information Administration, Commercial Buildings Energy Consumption
Survey (CBECS), http://www.eia.doe.gov/emeu/cbecs/
For Government Buildings and Schools
• M. A. Halverson, K. Gowri, and E. E. Richman of Pacific Northwest National Laboratory.
“Analysis of Energy Saving Impacts of New Commercial Energy Codes for the Gulf Coast”,
December 2006, http://www.energycodes.gov/pdf/pnnl16282.pdf (accessed January 6, 2008).
•
Incremental Costs from WBCSD, “Energy Efficiency in Buildings: Summary Report,”
October 2007.
•
Greg Katz and Jon Braman. Greening Buildings and Communities: Costs and Benefits. Draft
Findings on the Cost Premium, Energy and Water Savings by LEED Level. 2008.
(unpublished, under review).
•
ICC Code Website. Building Valuation Data. http://www.iccsafe.org/cs/techservices/
(accessed March 13, 2008).
Additional Resources For Schools
• Statistics found at http://maryland.schooltree.org/counties-page1.html and
http://www.heritage.org/research/Education/SchoolChoice/Maryland.cfm.
•
Forefront Economics, Inc., H. Gil Peach & Associates LLC, and PA Consulting Group.
“Duke Energy Carolinas DSM Action Plan: South Carolina Draft Report.” July 24, 2007.
Quantification Methods:
Benefits:
First, separate ramp ins for energy savings by existing and new buildings were developed to
together meet the overall energy savings goal and defined an overall energy savings ramp in.
Then, the number of existing and new building participants was calculated. Energy savings were
Appendix D-3 Page 32
Maryland Climate Action Plan Appendix D-3
developed using the energy savings ramp ins and the number of building participants. After the
energy savings were broken out by fuel type, the greenhouse gas emission reductions were
calculated using emissions factors for each fuel type. The avoided costs by fuel type were also
calculated.
Costs:
Incremental cost trajectories were developed independently for existing and new buildings based
on the energy savings trajectories. For existing buildings this was calculated using a bottom up
approach by estimating the cost of specific measures to achieve the first level of energy savings
and scaling these costs according to the energy savings trajectory. For new buildings this was
calculated using a top down approach by determining the cost to build the building and using a
percentage to back out the incremental costs of outfitting it with beyond-code measures. Then,
the incremental cost for the first level of energy savings was scaled according to the energy
savings trajectory. The incremental cost per building was multiplied by the number of
participants to determine the overall costs.
Key Assumptions:
The analysis of costs and GHG benefits was limited to energy efficiency measures. Alternative
means of reaching the goals (switching to low and no carbon-based fuels for previously carbonbased end-uses, off-site purchases on grid supplied “green power” and/or installing on-site offgrid power generating equipment) were not modeled.
Schools were included in this analysis as requested by TWG members.
It was assumed that the number of commercial government buildings from CBECS did not
include schools although this could not be confirmed.
Due to lag times associated with the design and permitting for new buildings, it was assumed
that a new build process initiated in 2009 will incur costs immediately but will not result in
energy savings until 2013.
For Government Buildings and Schools
Table F-11 shows the assumed energy savings ramp in to achieve the total energy savings goal.
Appendix D-3 Page 33
Maryland Climate Action Plan Appendix D-3
Table F-11. Energy savings trajectory for RCI-4 for new and existing buildings,
government buildings and schools
Year
Energy
Savings
from
Existing
Buildings
2009
15%
Code (15%)
0%
No savings due to designcompletion time lag
2010
15%
Code (15%)
0%
As above
2011
15%
Code (15%)
0%
As above
2012
15%
Code (15%)
0%
As above
2013
15%
Code (15%)
50%
LEED Platinum
2014
30%
ENERGY STAR Standard (15% + 15%)
50%
LEED Platinum
2015
30%
ENERGY STAR Standard (15% + 15%)
50%
LEED Platinum
2016
30%
ENERGY STAR Standard (15% + 15%)
50%
LEED Platinum
2017
40%
LEED Certification/Silver (15% + 25%)
50%
LEED Platinum
2018
40%
LEED Certification/Silver (15% + 25%)
50%
LEED Platinum
2019
40%
LEED Certification/Silver (15% + 25%)
50%
LEED Platinum
2020
50%
LEED Silver/Gold (15% + 35%)
50%
LEED Platinum
Energy
Savings
from New
Buildings
Notes on Existing
Notes on New
LEED = Leadership in Energy and Environmental Design Green Building Rating System.
For Government Buildings
Table F-12 presents the assumed incremental cost trajectory based on the energy savings.
Table F-12. Incremental cost trajectory for RCI-4—government buildings
Year
Energy
Savings from
Existing
Buildings
2009
15%
$16,182
0%; No savings due to designcompletion time lag
4.0% increase
2010
15%
$16,182
0% (as above)
4.0% increase
2011
15%
$16,182
0% (as above)
4.0% increase
2012
15%
$16,182
0% (as above)
4.0% increase
2013
15%
$16,182
50%
4.0% increase
2014
30%
$16,182 × 2.0
50%
4.0% increase
2015
30%
$16,182 × 2.0
50%
4.0% increase
2016
30%
$16,182 × 2.0
50%
4.0% increase
2017
40%
$16,182 × 2.7
50%
4.0% increase
2018
40%
$16,182 × 2.7
50%
4.0% increase
2019
40%
$16,182 × 2.7
50%
4.0% increase
2020
50%
$16,182 × 3.3
50%
4.0% increase
Assumed Incremental
Cost for Existing
Buildings
Energy Savings from New
Buildings
Appendix D-3 Page 34
Assumed
Incremental Cost
for New Buildings
Maryland Climate Action Plan Appendix D-3
Benefits: Table F-13 presents the key assumptions for the potential benefits of the government
buildings component of this policy.
Table F-13. Key assumptions for benefits from RCI-4—government buildings
Assumption
Existing Buildings
New Buildings
Notes
Average square footage per
building
26,453
Number of buildings
21,348
2,102
Existing: As of the end of 2008
New: 2009–2020
Reach
50%
100%
Placeholder assumption
Average energy use
0.00008 BBtu/sq.
ft./‌year
0.00007 BBtu/sq.
ft./‌year
Calculation of energy use divided
by projected number of
homes/buildings
Ratio of commercial to
government energy use per
sq. ft.
1.00
Placeholder assumption
Current stock vs. new stock
energy savings
16%
Calculated using Gulf Coast
studies on building codes
Proportion of energy savings
by fuel type, emissions
factors, T&D electricity loss,
avoided energy costs
Same assumptions as used for RCI-1.
From CBECS
CBECS = Commercial Buildings Energy Consumption Survey; BBtu = billion British thermal units; sq. ft. = square
feet; T&D = transmission and distribution; RCI = Residential, Commercial, and Industrial
Costs: Table F-14 presents the key assumptions for the potential costs of the government
buildings component of this policy.
Table F-14. Key assumptions for costs of RCI-4—government buildings
Assumption
Existing and New Buildings
Notes
Real discount rate
Same assumptions as used for RCI-1.
Capital recovery factor for
levelization
5.6%
Interest Rate: 4%
Period: 30 years
Calculated assumption
Average construction cost of
a building
$3,458,708
Based on national estimates from
the International Code Council
(ICC)
RCI = Residential, Commercial, and Industrial.
For Schools
Table F-15 presents the assumed incremental cost trajectory based on the energy savings from
school buildings.
Table F-15. Incremental cost trajectory for RCI-4—schools
Year
Energy
Savings
from
Assumed Incremental
Cost for Existing
Buildings
Energy Savings from
New Buildings
Appendix D-3 Page 35
Assumed Incremental
Cost for New Buildings
Maryland Climate Action Plan Appendix D-3
Existing
Buildings
2009
15%
$14,783
0%; No savings due to
design lag
4.0% increase
2010
15%
$14,783
0%; No savings due to
design lag
4.0% increase
2011
15%
$14,783
0%; No savings due to
design lag
4.0% increase
2012
15%
$14,783
0%; No savings due to
design lag
4.0% increase
2013
15%
$14,783
50%
4.0% increase
2014
30%
$14,783 × 2.0
50%
4.0% increase
2015
30%
$14,783 × 2.0
50%
4.0% increase
2016
30%
$14,783 × 2.0
50%
4.0% increase
2017
40%
$14,783 × 2.7
50%
4.0% increase
2018
40%
$14,783 × 2.7
50%
4.0% increase
2019
40%
$14,783 ×2.7
50%
4.0% increase
2020
50%
$14,783 × 3.3
50%
4.0% increase
Benefits: Table F-16 presents the key assumptions for the potential benefits of the schools
component of this policy.
Table F-16. Key assumptions for benefits from RCI-4—schools
Assumption
Existing Buildings
New Buildings
Notes
Average square footage per
building
34,995
Number of buildings
2,267
238
Existing: As of the end of 2008
New: 2009–2020
Reach
50%
100%
Placeholder assumption
Average energy use
0.00008 BBtu/sq.
ft./‌year
0.00006 BBtu/sq.
ft./‌year
Calculation of energy use divided
by projected number of
homes/buildings
Ratio of commercial to school
energy use per sq. ft.
1.00
Placeholder assumption
Current stock vs. new stock
energy savings
23%
Calculated using school-specific
data from Gulf Coast studies on
building codes
Proportion of energy savings
by fuel type, emissions
factors, T&D electricity loss,
avoided energy costs
Same assumptions as used for RCI-1.
From analysis of South Carolina
by CCS
BBtu = billion British thermal units; sq. ft. = square feet; T&D = transmission and distribution; RCI = Residential,
Commercial, and Industrial.
Appendix D-3 Page 36
Maryland Climate Action Plan Appendix D-3
Costs: Table F-17 presents the key assumptions for the potential costs of the schools component
of this policy.
Table F-17. Key assumptions for costs of RCI-4—schools
Assumption
Existing and New Buildings
Real discount rate
Same assumptions as used for RCI-1.
Capital recovery factor for
levelization
Same assumptions as used for government
buildings
Average construction cost of
a building
$5,027,732
Notes
Based on national estimates from
the International Code Council
(ICC)
RCI = Residential, Commercial, and Industrial.
Key Uncertainties
The following are assumptions for which there were little or no supporting data:
•
The percentage of existing and new buildings that can be effectively reached with this policy,
•
The ratio between average commercial building energy use and government or school
building energy use, and
•
The incremental cost to renovate existing government buildings to achieve beyond-code
energy savings.
Additionally, the cost of new construction is based on national estimates. Region-specific
estimates may be either higher or lower than these costs.
Additional Benefits and Costs
•
With any lead-by-example policy, the intent is that state employees will become interested in
implementing the types of energy savings measures they are exposed to at work in their own
commercial buildings and/or residential homes. Another way that this initiative can spread is
through word of mouth to the employees friends and family. (This policy analysis did not
include a quantification of this additional benefit.) See CC-4.
•
Indoor comfort and air quality improvements, with related improvements in health and
productivity.
•
Savings on energy bills.
•
Electricity system benefits: reduced peak demand, reduced capital and operating costs,
improved utilization and performance of electricity system.
•
Reducing the risk of power shortages.
•
Reducing pollutants from emissions, improved health from fewer pollutants and particulates
and reduced water use for cooling.
•
Green collar employment expansion and economic development.
•
Reducing dependence on imported fuel sources.
Appendix D-3 Page 37
Maryland Climate Action Plan Appendix D-3
•
Reducing energy price increases and volatility.
Feasibility Issues
Will require state to provide resources.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
Not applicable.
Appendix D-3 Page 38
Maryland Climate Action Plan Appendix D-3
RCI-5. Energy Efficiency and Environmental Impacts Awareness
and Instruction in School Curricula
Jointly considered with the CC TWG. See CC-5.
Appendix D-3 Page 39
Maryland Climate Action Plan Appendix D-3
RCI-6. Promotion and Incentives for Improved Design and Construction
(e.g., LEED, Green Buildings, or Minimum Percent Improvement
Better Than Code) in the Private Sector
Combined with RCI-1.
Appendix D-3 Page 40
Maryland Climate Action Plan Appendix D-3
RCI-7. More Stringent Appliance/Equipment Efficiency Standards (State-Level, or
Advocate for Regional or Federal-Level Standards)
Policy Description
Appliance efficiency standards reduce the market cost of energy efficiency improvements by
incorporating technological advances into base appliance models, thereby creating economies of
scale. Appliance efficiency standards can be implemented at the state level for appliances not
covered by federal standards, or where higher-than-federal standard efficiency requirements are
appropriate. Regional coordination for state appliance standards can be used to avoid concerns
that retailers or manufacturers may either resist supplying equipment to one state that has
advanced standards, or focus sales of lower efficiency models on a state with less stringent
efficiency standards.
There are federal standards for 19 residential products and 19 pieces of commercial equipment,
as well as 14 lighting standards. Laws require the U.S. Department of Energy (DOE) to set
minimum appliance efficiency standards that are technologically feasible and economically
justified. However, there are many appliances not covered by federal standards for which state
standards can play a role.
This policy option includes
•
Lobbying for more stringent appliance standards at the federal level,
•
Establishment and enforcement of higher-than-federal state-level appliance and equipment
standards (or standards for devices not covered by federal standards), and
•
Joining with other states in adopting higher standards.
Consumer education is an important supporting measure for this option.
Policy Design
Goals: State minimum efficiency standards for appliances not covered by federal standards as
recommended by Appliance Standards Awareness Program1 by 2009.
Timing: As noted above.
Parties Involved: As noted above.
1
See http://www.standardsasap.org/documents/a062_sc.pdf. The analysis recommends standards for the following
products: bottle-type water dispensers, commercial boilers, commercial hot food holding containers, compact audio
products, DVD players and recorders, liquid immersion distribution transformers, medium voltage dry-type
distribution transformers, metal halide lamp fixtures, pool heaters, portable electric spas, residential furnaces and
boilers, residential pool pumps, single voltage external AC-to-DC power supplies, state regulated incandescent
reflector lamps, and walk-in refrigerators and freezers.
Appendix D-3 Page 41
Maryland Climate Action Plan Appendix D-3
Implementation Mechanisms
Appliance Standards can be promulgated by legislation or developed administratively.
Appliances covered by the Appliance Standards Awareness Program (ASAP) are updated
annually to incorporate the effects of new state and federal appliance standards. Review and
adoption of updated ASAP-recommended state-level appliance standards should be undertaken
periodically (e.g., every 3 years or as new federal standards are enacted).
It is recommended that the state work with manufacturers and consider impacts on manufacturers
when setting new standards.
Manufacturers shall be required to keep spare parts for existing appliances for a specified
number of years, if mandated by and consistent with federal regulation.
Related Policies/Programs in Place
Maryland Energy Efficiency Standards Act (became law per Maryland Constitution,
Chapter 2 of 2004 on January 20, 2004): Maryland standards apply to nine appliances:
Torchiere lighting fixtures; unit heaters; low-voltage, dry-type distribution transformers; ceiling
fans and ceiling fan light kits; red and green traffic signal modules; illuminated exit signs;
commercial refrigeration cabinets; large packaged air conditioning equipment; and commercial
clothes washers. Standards become effective in March 2005. The exceptions to this general rule
relate to commercial clothes washers, and ceiling fan light kits. Commercial clothes washers and
ceiling fan light kits do not have to meet the new efficiency standards until March 1, 2007.
Commercial clothes washers and ceiling fan light kits not meeting the standards may be installed
until January 1, 2008. There is no overlap between the appliances covered by this Act and the
appliances recommended by the 2006 Appliance Standards Awareness Program.
Maryland Energy Efficiency Standards Act of 2007: Before January 1, 2008 the MEA shall
adopt regulations establishing minimum efficiency standards for the following types of new
products: Bottle-type water dispensers; commercial hot food holding cabinets; metal halide lamp
fixtures; residential furnaces and furnace fans in new construction; single-voltage external
alternating current (AC) to direct current (DC) power supplies; state-regulated incandescent
reflector lamps; walk-in refrigerators and freezers. All of the appliances from this act are
included in the appliances recommended by the 2006 Appliance Standards Awareness Program.
However, the standards for all of these appliances, except for bottle-type water dispensers, and
commercial hot food holding cabinets will be superseded by the federal Energy Independence
and Security Act of 2007. Compact audio products and digital video disk (DVD) players and
recorders were also included in the original bill, but removed before the bill became law.
Energy Independence and Security Act of 2007: This federal law establishes new minimum
efficiency standards for several appliance types, including five that are also recommended by the
2006 Appliance Standards Awareness Program: residential boilers; state-regulated incandescent
reflector lamps; single-voltage external alternating current AC to DC power supplies; metal
halide lamp fixtures; and walk-in refrigerators and freezers. There are also provisions in this Act
for future residential furnace and furnace fan standards. This legislation will supersede the
Appendix D-3 Page 42
Maryland Climate Action Plan Appendix D-3
standards established in the Maryland Energy Efficiency Standards Act of 2007, where
applicable.
Type(s) of GHG Reductions
Reduction in GHG emissions (largely CO2) from avoided electricity production or on-site fuel
combustion.
Estimated GHG Reductions and Net Costs or Cost Savings
Table F-18 presents the estimated GHG reductions and net costs or costs savings from
implementing RCI-7.
Table F-18. Estimated GHG reductions and net costs of or cost savings from RCI-7
GHG Reductions
(MMtCO2e)
RCI–7
2012
2020
0.1
0.2
Net
CostGross
Gross
Present
EffectiveCosts
Benefits
Value
Total
ness
2008- (Million $) (Million $) 2008–2020 ($/tCO2e)
(Million $)
2020
1.2
$18
–$81
–$63
–$54
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalent; $/tCO2e = dollars per metric ton
of carbon dioxide equivalent.
Data Sources:
• U.S. Congress. House. Energy Independence and Security Act of 2007. H.R.6. 110th Cong.,
1st sess.
•
Maryland Energy Efficiency Standards Act, Annotated Code of Maryland, sec. 9-2006 2004.
•
Maryland Energy Efficiency Standards Act of 2007, Annotated Code of Maryland, sec. 92006, 2007.
•
Center for Integrative Environmental Research, University of Maryland, College Park 2007.
Economic and Energy Impacts from Maryland’s Potential Participation in the Regional
Greenhouse Gas Initiative: A Study Commissioned by the MDE, available at
http://www.cier.umd.edu/RGGI/.
•
Nadel, Steven, Andrew deLaski, Maggie Eldridge, and Jim Kleisch. Leading the Way:
Continued Opportunities for New State Appliance and Equipment Efficiency Standards,
ASAP and ACEEE, Report Number ASAP-6/ACEEE-A062, March 2006.
•
Nadel, Steven, Andrew deLaski, Maggie Eldridge, and Jim Kleisch. Energy Efficiency
Standards Benefits – 2006 Model Bill: Maryland, ASAP and ACEEE,
http://www.standardsasap.org/documents/a062_md.pdf (accessed December 7, 2007).
•
Prindle, Bill. Energy Efficiency in Maryland’s Electricity Future. American Council for an
Energy-Efficient Economy, ACEEE Report Number E077, September 2007.
Appendix D-3 Page 43
Maryland Climate Action Plan Appendix D-3
Quantification Methods:
• Energy savings are quantified for the following appliances, as recommended by ASAP:
commercial boilers, compact audio products, DVD players and recorders, liquid-immersed
distribution transformers, medium voltage dry-type distribution transformers, pool heaters,
portable electric spas (hot tubs), and residential pool pumps.
•
Projected electricity and natural gas savings are taken from the 2006 Appliance Standards
Awareness Program data for Maryland for the appropriate appliances not already covered by
the Maryland Energy Efficiency Standards Act and the federal Energy Independence and
Security Act of 2007.
•
These annual energy savings are adjusted to fit the analysis period, per ramp rate of
appliances and target implementation year.
•
The appropriate GHG emissions factors, energy prices, and discount rate are applied.
Key Assumptions:
• Costs and savings from efficiency improvement via standards are similar in Maryland to
those indicated in the ASAP/ACEEE report.
•
It is assumed that development and manufacturing lead time for bringing appliances that
meet ASAP standards to market is minimal, because most of the appliances identified by
ASAP are subject to efficiency standards in other states
(http://www.standardsasap.org/state.htm). Consistent with ASAP assumptions, appliances are
assumed to be available starting in 2009, except for commercial boilers, distribution
transformers, and pool heaters, which are assumed to be available as of 2010, 2010, and 2013
respectively.
•
Capital Recovery Factor: 10.27%, consistent with a 5.25% interest rate (average of
commercial and residential rates) and 13 year asset life
Key Uncertainties
It is unknown the degree to which other states in the region will join with Maryland in setting
higher-than-federal standards so as to increase effectiveness and practical application of
standards.
New federal standards may be enacted before 2020 that would minimize the projected energy
savings from these appliances.
Savings from efficiency standards for residential furnaces and furnace fans in the Maryland
Energy Efficiency Standards Act of 2007 (MEESA) may be overstated. In its analysis of the final
bill, ACEEE assumed a 1:1 ratio of the benefits from new construction to retrofits to adjust for a
late-coming amendment excluding retrofits from the standard. This may have overstated the
benefits of MEESA. As this policy analysis builds on the ACEEE analysis, RCI-7 may have
larger benefits from furnace and furnace fans in retrofits.
Appendix D-3 Page 44
Maryland Climate Action Plan Appendix D-3
Additional Benefits and Costs
•
Reduction in water use for some appliance upgrades – lower water demand leads to lower
costs and reduced energy use for water production. In the City of Annapolis, water utility and
sewer pumps account for around 23% of energy use and 30% of CO2e emissions.
•
Indoor comfort and air quality improvements, with related improvements in health and
productivity.
•
Savings to consumers and business on energy bills. Benefits to the low income by reducing
utility costs.
•
Electricity system benefits: reduced peak demand, reduced capital and operating costs,
improved utilization and performance of electricity system.
•
Reduced pollutants from emissions, improved health from fewer pollutants and particulates
and reduced water use for cooling.
•
Reduced dependence on imported fuel sources.
•
Reduced energy price increases and volatility
Feasibility Issues
The feasibility of this policy option is enhanced by ongoing efforts in nearby states and at the
federal level.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
Not applicable.
Appendix D-3 Page 45
Maryland Climate Action Plan Appendix D-3
RCI-8. Rate Structures and Technologies to Promote Reduced GHG Emissions
(Including Peak Pricing and Inverted Block Surcharge)
Policy Description
This option could include various elements of utility rate design that are geared toward reducing
greenhouse gas emissions, often with other benefits as well, such as reducing peak power
demand. The overall goal is to revise rate structures so as to better reflect the actual economic
and environmental costs of producing and delivering electricity as those costs vary by time of
day, day of the week, season, or from year to year. In this way, rates provide consumers with
information reflecting the impacts of their consumption choices.
Potential elements of this option include:
•
Tiered (increasing/inverted block) surcharges on electricity transmission and distribution
(T&D) charges, which keep base usage rates affordable but increase with increasing
consumption. Similarly, inverted block rates for natural gas use may be considered.
•
Time-of-use rates, which typically price electricity higher at times of higher power demand,
and thus better reflect the actual cost of generation. Time-of-use rates may or may not have a
significant impact on total GHG emissions, but do affect on-peak power demand and thus
both the need for peaking capacity and fuel for peaking plants.
•
“Smart metering”—implementation of consumer meters showing real-time pricing, and the
level of GHG emissions related to consumption at any given time.
Policy Design
Goals:
• Implement a 2 -tiered, inverted-block surcharge structure for all commercial and residential
electricity customers, to be placed on electricity T&D charges. The cheapest tier should
apply to a percentage of average consumption. The most expensive tier should apply to
electricity use above average consumption and be priced high enough to encourage
conservation. California may offer a good example of percentages and rates. The need for a
low income exclusion from the program should be investigated.
•
Replace traditional electricity meters with “smart meters” as meters otherwise need to be
replaced. Time of use rates should be implemented in conjunction with the replacement of
existing meters with smart meters.
Timing: The two-tiered surcharge system should be implemented for all utilities within 12
months. Conversion to smart meters should begin immediately but proceed slowly for many
years. Once more cost-effective energy efficiency measures have been taken, proactive
replacement of meters with smart meters should begin and expand.
Parties Involved: residential and commercial electricity customers, utilities, Maryland Office of
People’s Council (OPC), PSC, and MEA.
Appendix D-3 Page 46
Maryland Climate Action Plan Appendix D-3
Implementation Mechanisms
A two-tiered surcharge, applicable to all residential and commercial customers, will be proposed
by the utilities and approved by the PSC within 12 months. The revenues from this surcharge
will be invested in DSM programs.
The need for a low income exclusion from the program should be investigated by the PSC.
Under a replacement schedule and cost recovery plan approved by the PSC, utilities will replace
traditional electricity meters with “smart meters”. When their existing meters are replaced with
smart meters, customers will be transferred to a time of use rate schedule.
Related Policies/Programs in Place
The Southern California Edison program, which included a low-income component, should be
investigated.
AMI filings with the PSC (Case Number: 9111):
•
Application of Potomac Electric Power Company for Authority to Establish a Demand-Side
Management Surcharge, an Advance Metering Infrastructure (AMI) Surcharge and to
Establish a DSM Collaborative and an AMI Advisory Group (ML# 105286), and
•
Application of Delmarva Power & Light Company for Authority to Establish a Demand-Side
Management Surcharge, an Advance Metering Infrastructure Surcharge and to Establish a
DSM Collaborative and an AMI Advisory Group (ML# 105287).
Type(s) of GHG Reductions
Reduction in GHG emissions (largely CO2) from avoided electricity production or on-site fuel
combustion.
Estimated GHG Reductions and Net Costs or Cost Savings
Table F-19 presents the estimated GHG reductions and net costs or costs savings from
implementing RCI-8.
Appendix D-3 Page 47
Maryland Climate Action Plan Appendix D-3
Table F-19. Estimated GHG reductions and net costs of or cost savings from RCI-8
GHG Reductions
(MMtCO2e)
Net
CostGross
Gross
Present
EffectiveCosts
Benefits
Value
Total
ness
2008– (Million $) (Million $) 2008–2020 ($/tCO2e)
(Million $)
2020
2012
2020
RCI–8 Total (assuming 0.5% savings from
smart metering)
0.1
0.2
2.0
$403
–$157
$246
$120
Demand-side management surcharge –
residential
0.0
0.0
0.3
$0
–$29
–$29
–$96
Demand-side management surcharge –
commercial
0.0
0.0
0.1
$0
–$6
–$6
–$96
0.5% savings
0.1
0.2
1.7
$403
–$122
$281
$167
1.5% savings
0.2
0.7
5.1
$403
–$366
$37
$7
3.0% savings
0.4
1.3
10.1
$403
–$732
–$329
–$33
Smart metering:
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalent; $/tCO2e = dollars per metric ton
of carbon dioxide equivalent; RCI = Residential, Commercial, and Industrial.
Data Sources:
Price elasticity of electricity
• Energy Information Administration (EIA), Price Responsiveness in the Annual Energy
Outlook 2003 (AEO2003) National Energy Modeling System (NEMS) Residential and
Commercial Buildings Sector Models, available at
www.eia.doe.gov/oiaf/‌analysispaper/‌elasticity/index.html and
www.eia.doe.gov/oiaf/analysispaper/elasticity/table1.html
Electricity prices
• ACEEE et al. 2008. Maryland’s Clean Energy Future Potential For Energy Efficiency And
Demand Response To Meet Electricity Needs In Maryland
Distribution curve for electricity consumption
• EIA Residential Energy Consumption Survey (RECS) 2001, and
•
EIA CBECS 2003.
Impacts of different types of smart metering
• “Smart Metering Study Summary” (smart-metering-append.pdf) compiled by CU Denver for
the City and County of Denver.
•
Summit Blue Consulting, Inc. 2006. Evaluation of the 2005 Energy-Smart Pricing PlanSM,
prepared for Community Energy Cooperative, August 2006, available at
www.energycooperative.org/pdf/ESPP-Evaluation-Executive-Summary-2005.pdf and
www.energycooperative.org/energy-smart-pricing-plan.php.
•
Primen, Inc. 2004. California Information Display Pilot Technology Assessment,
www.ucop.edu/ciee/dretd/documents/idp_tech_assess_final1221.pdf.
Appendix D-3 Page 48
Maryland Climate Action Plan Appendix D-3
Cost of metering
• Idaho Power 2005. Phase One AMR Implementation Status Report under IPC-E-02-12,
December 30, 2005.
•
CA PUC 2006. Advanced Metering Infrastructure (AMI) Update, available at
www.cpuc.ca.gov/Static/hottopics/1energy/ami_update+june+2006.pdf.
•
Demand Response and Advanced Metering Coalition (DRAM) 2004. White Paper: Overview
of Advanced Metering Technologies and Costs, available at
http://www.dramcoalition.org/‌id66.htm.
•
Booz Allen Hamilton 2007. “Smart Grid – Opportunity Meets necessity,” presented at the
EEI Strategic Issues Forum in Miami, FL on February 7, 2007, available at
http://www.eei.org/‌meetings/nonav_2007-02-07-ja/index.htm.
Metering deployment schedule
• The Brattle Group 2007. Quantifying Customer Benefit from Reductions in Critical Peak
Loads from Pepco Holdings, Inc.’s (PHI’s) Proposed Demand-Side Management Program,
September 21, 2007.
Energy savings from smart metering
•
International Business Machines (IBM) Global Business Services et al. 2007. Ontario Energy
Board Smart Price Pilot Final Report, July 2007, available at
http://www.oeb.gov.on.ca/html/en/industryrelations/ongoingprojects_regulatedpriceplan_sma
rtpricepilot.htm.
•
Summit Blue Consulting, LLC. 2007. Final Report for the MyPower Pricing Segments
Evaluation, submitted to Public Service Electric and Gas Company, December 21, 2007.
Quantification Methods: This analysis consists of two major components: impact of inverted
block rates and smart meters. The steps that would be required to estimate the impact of inverted
block rates are as follows:
•
Determine the focus of customer groups (i.e., residential and commercial).
•
Determine two levels of surcharges that are applied to different levels of consumption
thresholds (e.g., 3 mills per kWh above 830 kWh per month per household (or 10 megawatt
[MW] per year) and 5 mills per kWh above 1420 kWh per month per household; 3 mills per
kWh above 0.8 kWh per month per square foot of commercial floor space and 5 mills per
kWh above 1.3 kWh per month per square foot).
•
Develop distribution curves for electricity consumption by residential and commercial
customers using the data available in EIA’s RECS 2001 and CBECS 2003.
•
Identify the total amount of consumption for three consumption groups (A, B, and C) where
households in Group A consume less than the first threshold per year, households in Group B
consume above the first threshold up to the second threshold per year, and households in
Group C consumes above the second threshold.
Appendix D-3 Page 49
Maryland Climate Action Plan Appendix D-3
•
Identify the level of consumption for consumers in each group that is subject to each
consumption threshold as a percentage of the total residential or commercial consumption.
(e.g., the sum of the consumption levels for households in Group B that is not subject to
surcharges is about 26% of the total residential consumption and the sum of the consumption
levels that is subject to the first surcharge is about 22%).
•
Apply the percentage of the total consumption subject to each surcharge to the total
consumption in each year.
•
Apply surcharges to appropriate consumption segments.
•
Project change in electricity consumption based on price elasticity.
•
Estimate energy savings and the associated economic benefit based on price elasticity.
•
Estimate GHG emissions reduction from energy savings.
The second piece of this analysis for smart metering involves
•
Developing a time schedule for replacing existing meters with smart meters,
•
Estimating the cost and energy savings from deployment of smart meters through 2020, and
•
Estimating GHG emissions reduction from energy savings.
Key Assumptions:
• Rate design—customers who install smart meters will be placed on Time-of-Use rates.
•
DSM surcharge—3 mills per kWh above the first threshold (Group B) and 5 mills per kWh
above the second threshold (Group C).
•
Distribution curve for residential electricity consumption—We obtained regional average
energy consumption from the EIA RECS 2001 and developed a distribution curve for MidAtlantic region with the following steps: assume all regional curves including Mid-Atlantic
have the same standard deviation, and adjust the level of standard deviation so that the
distribution curve that covers the entire United States would approximate a normal
distribution. Table F-20 presents the fraction of total regional consumption for each
residential grouping, and Table F-21 shows the level of household consumption subject to
each surcharge for each residential consumption group.
Table F-20. Fraction of total regional consumption by residential grouping
Group A
13%
Group B
48%
Group C
39%
Total
100%
Appendix D-3 Page 50
Maryland Climate Action Plan Appendix D-3
Table F-21. Level of household consumption subject to each surcharge as percentage of
total residential consumption in each consumption group
•
No Surcharge
1st Surcharge
2nd Surcharge
Total
Group A
13%
0%
0%
13%
Group B
26%
22%
0%
48%
Group C
13%
11%
15%
39%
Total
53%
32%
15%
100%
Distribution curve for commercial electricity consumption—To estimate the impact of an
increasing block rate structure on commercial electricity users, it was first necessary to
estimate the distribution of energy consumption on a square foot basis in Maryland. Based on
U.S. Census data, we determined that the per-square-foot energy consumption has a mean of
13.4 kilowatt per square foot (kW/sq-ft) per year. Lacking any basis to estimate the
population-wide distribution of the data, we assumed that it can be approximated by a normal
distribution with a standard deviation of 30% of the mean, or 4.02 kW/sq-ft per year. Given
these parameters, we found that the bottom quartile uses 10 kW/sq-ft per year or less energy;
while the top quartile uses 17 or more kw/sq foot annually. Thus this policy would impose no
surcharge on the first ten kW/sq-ft, a first surcharge on the next six kw/sq-ft, and the
maximum surcharge on all usage 17 kW/sq-ft or above. Based on the assumed distribution of
use described above, we can then calculate the total annual kWh usage and the total
surcharge recovered at each usage level. Table F-22 presents the fraction of total regional
consumption for each commercial grouping in Maryland, and Table F-23 shows the level of
consumption subject to each surcharge for each commercial consumption group.
Table F-22. Fraction of total commercial consumption by grouping
Group A
14%
Group B
54%
Group C
33%
Total
100%
Table F-23. Level of consumption subject to each surcharge as percentage of total
commercial consumption in each group
•
No Surcharge
1st Surcharge
2nd Surcharge
Total
Group A
14%
0%
0%
14%
Group B
40%
14%
0%
54%
Group C
17%
10%
5%
33%
Total
71%
24%
5%
100%
Consumption thresholds for residential customers—the following thresholds are illustrative
thresholds. Actual thresholds will change over time depending on the level of total
consumption.
○
1st threshold: 11,800 kWh per year or 980 kWh per month per household.
Appendix D-3 Page 51
Maryland Climate Action Plan Appendix D-3
○
•
2nd threshold: 15,700 kWh per year or 1308 kWh per month per household.
Consumption thresholds for commercial customers—the following thresholds are illustrative
thresholds. Actual thresholds will change over time depending on the level of total
consumption.
1st threshold: about 11 kWh per year or 0.92 kWh per month per square foot.
○ 2nd threshold: about 17 kWh per year or 1.4 kWh per month per square foot.
○
•
Schedule for replacing existing meters—we assume a lead time of two years for planning,
program designs, and selecting vendors and technologies before deploying smart metering.
Deployment schedule is 6 years. We assume utilities start to deploy smart metering/advanced
metering infrastructure (AMI) starting in 2011 and will fully deploy by 2016. After 2016,
small numbers of meters are deployed to cover the new customers. This deployment schedule
is longer than what has been proposed by utilities. For example, according to the Brattle
Group (2007), Pepco and Delmarva Power & Light (DPL) in Maryland are planning to
deploy AMI in three years. Also Pepco in Washington D.C. and DPL in Delaware are
planning to fully deploy AMI in two years. Table F-24 presents the assumed schedule for
replacing existing meters in all service territories in Maryland.
Table F-24. Schedule for replacing existing meters
•
Year
Share
2009
0%
2010
0%
2011
17%
2012
33%
2013
50%
2014
67%
2015
83%
2016
100%
Cost of smart meters (that are capable of having at least critical peak pricing) and in-home
display—$350 per smart meter system installed. Cost of smart metering/advanced metering
systems (including interval meters, in-home displays, and meter data management system)
ranges from $200 to $500 per meter depending upon the deployment size and complexity.
This range is based on Idaho Power 2005, California Public Utilities Commission (CA PUC)
2006, Demand Response and Advanced Metering Coalition (DRAM) 2004, and Booz Allen
Hamilton 2007. Figure F-1 from Booz Allen Hamilton (2007) presents cost of AMI
deployments based on number of meters. We are assuming utilities will deploy
approximately 2.8 million meters by 2020.
Appendix D-3 Page 52
Maryland Climate Action Plan Appendix D-3
Figure F-1. Cost of AMI meters relative to number of meters deployed
Source: Booz Allen Hamilton 2007
•
Demand reduction from deployment of smart meters—No existing studies estimate annual
energy reduction as well as emission reductions from the time of use pricing that has been
proposed recently including critical peak pricing. The studies on smart metering and critical
peak pricing pilot projects in New Jersey and Ontario, Canada provide some useful, but
limited experience on annual energy savings. Given the uncertainty regarding how much
annual energy consumption and emissions this program (smart metering and time of use
pricing) will reduce and how many years the savings can be expected to last when a program
runs for many years and is applied to all customers, we assume multiple scenarios on the
percentage of energy reduction (e.g., 0.5%, 1.5%, and 3.0% savings). Note that there is the
possibility that GHG emissions could increase if this program increases energy consumption
at off peak hours, because coal-fired power plants are the dominant source of energy during
off-peak hours.
Summit Blue Consulting (2007) found that customers participating in New Jersey Public
Service Enterprise Group’s (PSEG’s) MyPower Pricing pilot project reduced consumption
from 3.3% to 4.3% during the summer time. IBM Global Business Services et al. (2007)
found that customers participating in Ontario’s Smart Price Pilot reduced energy
consumption by 6% during the pilot period, from August 1, 2006 to February 28, 2007 (6
months). Primen (2004) cited past studies that documented energy use reductions of 4% to
15% associated with energy price feedback using an in-home display. However, Primen
(2004) is less relevant to RCI-8, because the savings in this study are not associated with
time of use pricing that is tied to billing. Furthermore, many cited studies were conducted in
other countries, and they do not provide how long the savings lasted.
Appendix D-3 Page 53
Maryland Climate Action Plan Appendix D-3
•
Cost of financing—8.52% capital recovery factor, consistent with a 6.5% interest rate for
utility financing and 20 year asset life.
•
Lifetime of smart metering infrastructure—20 years.
•
Number of residential and commercial customers— projected to increase in proportion to the
growth rate of electricity consumption.
•
Number of smart meters required per site—assumed to be equal to the number of total
customers.
•
Assumed cost of implementation of inverted-block surcharges—$0 (placeholder assumption).
•
Avoided electricity cost—Same assumptions as used for RCI-1.
•
Retail electric rates—Same assumptions as used for RCI-3.
•
Emission factors—Same assumptions as used for RCI-1.
Key Uncertainties
There are a number of uncertainties associated with this policy, because there has not been much
experience with deployment of smart meters. The level of energy savings from deployment of
smart meters is uncertain. Three percent savings is a conservative estimate of savings based on
two critical peak pricing pilot projects in New Jersey and Ontario, Canada. Both pilot projects
ran only for six months, including summer peak. Annual average savings are likely to be lower
because the savings during the other 6 months are likely to be lower. Also, if all customers are
required to take time of use service (as is contemplated in this policy, but unlike the conditions in
the referenced study), the savings are likely to be significantly lower. The public’s reaction to
being required to accept smart metering and Time of Use (TOU) rates could be negative. Finally,
these estimates are based on customer response for less than a year. No study has estimated how
customers would respond to price signals from time of use or critical peak pricing for long
periods of time (e.g., 10 to 20 years).
Technological progress in this field is very fast and cost-effectiveness (benefit-cost ratio) of
different metering technologies is uncertain. Thus stakeholders, utilities, and the public utility
commission need to be careful about the choice of technology.
TOU rates tend to encourage consumers to shift electricity usage to off-peak times. A policy that
moves consumption from peak to off-peak times may or may not decrease GHG emissions,
depending on whether the generation avoided during times of reduced consumption has lower
emissions than the generation that is dispatched when consumption is increased.
Other uncertainties include actions the PSC and the utilities may take in the future.
Additional Benefits and Costs
•
Aligning price signals with demand to increase awareness of costs of consumption.
•
Savings to consumers and business on energy bills.
•
Reduced peak demand and reduced capacity requirements.
Appendix D-3 Page 54
Maryland Climate Action Plan Appendix D-3
•
Other electricity system benefits: reduced capital and operating costs, improved utilization
and performance of electricity system.
•
Reducing energy price increases and volatility.
Feasibility Issues
Legislation may be required for implementation of this policy.
Procurement of wholesale electricity supply may be complicated by the shifts in consumption
accompanying the implementation of three-tiered surcharges and TOU rates, especially in the
beginning of the program when data are limited. Bidders in the annual Standard Offer Service
(SOS) procurement may want information about which meters will be replaced, when, and how
consumption is likely to change as a result of the new rate schedules. Administrative costs of
providing these data to bidders could be burdensome.
The policy should apply to all customers in the rate class, to avoid switching.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
Not applicable.
Appendix D-3 Page 55
Maryland Climate Action Plan Appendix D-3
RCI-9. GHG or Carbon Tax
Transferred to ES TWG.
Appendix D-3 Page 56
Maryland Climate Action Plan Appendix D-3
RCI-10. Energy Efficiency Resource Standard
Policy Description
An EERS is a market-based mechanism to require more efficient use of electricity and natural
gas. State public utility commissions or other regulatory bodies set electric and/or gas energy
savings targets for utilities. All EERS include end-use energy savings improvements; in some
cases, distribution system efficiency improvements and combined heat and power (CHP) systems
and other high-efficiency distributed generation systems are included as well.
Policy Design
Goals: Together with RCI-2, require the utilities to achieve energy savings equal to 15% of per
capita demand by 2015.
For RCI-10, develop mandatory utility electricity reduction targets of 0.5% of demand in 2009,
1.0% in 2010, 1.5% in 2011–2013, and 2% in 2014–2015.
For RCI-10, develop mandatory utility natural gas reduction targets of 0.5% of demand in 2009,
1.0% in 2010, 1.5% in 2011–2013, and 2% in 2014–2015. The targets apply to natural gas to be
used for energy purposes only; natural gas for use as feedstock is excluded.
Timing: As above.
Parties Involved: All load-serving electricity and natural gas entities.
Implementation Mechanisms
Utilities submit plans for efficiency programs to the PSC for approval. The plan must include a
diverse portfolio of programs, including home energy assessments, energy efficiency rebates,
commercial and industrial programs, training for contractors and facility managers, and demand
response programs. The plan should evaluate programs in terms of cost-effectiveness, ability to
capture opportunities for energy efficiency that would otherwise be lost, and fair distribution of
programs geographically, relative to the source of the funds, and within sectors.
After the plan is approved, utilities issue requests for proposals (RFPs) for each type of energy
service. Energy service companies of all shapes and sizes would be encouraged to submit bids
and do the work.
Related Policies/Programs in Place
The Empower Maryland goal, set by Governor O’Malley in July 2007, established a statewide
goal of reducing per capita electricity consumption and peak demand by 15% by 2015. Modeled
on the governor’s goal, SB 205/HB 374 requires electric utilities to submit plans to reduce per
capita electricity consumption by 10% by 2015.
The Maryland Energy Efficiency Standards Act of 2007 requires the MEA to adopt regulations
establishing minimum efficiency standards for a number of consumer products.
Appendix D-3 Page 57
Maryland Climate Action Plan Appendix D-3
RGGI auction proceeds may be dedicated to Energy efficiency. HB 0368/SB 268 established the
Maryland Strategic Energy Investment Program and Fund, to decrease energy demand and
increase clean energy supply utilizing proceeds from the sale of RGGI allowances. This
legislation has not been reflected in the analysis that follows.
The Energy Independence and Security Act of 2007 has three titles particularly relevant to RCI10: Title III (Appliance and Lighting Efficiency), Title IV (Energy Savings in Building and
Industry), and Title V (Energy Savings in Government and Public Institutions).
Type(s) of GHG Reductions
Reduction in GHG emissions (largely CO2) from avoided electricity production or on-site fuel
combustion.
Estimated GHG Reductions and Net Costs or Cost Savings
Table F-25 presents the estimated GHG reductions and net costs or costs savings from
implementing RCI-10.
Table F-25. Estimated GHG reductions and net costs of or cost savings from RCI-10
GHG Reductions
(MMtCO2e)
Net
CostGross
Gross
Present
EffectiveCosts
Benefits
Value
Total
ness
(Million
$)
(Million
$)
2008–2020
2008–
($/tCO2e)
(Million $)
2020
2012
2020
RCI–10 Total
2.9
11.9
71.0
$1,726
–$5,396
–$3,670
–$52
Electricity demand-side management
2.4
10.3
61.1
$1,426
–$4,404
–$2,978
–$49
Natural gas demand-side management
0.4
1.6
9.9
$300
–$991
–$691
–$70
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalent; $/tCO2e = dollars per metric ton
of carbon dioxide equivalent; RCI = Residential, Commercial, and Industrial.
Data Sources:
• General: MEA modeling completed by Exeter (electric only, not natural gas).
•
Energy efficiency potential study: See RCI-2.
•
Cost of energy efficiency measures in Maryland: See RCI-2.
•
Experience in other states on cost of energy efficiency: See RCI-2.
•
Cost of saved natural gas: See RCI-2.
•
Avoided cost of fuels: See RCI-2.
Quantification Methods:
• Estimate energy reduction based on the recommended energy reduction targets for electricity
and natural gas consumption,
•
Estimate the total cost of electricity and natural gas savings, and
•
Estimate the GHG emissions reduction through the electric energy efficiency measures.
Appendix D-3 Page 58
Maryland Climate Action Plan Appendix D-3
Key Assumptions:
• Discount rate: See RCI-1.
•
Cost of financing: 0% interest rate (DSM costs are incurred as the Systems Benefits Charge
(SBC) is collected).
•
Avoided cost of electricity and fuels: See RCI-1.
•
Target electricity and natural gas efficiency savings: Through 2015, the target draws on the
stated policy goal. After 2015, 1.6% per year for electricity efficiency and 1.2% per year for
natural gas efficiency is assumed, based on a number of DSM potential studies and
experience by leading electric and natural gas utilities. Table F-26 presents the electricity and
natural gas efficiency savings targets for RCI-10.
Table F-26. Electricity and natural gas efficiency savings trajectory for RCI-10
Year
Electricity
Target
Natural Gas
Target
2008
0%
0%
2009
0.5%
0.5%
2010
1.0%
1.0%
2011
1.2%
1.2%
2012
1.3%
1.3%
2013
1.5%
1.5%
2014
1.8%
1.6%
2015
2.0%
1.6%
2016
1.6%
1.2%
2017
1.6%
1.2%
2018
1.6%
1.2%
2019
1.6%
1.2%
2020
1.6%
1.2%
•
Cost of electric efficiency measures—Same assumptions as used for RCI-2.
•
Cost of saved natural gas—Same assumptions as used for RCI-2.
•
Efficiency measure lifetime—Same assumptions as used for RCI-2.
•
Displaced emissions—Same assumptions as used for RCI-1.
Key Uncertainties
The source of funding to implement the aggressive DSM program envisioned here is uncertain.
Consumer response to this program is also uncertain.
Additional Benefits and Costs
•
Indoor comfort and air quality improvements, with related improvements in health and
productivity.
Appendix D-3 Page 59
Maryland Climate Action Plan Appendix D-3
•
Savings to consumers and business on energy bills. Benefits to the low income by reducing
utility costs.
•
Electricity system benefits: reduced peak demand, reduced capital and operating costs,
improved utilization and performance of electricity system.
•
Reduced the risk of power shortages.
•
Reduced pollutants from emissions, improved health from fewer pollutants and particulates
and reduced water use for cooling.
•
Green-collar employment expansion and economic development.
•
Reducing dependence on imported fuel sources.
•
Reducing energy price increases and volatility.
Feasibility Issues
It may be difficult to achieve the aggressive energy savings goals set by this policy.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
Not applicable.
Appendix D-3 Page 60
Maryland Climate Action Plan Appendix D-3
RCI-11. Promotion and Incentives for Energy Efficient Lighting
Policy Description
This policy option involves phasing out the sale or use of energy-inefficient incandescent light
bulbs in the state. California has announced its plan to phase out the use of incandescent light
bulbs by 2018, Nevada adopted a lighting efficiency standard for light bulbs sold beginning in
2012, and a number of other states are considering similar policies, including Connecticut,
Rhode Island, and New Jersey. Australia and Ontario, Canada, have announced similar bans.
Incandescent bulbs waste roughly 95% of the electricity they consume—emitting heat rather than
light. In contrast, efficient light bulbs emit more light (lumens) while consuming less electricity
(watts). The typical incandescent bulb produces 14 lumens per watt, whereas a compact
fluorescent bulb produces 63 lumens per watt. Compact fluorescent light (CFL) bulbs have the
additional advantage of lasting up to ten times as long without burning out. With current
prototypes boasting even higher efficiencies than CFLs, light-emitting diodes (LEDs) show
promise for widespread use in a variety of different applications, including general service
lighting, if production costs can be lowered.
Policy Design
Goals: Implement aggressive campaigning and incentives encouraging residential customers to
purchase screw-in compact fluorescent light bulbs or other high-efficiency lighting as needed to
replace their screw-in incandescent light bulbs. Screw-in compact fluorescent bulbs will make up
95% of residential light bulb sales by 2014.
Timing: As above.
Parties Involved: Residential customers.
Implementation Mechanisms
Voluntary measures would be encouraged through public awareness campaigns.
The state should consider whether mercury from disposal of compact fluorescent bulbs may
present a concern to human health or the environment. MDE has a webpage with instructions on
proper disposal of CFLs
(http://www.mde.state.md.us/Programs/LandPrograms/‌Solid_‌Waste/‌cfl_mercury.asp); however,
a more comprehensive, widely accessible recycling program for residential and commercial
bulbs may be appropriate.
Related Policies/Programs in Place
•
Energy Independence and Security Act of 2007: This federal law establishes new minimum
efficiency standards for common light bulbs, requiring them to use about 20%–30% less
energy than present incandescent bulbs by 2012–2014 (phasing in over several years) and
requiring a U.S. Department of Energy (DOE) rulemaking to set standards that will reduce
energy use to no more than about 65% of current lamp use by 2020.
Appendix D-3 Page 61
Maryland Climate Action Plan Appendix D-3
•
Campaigns by utilities to promote use of CFLs and other energy efficient lighting:
Allegheny Maryland’s Compact Fluorescent Light Energy Efficiency Program
(http://www.alleghenypower.com/EngConserv/MdCFLProgram.asp),
○ BGE’s Change a Light campaign (http://bgesmartenergy.com/changealight.html) and
CFL discounts (http://bgesmartenergy.com/lighting.html),
○ DPL Maryland’s CFL campaign (http://www.delmarva.com/home/education/cfl/), and
○ Pepco Maryland’s CFL campaign (http://www.pepco.com/home/education/cfl/).
○
•
The EmPOWER Maryland goal, set by Governor O’Malley in July 2007, established a
statewide goal of reducing per capita electricity consumption and peak demand by 15% by
2015. Modeled on the governor’s goal, SB 205/HB 374 requires electric utilities to submit
plans to reduce per capita electricity consumption by 10% by 2015.
•
RGGI auction proceeds may be dedicated to Energy efficiency. HB 0368/SB 268 established
the Maryland Strategic Energy Investment Program and Fund, to decrease energy demand
and increase clean energy supply utilizing proceeds from the sale of RGGI allowances. This
legislation has not been reflected in the analysis that follows.
Type(s) of GHG Reductions
Reduction in GHG emissions (largely CO2) from avoided electricity production or on-site fuel
combustion.
Estimated GHG Reductions and Net Costs or Cost Savings
Table F-27 presents the estimated GHG reductions and net costs or costs savings from
implementing RCI-11.
Table F-27. Estimated GHG reductions and net costs of or cost savings from RCI-11
GHG Reductions
(MMtCO2e)
RCI–11
2012
2020
Total
2008–
2020
0.1
1.1
7.7
Net
CostGross
Gross
Present
EffectiveCosts
Benefits
Value
ness
(Million $) (Million $) 2008–2020
($/tCO2e)
(Million $)
$153
–$516
–$362
–$47
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalent; $/tCO2e = dollars per metric ton
of carbon dioxide equivalent.
Data Sources:
• U.S. Department of Energy. U.S. Lighting Market Characterization, Volume I: National
Lighting Inventory and Energy Consumption Estimate. Prepared by Navigant Consulting,
Washington, DC: U.S. Department of Energy, Office of Energy Efficiency and Renewable
Energy, Building Technologies Program, September 2002.
•
One Billion Bulbs. Summary Statistics for Maryland.
http://www.onebillionbulbs.com/‌Stats/State/MD (accessed December 11, 2007).
Appendix D-3 Page 62
Maryland Climate Action Plan Appendix D-3
•
2004–2005 Database for Energy Efficiency Resources Update Study. California Public
Utilities Commission and California Energy Commission, Prepared by Itron, Inc., December
2005.
•
California Lamp Report 2003. Prepared for: Southern California Edison, Prepared by: Itron,
Inc., July 15, 2004.
•
Report to Baltimore Gas and Electric: Demand-Side Management Program Measure Impact
and Cost. Submitted to: Honeywell Utility Solutions, Prepared by: Summit Blue Consulting,
LLC, November 12, 2007.
•
Residential Energy Efficiency Program Design Recommendations. Submitted to Baltimore
Gas and Electric, Prepared by: American Council for an Energy Efficient Economy
(ACEEE), October 2006.
•
Forefront Economics, Inc., H. Gil Peach & Associates LLC, and PA Consulting Group.
“Duke Energy Carolinas DSM Action Plan: South Carolina Draft Report.” July 24, 2007.
•
U.S. Congress. House. Energy Independence and Security Act of 2007. H.R.6. 110th Cong.,
1st sess.
Quantification Methods:
• Estimate the lumen/watt output of all light bulbs currently sold in the United States.
•
Estimate the ramp in rate necessary for achieving the Maryland-specific goal and the
minimum targets under the federal 2007 Energy Bill.
•
Estimate the current and projected number of screw-in light bulbs (all types) sold in
Maryland.
•
Estimate the current and projected number of screw-in compact fluorescent light bulbs sold
in Maryland.
•
Estimate the amount of energy saved by meeting the Maryland-specific goals (excluding the
amount of energy saved by meeting the 2007 federal energy bill targets).
•
Estimate the total cost by multiplying the number of bulbs sold under the Maryland-specific
goal by the incremental cost of each compact fluorescent light bulb.
Key Assumptions:
• The energy savings, GHG emissions reductions, benefits, and costs apply only to new light
bulbs sold in Maryland after 2008.
•
An average compact fluorescent light bulb outputs 63 lumens/watt, while an average
incandescent light bulb outputs 14 lumens/watt. (LEDs were not modeled in this analysis.)
•
Analysis applies only to the residential sector and medium screw-based light bulbs.
•
Annual energy savings of installing a compact fluorescent instead of an incandescent light
bulb: 51 kWh/year.
•
Average lifetime of a compact fluorescent light bulb: 10,000 hours.
•
Average number of hours used per day: 4.
Appendix D-3 Page 63
Maryland Climate Action Plan Appendix D-3
•
Average incremental cost of a compact fluorescent over an incandescent light bulb:
$6.33/bulb.
•
Number of residential screw-based lamps (all types) sold nationally: 1,369,310,000 in 2003
•
Market penetration of ENERGY STAR residential light bulbs in screw-in light bulbs sold
nationally.
•
The purchases of compact fluorescent light bulbs by residential customers ramp up linearly
from the current market penetration to 95% of light bulbs sold by 2014 and then holds steady
at 95% through 2020.
•
Market share of medium screw-based halogen bulbs stays constant.
•
Maryland residential customers as a percentage of total U.S. customers: 1.8%.
Key Uncertainties
It should be investigated whether additional efforts into collection and disposal of compact
fluorescent bulbs, beyond current recycling efforts and information dissemination,2 is needed to
avoid mercury contamination.
It is unclear how manufacturers will respond to the 2007 federal energy bill, which requires
common light bulbs to use 25%–30% less energy by 2012–2014 and a minimum efficiency of
45 lumens/watt for all bulbs sold by 2020. Retailers are assumed to linearly ramp up the
efficiency of their light bulbs sold to meet the 2007 Energy Bill targets, beginning in 2009. This
assumption gives the most conservative estimation of Maryland-specific energy savings.
This analysis assumes that customers would bear all incremental costs of replacing an
incandescent light bulb with a compact fluorescent light bulb. However, direct incentives will
probably be required to achieve the voluntary target stated in this policy. For example, in a
November 2007 report to BGE from Summit Blue Consulting, the recommended incentive was
$1.50 per screw-in compact fluorescent bulb (shown in Table F-28).
Table F-28. Recommended incentives per compact fluorescent bulb for the BGE service
territory
Demand/Energy Savings
Incentive Calculations
NonPV Program
RecomCoincid On-pk Off-pk
CFL
Energy Energy
PV
mended
.
Incand. Fixtur Demand Saving Saving Benefi Incentiv
Fixture Fixture
e
s
s
t
e
Savings
Cost NPV
(kWh) (kWh)
($)
Type
Watts Watts
($)
(kW)
($)
($)
Screwin
Customer Cost/Savings
Payback
Incr.
Cost
($)
Cost
Saving Withou
s
t incr.
($)
(years)
35
9
0.026
18
8
$18
$1.50
$6
$12
$5.03
75
20
0.055
39
16
$39
$1.50
$6
$33
$5
150
41
0.109
77
32
$76
$1.50
$8
$68
$7.21
0.072
51
21
$50
$1.50
$7
$43
$5.89
$10
Weighted average
With
incr.
(years
)
$3
1.4
1
$7
0.7
0.5
$15
0.5
0.4
0.74
0.54
Source: Summit Blue Consulting 2007
2
See MDE, Statement on Compact Fluorescent Light Bulbs and Mercury, available at:
http://www.mde.state.md.us/Programs/LandPrograms/Solid_Waste/cfl_mercury.asp. Accessed April 8, 2008.
Appendix D-3 Page 64
Maryland Climate Action Plan Appendix D-3
PV = photovoltaics; incand. = incandescent; CFL = compact fluorescent lamps; coincid. = coincidental; kW = kilowatt;
on-pk = on peak; off-pk = off peak; NPV = net present value; incr. = increase.
Existing penetration of CFLs into the residential sector may be higher. A recent national study
estimates penetration at 20%. However, a change to this assumption does not materially change
the results of the policy analysis.
Additional Benefits and Costs
•
Exposure to fluorescent bulbs producing light in the blue part of the spectrum suppresses the
body’s production of melatonin more than conventional incandescent bulbs. Melatonin helps
to prevent tumor formation, which suggests that there may be a link between blue-light
emitting CFLs and cancer. (Weiss, Rick. “Lights at Night Are Linked to Breast Cancer”
Washington Post, Feb 20 2008. http://www.washingtonpost.com/wpdyn/content/article/‌2008/02/19/AR2008021902398_pf.html)
•
Savings to consumers and business on energy bills. Benefits to the low income by reducing
utility costs.
•
Electricity system benefits: reduced peak demand, reduced capital and operating costs,
improved utilization and performance of electricity system.
•
Reducing pollutants from emissions, improved health from fewer pollutants and particulates
and reduced water use for cooling.
•
Reducing dependence on imported fuel sources.
•
Reducing energy price increases and volatility.
•
Additional costs associated with the collection and disposal of compact fluorescent bulbs.
Feasibility Issues
95% target is aggressive.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
Not applicable.
Appendix D-3 Page 65
Maryland Climate Action Plan
Appendix D-4
Transportation & Land Use
Maryland Climate Action Plan Appendix D-4
Transportation and Land Use
Introduction
This document outlines policies, tools, and programs needed to ensure that transportation and
land development contribute to achieving Maryland’s greenhouse gas (GHG) emissions
reduction goals.
The GHG reductions estimated for the proposed priority policy options are listed in the table
below. The policies are not listed in the order discussed in the text that follow the table, but
rather are grouped to reflect how the policy options will affect emissions. Specifically, the factors
that determine GHG emissions from the transportation sector, and addressed in the policy
options, can be categorized as follows:
•
Transportation carbon emissions = miles driven × carbon per mile.
•
Carbon per mile = vehicle emissions per unit × carbon per unit of fuel.
Thus, reducing GHG emissions requires reducing
•
The number of miles driven,
•
The carbon per unit of fuel (cleaner fuels), and
•
The carbon per mile and per hour emitted by vehicles (improved vehicle efficiency).
The policy options are grouped as follows: those that affect the number of miles driven comprise
Transportation and Land Use (TLU) Area 1, those related to cleaner fuels comprise TLU Area 2,
and those related to improved vehicle efficiencies comprise TLU Area 3.
Note that while specific data and assumptions are useful for quantification purposes, they should
be seen as neither fully constraining, nor as fully defining of the measures. The specific emission
reduction calculations outlined in the draft policy document often imply more reliability than
currently exists. These are intended as a first-order illustration of the potential for these
measures. These strategies can and should be refined, and more thoroughly analyzed in the near
future.
Appendix D-4 Page 2
Maryland Climate Action Plan Appendix D-4
Summary List of Draft Priority Policy Options for Analysis [AU: Gloria, check this table title
for match with others.]
Net
CostPresent
Value Effective Level of
2008–
-ness
Support
Total
2020
($/tCO2e)
2008–
2020 (Million $)
GHG Reductions
(MMtCO2e)
Option
No.
Policy Option
2012
2020
TLU Area 1: Reduce VMT’s contributions
TLU-2
Integrated Planning for Land Use and
Location Efficiency
1.1
3.6
23.7
Large net savings
Unanimous
TLU-3
Transit
1.1
2.2
17.5
Large net savings
Unanimous
TLU-5
Intercity Travel: Aviation, Rail, Bus, and
Freight
0.2
0.3
1.9
Net
savings
Unanimous
TLU-6
Pay-As-You-Drive (PAYD) Insurance
1.0
3.4
23.0
Net savings
Unanimous
TLU-8
Bike/Pedestrian Infrastructure
TLU-9
Incentives, Pricing, and Resource Measures
TLU-11
Evaluate the Greenhouse Gas (GHG)
Emissions Impacts of Major Projects
Included in TLU-3 quantification
2.6
3.7
32.8
–$1
Unanimous
–$1
N/A
Total of Individual Options
6.0
Unanimous
Unanimous
13.2
98.9
TLU Area 2: Reduce carbon per unit of fuel
TLU-4
Low Greenhouse Gas Fuel Standard (LGFS)
Not
approved
TLU Area 3: Reduce carbon per mile and per hour
TLU-10
Transportation Technologies
2.70
2.83
14.7
Sector Total Before Adjusting for
Overlaps, Using ONLY the Area Totals
8.7
16.03
113.6
Reductions From Recent Actions
0.18
0.20
1.67
Sector Total Plus Recent Actions
8.88
16.23
115.27
$4,091
($200)–
$1,500
Unanimous
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalent; $/tCO2e = dollars per ton of
carbon dioxide equivalent; VMT = vehicle miles traveled; N/A = not applicable.
As the TLU Technical Working Group (TWG) worked to set appropriate goals for each of the
TLU Area 1 policy options, the TWG also sought guidance from the level of needed reductions.
Maryland set statewide goals for reducing GHG emissions, and while there is no mandate that
the emission reductions for each sector be commensurate with the current and projected
contribution of the sector to emissions, it is a benchmark against which to compare the
reductions estimated for the policy option goals.
The statewide goals for GHG emissions reductions in Maryland are
•
10% below 2006 GHG emissions levels by 2012,
•
15% below 2006 GHG emissions levels by 2015, and
•
25%–50% below 2006 GHG emissions levels by 2020.
Appendix D-4 Page 3
Maryland Climate Action Plan Appendix D-4
If each sector were expected to participate in the reduction efforts in proportion to their
contribution, then in 2020 a 25%–50% reduction below 2005 GHG emissions levels would also
be expected from the transportation sector.
Table H-1 shows historical, current (2005, the last year for which date were available for this
report) and projected contributions of the transportation sector to Maryland GHG emissions, and
emissions required to contribute proportionately to the 2015 and 2020 goals:
Table H-1. Maryland GHG emissions
MMtCO2e
Source
1990
1995
2000
2005
2010
2015
2020
On-road Gasoline
17.91
19.67
21.61
23.94
25.29
26.97
28.78
On-road Diesel
2.91
3.42
5.09
5.89
6.83
7.91
9.18
Jet Fuel/Aviation Gas
1.49
1.41
1.68
1.31
1.32
1.37
1.42
Boats and Ships—
Ports/Inshore
1.16
0.90
0.90
0.87
0.81
0.87
0.93
Boats and Ships—Offshore
0.21
0.35
0.39
0.31
0.33
0.35
0.37
Rail
0.39
0.27
0.05
0.06
0.06
0.06
0.06
Other
0.14
0.14
0.16
0.14
0.16
0.18
0.19
24.20
26.16
29.90
32.52
34.81
37.71
40.93
Total emissions
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalent.
Goal (if proportionate) =
–15%, so 32.52 – 15% =
–25%, so 32.52 – 25% =
–50%, so 32.52 – 50% =
All TLU Area reductions together would reduce Maryland emissions by
Leaving total remaining emissions of 40.93 – 19.15 =
21.78/40.93 = 53%; so all TLU options together produce a reduction of
2006 *
total emissions of 27.64
total emissions of 24.39
total emissions of 16.26
–19.15
21.78
~47% from 2020 BAU
As demonstrated by Table H-1 and Figure H-1, the TLU policy options, if implemented
aggressively, produce emissions reductions within the range of 25% and 50% reductions from
2006 emissions levels.
Appendix D-4 Page 4
Maryland Climate Action Plan Appendix D-4
Figure H-1. GHG projections and goals in 2020
4
5
4
0
Maryland Transportation
emissions,
historical and BAU
trend
3
5
TLU reductions:
19.1
3
0
2
5
2
0
1
5
Goal: emissions 50% below 2006:
16.2
1
0
Goal: emissions 25% below 2006:
24.3
5
Goal: emissions 15% below 2006:
0
198
199
199
200
200
5
0
5
0
5
BAU = business as usual; TLU = Transportation and Land Use.
201
0
27.64
201
5
202
0
202
5
Reductions from Recent Actions
This quantification is based on actions taken by the Maryland Department of Transportation
(MDOT) in the last few years, and include intelligent transportation systems (ITS) (e.g.,
Coordinated Highways Action Response Team [CHART]), incentives for ridesharing and
telecommunications programs, Guaranteed Ride Home (GRH) for transit users, low-carbon fuels
(bio-diesel) purchases by state fleets, and traffic signal synchronization. These actions were
found to decrease transportation emissions by 0.08 million metric tons of carbon dioxide
equivalent (MMtCO2e) in 2012, and 0.11 MMtCO2e in 2020. These emissions reduction
quantifications were based on MDOT calculations submitted to the Center for Climate Strategies
(CCS) on April 15, 2008, or on previous analyses done for the state (ongoing Transportation
Emission Reduction Strategies, MDOT).
Appendix D-4 Page 5
Maryland Climate Action Plan Appendix D-4
Transportation and Land Use
Policy Descriptions
TLU Area 1: Reduce the contribution of VMT to GHG emissions
This suite of policies will reduce the state’s GHG emissions by reducing the growth in vehicle miles
traveled (VMT). The TLU TWG highly recommends these policy options be implemented as a
group. All options in this area save money, and all target policy areas that require change in order
to meaningfully reduce GHGs from the TLU sector.
Within this group of options, the important variable is the strength of implementation. These
policies have substantial power to reduce GHGs. The quantification in the following table, and in
each of the policy option descriptions, is based on an aggressive implementation of each policy
option. This aggressive implementation of TLU policies would help contribute to attaining the
high end of Maryland’s goal of reducing GHG emissions by 25%–50% by 2020. Less aggressive
implementation would reduce VMT by 20%, contributing to meeting the lower end of the state’s
25%–50% reduction goal. Put another way, the TWG’s recommendation to the Mitigation
Working Group (MWG) is: if the state desires to vary the aggressiveness of the final package of
measures, then it should do so by varying the aggressiveness of the package and of the policies
within it. The TWG recommended against varying the aggressiveness of the package by adding
or deleting individual policies.
For example, TLU-6, Pay-As-You-Drive Insurance (PAYD), can have a range of emissions
reductions, depending on how it is implemented. If it covers only “miles driven,” it will reduce
the number of miles driven, and produce smaller impacts. If (as recommended) it covers also
driving style, it will produce a more efficient method of driving (for example, less speeding), and
thus reduce GHG emissions from improved efficiency. The technology for the broader
implementation has been successfully deployed in the commercial sector. The TWG
recommends that Maryland aggressively work with its insurance commission and with the
insurance industry to implement the broadest deployment of PAYD possible, in terms of drivers
covered, and of covered mileage and driving styles. But the TWG also recognizes the likelihood
of such aggressive implementation is smaller than that of a modest implementation.
To summarize, the quantification shown is for aggressive implementation of all policy options.
At a less aggressive level of implementation, expected GHG reductions would tend toward onehalf of the reductions shown.
Appendix D-4 Page 6
Maryland Climate Action Plan Appendix D-4
Table H-2. VMT reduction options considered in TLU Area 1
GHG Reductions
(MMtCO2e)
Option
No.
Policy Option
2012
2020
Total
2008–
2020
TLU Area 1
TLU-2
Integrated Planning for Land Use and Location Efficiency
1.1
3.6
23.7
TLU-3
Transit
1.1
2.2
17.5
TLU-5
Intercity Travel: Aviation, Rail, Bus, and Freight
0.2
0.3
1.9
TLU-6
Pay-As-You-Drive (PAYD) Insurance
1.0
3.4
23.0
TLU-8
Bike/Pedestrian Infrastructure
TLU-9
Incentives, Pricing, and Resource Measures
TLU-11
Evaluate the Greenhouse Gas (GHG) Emissions Impacts
of Major Projects
Included in TLU-3 quantification
Total of individual options
2.6
N/A
3.7
N/A
6.0
13.2
32.8
N/A
98.9
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalent; TLU = Transportation and Land
Use; PAYD = Pay-As-You-Drive; N/A = not applicable.
Appendix D-4 Page 7
Maryland Climate Action Plan Appendix D-4
TLU-2. Integrated Planning for Land Use and Location Efficiency
Policy Description
Implement land-use planning and development strategies that reduce the number of VMT and
corresponding GHG emissions. Strategies include adopting statewide growth-management plans
and planning process reforms to encourage more compact development, transit-oriented
development (TOD), transportation management system (TMS) and pricing, and other tools that
encourage people to drive fewer miles, while ensuring a competitive economy and affordable
housing opportunities for Maryland residents.
Policy Design
Goals:
To return statewide VMT to 2000 per capita levels by 2020 and ensure continuing reductions in
per capita VMT (excluding vehicles over 10,000 pounds engaged in commercial freight activity)
of 30% by 2035, and 50% by 2050, from a 2020 per capita baseline, by implementing policies to
maximize growth management and incentivize GHG emissions reductions in the following areas:
•
Land-use planning and regulation policies;
•
Development and housing policies that shape public and private investment; and
•
Integrated transportation policies, investments, management, and pricing systems.
Timing: Governor and appropriate Cabinet Secretaries should initiate planning and
administrative activities in 2008 to shape transportation plans and policies to support the goal in
2008 and beyond, and prepare additional legislation for 2009 the legislative session.
Parties Involved: Maryland Department of Planning (MDP)—Office of Smart Growth (OSG),
MDOT, Maryland Department of Housing and Community Development (DHCD), Maryland
Department of the Environment (MDE), Maryland local governments, real estate development
industry, economic development interests, environmental and community interest groups.
Other:
The 2000 benchmark in Maryland is 9,496 miles traveled per capita based on a 2000 population
of 5.3 million, and 2000 VMT of 50,296 million miles.
The comparable statistics for 2005 are 10,200 miles per capita based on a 2005 population of
5.56 million, and 2005 VMT of 56,725 million miles.
2020 projections estimate VMT per capita in Maryland in that year of 11,519.
Therefore, the needed VMT per capita reduction in Maryland from 2020 business-as-usual
(BAU) estimates to reach 2000 levels is 18%. This would result in a total VMT of 60,643 million
given a 2020 forecast population of 6,386,225, and would be an increase of 6.9% from total 2005
VMT.
Appendix D-4 Page 8
Maryland Climate Action Plan Appendix D-4
Additionally, the TLU supports a goal of a 35% reduction in per capita VMT (excluding vehicles
over 10,000 pounds engaged in commercial freight activity) by 2035 and a 50% reduction by
2050, consistent with the goals recently established as benchmarks in Washington State House
Bill 2815, which was signed into law in 2008.1 These goals should be used in refinement of state,
regional, and local long-range TLU plans. Setting such longer-term goals is especially important
because federal law requires the periodic updating of state and metropolitan transportation plans
with at least a 20-year planning horizon. The degree of timely progress towards these goals
should be monitored, evaluated and reported with each plan update.
Implementation Mechanisms
Governor and appropriate Cabinet Secretaries should initiate planning and administrative
activities in 2008 to shape transportation plans and policies designed to minimize GHG
emissions related to traffic, while supporting sound economic and community development and
affordable housing goals in 2008 and beyond.
The Governor should convene a Task Force of key state and local leaders and stakeholders to
develop further recommendations for the Governor and Legislature by November 30, 2008 on
initiatives and options to reduce traffic growth through better integrated TLU planning and
management.
The Governor should work with the Legislature to develop supportive laws to meet these goals.
The Governor should establish an independent state agency to coordinate smart growth activities.
Several strategies and mechanisms should be considered in addressing these three policies
outlined under policy design.
•
Land-use planning and regulation policies
○
Require climate-friendly compact growth and integrated TLU planning.
–
Adopt a statewide development plan, including a GHG emissions cap for regional
TLU plans and programs.
– Develop GHG budgets and VMT per-capita targets for local, county, regional, and
state land-use and infrastructure plans.
– Develop a mechanism for coordinating with, and comparing local and county land
use and infrastructure plans with, the statewide growth-management plan to ensure
consistency and compatibility.
– Develop and ensure funding for appropriate institutional capacity at the state,
regional, and local level for planning, data collection, analysis, and performance
monitoring to support effective integrated transportation, land use, and environmental
planning and system management.
○
1
Require local comprehensive plans and environmental impact statements, fostering more
integrated local TLU plans, policies, and pricing incentives designed to minimize GHG
http://apps.leg.wa.gov/billinfo/summary.aspx?bill=2815
Appendix D-4 Page 9
Maryland Climate Action Plan Appendix D-4
emissions, while supporting sound economic and community development and affordable
housing goals.
○ Direct state spending (including sewer and water) to communities that adopt land-use
planning and regulation best practices to meet the GHG budget and VMT performance
standards set, with competitive grants available for efforts that extend best practices in
reducing GHGs related to transportation demand and system management, and bonus
funding to communities for demonstrating measurable exemplary progress in meeting
these goals.
○ Require and support zoning for smart growth.
○ Enhance open-space protection programs and policies to focus on protection and
development of carbon sinks, and concentrate development in existing urbanized areas.
•
Development and housing policies that shape public and private investment to foster growth
and redevelopment to minimize and incentivize GHG emission reductions, while supporting
economic development and affordable housing goals.
Create smart location requirements and incentives for developers, business, and
homeowners.
○ Support sound development and redevelopment of cities, towns, and villages by creating
and expanding appropriate tax incentives and funding programs.
○ Fund the reform of state and local tax, zoning, and building codes and policies to support
and incentivize appropriate growth and redevelopment.
○ Develop an indirect source rule that provides for GHG impact fees on new development.
Examples of indirect source rules that are available elsewhere in the United States should
be reviewed, and a rule appropriate for Maryland should be developed from the
examples.
○
•
Transportation policies that are designed to minimize GHG emissions, while supporting
sound economic and community development and affordable housing goals.
Foster expeditious progress in achieving VMT reduction targets, with timely
development of more effective VMT measurement, monitoring, and state and local
planning and system management. State transportation funding should be tied to progress
in planning and implementing measures that achieve adopted goals. The TWG envisions
a state and metropolitan planning organizations (MPO) consultative process to establish
rules and requirements, but with establishment and management at the state level.
○ Targets should be set as follows:
○
Set a carbon dioxide (CO2) cap for the transportation sector (for example, following
the model of Clean Air Act “conformity”).
– Set a VMT cap that is a subset of the CO2 cap. The VMT cap would take into account
the effects of other impacts on CO2 from the transportation sector, including
improvements in fuel economy and other impacts from measures developed through
this process, and set a VMT goal necessary to meet the CO2 goal, given all other
factors.
– Develop a statewide plan with targets to reduce annual per capita non-commercial
light-duty VMT consistent with the VMT goal.
–
Appendix D-4 Page 10
Maryland Climate Action Plan Appendix D-4
–
–
–
○
The state should adopt a schedule of statewide per capita VMT reduction targets.
Schedule would include goal to reduce annual per capita VMT from a BAU
projection for 2020 to 1990 levels.
As the per capita VMT reduction plan would be a partnership connecting the state,
regional, and local levels, the state should design a plan in consultation with local
governments that helps direct state actions and investments, incentives, regulations,
and policies to achieve the targets.
Apportion responsibilities of that plan to planning organizations, inclusive of local
jurisdictions.
–
–
–
Local governments must adopt VMT plans consistent with statewide plans.
State to develop and provide guidance to the local transportation groups, with a wide
range of tools and best practices in order to reach the identified benchmarks.
Significant state oversight is anticipated, and much of the attainment in per capita
VMT reductions is expected to result from complementary actions considered by the
TWG.
Prioritize funds to significantly expand and improve transit and paratransit systems,
walking, and cycling, giving these clearer priority in the allocation of street space and
providing alternatives to single-occupancy vehicular (SOV) travel.
○ Fully consider direct, indirect, secondary, and induced impact costs and cost-effectiveness
of strategies that preserve and better manage existing roadways and other transportation
system elements before investing in new major transportation capital investments and
capacity expansion.
○ Introduce new pricing incentives for roads, parking, transit, and motor vehicle ownership
to support these goals.
○
•
Develop appropriate funding incentives, regulations, and policies to ensure that the plans are
respected and result in timely progress to achieve goals.
•
Develop appropriate public-private cooperation and governance structures to help manage
travel at a sub-area and district level, especially Transportation Management Districts
(TMD). MDOT should work with local governments to designate TMDs to identify and
coordinate strategies to manage motor vehicle travel, with the state providing initial funding
for TMD operation and related data analysis, reporting, and stakeholder involvement. TMDs
will engage Maryland State Highway Administration (SHA), MDP, Maryland Transportation
Authority (MDTA), Maryland Transit Administration (MTA), area transit agencies, MDE,
MDP OSG, and affected or interested stakeholders, and will be encouraged to work closely
with applicable local, regional, and state agencies and the private sector to achieve their
goals.
TMDs will encourage transit-oriented smart growth, public transportation investment, and
smart transportation pricing incentives, advising and commenting on relevant initiatives by
local and state agencies. TMDs will design and coordinate initiatives, incentives, and
investment proposals to: reduce vehicle miles of travel (VMT) per capita in their area of
operation to help meet state goals; increase use of public transportation, ridesharing, walking,
and bicycling; and reduce direct and indirect GHG emissions related to transportation and
land development. TMDs will retain consultants to design appropriate VMT and mode share
Appendix D-4 Page 11
Maryland Climate Action Plan Appendix D-4
monitoring programs and provide independent annual reporting on progress towards their
goals, with opportunity for public comment.
Related Policies/Programs in Place
Smart Growth Priority Funding Areas.
Task Force on the Future for Growth and Development.
The proposed policy would build on the model of Clean Air Act conformity, adapting that model
to growth in VMT and CO2. That model takes one piece of a state-level challenge—future
growth—and gives it to local jurisdictions closest to the source of the growth. The model uses
the locals’ structure to respond, while building on incentives and technology adopted by the
state.2
Type(s) of GHG Reductions
Primarily CO2
Estimated GHG Reductions and Net Costs or Cost Savings
GHG impacts:
Current reductions assume a return to 2000 per capita VMT in 2020, which is an 18% reduction
from BAU 2020 VMT. All else is held constant.3
Costs/cost savings:
All else being equal, buildings cost somewhat more to construct in urban areas than in suburban
or exurban areas. The preponderance of the evidence, and of the academic review of that
evidence, finds that increased private construction costs are more than paid for through initial
higher sales prices and higher resale value over time, and through substantial savings in reduced
infrastructure costs.
Under a compact, TOD scenario, such as would be produced under this option, the state would
save substantial infrastructure costs. A portion of those benefits would come from the transit use
that improved land-use patterns would make possible. More compact land use alone would
produce net cost savings, as the more compact development pattern by itself would save
substantial amounts. A wide variety of literature shows that integrated TLU planning produces
net savings on total costs of buildings + land + infrastructure + transportation. Some portions of
that total cost may be higher. The preponderance of literature suggests net savings overall.4 A
National Academy of Sciences (NAS) and Transportation Research Board (TRB) review found
substantial regional and state-level infrastructure cost savings from more compact development,
as shown in Table H-1.
2
See, for example, Environmental Defense, “Incorporating Environmental Performance into Transportation
Projects,” memo to TLU TWG, January 30, 2008.
3
This is consistent with the target adopted in recently signed Washington State climate change legislation.
4
Literature reviews include US EPA (2001), “Our Built and Natural Environments: A Technical Review of the
Interactions Between Land Use, Transportation, and Environmental Quality,” and Burchell, et al. in footnote 5.
Appendix D-4 Page 12
Maryland Climate Action Plan Appendix D-4
Costs of sprawl were estimated based on studies by Burchell and are displayed in Table H-3.
Table H-3. Burchell findings of savings of compact growth versus trend development5
Lexington,
Kentucky and
Delaware
Estuary
Michigan
South
Carolina
New
Jersey
14.8%–19.7%
12.4%
12%
26%
Utilities (water/sewer)
6.7%–8.2%
13.7%
13%
8%
Housing costs
2.5%–8.4%
6.8%
7%
6%
6.9%
3.5%
5%
2%
Developable land
20.5%–24.2%
15.5%
15%
6%
Agricultural land
18%–29%
17.4%
18%
39%
Frail land
20%–27%
20.9%
22%
17%
Area of Impact
Public–private capital and operating costs
Infrastructure roads (local)
Cost-revenue impacts
Land/natural habitat preservation
Data Sources: CCS inventory and forecast.
Quantification Methods: Top-down.
Key Assumptions: None cited.
Key Uncertainties
There is substantial discussion in the TWG about whether land use and location efficiency can
produce the gains at the high end of the quantified range.
Additional Benefits and Costs
None cited.
Feasibility Issues
None cited.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
5
R. Burchell et al. 1998. The costs of sprawl—revisited. TRB/National Research Council (NRC)/National
Academies Press (NAP). TCRP Report 39.
Appendix D-4 Page 13
Maryland Climate Action Plan Appendix D-4
TLU-3. Transit
Policy Description
Shift passenger transportation mode choice to increase transit ridership and carpooling. This
strategy will reduce GHG emissions by reducing VMT (fewer vehicle trips). Ensure that
transportation is integrated with and appropriately serves land-use development plans (developed
under TLU-02).
This option supports and enables TLU-09 (Incentives, Pricing, and Resource Measures) in a
variety of ways. For one, recent findings in a road charging experiment demonstrate that
responses to roadway tolling are more pronounced in areas where transit to workplaces is an
option for participants6. Additionally, the transportation pricing and commuter choice policies
recommended under TLU-09 cannot be effectively advanced if the state transit infrastructure
cannot meet the demands and expectations of the SOV commuters for higher quality, convenient,
and attractive public transportation, walking, and cycling options. As such this option should be
bundled with TLU-09, as the potential to achieve forecast GHG reductions from pricing is
limited without the implementation of TLU-3 transit (as well as TLU-8 pedestrian and cycling)
improvements. If not bundled, the GHG reductions, costs and benefits from the policy options
would need to be revised.
Policy Design
Goals:
• To double transit ridership statewide by 2020 from a 2006 baseline;
•
Improve transit service and expand transit infrastructure (rail, bus);
•
Focus new development and growth on transit-served corridors;
•
Expand transit marketing and promotion; and
•
Expand low GHG options.
Timing: To begin immediately.
Parties Involved: MTA
Implementation Mechanisms
The following strategies should be implemented.
Improve transit service and expand transit infrastructure (rail, bus)
• Planning:
6
M. Kitchen. 2008 (Mar.). PowerPoint presentation on lessons from road charging experiments/traffic choices
study: Central Puget Sound region, Washington/findings from a road pricing experiment. Prepared for the Puget
Sound Region Council (PSRC).
Appendix D-4 Page 14
Maryland Climate Action Plan Appendix D-4
Coordinate rideshare, transit, park and ride, bike/pedestrian and interstate transportation
planning and investment at the state, regional and municipal levels
○ Prioritize regional routes for expansion, emphasizing cost-effective Bus Rapid Transit
(BRT) to maximize service expansion.
○
•
Capital/Infrastructure:
Improve walking, bicycling, and park-and-ride transit access with a focus on costeffectiveness in expanding ridership and minimizing GHG emissions. Towards this end,
ensure safe and attractive conditions for walking within ¼ mile of transit stops; ensure
secure parking for bicycles at transit stops with safe and attractive conditions for cycling
within ½ mile of transit stops, and improve Park and Ride Lots by expanding
construction of well-lighted and police patrolled parking.
○ Designate and develop more effective multimodal hubs (terminals and shelters),
especially at centers where TOD is being encouraged
○ Invest in technology improvements including real-time public transportation customer
information, real-time ride-matching and private paratransit services, and public
transportation priority treatments in traffic operations
○ Expand operations and maintenance facilities (transit bases) as needed to support
effective system development.
○
•
Operating:
○
○
○
○
○
○
Improve public transport access within and between development centers
Provide new services for developing areas in coordination with the permitting of new
developments
Increase resources available to elderly and disabled populations (paratransit),
Provide public transportation and paratransit assistance to rural areas, and
Coordinate schedules of transit services
Improve transit times using TMS, signal prioritization, managed lanes, and other priority
treatments.
Focus new development and growth on transit-served corridors
Expand transit marketing and promotion
○ Develop and fund marketing strategies promoting alternative modes
○ Provide incentives and fund GRH programs
○ Provide incentives and fund association or network for transit or transportation
coordination and management
○ Provide incentives to employers and individuals who encourage or use rideshare, van
pools transit, and other alternative modes
○ Provide employer education and technical assistance, especially for large employers
Related Policies/Programs in Place
MTA’s 2001 Maryland Comprehensive Transit Plan (MCTP) calls for a doubling of transit
ridership by 2020 from a 2000 baseline by increasing funding 42%.
Appendix D-4 Page 15
Maryland Climate Action Plan Appendix D-4
The MDOT, in cooperation with the MPOs, MDE, and local government bodies has the
following in place to promote transit use in the state:
•
Park-and-Ride spaces: This strategy has been ongoing in Maryland since 1976. SHA,
MDTA, and MTA will continue to implement additional Park-and-Ride spaces along the
major roadways of the state.
•
State Highway Administration (SHA):
2005–2008, 1,408 new spaces
○ 2009–2012, 2,012 new spaces
○ 58% occupancy
○ SHA estimates 102,010,000 VMT reduced per year based on 11,745 spaces which exist
today
○
•
Maryland Transit Administration (MTA):
2005–2008, 2,890 new spaces
○ 2008–2012, 2,475 new spaces
○
•
Expansion of Maryland Rail Commuter Service (MARC) and other transit services:
There is an understanding that there is a need to increase the supply of available transit
service in Maryland.
MTA expects that there will be 10,000 additional MARC seats from added train sets and
railcars by 2012.
○ Occupancy is conservatively estimated at 80%.
○
Type(s) of GHG Reductions
CO2, methane (CH4), and black carbon
Estimated GHG Reductions and Net Costs or Cost Savings
Data Sources:
Cambridge Systematics, Inc. 1999. Public transportation and the nation’s economy: a
quantitative analysis of public transportation’s economic impact. Available at
http://www.apta.com/research/info/online/documents/vary.pdf
J. Brown, D. Hess, and D. Shoup. 2003. Fare-free public transit at universities: an evaluation.
Journal of Planning Education and Research 23:69–82.
J. Brown, D. Hess, and D. Shoup. 2001. Unlimited access. Transportation 28:233–267, Kluwer
Publications.
Minnesota Department of Transportation. 2006. Modal Options Identify Project, “Measurement
and Evaluation.”
Appendix D-4 Page 16
Maryland Climate Action Plan Appendix D-4
L. Bailey. 2007 (Jan.). Public transportation and petroleum savings in the U.S.: reducing
dependence on oil. ICF International. Available at
http://www.icfi.com/Markets/Transportation/doc_files/public-transportation.pdf
D. Anderson, and G. McCullough. 2000. The full costs of transportation in the Twin Cities
region. University of Minnesota. Available at
http://www.cts.umn.edu/trg/research/reports/TRG_05.html
D.J. Forkenbrock, and G.E. Weisbrod. 2001. Guidebook for assessing the social and economic
effects of transportation projects. TRB, National Cooperative Highway Research Program
(NCHRP) Report 456.Available at http://www.trb.org
Quantification Methods:
GHG impacts:
TLU-3 would be funded with $2,768,000,000/year from the TLU-9 carbon fuel tax. That amount
would be an 84% increase in total transit expenditures statewide.
Total transit ridership in Maryland in 2006 was 252,773,000 trips. An 84% increase in trips
would produce an additional 212,329,000 trips. Put another way, we can simply assume an 84%
increase in non-single-occupant vehicle (non-SOV) mode share. We take the latter approach and
calculate the impacts of an 84% increase in non-SOV mode share.
Transit mode share in 2005 was 8.5%.
8.5% × 84% = 7.14%
Thus we analyze the impacts of an additional 7.14% transit mode share = a decrease in VMT of
7.14% by 2020. We ramp up from 2007 smoothly to the 2020 goal of an additional 7.14%.
Costs/cost savings:
The cost-effectiveness of investments in transit and transit promotion will vary depending on
how those investments are made, and the Option language gives the state and its constituents a
wide flexibility in making those investments. A given investment in transit and transit promotion
may or may not produce net benefits, so while this process needs to make general policy
recommendations, it will remain the responsibility of the state and its constituents to maximize
the cost-effectiveness of investments made.
For the purposes of this analysis, and to give the MWG guidance, we ask whether those types of
investments are likely to produce net costs or net savings. A wide variety of empirical experience
suggests that the policies and investments listed in the Option Design and Implementation
Mechanisms sections are likely to produce substantial net savings, as in the following four
examples:
•
Transit investments generally—Nationally, transit produces net economic returns on
investment: “For every $10 million invested, over $15 million is saved in transportation costs
Appendix D-4 Page 17
Maryland Climate Action Plan Appendix D-4
to highway and transit users. These costs include operating costs, fuel costs, and congestion
costs.” These are in addition to the ancillary benefits summarized below.7
Transit fare initiatives—Unlimited Access transit at the University of California, Los Angeles
(UCLA) costs $810,000 a year and has total benefits of $3,250,000 a year.8 Similar programs
at other universities show similar results.9 Universities are, in some senses, unique
institutions, but the general types of challenges (especially demand for and cost of providing
parking), and the types of benefits enjoyed in response to commute benefits programs, are
equally available to businesses, even businesses located in what would normally be thought
of as locations unsupportive of transit use. Deeply discounted bulk transit pass purchase
programs, sometimes called “Eco Passes,” offer an example. Under these, employers or
schools purchase transit passes for 100% of their commuters or student population at a
discount based on anticipated usage levels.
•
“Eco Passes also offer significant advantages for employers who offer free parking to all commuters,
because those who shift from driving to transit will reduce the demand for employer-paid parking
spaces. A survey of Silicon Valley commuters whose employers offer Eco Passes found that the solodriver share fell from 76% before the passes were offered to 60% afterward. The transit mode share for
commuting increased from 11% to 27%. These mode shifts reduced commuter parking demand by
approximately 19%.”
“Given the high cost of constructing parking spaces in the Silicon Valley, each $1 per year spent to buy
Eco Passes can save between $23 and $333 on the capital cost of required parking spaces.”10
•
Transit and non-SOV options information and promotion—Per public dollar, a Transportation
Management Organization (TMO) can accommodate seven times as many commuters as new
highway investment.11
•
Transit use—Nationally,
“Households who use public transportation save a significant amount of money. A two adult “public
transportation household” saves an average $6,251 every year, compared to an equivalent household
with two cars and no access to public transportation service. We define “public transportation
household” as a household located within ¾ mile of public transportation, with two adults and one
car.”12
As a bounding measure of benefits, one may use the most recent analysis of the full cost of a
mile of auto travel in a U.S. urban area, which concluded that the total cost of a mile of auto
7
Cambridge Systematics, Inc. 1999. Public transportation and the nation’s economy: a quantitative analysis of
public transportation’s economic impact. Available at:
http://www.apta.com/research/info/online/documents/vary.pdf
8
J. Brown, D. Hess, and D. Shoup. 2003. Fare-free public transit at universities: an evaluation. Journal of Planning
Education and Research 23:69–82.
9
J. Brown, D. Hess, and D. Shoup. 2001. Unlimited access. Transportation 28:233–267, Kluwer Publications.
10
Ibid., 260.
11
Minnesota Department of Transportation. 2006. Modal Options Identify Project, “Measurement and Evaluation.”
12
L. Bailey. 2007 (Jan.). Public transportation and petroleum savings in the U.S.: reducing dependence on oil. ICF
International. Available at: http://www.icfi.com/Markets/Transportation/doc_files/public-transportation.pdf
Appendix D-4 Page 18
Maryland Climate Action Plan Appendix D-4
travel was between $0.84 and $1.62, with a mid-range estimate of $1.14, in 2020.13 That figure
would give net savings of $2,570,164,781.
65,582,642,647
–7.14%
= 4,682,600,685
× $1.14/mile
= $5,338,164,781
– 2,768,000,000
= $2,570,164,781
VMT
VMT
transit investment
net savings in 2020
The $1.14/mile is composed of the following costs:
•
Internal to driver or owner are
○
○
○
○
○
○
•
Fixed vehicle,
Variable vehicle,
Travel time,
Other time,
Crashes, and
Parking and driveways.
External to driver or owner are
○
○
○
○
○
○
○
Congestion,
Crashes,
Air pollution (health),
Air pollution (other),
Noise,
Fires and robberies, and
Petroleum consumption.
At a lower bound, one might do the same calculation using the current federal mileage
reimbursement rate of $0.60/mile:
65,582,642,647
–7.14%
= 4,682,600,685
× $0.60/mile
= $2,809,560,411
– 2,768,000,000
= $41,560,411
VMT
VMT
transit investment
net savings in 2020
Due to recent rapid increases in fuel prices, there are no good low bounds to use in this analysis.
For example, during the MWG process, the American Automobile Association (AAA) cost per
13
D. Anderson, and G. McCullough. 2000. The full costs of transportation in the Twin Cities region. University of
Minnesota. Available at: http://www.cts.umn.edu/trg/research/reports/TRG_05.html
Appendix D-4 Page 19
Maryland Climate Action Plan Appendix D-4
mile figure of $0.522/mile was from 2007: “Fuel prices in the study are based on the fourth
quarter 2006 U.S. price for regular grade fuel, which averaged $2.256 per gallon….”14 As of
June 6, 2008, the AAA gives a national average price of $3.975/gal or 56% higher.15 The Internal
Revenue Service (IRS) mileage reimbursement rate does not include all relevant expenses. A
price of $0.60/mile possibly underestimates even private costs and certainly underestimates total
social costs. Thus, regardless of what the true cost per avoided mile is, transit investments of this
magnitude will likely show net benefits.
How to characterize those benefits per ton is another challenge. Savings per ton behave very
differently than do costs per ton. To give a simple example:
•
If Maryland will spend a given amount and reduce emissions, the more emissions Maryland
can reduce for that expense, the lower the cost per ton.
If Maryland were to spend $2.7 billion and reduce emissions by 2.8 million metric tons
(MMt), the cost would be $964/ton.
○ If Maryland were to spend $2.7 billion and produce twice the benefit, reducing emissions
by 5.6 MMt, the cost would fall by half, to $482/ton.
○
•
But if Maryland will save a given amount and reduce emissions, the more emissions
Maryland can reduce for that expense, the lower the savings per ton.
If Maryland were to save $2,570,164,781 (the estimated savings above) and reduce
emissions by 2.8 MMt, the cost would be –$918/ton.
○ If Maryland were to save $2,570,164,781 (the estimated savings above) and double GHG
reductions, reducing emissions by 5.6 MMt, the savings would fall by half, to –$459/ton.
○
In sum, for a given amount of savings, the higher the estimated emissions reduction, the less
money per ton is saved. To exaggerate for the sake of argument:
•
Say that Maryland invested the entire $2.7 billion in transit for purely economic and quality
of life reasons, and happened to reduce a ton of emissions in the process. The savings would
be $2.7 billion/ton.
•
On the other hand, if Maryland made the same investment and made a wildly inflated
estimate of 2.7 billion tons of emissions reductions, then it could estimate the savings at an
apparently very reasonable $1/ton.
The bottom line is that characterizing the benefits of transit and multimodal investments in $ per
ton is fraught with difficulty. Transit—and transportation generally—serves so many social goals
that estimating its benefits has always been a difficult challenge.16 Going another step and
assigning those monetary benefits to a single-output measure, such as tons of emission reduction,
risks further distorting the policy picture. “$ per ton” is a measure very well suited to evaluating
14
http://www.aaanewsroom.net/main/Default.asp?CategoryID=4&ArticleID=529
15
http://www.aaafuelgaugereport.com/
16
D.J. Forkenbrock, and G.E. Weisbrod. 2001. Guidebook for assessing the social and economic effects of
transportation projects. TRB, National Cooperative Highway Research Program (NCHRP) Report 456.Available at:
http://www.trb.org
Appendix D-4 Page 20
Maryland Climate Action Plan Appendix D-4
and comparing investments such as scrubbers that have explicit costs directly attributable to
emissions reduction. Transit and transportation investments, unless made for the sole purpose of
emissions reduction (such as various vehicle technologies), are not well evaluated using that kind
of metric.
What then should policy makers do in a process like this one that uses $ per ton as an evaluation
criterion? This analysis suggests that under a reasonable band of assumptions, a substantial
Maryland investment in transit and multimodal transportation is almost certain—especially in an
era of high and increasing fuel prices—to produce meaningful net savings for Maryland. Various
people have characterized policies in this category as “no regrets policies” from a GHG
perspective. One hesitates to use a phrase with such a political background, but the TWG—and
then the MWG—might think about finding a phrase to describe policies that produce large nonGHG benefits, such that assigning all their benefits to GHG reduction produces numbers that are
not useful in the policy-making process.
Counter-argument:
Not presenting and defending very high cost-effectiveness figures for transit and related
investments incorrectly hides the large benefits available to society from those investments. In
two examples given in the above discussion: (1) Unlimited Access transit at UCLA costs
$810,000/year and has total benefits of $3,250,000/year; and (2) given the high cost of
constructing parking spaces in the Silicon Valley, each $1/year spent to buy Eco Passes can save
between $23 and $333 on the capital cost of required parking spaces.
The way for society to achieve that rate of return of “1 to 23” or “1 to 333” is to have the transit
in place so that garages do not need to be built. Available benefits are empirically large, and
should not be hidden behind a catchall phrase “net benefits.”
Cost-effectiveness:
$2,570,164,781 savings per 2.8 MMt = $917 per ton savings. The specific GHG emissions, costs
and cost effectiveness are displayed in Table H-4.
Table H-4. TLU-3 Transit cost-effectiveness
Option
No.
TLU-3
Net
CostPresent
EffectiveValue
Total
ness
2008–
2008–
($/tCO2e)
2020
2020 (Million $)
GHG Reductions
(MMtCO2e)
Policy Option
Transit
2012
2020
1.1
2.2
17.5
Net savings
Level of
Support
Unanimous
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalent; $/tCO2e = dollars per ton of
carbon dioxide equivalent.
Key Assumptions: The “Goals” statement above initially proposed “doubling transit service;” it
is now “doubled transit ridership.” The initial assumption was that doubled provision would
produce doubled ridership. The MTA analysis proposes to double ridership with a 42% increase
in funding.
Appendix D-4 Page 21
Maryland Climate Action Plan Appendix D-4
Key Uncertainties
Ability to expand transit service and ridership at the modeled pace.
Additional Benefits and Costs
Reducing VMT and increasing reliance on public transit will result in a reduced parking demand,
lower household costs for transportation, decreased traffic congestion, improved air quality,
reduced need and cost for roadway expansion, and improved health for new transit riders who
walk or bicycle to transit.
Feasibility Issues
See “Key Uncertainties” about feasibility. On the other hand, the American Association of State
Highway and Transportation Officials (AASHTO) has a goal of doubling national transit
ridership by 2030.17
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
17
J. Horsley. 2008 (Jan.) Reauthorization and climate change. Available at:
http://www.transportation.org/sites/‌aashto/docs/Horsley-2008-01-14.pdf
Appendix D-4 Page 22
Maryland Climate Action Plan Appendix D-4
TLU-4. Low Greenhouse Gas Fuel Standard (LGFS)
Policy Description
A low greenhouse gas fuel standard (LGFS) would create a market-based program to reduce the
GHG emissions from transport fuels and diversify transport fuel options for consumers.
The LGFS is designed to show no bias toward any particular fuel: it includes fossil and
renewable fuels. Instead, the LGFS is meant to require fuel providers to reduce the GHG
intensity of the fuels they sell in Maryland. “Fuel providers” are identified as producers,
importers, refiners, and blenders.
The LGFS is not a tailpipe standard for GHGs. The LGFS considers GHG emissions on a full
fuel-cycle basis, which includes not only tailpipe emissions, but also emissions associated with
the production and distribution of fuels (well to wheels [WTW]). This will result in varying
carbon impact values for fuels that would otherwise look the same to customers.18 It is essential
to the success of this policy option that it is implemented at a regional level. In terms of GHG
reductions and cost-effectiveness, effective coordination with nearby states is imperative.
Policy Design
Goals: Implement policy that reduces the average carbon intensity of on-road transportation fuel
5% by 2020. This was revised down from 10% based on the uncertainty surrounding the GHG
emissions reductions that can be expected from the biofuels currently available on the market.
Additionally, proposed implementation mechanisms should emphasize use of fallow land or
waste feedstocks to produce the biofuels.
Timing: Longer term.
Parties Involved: All layers of government, and fuel providers.
Implementation Mechanisms
•
Partnership with the MDOT to create the framework for the LGFS.
•
Market-based mechanisms for fuel providers to choose how they wish to meet LGFS.
•
Full life-cycle basis of measuring GHG impact of transportation fuels. Implemented by a
cap-and-trade (C&T) system for fuel providers.
•
Financial incentives for refueling station creation and retrofitting based on LGFS.
•
Certification process.
•
To the extent practicable, harmonize with any Northeast States for Coordinated Air Use
Management (NESCAUM) proposal or the California LCFS.
18
For example, how ethanol is made affects its life cycle GHG profile substantially.
Appendix D-4 Page 23
Maryland Climate Action Plan Appendix D-4
Related Policies/Programs in Place
Currently, about 85% of Maryland’s gasoline supply contains 10% ethanol (E10), which has
been added to federal reformulated gasoline to replace methyl tert-butyl ether (MTBE). Other
sources of biofuels are three stations in the state dispensing a blend of 85% ethanol and 15%
gasoline (E85) to the public and eight retail outlets and 10 distribution facilities offering biodiesel. Maryland requires that at least 50% of state vehicles must use a minimum bio-diesel
blend of 5% bio-diesel fuel (B5) beginning in fiscal year 2008.
The Energy Policy Act of 1992 (EPAct) required federal and state governments to purchase
alternative-fuel vehicles (AFV), and in 2001, a Maryland Executive Order was signed requiring
state vehicles use flexible fuel at least 50% of the time. The State of Maryland owns
approximately 800 flexible-fuel vehicles (FFVs), few of which use E85. However, under current
mandates at least 50% of diesel-fueled vehicles in the state’s fleet are required to use a blend of
fuel that is at least B5. The state is currently meeting this B5 requirement in its fleets. The state
expects to be at the B20 level by 2012.
U.S. refiners and importers were required to use 4.7 billion gallons of biofuels. However,
6.85 billion gallons of ethanol were used as a transportation fuel in 2007, exceeding the federal
mandate. In December 2007, the U.S. Congress passed the Energy Independence and Security
Act of 2007 (EISA). The EISA included a significantly increased renewable fuel standard
containing four interrelated parts consisting of an overall mandate and set asides for advanced,
cellulosic, and biomass diesel. These mandates incorporate life cycle GHG-reduction
requirements. The overall mandate starts in 2008 at 9.0 billion gallons, and grows to 36 billion
gallons in 2022. In 2009, the individual mandates begin to phase-in.
The Renewable Fuels Promotion Act of 2005 authorizes the payment of credits to producers of
Maryland-originating ethanol and bio-diesel that meet certain requirements. The amount of credit
paid to producers would depend on the number of qualifying plants and whether the feedstocks
would qualify for a $0.05 or $0.20/gal credit. The law also established a Renewable Fuels
Incentive Board to review claims and pay credits to producers over a 10-year period. Beginning
in fiscal year 2008, once a facility is certified, the Governor must include funds to implement the
credit program. To date, no facility in Maryland has been certified.
Chapter 425 of 2006 SB 54)—this requires that at least 50% of diesel-fueled vehicles in the
state vehicle fleet (with the exception of vehicles whose manufacturers warranties would be
voided if the use of bio-diesel caused mechanical failure) use at least B5 fuel, beginning in fiscal
year 2008. The effects of this legislation are just beginning to be felt, but it appears that the state
is successfully meeting the requirements of the bill.
Chapter 623 of 2007 (HB 745)—this requires that, beginning in fiscal year 2009, at least 50%
of the state’s heavy equipment, off-road equipment, and heating equipment that uses diesel fuel
must use at least B5 fuel, subject to its availability. According to the bill’s fiscal and policy note,
this resulted in increased state expenditures (all funds) of $177,600 in fiscal year 2009, reflecting
a $0.05/gal price premium for B5 fuel for heating and heavy equipment. According to the
Maryland Department of Budget and Management (DBM), the state purchases 9.5 million
gallons of diesel annually. The two largest state consumers of diesel fuel are the MTA, which
uses 8 million gallons of diesel fuel annually in 800 buses, and the SHA, which uses 750,000
gallons. These two agencies consume 92% of diesel fuel purchased by Maryland state agencies.
Appendix D-4 Page 24
Maryland Climate Action Plan Appendix D-4
Under the terms of this bill, MTA would use 4 million gallons of B5 fuel annually to run half of
its fleet, and SHA would use 375,000 gallons. In total, the state would purchase 4.75 million
gallons of B5, nearly all of it with Transportation Trust Fund (TTF) dollars. This equates to a
market for approximately 240,000 gallons of bio-diesel. The state anticipates having no difficulty
meeting the mandates of this legislation.
Type(s) of GHG Reductions
All GHG types in the fuel life cycle.
Estimated GHG Reductions and Net Costs or Cost Savings
Table H-5 displays the difference between the no-action trend and implementation of the
California low GHG gas fuel standard.
Table H-5. Comparison of no action trend and California low greenhouse gas fuel standard
(LGFS)
MMtCO2e
No-action trend
(Light-duty + heavy-duty)
2005
2015
2020
23.94 + 5.89 = 29.83
26.97 + 7.91 = 34.88
28.78 + 9.18 = 37.96
CA LGFS – 5% by 2020
Reduction
33.73
36.06
1.1
1.9
LGFS = low greenhouse gas fuel standard; MMtCO2e = million metric tons of carbon dioxide equivalent; CA =
California.
Under the LGFS, fuel providers would be required to track the global warming intensity (GWI)
of their products, measured on a per-unit-energy basis, and reduce this value over time. GWI is a
measure of all of the mechanisms that affect global climate including not only GHGs, but also
processes (like land-use changes that may result from biofuel production). The term life cycle
refers to all of the activities included in the production, transport, storage, and use of fuel. The
unit of measure for GWI used in this study is carbon dioxide equivalent per megajoule
(gCO2e/MJ) of fuel delivered to the vehicle, and adjusted for inherent differences in the in-use
efficiency of different fuels (e.g., diesel, electricity, and hydrogen).
The table below is from the University of California (UC) analysis of the LGFS. It shows the
global warming impacts by fuel estimated by two different life cycle analysis (LCA) models.
Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) is a model
developed by Argonne National Laboratory (ANL) for the U.S. Department of Energy (US
DOE). The GREET model is the primary tool relied upon in the UC study. While Lifecycle
Emissions Model (LEM) has been under development for several years, it remains unfinished
today, so some of the qualified impacts are best characterized as illustrative of rough magnitudes
under certain sets of assumptions. However, LEM is more comprehensive than many other LCA
models.
Note that very recent research published in Science (Fargione, et al., 2008) provides different
evidence than the UC study from which the information that follows on GWIs was developed.
The Fargione paper says that while biofuels can offer carbon savings, this is dependent on how
they are produced. Converting grasslands, peatlands, or savannas to produce food-based biofuels
Appendix D-4 Page 25
Maryland Climate Action Plan Appendix D-4
in Brazil, Southeast Asia, and the United States creates a biofuel carbon debt be releasing 17 to
420 times more CO2 than the annual GHG reductions these biofuels provide by replacing fossil
fuels. In contrast, biofuels made from waste biomass, or from biomass grown on abandoned
agricultural lands planted with perennials incur little or no carbon debt and offer immediate and
sustained GHG advantages.
A second Science article (Searchinger, et al., 2008) notes that most prior studies of biofuels have
failed to count the carbon emissions that occur as farmers worldwide respond to higher prices,
and convert forest and grassland to new cropland to replace the grain (or cropland) diverted to
biofuels. Using a worldwide agricultural model to estimate emissions from land-use change, they
found that corn-based ethanol, instead of producing a 20% savings, nearly doubles GHG
emissions over 30 years, and increases GHGs for 167 years. Biofuels from switchgrass, if grown
on U.S. corn lands, increase emissions by 50%. This result raises concerns about large biofuel
mandates and highlights the value of using waste products.
U.S. Environmental Protection Agency (US EPA) will propose life cycle GHG reductions as part
of its responsibility under EISA. These emission reduction estimates will take into account the
concerns raised in these Science articles. The US EPA plans to issue these regulations during
2009.
Table H-6 illustrates two important points: (1) the wide range of GWI values for motor vehicle
fuel alternatives, and (2) the level of uncertainty in estimated GWI values for any specific fuel
(as seen by the difference between the GREET and LEM model GWI estimates for individual
fuels).
Appendix D-4 Page 26
Maryland Climate Action Plan Appendix D-4
Table H-6. Global warming impacts estimated by two life cycle analysis (LCA) models
(gCO2e/MJ)
Fuel
Fuel production pathway
GREET
LEM (CEF)
CA RFG
Marginal gallon produced in CA
92
85
Diesel
Ultra-low-sulfur diesel produced in CA
71
73
Propane
From petroleum
77
67
CNG
From North American natural gas (in spark ignition engines)
79
81
BTL
Fischer-Tropsch (F-T) diesel from California biomass (poplar trees)
CTL
F-T diesel from coal
Bio-diesel
FAME bio-diesel from Midwest soybeans
Ethanol
Midwest corn ethanol from a coal-fired dry-mill
114
–
Ethanol
Midwest corn ethanol from a natural gas-fired dry-mill
70
97
Ethanol
Midwest corn ethanol using stover as fuel in a dry-mill
47
–
Ethanol
California corn from a gas-fired dry-mill, wetcake coproduct
52
–
Ethanol
Cellulosic ethanol from California poplar trees
–12
–
Ethanol
Cellulosic ethanol from Midwest prairie grass
7
–
Ethanol
Cellulosic ethanol from municipal solid waste
5
–
Electricity
CA average electricity
27
–
Electricity
Natural gas combined cycle and renewable generation
21
34
Hydrogen
Hydrogen from biomass, delivered by pipeline
22
–
Hydrogen
Hydrogen from steam-reformation of onsite natural gas
48
26
–3
–
167
–
30
224
LCA = life cycle analysis; gCO2e/MJ = grams of carbon dioxide equivalent per megajoule; GREET = Greenhouse
Gases, Regulated Emissions, and Energy Use in Transportation; LEM = Lifecycle Emissions Model; CEF = carbon
emission factor; CA = California; RFG = reformulated gasoline; CNG = compressed natural gas; BTL = biomass to
liquids; F-T = Fischer-Tropsch; CTL = coal to liquids; FAME = Fatty Acid Methyl Ester.
Table H-7 below summarizes the LDV scenarios that were evaluated in the California lowcarbon fuel standard study. This table compares the baseline scenario of continuing use of
existing fuel and vehicle technologies with various fuel and vehicle innovations. While the LGFS
could be met, in part, by vehicle technology innovations, it is suggested that the scenarios of
most interest to Maryland should be the two labeled: (1) existing vehicles with advanced
biofuels, and (2) biofuel intensive. For these two scenarios, D10 and G10 represent the 10%
reduction goal. (Perhaps confusingly, these designations are simply identifiers, not abbreviations
like B10 for 10% bio-diesel.)
The D10 scenario includes two types of advanced biofuels for LDVs, low GHG biofuel blends
with gasoline and low GHG Fischer-Tropsch (F-T) diesel blends. This scenario minimizes
changes to the fuel delivery infrastructure, including the equipment to ship biofuels into and
within the state and at retail stations. This scenario avoids the use of E85. Attaining a 10% AFCI
reduction by 2020 requires some biofuels with performance better than the identified low GHG
fuels (cellulosic ethanol from switch grass or Midwest prairie grass). Unfortunately, these are
controversial, and it is not clear that such fuels are technically feasible. An alternative is to
increase the fraction of biofuel blended with gasoline.
The G10 scenario is designed to explore potential outcomes that require as little fuel and vehicle
innovation as possible, and instead rely mostly on large volumes of mid-GHG biofuels in low
Appendix D-4 Page 27
Maryland Climate Action Plan Appendix D-4
blends (10% by volume in gasoline and 10% bio/renewable diesel) and high blends (85% volume
in gasoline).
Table H-7. Light-duty vehicle (LDV) scenario names, descriptions, and AFCI goals
Scenario Name
Fuel Innovations
Vehicle Innovations
–5%
–10%
–15%
Baseline
Current technologies
Gasoline ICE dominates
Increased diesel, HEVs
A*
Electric Drive
Electric charging and H2
refueling
Significant innovation in
PHEV, EV, and FCV
technologies
C5
†
†
Existing Vehicles
with Advanced
Biofuels
Significant biofuel innovation
Low-GHG biofuels (5.7% vol.)
Low-GHG F-T diesel blends
None required
D5
D10
†
Evolving Biofuels
and Advanced
Batteries
No fuel innovation
Mid-GHG biofuels (10% vol.)
Mid-GHG bio-diesel blends
Advances in PHEV, EV, and
FCV technologies.
F5
F10
†
Biofuel Intensive
No fuel innovation
Mid-GHG biofuels (10%, 85%)
Mid-GHG bio-diesel blends
Low-GHG fuels for G15
None required
G5
G10
G15
Multiple Fuels and
Vehicles
Low-GHG biofuels (10%, /85%)
Low-GHG F-T diesel blends
Electric charging and H2
refueling
Advances in PHEV, EV, and
FCV technologies
H5
H10
H15
Heavy-Duty
Compliance
To be determined
To be determined
LDV = light-duty vehicle; AFCI = Average Fuel Carbon Intensity; ICE = internal combustion engine; HEVs = hybrid
electric vehicles; PHEV = plug-in hybrid electric vehicles; EV = electric vehicle; FCV = fuel cell vehicle; GHG =
greenhouse gas; F-T = Fischer-Tropsch.
* No Average Fuel Carbon Intensity (AFCI) goal applies.
† Not considered.
NOTES: No “B” or “E” scenarios are used to avoid confusion with bio-diesel and ethanol blends.
In the “No fuel innovation” scenarios, investment is needed to increase the use of current technologies, but no new
technologies are assumed. Biofuel scenarios that assume energy crop production for mid-GHG ethanol (F and G
scenarios) have large uncertainties due to feedstock production. See Section 2.4.
The incremental long-term cost of bio-diesel is estimated to be $0.20/gal above the cost of
petroleum diesel. Maryland 2020 on-road diesel usage is expected to be 837 million gallons. If
20% of the petroleum diesel gallons are replaced with bio-diesel, then the added consumer cost
in Maryland during 2020 is $33.5 million. Diesel CO2 emission reductions in a 10% reduction
scenario are 0.998 MMt. The cost-effectiveness of these diesel emission reductions therefore
would be $33.5 dollars per ton of carbon dioxide equivalent ($/tCO2e).
For F-T diesel, recent analyses have estimated the F-T diesel costs $0.15 more than conventional
diesel. This is based on California Energy Commission (CEC) reports stating that the analysis of
a mature market assumes that the incremental cost of F-T fuel is $0.15/gal higher than US EPA
diesel at the refinery gate.
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Maryland Climate Action Plan Appendix D-4
Based on 2007 U.S. prices, the cost per gallon for gasoline is $3.03/gal, while the cost for
ethanol as E85 is $3.71 (to get the energy equivalent of a gallon of gasoline). The gasoline cost
analysis reviewed the 2020 gallons of gasoline equivalent projections of LDV fuel use by fuel
type for the D10 and G10 scenarios in California. The G10 scenario was ultimately used for this
cost analysis because it included the largest penetration of E85. The California analysis showed a
14% statewide reduction in gasoline usage, with most of these gallons replaced with either E85
or an ethanol blend. A 14% reduction in 2020 gasoline gallons in Maryland is 376 million
gallons. The cost of achieving this gasoline displacement is $255 million at a $0.68 price
differential per gallon. A 10% reduction in gasoline-associated carbon is estimated to yield a
2.878 MMt reduction in carbon dioxide equivalent (CO2e). The associated cost-effectiveness is
$88.6 per metric ton.
Data Sources:
“Maryland Task Force on Renewable Alternative Fuels, Final Report,” December 31, 2007.
A. Farrell and D. Sperling. 2007. A low-carbon fuel standard for California, part 1: technical
analysis. UC Berkeley and UC Davis. UCB-ITS-TSRC-RR-2007-2. Available at:
http://repositories.cdlib.org/its/tsrc/UCB-ITS-TSRC-RR-2007-2/
J. Fargione et al. 2008. Land clearing and the biofuel carbon debt. Science 319:1235–1238.
T. Searchinger et al. 2008. Use of U.S. croplands for biofuels increases greenhouse gases through
emissions from land-use change. Science 319:1238–1240.
Quantification Methods: Above.
Key Assumptions: Current costs of biofuels are representative of the long-term price differences
compared with petroleum-based fuels.
Key Uncertainties
There is considerable uncertainty in the future price of gasoline and petroleum diesel, as well as
the lower carbon alternatives to these transportation fuels. There is uncertainty in AFCI values
for the alternatives to petroleum fuels. There is also uncertainty in the ability of the market to
deliver lower carbon fuels. Cost estimates for biofuels, such as bio-diesel and F-T diesel, are
based on long-term expectations, but are highly uncertain.
Additional Benefits and Costs
These depend on the compliance pathway(s) that the marketplace uses to meet the LCFS.
Feasibility Issues
See “Key Uncertainties.”
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Appendix D-4 Page 29
Maryland Climate Action Plan Appendix D-4
Barriers to Consensus
None.
Appendix D-4 Page 30
Maryland Climate Action Plan Appendix D-4
TLU-5. Intercity Travel: Aviation, Rail, Bus, and Freight
Policy Description
Provide transportation infrastructure between cities to create connectivity of non-auto, non-truck
transportation modes. Rail transport is one of the most energy-efficient means to move people
and freight over commonly traveled routes on land. Modern rail can also provide a competitive,
low-GHG alternative to short-range air travel. Movement of passengers and freight by an
efficient rail system decreases overall GHG emissions by 2 to 4 times as compared with
movement by highway. Increased rail capacity would shift freight from trucks to rail.
Technology-based improvements, such as anti-idle devices and more efficient engines, will
reduce direct emissions from the locomotives operating on the rail network. A robust and
efficient rail network using modern, efficient technology is a cornerstone for sustaining
Maryland’s thriving economy under future carbon emission constraints, while providing many
social, economic, and environmental benefits.
Policy Design
Goals:
Reduce transportation sector GHG emissions from intercity travel by making passenger and
freight rail more accessible, efficient, and available via
•
Building capacity of express rail and bus by expanding or improving current passenger and
freight rail as needed,
•
Marketing of new and improved or expanded services,
•
Shift short and mid-distance air travel to modern rail, and
•
Support auto-free tourism development in Maryland.
In particular, implement the recommendations of the Mid-Atlantic Rail Operations (MAROps)
Study19 to address bottlenecks in Maryland and through out the I-95 Corridor. The
recommendations include near-, medium-, and long-term actions items and improvements. For
Maryland, the improvements and actions items are
•
Near-Term Program: Design for reconstruction of the Howard Street Tunnel and approaches
on the rail network; connection between Amtrak Penn Line and CSX Camden Line to serve
MARC; second and third main track on CSX from West Baltimore to Washington, D.C.;
clearance projects (17 locations) on CSX north from Baltimore; rehabilitation of Amtrak’s
Gunpowder, Susquehanna, and Bush River bridges; design for reconstruction of Amtrak’s
Union Tunnels and Baltimore and Potomac (B&P) Tunnel; dedicated freight track to
eliminate Norfolk Southern (NS) passenger train conflicts between Perryville and Baltimore,
Maryland; and second main track on NS from the Pennsylvania/Maryland state line to
Berryville, Virginia.
19
Cambridge Systematics, Inc. 2004 (Mar.). MAROps study: interim benefits report. Prepared for 1-95 Coalition.
Available at: http://66.167.232.132/pm/projectmanagement/Upfiles/reports/full240.pdf
Appendix D-4 Page 31
Maryland Climate Action Plan Appendix D-4
•
Medium Term Project: Second main track on CSX from the Delaware/Maryland state line to
Baltimore; reconstruct the Howard Street Tunnel and approaches on CSX; construct new
freight bridges over the Gunpowder, Susquehanna, and Bush rivers to eliminate
NS/passenger conflict; and reconstruct Amtrak’s Union Tunnels and B&P Tunnel.
•
Long Term Project: Reconfigure existing tracks on Amtrak from West Baltimore to Baltimore
Washington International Airport (BWI); construct new passenger station at BWI; and
construct fourth main track from Halethorpe to Landover to eliminate freight/passenger train
conflicts.
Maryland should also closely examine proposals by the National Association of Rail Passengers
(NARP) and by America 2050,20 which propose substantial investments in passenger rail transit.
It is beyond the scope of this process to examine those in detail and quantify their potential
impact in Maryland.
Timing: Timing of the programs recommended by the MAROps Study is as follows: near-term
program by 2009; medium-term program from 2009–2014; and long-term program from 2014–
2024.
Parties Involved: Public and private.
Other: Remove capacity constraints through the Baltimore area that restrict use of double stack
rail cars that are of limited capacity
Implementation Mechanisms
Implementation details include
•
Building capacity of express rail and bus by expanding or improving current passenger and
freight rail as needed.
○
Planning:
–
–
○
Work with municipalities to plan and regulate land use to accommodate wellconnected rail and bus infrastructure and service; and
Work with Maryland tourism industry to launch car-free tourism initiatives and
promotion strategies.
Capital/Infrastructure:
– Improve rail infrastructure to serve all freight needs (e.g., double-stack);
– Provide adequate inter-modal (e.g., transit, bike, pedestrian, shuttle bus, bike-sharing,
car-sharing) connections at railroad stations, airports, and major bus stops; and
– Identify and provide necessary freight modal transfer stations throughout Maryland.
○
Operating:
–
20
Improve the frequency of service and travel time of current express train and bus
routes; and
http://www.america2050.org/pdf/America2050prospectus.pdf
Appendix D-4 Page 32
Maryland Climate Action Plan Appendix D-4
–
•
Extend service to underserved cities and regions of Maryland, if and as warranted by
demand analysis
Standardize the use of anti-idle equipment and best practices for locomotives.
Increase the number of modern, more fuel-efficient locomotives in service (e.g., Diesel
Multiple Units [DMUs]).
○ Develop electrified rail support systems, and hybrid or fully electric locomotives where
cost-effective.
○ Adopt incentives and regulations to ensure timely adoption of high-efficiency, lowpolluting freight, passenger, and port equipment statewide.
○
•
Marketing of new and improved or expanded services.
Target improved railroad station and airport inter-modal connections to large institutions
and companies, as well as the Maryland travel industry.
○ Develop an auto-free tourism initiative through the agency of Maryland government such
as the Maryland Office of Tourism or Maryland Tourism Development Board that engage
in tourism promotion, in cooperation with MDOT. Develop program investments and
public-private partnerships and incentives to support these initiatives.
○
Related Policies/Programs in Place
None cited.
Type(s) of GHG Reductions
CO2 and fine particulates from diesel.
Estimated GHG Reductions and Net Costs or Cost Savings
Data Sources:
U.S. Department of Transportation (US DOT). 2006 (Aug.). Guide to quantifying the economic
impacts of federal investments in large-scale freight transportation projects. Available at
http://www.dot.gov/freight/guide061018/index.htm
VMT from the Maryland GHG Inventory and Forecast Projections.
Quantification Methods:
GHG Reductions:
We calculate average emissions per mile for heavy-duty vehicles (HDV) for each year from 2010
to 2020. The VMT reductions anticipated for freight from improved alignments as well as new
tunnels beneath the City of Baltimore and alternative alignments to bypass the city is reported in
“Case Study: Baltimore Freight Rail Bypass” (chapter 8.2) of the “Guide to Quantifying the
Economic Impacts of Federal Investment in Large-Scale Freight Transportation Projects.”
Freight VMT reductions from just this one improvement project are reported as nearly 426,000
trucks or 143 million miles in 2010, and 866,000 trucks or over 560 million miles by 2039.
Multiplying the anticipated reduction in heavy-duty miles with the projected average emissions
per miles, the emissions reductions that can be anticipated for reduced HDV VMT are 0.2
Appendix D-4 Page 33
Maryland Climate Action Plan Appendix D-4
MMtCO2e in 2012, and 0.3 MMtCO2e in 2020. The anticipated total reduction in MMtCO2e
from 2012 to 2020 is 1.9 MMtCO2e.
Because these emissions reductions are for implementing only the MAROps recommendations,
and the Policy Option recommends broader improvement of freight and passenger infrastructure
and operations in Maryland, this is reported as a low-end estimation of the possible VMT
reductions that are available from improving intercity rail.
Net Present Value and Cost-effectiveness:
The “Case Study: Baltimore Freight Rail Bypass” reports that an improved rail system would
cost $3.05 billion over the 2-year period to build the project, and for operating and maintenance
costs through 2035. The improved rail system would have benefits in Maryland of $2.06 billion
and $4.73 in national benefits. These benefits take into consideration freight rail operator
benefits, shipper costs, Amtrak, highway benefits, and supply chain benefits.
Key Assumptions:
The freight VMT miles, from the Case Study: Baltimore Freight Rail Bypass,” assumes that
freight trips, originating or terminating in Maryland, travel 300 miles on average, while through
trips would travel an average of 500 miles.
Key Uncertainties
None cited.
Additional Benefits and Costs
None cited.
Feasibility Issues
None cited.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-4 Page 34
Maryland Climate Action Plan Appendix D-4
TLU-6. Pay-As-You-Drive (PAYD) Insurance
Policy Description
PAYD insurance ties a substantial portion of consumer insurance costs to a variable cost with
respect to actual motor-vehicle travel use, so premiums are more directly related to hours or
miles driven, with adjustment for other rating factors, such as driving record, age, and the vehicle
driven. PAYD makes insurance more actuarially accurate and allows motorists to save money
when they reduce their vehicle use and drive more calmly. Miles driven is only a minor rating
factor in current insurance policy pricing.
Consider if all drivers paid a fee for gasoline every six months based on the average driver’s fuel
consumption. That is akin to how insurance is now priced. Compare this with a system in which
drivers pay only for the gasoline they actually use, and get to save money if they drive less. That
is similar to the idea of PAYD insurance, where the policyholder saves more if he or she drives
less
Policy Design
Goals:
PAYD coverage available to all Maryland drivers by 2010, with 10% of Maryland drivers
adopting such policies by 2012 and 100% adopting by 2020, by implementing the following:
•
Conducting a review of opportunities and barriers;
•
Converting all Maryland Automobile Insurance Fund policies to PAYD;
•
Initiating state-sponsored pilot programs, with state-level incentives for insurance companies
to offer PAYD policies that reduce GHG emissions; and
•
Phasing in a requirement that carriers offer PAYD policies as part of their Maryland product
choices.
Timing: Establish Task Force by June 2008 to develop recommendations for administrative,
regulatory, and statutory action, with preliminary report by November 30, 2008, and final report
to Governor and Legislature by March 1, 2009. Initiate pilot programs, marketing, industry
outreach, and administrative, regulatory, and statutory actions in 2009–2010.
Parties Involved: Insurance Commissioner, insurance companies, MDOT, Secretary of
Transportation, consumer groups, and environmental advocates
Implementation Mechanisms
•
The Governor should convene a “Motor Vehicle Insurance and Climate Change Task Force”
to develop preliminary recommendations for the Governor and Legislature by November 30,
2008, and final recommendations by March 1, 2009, on initiatives and options that might
reduce GHG emissions from transportation through usage-based pricing of motor vehicle
insurance.
Appendix D-4 Page 35
Maryland Climate Action Plan Appendix D-4
•
The Governor, State Insurance Commissioner, Maryland Motor Vehicle Administrator,
Legislature, and other key actors should initiate coordinated state sponsored pilot programs,
insurance industry outreach, regulatory measures, and state-level incentives for insurance
companies to offer PAYD policies, designing a program that will result in GHG emission
reductions consistent with x goals adopted by the Maryland Climate Change Commission
(MCCC).
•
The Governor should work with the Legislature to ensure state insurance regulations are
supportive of timely widespread availability for all Maryland motorists of PAYD insurance
policies designed to contribute to meeting GHG-reduction goals.
To design this coordinated set of implementation actions, a “Motor Vehicle Insurance and
Climate Change Task Force” should be convened by the Maryland Governor. This should be
composed of the Maryland Insurance Commissioner, Maryland Motor Vehicle Administrator,
and Maryland Secretary of the Environment. The panel should develop preliminary
recommendations for the Governor and Legislature by November 30, 2008, and final
recommendations by March 1, 2009, on initiatives and options that might reduce GHG emissions
from transportation through usage-based pricing of motor vehicle insurance consistent with the
goals of the MCCC. The panel should include a balanced mix of representatives from the
insurance industry, consumer groups, and environmental stakeholders. The reports should
identify different options and their potential to contribute to GHG reductions, consistent with
goals articulated by the MCCC. The reports should include the implementation details listed
below.
•
Conducting a review of possibilities for changes in factors determining motor-vehicle
insurance rates that might align these more closely to measured motor vehicle usage, thereby
better enabling consumers to save money by modifying their amount of driving, behavior,
and fuel consumption.
•
Payment mechanisms to be considered include:
○
Insurance type
–
Discrete premium levels, where premiums are set within specific ranges for mileage
driven, given other rating factors;
– Pay by the mile, using a linear or non-linear rate that increases as mileage increases;
or
– Pay based on hours or miles driven, with adjustment for time, location, speed, and
aggressiveness of driving style, given other rating factors.
○
Pricing options
–
Fixed up-front pricing with a re-imbursement (or additional payment) at the end of
the policy period;
– Shorter policy periods (e.g., 1 month, instead of 6 to 12 month period), to be billed in
a manner similar to utilities; or
– Purchased insurance is valid up to a certain mileage, instead of or until a particular
date.
Appendix D-4 Page 36
Maryland Climate Action Plan Appendix D-4
•
Technology options—Review applicable technologies for real-time, occasional, or periodic
consumer feedback on how motor vehicle usage affects consumer insurance costs, including:
Periodic certified odometer readings,
○ Periodic upload of on-board vehicle computer data,
○ In-vehicle real-time global positioning system- (GPS) based meters with periodic
reporting, or
○ Pay-at-the-pump technologies.
○
•
Regulatory, promotion, and implementation options to be considered include:
Voluntary market-driven strategies to encourage PAYD policies;
Identifying regulatory and market barriers to PAYD policies in Maryland, and changes
needed to eliminate these;
Identifying regulatory measures that could be taken to ensure 100% of Maryland drivers
are offered timely PAYD policies designed to maximize reduce GHG emissions;
Tax credits and other incentives that could accelerate the timely adoption of PAYD
policies to meet GHG emission reduction goals; or
Federal and state transportation funding that might support pilot programs, promotion and
marketing, planning, industry outreach and incentives, research, monitoring, and
evaluation related to the goals of this initiative.
○
○
○
○
○
Related Policies/Programs in Place
GMAC and OnStar Offers Low-Mileage Discount Rates21
Since mid-2004, the General Motors Acceptance Corporation (GMAC) Insurance has offered
mileage-based discounts to OnStar subscribers located in certain states. The system
automatically reports the vehicle odometer reading at the beginning and end of the policy term to
verify vehicle mileage. Motorist who drive less than specified annual mileage receive insurance
premium discounts of up to 40%. These are higher than the standard industry discounts, but fall
well short of the full marginal-cost insurance pricing needed to achieve envisioned PAYD GHGreduction goals:
Miles
Discount
1–2,500
40%
2,501–5,000
33%
5,001–7,500
28%
7,501–10,000
20%
10,001–12,500
11%
12,501–15,000
5%
15,001–99,999
0%
21
See http://www.onstar.com/us_english/jsp/low_mileage_discount.jsp
Appendix D-4 Page 37
Maryland Climate Action Plan Appendix D-4
Value Pricing Program Government-Supported PAYD Pilot Projects 22
This Federal Highway Administration’s (FHWA) Value Pricing Pilot Program has made over
$4 million in funding for PAYD pilot projects in Georgia and Washington State. The Puget
Sound region’s PAYD pilot project is now moving forward most expeditiously. The Dallas-Ft.
Worth MPO has made available $2 million in regional transportation funding for a PAYD pilot
program. These initiatives are designed to help assist the insurance industry in evaluating how
best to advance PAYD policies.
Use-Based Insurance Program
Progressive Insurance23 currently offers policies with small distance-based insurance discounts in
Oregon, Michigan, and Minnesota. The program uses a device that reads on-board diagnostics
from participating vehicles and provides drivers a means to transmit this data, at their discretion,
via the Internet to Progressive.
“Safer drivers and people who drive less than average should pay less for auto insurance. That’s
why we created the revolutionary TripSenseSM discount program, which measures your actual
driving habits and allows you motorists to earn discounts on your insurance by showing us the
insurer “how much, how fast and what times of day you drive.” According to Progressive,
“TripSenseSM gives you more control over what you pay for insurance, as your driving habits
determine your discount.” 24
From 1998 to 2001, which was prior to the current Dallas-area pilot with Progressive and to the
TripSenseSM Program, Progressive piloted PAYD insurance with over 1,200 Texas drivers
whose vehicles were equipped with GPS devices. Individualized premiums under this
“Autograph” program were primarily based on the amount of time people drove, when and
where they drove, and included a small fixed charge.
Each of the programs discussed above offer mileage-based discounts or premiums that go
beyond the current standard practice in the insurance industry in which there is little or no
discount for driving less, and little or no extra charge for driving more under a given insurance
policy. Several insurance companies, including Progressive, will expand offerings for PAYD
insurance products in the near future.
According to the New York Times (April 20, 2008), new research by Brookings Institution
authors Jason Bordoff and Pascal Noel,
makes a compelling case that PAYD insurance would work well, reducing the carbon emissions,
congestion and accident risk created by too much driving while leading drivers to pay the true cost of
their mileage. Bordoff and Noel put the total social benefit at $52 billion a year.
The better news is that PAYD insurance is no longer just an academic exercise. G.M.A.C. has begun
using OnStar technology to offer mileage discounts, and next month Progressive will roll out a
comprehensive PAYD plan called MyRate. Progressive, the huge Ohio-based insurer that has long
prided itself as an innovator, will first offer the plan in six states, having run a similar pilot in three
other states. Drivers who sign up for MyRate will install a small wireless device in their cars that
22
See http://www.fhwa.dot.gov/policy/13-hmpg.htm
23
See http://www.progressive.com
24
See http://tripsense.progressive.com/about.aspx
Appendix D-4 Page 38
Maryland Climate Action Plan Appendix D-4
transmits to Progressive not just how many miles they drive but also when those miles are driven and,
to some extent, how they are driven: the device measures the car’s speed every second, from which
Progressive can derive acceleration and braking behavior. Which means that Progressive will not only
be able to charge drivers for the actual miles they consume but will also better assess the true risk of
each driver.
Maryland is a state where Progressive has been actively exploring PAYD policies, and in which
it’s highly probable that MyRate will be offered soon.
Type(s) of GHG Reductions
Predominantly CO2.
Estimated GHG Reductions and Net Costs or Cost Savings
Data Sources:
The Arizona Public Interest Research Group (PIRG) Education Fund analyzed the potential GHG
savings from a PAYD automobile insurance policy. The strategy for a PAYD policy analyzed
assumes that insurers are required to offer mileage-based insurance for certain elements of
vehicle insurance, including collision and liability. The PIRG Education Fund assumes the PAYD
policy is required, phased in over time, and that all drivers in Arizona are eventually covered.
To calculate GHG savings, PIRG converted Arizona State automobile collision and liability
insurance expenditures to an insurance cost per mile ($0.064/mile). If insurance consumers pay
80% of their collision and liability insurance on a per-mile basis, then drivers would be assessed
about a $0.051 charge per mile. This per-mile insurance charge would reduce VMT by about
8%.25 To put this PAYD pricing in context, at 20 miles/gal, the effect of a $0.051/mile savings is
equivalent to a savings of about $1/gal of gasoline.
CCS compared the PIRG Education Fund results for estimated reductions in VMT with other
studies of PAYD policies, including those produced by the Economic Policy Institute (EPI) and
Resources for the Future (RFF). CCS found that the Arizona PIRG estimates were comparable
with other estimates, which ranged from 8% to 20%.
Quantification Methods:
Impacts:
• Pilot studies, and empirical experience with other marginal costs of use, find that PAYD can
reduce VMT by between 8% and 20%, therefore if phase in/ramp-up, then
•
Apply reductions to LDV VMT only
•
2012 reduction = statewide LDV * 4% reduction (assuming voluntary PAYD with only
partial mileage based discounting and no real-time driver feedback on driving style)
•
2012–2020 reduction = statewide LDV * 15% reduction (assuming full mandatory PAYD
pricing with real-time driver feedback to encourage calm driving for all motor vehicle
classes; benefits derive from reduction in VMT and reductions in emission rates per mile
25
E. Ridlington and D.E. Brown. 2006 (Apr.). A blueprint for action: policy options to reduce Arizona’s
contribution to global warming. Arizona PIRG Education Fund, pp. 25–26. Available at:
http://www.arizonapirg.org/AZ.asp?id2=23683. See also: http://www.serconline.org/payd/links.html, which links to
a wide variety of PAYD studies and materials.
Appendix D-4 Page 39
Maryland Climate Action Plan Appendix D-4
traveled, due to calmer driving style and a lower rate of speed law violation on high speed
roadways)
•
Convert to CO2
Table H-8. Pay as you drive (PAYD) quantifications
Option
No.
TLU-6
GHG Reductions
(MMtCO2e)
Policy Option
Pay-As-You-Drive (PAYD) Insurance
2012
2020
1.0
3.4
Net
CostPresent
EffectiveValue
Total
ness
2008– 2008–2020 ($/tCO2e)
2020 (Million $)
23.0
Large net savings
Level of
Support
Unanimous
consent.
PAYD = Pay-As-You-Drive; GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalent; $ =
dollars; $/tCO2e = dollars per ton of carbon dioxide equivalent; TLU = Transportation and Land Use.
Net present value/cost-effectiveness:
The success of the Progressive Insurance earlier “Autograph” pilot in Texas, where the average
household reportedly saved over $100/year on insurance through PAYD, suggests that there is an
unmet demand for more choice in auto insurance. If PAYD improves and increases consumer
choice, and allows insurance providers to more efficiently align risks and premiums, then
economic efficiency will increase. Multiple studies have concluded that PAYD insurance pricing
is likely to reduce driving, which in turn can be expected to reduce the number of motor vehicle
crashes and related casualties. Progressive Insurance data shows a linear but not 1:1 relationship
between miles driven and accident claims, as shown in Figure H-2 below. Thus, this reduces the
amount of total claims, cutting insurance costs overall for consumers, as well as reducing health
costs, traffic congestion, and air pollution. The net result is that PAYD can be expected to
produce large savings for consumers and taxpayers, while reducing GHG emissions. Preliminary
results from a forthcoming Brookings Institution study of PAYD suggest total annual benefits of
$225/vehicle and an 8% overall traffic reduction.26
26
J.E. Bordoff and P. Noel. In press. Pay-as-you-drive auto insurance: a simple way to reduce driving-Related
harms and increase equity, Brookings Institution: Washington, DC. See also:
http://www.brookings.edu/articles/2008/spring_car_insurance_bordoff.aspxraft study is available at
http://www.brookings.edu/~/media/Files/rc/papers/2008/0417_payd_bordoff/0417_payd_bordoff.pdf.
A study by the California Economic and Technology Advancement Advisory Committee (ETAAC), titled
“Technologies and Policies to Consider For Reducing Greenhouse Gas Emissions In California”
(http://www.arb.ca.gov/cc/etaac/‌ETAACFinalReport2-11-08.pdf), evaluated various ways to reduce GHG emissions
and gives strong support for mobility management strategies, such as PAYD vehicle insurance because it recognizes
their co-benefits (e.g., congestion and accident reductions).
Appendix D-4 Page 40
Maryland Climate Action Plan Appendix D-4
Figure H-2. Relationship between miles driven and accident claims
Key Assumptions: None cited.
Key Uncertainties
There are various options for introducing PAYD, use-based or per-mile insurance pricing. There
are uncertainties about how different pricing and information mechanisms will affect behavior.
Having a device on the dashboard that notifies the motorist in real time that it costs more per
mile to drive at one time or another, or when traveling significantly over the speed limit, or when
driving aggressively, would have a bigger impact in reducing GHG emissions than getting a
policy rebate notice by mail at year end that is based on miles driven, even if the total charges in
each case would be equivalent. Calm driving generates less fuel use and GHGs than aggressive
driving with rapid accelerations and sharp braking, so a GHG-optimal PAYD policy might
reward calm drivers with cost savings, as well as savings due to reducing driving. A PAYD
policy that sets the incremental cost per mile of travel at a low level (for example, less than
$0.01/mile) will produce much less traffic and GHG reduction than a policy that more fully
marginalizes the cost of insurance based on motor vehicle usage.
The simplest approach is to establish vehicle insurance premiums directly on the amount a
vehicle is driven. Maryland could promote early action for GHG reductions through near-term
encouragements or requirements for mileage-based pricing for PAYD insurance. Existing rating
factors could be incorporated so vehicles with higher fees pay more per mile than those with
lower fees. Such PAYD fees are easy to calculate: simply divide existing annual fees (or a large
portion of them) by the average annual mileage of each vehicle class (typically about 12,000
annual miles). For example, a $500 annual premium becomes $0.042/mile, and a $1,200 annual
Appendix D-4 Page 41
Maryland Climate Action Plan Appendix D-4
premium becomes $0.10/mile. The only significant new administrative cost would be the need to
perform annual odometer audits, which would typically take a few minutes and cost less than
$10 (most motorists would probably have audits performed by their broker or during scheduled
maintenance, such as oil changes or emission inspections, minimizing the cost). Many
transactions are already based on odometer readings, such as vehicle warranties, lease fees and
used vehicle sales. Odometers are now highly tamper-resistant. Most types of fraud could be
detected during annual audits and crash investigations. Odometer audits should provide data
comparable in accuracy to that used in other common commercial transactions.
As noted above, several private insurance companies in other jurisdictions already base some
portion of premiums on mileage, beyond the tiny amount that is customary, demonstrating that it
can be attractive to consumers and financially successful. Most current PAYD programs require
in-vehicle monitoring devices, allowing premiums based on time and—in cases where GPS is
used—location. This can allow greater actuarial accuracy, but it increases administration costs,
adding $50 to $100/vehicle-year. For some people this raises privacy concerns. In addition,
Progressive Insurance holds patents on this type of pricing, so competitors would need to either
pay royalties, or risk a patent infringement lawsuit.
There are growing efforts to move towards adoption of national distance-based road user charges
as a replacement or complement to motor fuel taxes over the next 10–15 years.27 This change
would entail universal adoption of in-vehicle devices to monitor vehicle use, supporting
universal PAYD insurance. The market will help determine whether all of the benefits of using
more advanced technologies to monitor driving to implement PAYD are worth the costs and find
wide societal acceptance. In the meantime, Maryland should take steps to advance universally
available insurance with odometer-based pricing to secure much needed early action for GHG
reductions.
Additional Benefits and Costs
Equity Impacts
PAYD insurance that fully shifts premiums to be based on the amount people drive will
significantly improve equity in insurance pricing. As one recent report stated,
“Current vehicle insurance pricing significantly overcharges motorists who drive their vehicles less
than average each year, and undercharges those who drive more than average within each price class.
Since lower-income motorists drive their vehicles significantly less on average than higher-income
motorists, this is regressive. Distance-based insurance is fairer than current pricing because prices
more accurately reflect insurance costs.
“Distance-based pricing benefits lower-income drivers who otherwise might be unable to afford
vehicle insurance, and who place a high value on the opportunity to save money by reducing vehicle
mileage. It benefits lower income communities that currently have unaffordably high insurance
rates…. Distance-based insurance would provide significant savings to workers during periods of
unemployment, when they no longer need to commute.”28
A forthcoming Brookings Institution Hamilton Project analysis of PAYD insurance, by Jason E.
Bordoff and Pascal J. Noel, includes an evaluation of PAYD benefits by income group. This
27
See, for example, reports of the U.S. National Surface Transportation Policy and Revenue Study Commission,
January 2008, and the U.S. Surface Transportation Infrastructure Finance Commission, January 2008.
28
Ridlington and Brown. 2006. op. cit.
Appendix D-4 Page 42
Maryland Climate Action Plan Appendix D-4
preliminary analysis shows how average U.S. vehicle mileage increases as household income
rises, based on 2001 National Household Travel Survey data, and the share of U.S. households
likely to save money with PAYD by income.29
There exists a direct relationship between the miles driven and household income level as shown
in Figure H-3.
Figure H-3. Relationship of miles driven and income
For some, PAYD will accrue notable savings as illustrated in Figure H-4.
29
J.E. Bordoff and P. Noel. In press. Pay-as-you-drive auto insurance: a simple way to reduce driving-related
harms and increase equity, Brookings Institution: Washington, DC.
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Maryland Climate Action Plan Appendix D-4
Figure H-4. Can people save money through PAYD?
PAYD = Pay-As-You-Drive.
The forthcoming Brookings Institution study estimates savings from PAYD by income group.
Almost two-thirds of households save money on their insurance under PAYD, with the average
savings for this group amounting to $498, or 28% of their current policy costs. As Figure H-5
shows, lower income households particularly benefit, although a majority of drivers in every
income group save money.30
30
Bordoff and Noel, op.cit.
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Maryland Climate Action Plan Appendix D-4
Figure H-5. Amount of savings from PAYD by household
Appropriately designed PAYD policies will be equitable and enable all drivers—in urban,
suburban, and rural areas—to save money on their car insurance if they find ways to drive less
than they now do by linking or sharing trips, choosing destinations closer at hand, or changing
how they drive and travel. Lower income households devote a larger share of their income to
transportation costs and are more price-sensitive than higher income households. The lower the
household income, the greater the likely benefit from PAYD, although drivers from all income
groups would benefit from the ability to control their insurance costs by strategically limiting
their driving. Drivers living in rural areas, where people tend to drive more, will not face unfair
impacts from PAYD policies, since under PAYD their premiums would be determined in
relation to how many miles the average driver in their area travels and geography will remain a
key risk factor.
Feasibility Issues
None cited.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-4 Page 45
Maryland Climate Action Plan Appendix D-4
TLU-8. Bike/Pedestrian Infrastructure
Policy Description
Improve, add, and promote sidewalks and bikeways to increase pedestrian and bicycle travel and
reduce automobile use. Expansion of bike/pedestrian infrastructure would aid in decreasing the
Maryland per capita VMT. A substantial body of research demonstrates that communities with
traditional neighborhood design, connected pedestrian and bicycle networks, available transit and
a rich mix of uses are strongly correlated with decreased automobile use.31
Policy Design
Goals:
Remove obstacles to providing and benefiting from improved bike/pedestrian infrastructure:
•
Planning for local streets has often focused on the movement and storage of cars, while
making walking and biking unsafe and unattractive through street design and management,
neighborhood design, and parking policies.
•
Local governments have lacked sufficient funding and incentives to maintain basic street
infrastructure and invest in biking and walking.
Therefore, increase the bicycle- and walking-mode share of all trips in Maryland urbanized areas
to 15% by 2020 by putting the following policies in place:
•
Build on and implement infrastructure planning and designing tools that support and promote
bicycle and pedestrian activity. Improve accommodations for bicycles on public transit.
•
Adopt financial requirements or provide incentives that promote bicycle and pedestrian
activities.
•
Investing much more in this area.
•
Improve data collection for nonmotorized travel.
Timing: To reach the 15% goal, will need to begin immediately.
Parties Involved: Local governments, transit agencies, Washington Area Bicyclist Association
(WABA), Baltimore Bicycle Association, League of American Bicyclists (LAB), Rails-to-Trails
Conservancy, other Maryland bicycling organizations, safety groups, Parent-Teacher
Associations (PTAs), Safe Routes to Schools (SRTS) Coordinators, and traffic police.
31
L.D. Frank et al. 2006 (Winter). Many pathways from land use to health: associations between neighborhood
walkability and active transportation, body mass index, and air quality. Journal of the American Planning
Association 72(1). “We found a 5% increase in walkability to be associated with a per capita 32.1% increase in time
spent in physically active travel, a 0.23-point reduction in body mass index, 6.5% fewer vehicle miles traveled, 5.6%
fewer grams of oxides of nitrogen (NOx) emitted, and 5.5% fewer grams of volatile organic compounds (VOCs)
emitted.”
See also the Land Use, Transportation, Air Quality, and Health (LUTAQH) Study, among others. Discussed by L.
Aurbach in “Connectivity Part 4: Neighborhood Walking,” available at: http://pedshed.net/?p=71
Appendix D-4 Page 46
Maryland Climate Action Plan Appendix D-4
Implementation Mechanisms
Following details are recommended for the policies mentioned above:
•
Introduce infrastructure planning and designing tools and concepts, such as
○
A statewide “Complete Streets” policy:
–
Complete street policies require that new streets, or streets undergoing major
maintenance, be designed to accommodate all users; and
– Local governments could be required to adopt Complete Street policies for their
spending, or provides substantial incentives to localities to do so, e.g., making state
transportation grants to localities contingent on project consistency with Complete
Street policies.
A rewrite of the Highway Design Manual to require all new engineering and construction
to accommodate safe, convenient movement of bicycles and pedestrians along all nonlimited corridors, as well as across corridors where these act as barriers, unless
exceptional circumstances exist.
○ Local land-use policies could be mandated to include requirements for shower and bike
storage facilities in new buildings, and design requirements to promote a pedestrian
friendly environment.
○ Add bike storage at transit stations and employers. Provide grants and incentives to
develop bike stations at major transit and activity centers to ensure secure overnight
bicycle storage, bike rentals, and related services.
○
•
Financial requirements or incentives that promote bicycle and pedestrian activities include:
○
Increased funding available for bicycle and pedestrian projects.
–
Provide grants to localities to develop plans and policies to encourage biking and
walking, including public education, safety, engineering, and revisions to local landuse policies.
– Provide grants to local governments to identify and study the gaps in their bicycle and
pedestrian infrastructure and determine how these gaps can be best filled by streetrelated improvements as well as those associated with other public right-of-ways
(e.g., parks, inter-street links, and specialized structures).
Fund and implement low-cost safety solutions that improve conditions for bicycling and
walking in maintenance projects like paving projects.
○ Provide local governments with new taxing authority and more flexibility with gas tax
revenues to finance local improvements.
○
–
Initiate a pilot program with funding and technical assistance under which local
governments and neighborhoods can readily form neighborhood improvement
districts to develop public-private partnerships that manage and price on-street
parking by time-of-day to ensure a portion of spaces are available even during times
of peak demand, with surplus parking revenues available for streetscaping, pedestrian
and bicycle infrastructure and services, and neighborhood improvement districts.
– Over time, increase the share of state transportation funding made available to local
governments for pedestrian and bicycle improvements to more closely match the
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Maryland Climate Action Plan Appendix D-4
share of travel in the state of Maryland that involves a pedestrian or bicycle trip for
some portion of the journey and the share of traffic accidents involving pedestrians or
cyclists.
– The goal would be provide sufficient funding for localities to build out their
pedestrian and bicycle networks, invest in inviting streetscapes to accompany new
development, and retrofit existing streets to prioritize transit, biking and walking.
– Similarly, local transit agencies should be granted additional voter-approved revenue
sources.
Related Policies/Programs in Place
The proposed policy would build on the model of Clean Air Act conformity, adapting that model
to growth in VMT and CO2. That model takes one piece of a state-level challenge—future
growth—and gives it to local jurisdictions closest to the source of the growth. The model uses
the locals’ structure to respond, while building on incentives and technology adopted by the
state.32
Type(s) of GHG Reductions
Primarily CO2 and carbon black.
Estimated GHG Reductions and Net Costs or Cost Savings
Key Assumptions: This is financed through TLU-9 (Incentives, Pricing, and Resource
Measures) and implemented in coordination with TLU-3 (Transit). GHG reductions are not
quantified independently.
The GHG emission reductions from the replacement of a significant share of short car trips with
pedestrian and bicycle trips will be significant.
•
National Transportation Survey Data (1990) demonstrates that more than half of commute
trips, and three out of four shopping trips, are under 5 miles in length; ideal for bicycling.
Additionally, 40% of all trips are less than 2 miles.
•
Past national polls have found that 17% to 20% of adults say they would sometimes bike to
work if safe routes and workplace parking and changing facilities were provided33. A
comprehensive review of nonmotorized travel data indicates, “considerable latent demand for
bicycling and walking will be released if infrastructural impediments to these modes are
removed or mitigated.”34
32
For example, see Environmental Defense, “Incorporating Environmental Performance into Transportation
Projects,” memo to TLU TWG, January 30, 2008.
33
Harris Poll data published by Bicycling magazine, April 1991 and by Rodale Press, 1992.
34
University of North Carolina Highway Safety Research Center (HSRC). 1994 (Oct.). A compendium of available
bicycle and pedestrian trip generation data in the United States (for the FHWA).
Appendix D-4 Page 48
Maryland Climate Action Plan Appendix D-4
•
Overall, creating bicycle/pedestrian-friendly communities can result in between a 5% to 15%
reduction in overall VMT in a community35. These figures can be even higher in close
proximity to bike/pedestrian facilities with local reductions of 20% to 30%.36
Key Uncertainties
None cited.
Additional Benefits and Costs
Substantial health benefits.
Feasibility Issues
None cited.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
35
T. Litman, T. 2007. Win-win emission reduction strategies: smart transportation strategies can achieve emission
reduction targets and provide other important economic, social, and environmental benefits. Prepared for the
Victoria Transport Policy Institute (VTPI). Available at: http://www.vtpi.org/wwclimate.pdf
36
S, Winkelman. 2007 (Feb.). Linking green-TEA and climate policy. Presentation prepared for the Center for
Clean Air Policy (CCAP). Available at: http://www.ccap.org/transportation/documents/LinkingGreenTEAandClimate-PolicyCCAP3-12-07.pdf.
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TLU-9. Incentives, Pricing, and Resource Measures
Policy Description
Pricing and incentives provide information that helps allocate scarce resources and encourage
wise stewardship when consumers make choices. Current transportation pricing and incentives in
Maryland often encourage over-consumption of driving by hiding true environmental and social
costs from travelers. Unless widespread perverse pricing incentives are modified, efforts to
reduce GHG emissions through smart growth incentives and transit investments will fail.
Roadway tolling can help manage SOV use and provide revenue for alternative modes, but if
tolls are used just to build new lanes or roads this will increase GHG emissions. Tolls that vary
by time-of-day with congestion levels can reduce congestion and ensure efficient use of roads,
preventing the loss of capacity that routinely occurs in stop-and-go conditions. Mileage and
emission-based road user fees also help manage traffic and GHG emissions and finance
transportation. Experience from around the world shows political acceptance of pricing existing
roads is dependent on whether this is done in a way that significantly cuts congestion and helps
ensure attractive alternatives to driving in the affected area. Thus, it makes sense to bundle
implementation of pricing measures with TLU-3 (transit improvements) and TLU-8 (walking
and cycling improvements).
Employer commute incentives have a profound impact on travel behavior. Offering free
workplace parking is a major inducement for commuting by car. Commuter Choice Programs
encourage employees to use other travel options by supporting telecommuting, reducing the cost
of transit commuting through subsidies or pre-tax transit fare programs, offering cash-in-lieu-ofparking to encourage ridesharing, biking, walking, or transit use, and guaranteed ride-home
service in order to reduce automobile dependence. Telecommuting promotion may include the
development and support of neighborhood telecommuting centers that offer office-type services
in locations close to commuters’ residences. Government spending to encourage commuter
choice can stimulate a large private-sector match ($17 of private incentives/dollar of public
incentive, according to one source).
Automobile use is strongly influenced by the location, supply, and pricing of parking. Local
governments can encourage reduction in automobile use by eliminating minimum parking supply
requirements, establishing parking supply caps, encouraging higher parking prices, developing
parking management districts, and other mechanisms. Parking ratios for the maximum number of
spaces allowed can be set based on an area’s level of transit service. Smart parking identification
systems can help inform drivers of parking availability and reduce excessive circling and
searching.
This option responds to these dynamics by implementing a set of Incentives, Pricing, and
Resource Measures, that would together use market signals to help Maryland agencies and
citizens manage travel using better information about costs and benefits, and use a restructured
transportation pricing system to fund investments in that system to accept growth and support
quality of life without increasing GHG emissions.
Appendix D-4 Page 50
Maryland Climate Action Plan Appendix D-4
Policy Design
Goals:
The goal for Maryland transportation pricing should be to foster efficient use of existing
transportation infrastructure and services to support a vibrant economy with expanded, attractive
travel choices for all, with equitable access to jobs, affordable housing, and other opportunities.
Pricing incentive strategies should be considered and integrated into transportation planning,
project review and development, corridor management and transportation system operations at
the state, regional, and local level across Maryland. Major capital investments for new capacity
should be undertaken only after considering how pricing measures might be used to improve the
performance of related infrastructure and mobility services.
By 2020, automated time-of-day road pricing should be coming into more widespread use in
metropolitan areas to significantly reduce traffic congestion delays that threaten economic
competitiveness and to reduce GHG pollution to meet environmental goals. Such systems should
be implemented in a way that ensures improved travel choices for low and moderate income
travelers, providing targeted user-side subsidies as needed to ensure equitable, attractive
opportunities for access to jobs and public facilities all across Maryland. Pricing strategies
should be designed to enhance low-carbon mobility systems, such as walking, cycling, and
public transportation, while ensuring high efficiency, high-speed mobility is available at all times
in travel principal corridors for high value trips and freight shipments.
By 2020, workplace commuter benefit discrimination against commuters who walk, bike, ride
transit, or rideshare should be eliminated in Maryland, and the state should be seen as a national
leader in providing workplaces such means of travel encouraged through smart commuter
incentives.
Maryland should establish incremental carbon-based fees whose revenue would fund
transportation investments and operations that reduce GHG emissions. Funds would be available
to be spent on any carbon-reducing transportation measure. The GHG performance of the
proposed transportation investments would be closely evaluated prior to funding, and closely
tracked afterwards with performance-based contracts ensuring timely GHG reductions. GHG
emission reductions will be greater if regional implementation can be coordinated. Such fees
could be implemented beginning in the short run through a carbon fuel tax. The MWG does not
recommend a specific amount for such a carbon fuel tax pending much more detailed analysis.
For the purposes of illustrating the kinds of GHG reductions and revenue that such a carbon fuel
tax might raise, the following general empirics were taken into account:
•
Small amounts (up to $0.15) can have some demand impact, but can be more appropriately
seen as a way to fund transportation related policies than to reduce consumption and
emissions directly; and
•
Larger amounts can have a more meaningful direct impact on consumption and emissions.
The MWG analyzed the potential impact of a carbon fuel tax starting in 2011 at $0.15/gal, and
rising smoothly to the equivalent of $1/gal (real$) in 2020.
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Maryland Climate Action Plan Appendix D-4
In the slightly longer run, carbon-based fees can and should be assessed through a more
sophisticated set of instruments that help the state and its citizens respond to a broader set of
needs than just carbon. For example, emission-based mileage charges can be used not only to
reflect carbon emissions, but also manage congestion and road damages. The technology to
implement these kinds fees is in commercial use in several places around the world. Germany,
for example, currently uses such charges to raise approximately $3 billion a year from trucks.
In this policy option, revenue from these fees would fund primarily transportation-related
investment and operations; a variation could use some revenue to reduce other taxes and fees.
Timing: 2009 Legislative Session for Commute Incentives and Reforms in how pricing and
incentives are considered in planning (items 1, 2, and 3 in “Implementation Mechanisms”
below), and 2011 Legislative Session for the revenue items (item 4).
Parties Involved: Automobile users, state departments of commerce, transportation, revenue,
finance, and freight transportation sector.
Implementation Mechanisms
Commute incentives. Immediate steps should be taken to build on Maryland’s efforts at shifting
employer commute incentives by strengthening marketing, incentives, and requirements for
employers, schools, and universities to reconsider commuter and student travel benefits that
discriminate against those who walk, bike, take public transportation, carpool, or telework, and
to adopt new incentives that instead favor these alternatives to solo car travel. The state should
expand its promotion to employers and employees of the Maryland Commuter Choice Tax
Credit, which offers up to $50/month tax credit to Maryland employers who offer cash-in-lieuof-parking or transit benefits to employees. The credit is even available to nonprofit corporations
as a deduction from state withholding taxes. The state should take expeditious steps to ensure all
state agencies, state contractors, and as permissible and feasible, state grantees, such as
universities and schools, offer transit benefits and, as feasible, cash-in-lieu-of-parking benefits to
their employees. The state should encourage testing of parking impact fees in transit-served
metropolitan communities that would be waived for employers who offer cash-in-lieu-of-parking
and transit benefits, with a de minimis exemption for small businesses.
Low-GHG transportation investment fund. The revenue generated from any of the pricing or fee
initiatives in this policy (e.g., carbon-fuel, carbon-road) should be invested in transportation
projects (e.g., capital and operational) that improve choice and reduce GHG emissions. To
illustrate how such an example would work
•
To implement the multimodal transit elements of this policy,
State, regional, and local transit plans are to be developed, as well as the transit
promotion programs and other related programs such as improved bike/pedestrian access
to stations and BRT.
○ Funding gaps that exist to implement these plans should be assessed.
○ Proportion of the gap that would be covered by the gas tax levied should be determined.
○ The Governor should create an interagency group to identify ways to reduce GHGs and
develop resource allocation strategy to:
○
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Maryland Climate Action Plan Appendix D-4
–
–
–
•
Recognize different regional needs (especially rural versus metropolitan);
Establish cost-effectiveness/emission-reduction criteria for determining how tax
revenue will be spent; and
Establish a mechanism to ensure that revenue can only be spent for low-carbon
transportation options and not for other state purposes.
To implement the non-transit transit elements of this policy, state, regional, and local needs
and opportunities to reduce GHG emissions from transportation through non-transit
investments, tax abatements, and incentives for infill and redevelopment are to be developed.
The state should lead, working together with regional and local jurisdictions.
Travel Smart marketing. The state should fund and implement a form of “Travel Smart”
individualized transit marketing. This kind of marketing has shown power in Portland, Oregon,
Perth, Australia, and various communities in Europe as a way to reduce car use through better
information. It is included in this policy option rather than in TLU-3 Transit because it helps
people understand their costs, benefits, and incentives related to transit and non-SOV travel. It
can be seen as an extension of Commuter Connections, where Travel Smart deals not just with
work-related trips, but all travel.37
Pricing and incentives in planning, project development, and operations. The MDOT Secretary
should adopt policies to foster the routine consideration of pricing incentives in state and
regional transportation planning, project development, and operations. The Governor should
convene a Transportation Pricing and Revenue Study Commission to review how new
approaches to pricing and transportation finance might help the state address multiple
simultaneous challenges: climate change, mobility system financing, congestion, economic
competitiveness, housing affordability, and growing income inequality. The Governor,
legislature, and state officials should work with appropriate stakeholders to further refine policy
options and strategies for planning, testing, and implementation, including those listed below.
The most effective management of GHG emissions in Maryland’s transportation sector would
result from the establishment of the following pricing measures throughout the state by 2020:
•
GHG emission-based road user fees statewide to complement or replace motor fuel taxes,
with congestion pricing as a local option in metropolitan areas, with revenues used to fund
transportation improvements and systems operations meeting state goals.
•
Time-of-day emission-based cordon pricing in appropriate central areas as a local option to
finance improved public transportation,
•
Parking pricing policies that ensure effective use of urban street space for the highest and
best uses, giving greater priority to low-carbon modes of transportation (e.g., walking,
cycling, and public transportation), while ensuring efficient, effective, and attractive mobility
37
See R. Salzman. 2008 (Apr.) TravelSmart: a marketing program empowers citizens to be a part of the solution in
improving the environment. MassTransitMag.com. Available at: http://www.masstransitmag.com/print/MassTransit/TravelSmart/1$5825 Excerpt: “People want to be part of the solution, they just don’t know how,” explains
Werner Brög, the founder of the concept. “Across three continents, we’ve found that people always underestimate
the time and cost of using the car and overestimate the time and cost of using environmentally friendly modes. “Our
philosophy is that we never tell them what to do. We empower people to do what they can do by addressing those
misperceptions.”
Appendix D-4 Page 53
Maryland Climate Action Plan Appendix D-4
choices for all residents and businesses, including those dependent on private motor vehicles,
as discussed under TLU-8. Provision of off-street parking should be regulated and managed
in all urban, suburban, town, and village centers of development, with appropriate impact
fees, taxes, incentives and regulations to ensure sound user pricing and provision of parking
spaces appropriate for smart growth development and GHG management.
Implementing such approaches will require substantial efforts (in addition to those now
underway) to identify and evaluate options, plan and develop pilot tests, and cultivate public
understanding and acceptance of new approaches to mobility system management and financing.
The experience and approach of other states (e.g., Washington, California, New York), and other
affluent urbanizing coastal regions (e.g. the Netherlands, Sweden, and the United Kingdom), in
this arena are relevant to Maryland and deserve close attention from the state’s policy makers.
Initial pilot tests of road pricing now moving forward in several corridors in Maryland will
involve use of toll managed lanes. However, these must be carefully considered for their
implications for long-term GHG growth, as global experience and research, as well as recent
planning studies by the Metropolitan Washington Council of Governments (MWCOG)
Transportation Planning Board, clearly show that adding significant toll-managed lane capacity
will increase, not decrease VMT and related GHG emissions, and that the high cost of adding
road capacity typically leaves little or no toll revenues to pay for improved public transportation.
Future planning should consider how existing road capacity might be managed for higher
productivity through congestion pricing and transit improvements to minimize the demands for
addition of costly high-speed road capacity.
Related Policies/Programs in Place
The 2009 Maryland Transportation Plan (MTP) is now under development. The last MTP was
issued in 2004. State transportation funding plans are outlined in the Consolidated Transportation
Program (CTP), the department’s 6-year capital program outlining transportation projects around
the state.38 Speaking broadly, the current commitments would not attain the goals proposed here.
The MDOT, in cooperation with the MPOs, MDE, and local government bodies, has the
following in place with regards to expanding commuter choice and offering of commuter
benefits in the state: GRH for transit users. GRH is in place in the Washington region and
portions of the Baltimore region.
Ridesharing: MDOT works with the counties and MWCOG to help facilitate ride matching
Commuter Choice: Under the Maryland Commuter Benefits Act of 2000, employers may take a
50% tax credit on sponsored commuting costs and cash-in-lieu-of-parking benefits up to a
maximum credit of $50/employee per month applied toward the state income tax, the financial
institution franchise tax, or the insurance premium tax. Maryland nonprofit organizations can
take the credit as a deduction from state withholding taxes. Commuting costs are applicable to
transit passes, vouchers, tokens or other valid non-cash instruments that are accepted as payment
by public and private transportation services, with the exception of private taxi service. Initially
efforts to promote this tax credit to employers appear to have fallen off, and use of the credit is
not widespread due to very low awareness of the benefit among employers.
38
http://www.e-mdot.com/Planning/Plans%20Programs%20Reports/Programs/Index.html
Appendix D-4 Page 54
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Type(s) of GHG Reductions
Primarily CO2 and black carbon.
Estimated GHG Reductions and Net Costs or Cost Savings
The recommendations under this policy option cover policies that can be technologically
implemented immediately (fuel tax and Commuter Choice) and those that would take longer to
implement in Maryland. Only the impacts of the first kind are quantified here: carbon fuel tax
and Commuter Choice programs.
Table H-9. TLU-9 Quantifications estimates
Option
No.
TLU-9
Net
CostPresent
Value EffectiveTotal
ness
2008–
2008–
($/tCO2e)
2020
2020 (Million $)
GHG Reductions
(MMtCO2e)
Policy Option
Incentives, Pricing, and Resource Measures
2012
2020
2.6
3.7
32.8
–$1
–$1
Level of
Support
Unanimous
TLU = Transportation and Land Use; GHG = greenhouse gas; MMtCO2e = million metric tons per carbon dioxide
equivalent; $ = dollars; $/tCO2e = dollars per ton of carbon dioxide equivalent.
Data Sources:
For Commuter Choice
• ICF Consulting. 2004 (Nov.). Commuter connections strategic review, final report. Prepared
for MDOT, Office of Planning and Capital Programming.
•
ICF Consulting. 2005. Analyzing the effectiveness of commuter benefits programs. Transit
cooperative research program report 107.39
•
ICF Consulting. 2003. Strategies for increasing the effectiveness of commuter benefits
programs. Transit cooperative research program report 87.40
•
D.C. Shoup. 1997 (Oct.). Evaluating the effects of cashing out employer-paid parking: eight
case studies. Transport Policy.
•
D.C. Shoup. Cashing out employer-paid parking. US DOT. Report No. FTA-CA-11-0035-921.
•
ICF Consulting. 2003. Strategies for increasing the effectiveness of commuter benefits
programs. Transit cooperative research program report 87.
For Carbon Fuel Tax
• J. Hughes, C.R. Knittel, and D. Sperling. 2007 (Feb.). Evidence of a shift in the short-run
price elasticity of gasoline demand. Center for the Study of Energy Markets. Paper.
CSEMWP-159. Available at: http://repositories.cdlib.org/ucei/csem/CSEMWP-159
39
http://onlinepubs.trb.org/onlinepubs/tcrp/tcrp_rpt_107.pdf
40
http://onlinepubs.trb.org/onlinepubs/tcrp/tcrp_rpt_87.pdf.
Appendix D-4 Page 55
Maryland Climate Action Plan Appendix D-4
•
ICF Consulting. 2004 (Nov.). Commuter connections strategic review, final report. Prepared
for MDOT, Office of Planning and Capital Programming.
Quantification Methods:
Commuter Choice programs
• Increased funding for existing DC-area Commuter Connections: $12 million.
•
Increased funding for existing and new Commuter Connections-type programs in Baltimore,
Frederick, and throughout the state: $20 million.
Impact: Commuter Connections currently reduces 1,774,670 VMT/day (461,414,200
VMT/year), for $5 million/year.
Maryland VMT in 2005 was 51,430 million, thus Commuter Connections reduced statewide
VMT by 0.89%. Moving from $5 million/year to $32 million/year on Commuter Connectionstype programs should reduce VMT by ($32/$5 = 6.4 × 0.0089) = 5.7% (2,953,050,880 VMT)
Carbon fuel tax
The forecast effect of this policy turns on two calculations: (1) the elasticity of demand for fuel
with respect to price, and (2) the responsiveness of VMT to investments in its reduction.
If a carbon fuel tax is implemented, it will have benefits in terms of revenues raised for the state
to fund GHG mitigation measures, as well as GHG reduction from increased fuel costs.
In response to recent data showing a low gasoline elasticity of demand, we use an elasticity of
0.1. The GHG reductions reported in the table are due to the demand response only. The
elasticity of demand for gasoline is a subject of ongoing quantification by economists, and as the
U.S. enters a period of historically unprecedented prices for gasoline, there is not a consensus on
the likely consumer response.41 The elasticity of demand of 0.1 used is historically low, which is
to say, for these purposes, conservative; it is at the low end of the range, and so possibly
underestimates the carbon reductions gained from a carbon fuel tax.
The revenue from the tax is invested in projects, services, and incentives that reduce VMT. Those
reductions are quantified in the category in which the revenue is spent. Thus, a carbon fuel tax
that increased smoothly from $0.15/gal (for conventional gasoline) in 2008 to $2.00/gal in 2020
would reduce demand directly by about 0.8 MMtCO2e in 2012. It would also rise to (at
$0.77/gal) about $2.8 billion/year in 2012. For this analysis, we assume that the carbon fuel tax
rises from $0.15 to $1 in 2020, and that the other half of the $2.8 billion/year is raised through
some combination of other carbon- and road-charges.
Benefits
The most cost-effective VMT-reducing Commuter Choice programs in the country are in the
District of Columbia region, reducing VMT at approximately $0.01–$0.02/VMT.42 Such a
41
For example, recent statistics from California suggest a roughly –0.2 elasticity. M. Glover. 2008. State’s drivers
reduce gas use. Sacramento Bee 1 May 1. Available at: http://www.sacbee.com/wheels/story/903743.html
42
ICF Consulting. 2004 (Nov.). Commuter connections strategic review, final report. Prepared for MDOT, Office of
Planning and Capital Programming.
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program can effectively invest much more than its current budget, but almost certainly not
$2.8 billion. The rest would go into funding transit and pedestrian, bicycle, intermodal freight,
traffic management, and demand management measures, whose impacts are quantified largely in
TLU-3.
The TWG needs to advise on an investment split between commuter benefits programs and other
programs and measures.
For this round of analysis, we assume the following use of the $2.8 billion in 2012:
Commuter Choice programs:
•
Increased funding for existing D.C.-area Commuter Connections: $12 million
○ Increased funding for existing and new Commuter Connections-type programs (including
parking cash out) in Baltimore, Frederick, and throughout the state: $20 million
○
Impact: Commuter Connections currently reduces 1,774,670 VMT/day (461,414,200
VMT/year), for $5 million/year.
Maryland VMT in 2005 was 51,430 million, so Commuter Connections reduced statewide
VMT by approximately 1%. Moving from $5 million/year to $32 million/year on Commuter
Connections-type programs should reduce VMT by ($32/$5 = 6.4 * 0.0089) = 5.7%
•
Transit and non-SOV travel investments: $2.8 billion – $32 million = $2,768,000,000.
The MWG direction on how to analyze spending this revenue: “Focus on the options most likely
to reduce GHG emissions.” For this round of analysis, we proceed as follows:
2007 Maryland Department of Transportation (MDOT) capital expenditures
Maryland Transit Administration (MTA)
$1.5 billion
Washington Metropolitan Area Transit
Authority (WMATA)
$1.1 billion
2007 MDOT operating expenditures
MTA
$0.5 billion
WMATA
$0.2 billion
Total
$3.3 billion per year
MDOT = Maryland Department of Transportation; MTA = Maryland Transit Administration; WMATA = Washington
Metropolitan Area Transit Authority.
An additional $2.78 billion/year would be an 84% increase in total transit expenditures.
Total transit ridership in Maryland in 2006 was 252,773,000 trips. An 84% increase in trips
would produce an additional 212,329,000 trips. This is very close to a doubling in transit
ridership. Thus:
We report here in TLU-9 only those reductions from the direct impact of the proposed carbon tax
via fuel.
We report:
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•
In TLU-3 the reductions from investments in transit, since the revenue raised in TLU-9
would be almost exactly the amount needed to double transit expenditures, and thus the
double ridership goal in TLU-3; and
•
Here in TLU-9 the reductions from investments in commuter connections programs.
Costs
Generally, tax revenue is considered a transfer payment, and is not analyzed as a “cost.” Whether
a carbon fuel tax is the most efficient (least distortionary) way to raise revenue with which to
make the above investments is beyond the scope of this analysis. We observe that the $2.8 billion
is 1.09% of Maryland’s Gross State Product (GSP).43
Another way to use the revenue would be to rebate it or “recycle” it, such as through a reduction
in the income tax, a reduction in employer payroll taxes, or abatement of taxes on urban infill
TOD. Such a use would shift taxations from “goods” (e.g., income, jobs, smart growth) to “bads”
(e.g., GHG emissions). The literature on revenue recycling of carbon taxes is too extensive to
summarize here. There is widespread agreement that revenue recycling reduces the costs of any
carbon tax; the extent to which it does so has less agreement, and is subject to the specifics of the
case.
Key Assumptions:
GHG impacts
The assumptions are given above. These kinds of increases are possible, considering more than
half of the surveys reported an increase in transit riders between 10% and 40%, and nearly onequarter reported increases of more than 60%. Furthermore, two surveys—one in San Jose in
1997 and one in Atlanta in 2003—suggest that transit ridership more than doubled after a transit
benefits program was implemented.44
Costs
The costs of providing commuter benefits at the work place vary widely. Contributing to
employee commuter benefits financially produces the largest mode shifts. Simply allowing an
employee to participate in a pre-tax transit pass deduction actually saves the employer money,
and generally produces almost as much mode shift. Employers then save money on parking, on
turnover, and on employee stress.
In a national survey of employers about why they did or did not offer commuter benefits, the
main concern was not cost, but the perceived hassle of adding an additional benefit. This, we
show as the main cost the state’s investment in promoting Commuter Connections.
43
Federal Reserve Bank of Richmond (FRB),
http://www.richmondfed.org/research/regional_conditions/‌regional_profiles/‌maryland/output/gross_state_product.cf
m
44
ICF Consulting. Analyzing the effects of commuter benefits programs, Internet conference (live broadcast April 7,
2005) featuring ICF International’s Michael Grant, lead author of the Transit Cooperative Research Program
(TCRP) Report 87, "Strategies for Increasing the Effectiveness of Commuter Benefits Programs."
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At the IRS mileage rate of $0.505/mile, cost savings to commuters would total:
2,953,050,880 VMT
× $0.505
$1,491,290,694
– $32,000,000 Investment in Commuter Connections
$1,459,290,694
In order for there to be negative benefits, costs per employee statewide would have to exceed:
$1,459,290,694 savings per 2,530,000 employees = $576 per year
With an MTA pass at $64 per month/$768 per year, it seems highly unlikely that all savings from
reduced driving costs would be used up by additional transit fare costs. A substantial portion of
the target population would be in the Washington DC suburbs, where transit costs are higher, but
these would be balanced by those in the many parts of Maryland with far lower costs.
For a broader discussion of the difficulty of quantifying these benefits in terms of $ per ton,
please see TLU-3.
More generally, for this round of analysis, it is assumed that
•
The revenue raised in this Policy Option is spent as outlined above, and
•
Notwithstanding the proposed fund’s ability to invest in non-transit GHG-reducing actions,
the assumption is that the two most effective uses of the funds are:
To help people use transit and non-SOV options that are in place, which is the role of
Commuter Connections and related programs targeting non-commute trips; and
○ To expand the transit and related options and incentives that those programs need.
○
Clearly the two are also linked; the one is most effective with the other.
Key Uncertainties
Response to carbon fuel tax, any other charges.
How the state will choose to invest the revenue.
Additional Benefits and Costs
None cited.
Feasibility Issues
None cited.
Status of Group Approval
Approved.
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Level of Group Support
Unanimous.
Barriers to Consensus
None.
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TLU-10. Transportation Technologies
Policy Description
Reduce GHG emissions from on-road vehicles and off-road engine vehicles (including marine,
rail and other off-road engine and vehicles, such as construction equipment) through deploying
technology designed to cut GHG emission rates per unit of travel activity.
Emissions reductions on on-road vehicles are expected from
•
The implementation of the committed-to Maryland Clean Car Program and new policies to
spur development and use of Plug-in Hybrids; and
•
A combination of intelligent vehicle infrastructure, driver education (for fuel efficient traffic
operation), and smart traffic operations and management designed to simultaneously reduce
congestion, curb traffic growth, and expand travel choices.
Transportation management systems improve vehicle flow on the roadway system, which can
reduce fuel use and GHG emissions. Coordinated operation of the regional transportation
network can improve system efficiency, reliability, and safety. Tools to reduce traffic congestion
include high-occupancy vehicle (HOV) lanes, roundabouts at intersections, synchronized signals,
incident management, variable message signs, and other forms of ITS, such as real-time traffic
information and dynamic road-way pricing.
Policy Design
Goals:
To reduce emissions from on-road engines/vehicles by an additional 7.5% by 2020 from current
adopted baseline policies (particularly including the Maryland Clean Car Bill) through more
efficient technologies and operations. Reduce emissions from off-road transportation sources
through use of more efficient technologies and operations by 15% by 2020.
Policies to be implemented that relate to off-road engines/vehicles include:
•
Provide incentives to increase purchases of fuel-efficient or low GHG vehicles,
•
Increase the use of alternate fuels or low sulfur diesel to reduce GHG emissions,
•
Reduce idling time in locomotive and construction equipment,
•
Initiate marketing and education campaigns to operators of off-road vehicles,
•
Adopt “Green Port Strategy” for Baltimore area port facilities, and
•
Adopt state contracting and fleet standards for low GHG equipment procurements.
TMS policies to be developed, refined, and implemented include:
•
Active traffic management (ATM);
•
Traffic management center(s);
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•
Traffic signal synchronization;
•
Managed lanes, dynamic roadway, and full corridor pricing;
•
Smart parking systems; and
•
Bus signal priority.
Plug-in hybrids and other high-fuel economy vehicles should be encouraged through further
incentives such as feebate programs. If California adopts additional regulations to require
reduced GHG intensity in motor vehicles, Maryland should follow its lead in light of federal
preemption requirements.
Timing: To be determined.
Parties Involved: To be determined.
Other: Not applicable (N/A).
Implementation Mechanisms
Details for implementing policies include
•
Providing incentives to increase purchases of fuel-efficient or low-GHG vehicles.
Examples of vehicles targeted by this program include pure electric, hybrid, plug-in
hybrid, and other AFV.
○ Examples of incentives include
○
–
–
–
Fees on relatively high emissions/lower fuel economy vehicles (that is, higher vehicle
registration fees can be charged for vehicles that have lower fuel economy, or
vehicles that use alternative fuels could be charged a lower vehicle registration fee.
Vehicle licensing fees could be based on vehicle weight, with use of a dollar per
vehicle-ton multiplier instead of the present broad categories of vehicle weight.
Rebates or tax credits on low emissions/higher fuel economy vehicles.
Implement a sliding scale tax that would allow purchasers of low GHG emitting
vehicles to earn a rebate on their vehicle registration or sales tax of up to X%, and
purchasers of high GHG emitting vehicles to be assessed a vehicle registration or
additional sales tax of up to X%. The sliding scale could be designed to be revenueneutral in such a way that rebates would be offset by fees assessed.
•
Increase the use of alternate fuels or low-sulfur diesel to reduce GHG emissions. By
increasing the availability and usage of alternative fuels (low-carbon fuel) and low-sulfur
diesel for off-road vehicles, as well as recreational marine usage, there could be a significant
reduction in GHG emissions.
•
Reduce idling time in locomotive and construction equipment.
○
Consider increasing measures to reduce locomotive idling, including “auxiliary engines”
to help maintain power, as well as “plug in” power receptacles in the proposed train
storage yards.
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○
•
For equipment in construction contracts, there would be clauses that would restrict idling
time in construction equipment.
Initiate marketing and education campaigns to operators of off-road vehicles.
Providing the operators of off-road vehicles with better operations information and
education can lead to a gain in fuel efficiency.
○ Operators also need to be aware of maintenance issues that cause an increase in pollution
and vehicle operating cost. By ensuring vehicles are well maintained, fuel efficiency and
emissions benefits can be achieved.
○
•
Adopt “Green Port Strategy” for Baltimore area port facilities.
Introduce less polluting, more energy-efficient technologies for vessel dwelling and for
land-side cargo handling equipment as part of strategy.
○ Include providing “shore power” at the port sites, where applicable and feasible for
shipping vessels.
○ Replace diesel cranes at the Port; consider electrifying, or other methods to reduce GHG
emissions, if feasible.
○
TMS Policy Options for Implementation
• ATM: The real time variable-control of speed, lane movement, and traveler information
within a corridor and can improve traffic flow in the corridors where it is applied. The
following is a list of technologies that are currently available. The implementation of TMS
should not be limited to these examples, especially if other technological options are
developed, and prove to more effective in reducing emissions than those listed below.
Speed Harmonization/Queue Warning/Lane Control—the ability to smooth traffic flows
and speeds as vehicles approach congested areas and reduce the speed of vehicles as they
approach queues. In Europe, this strategy has been shown to reduce primary and
secondary accidents, reducing non-recurrent congestion. It has also been found to reduce
congestion, queuing, and improve throughput. Speed control allows the highway to
continue operating nearer to its highest throughput capacity as volumes increase. Specific
performance measure is “increase operating speed for congested areas.” Anticipated
investment level to achieve it is medium.
○ Traveler Information and Dynamic Rerouting—providing Traveler Information
opportunities including travel times and the availability of alternative routes around
incidents and congested areas. Dynamic rerouting uses modified destination guide-signs
and other traveler information methods to assist drivers through alternative routes.
Specific performance measure is “reduction of delay” (time) from one destination to
another. Other measures may include how much time it takes to change signals across
various jurisdictions or alter signal timing dynamically for city streets. Anticipated
investment level to achieve it is medium.
○
Overall, benefits of ATM are reduced overall delay, reduced idling, and fewer secondary
accidents that will also reduce delay and idling. Again, anticipated investment level to
achieve it is medium.
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•
Traffic Management Centers: Provides centralized data collection, analysis, and real-time
management of the transportation system. System management decisions are based on inroad detectors, video monitoring, trend analysis, and incident detection.
○
•
Traffic Signal Synchronization: The timing and operations of the traffic signal operations
are synchronized to provide an efficient flow or prioritization of traffic, increasing the
efficient operations of the corridor and reducing unwarranted idling at intersections. The
system can also provide priority for transit and emergency vehicles.
○
•
Specific performance measures are how quickly problems are identified and responded to
and restored to normal, “reduced idling time,” and “reduction of secondary accidents.”
Specific performance is “reliability.” Anticipated investment level to achieve is fairly low,
though development of concurrent local jurisdiction support and coordination may raise
the cost to medium.
Managed Lanes are lanes that have special operational characteristics and restrictions
intended to manage the operations of the lanes. Management of the facility is typically a
combination of physical design, which limits access and regulation, and may include pricing.
Examples are:
○
○
○
○
○
○
○
○
○
HOV Lanes—exclusively used by transit, vanpools, and vehicles with a minimum
number of occupants, typically two or three;
Reversible Express Lanes—change directions during peak periods to manage peak
demand periods;
Direct Access Ramps—provide direct access to a managed lane (e.g., a direct access
ramp that links an HOV lane to a park & ride facility);
Ramp Bypass Lanes—provide priority bypass of ramp meters for vehicles;
Trucks Only Lanes—used exclusively by trucks;
Transit Only Lanes or Bus Ways—used exclusively for transit;
Green Lanes—exclusively for vehicles that meet specified environmental impact levels
(this management strategy will require careful study, since our HOV lanes are already at
capacity);
Limited Access Highways—have limited access points; and
High-Occupancy Toll (HOT) or Tolled Express Lane—discussed in detail under Pricing
Policy Options above.
Specific performance measures: It is important to continuously review the definitions of
the segments of the system to achieve the greatest travel time reliability without creating
undue inefficiencies in the overall network.
Reliability may be more useful measure than “delay;” some other measures include “average
operating speeds,” “person throughput,” and “VMT reduction,” depending on facility type
and improvement. Anticipated investment level is medium for conversion of existing lanes
and high for construction of new lanes.
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•
Increase Incident Response opportunities: Detection, assistance, and clearing of incidents
on the highway so as to assist travelers, increase safety, and reduce non-reoccurring delay
caused by incidences.
This strategy is best served on limited access roadways where it is hard for drivers to find
an alternative route to their destinations.
○ However, perhaps expand incidence response activities to high volume and accidentprone local streets and major arterials if appropriate.
Specific performance measures are “response time to the scene,” “time needed to clear an
incident,” “delay,” and reduced “idle time.” Anticipated investment level to achieve is
medium to high.
○
•
Improve Traveler Information: Providing real time and projection of travel conditions and
transit information to the public to aid in their decision about how, when, and where to travel.
Reliability may be a more useful measure than “delay.” Other measures include “speed/travel
time.” Anticipated investment level to achieve is medium to high.
Related Policies/Programs in Place
Federal Congestion Mitigation and Air Quality (CMAQ) program funding can be used for
retrofits that reduce idling and associated energy use.
The MDOT, in cooperation with the MPOs, MDE and local government bodies, has the
following in place with regards to promoting the purchase of fuel-efficient and low GHG
vehicles:
•
Hybrid Vehicles: MDOT and the State of Maryland have been purchasing hybrid vehicles to
reduce fuel usage and improve air quality.
•
Hybrid Buses: New buses powered by hybrid engines use much less fuel and emit fewer
emissions. MTA has begun to put into service.
MTA will put 10 Hybrid buses into service as replacements for older buses between 2005
and 2008
○ By 2012, MTA will have 340 hybrid buses total in service.
○ MTA will replace all buses with hybrids, as the fleet ages and needs replacement.
○ While hybrid buses cost $200,000 more than a conventional full-size diesel bus, the
average bus travels 250 miles a day 300 days a year, and as such fuel savings on
operating the buses should compensate for the higher purchase cost.
○
•
Locomotive Refurbishing:
MTA has purchased 26 remanufactured diesel/electric locomotives that meet TIER 2
standards.
○ Although not yet confirmed, emissions reductions of about 1/3 are expected for operating
these remanufactured locomotives in the place of conventional buses.
○
With respect to reducing idling time, MDOT, in cooperation with the MPOs, MDE and local
government bodies has the following in place:
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•
Truck Stop Electrification (TSE): Maryland already has 3 TSE locations with almost 300
spaces in service. Truckers do not need to idle their engines to heat, cool the cab, or obtain
power while “out of service.”
Between August 22, 2005 and March 13, 2008 the 3 TSE locations (Baltimore [63
spaces], Jessup [129 spaces] and Elkton [57 spaces]) operated 671,869 hours.
○ They saved 671,869 gallons of fuel.
○ 7,121 metric tons reduced, based on EPA emissions factor of 10,397 grams per hour
(g/hour) (Source: IdleAire)
○
•
Idling Reduction Requirements: Being pilot tested at major construction sites, including
the International Code Council (ICC) project.
With respect to TMS, MDOT, in cooperation with the MPOs, MDE and local government bodies
have the following in place
•
ITS, currently in place on the Maryland interstate system, allows for a reduction in delay due
to accidents, or breakdowns. According to the CHART report for 2006, the system in place
reduced idle time for trucks and passenger vehicles as follows
○
○
○
○
○
•
Annual truck idle time reduced: –2,445,865 hours,
Daily truck idle time reduced: –9,407 hours,
Annual car idle time reduced: –35,090,766 hours,
Daily car idle time reduced: –134,964 hours, and
Benefits have been growing conservatively at 2% a year. By 2012 benefits should
increase 10%–12%.
Traffic Signal Synchronization/Light-Emitting Diode (LED) signals
LED modules have been routinely implemented since January 2006.
○ About 2,700 LED state signal locations will be in place between 2011 and 2015.
○ Existing signal synchronizations in 2008 have provided significant benefits in reducing
network vehicle delays and fuel consumption (via reduced idling).
○ Timing changes and measurement improvements were calculated using Synchro traffictiming software.
○
Type(s) of GHG Reductions
CO2, black carbon
Estimated GHG Reductions and Net Costs or Cost Savings
Off-road
Table H-10 summarizes transportation sector off-road engine/vehicles baseline CO2e emissions
compared with a 15% by 2020 reduction program.
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Table H-10. Transportation sector off-road engines/vehicles (goals)
MMtCO2e
No action-trend (marine, air, rail, other)
2005
2015
2020
2.69
2.81
2.95
GHG-reduction strategy
2.51
Reduction
0.44
MMtCO2e = million metric tons of carbon dioxide equivalent; GHG = greenhouse gas.
This option includes a mix of policies designed to reduce GHG emissions from off-road
engines/vehicles. The costs and benefits of each of the individual policies are different.
These two technology approaches are used as examples of potential technology options available
in the State of Maryland. Locomotive auxiliary engines and providing shore power for Ocean
Going Vessels (OGV) have the potential to reduce emissions by 0.07 MMtCO2e in 2020, which
is only 16% of the 0.44 reductions planned for this policy option. It is assumed that other
technologies are available to reduce emissions at similar costs, and therefore the costs and
benefits found in the example projects can be scaled up to achieve the necessary emissions
reduction of 0.44 MMtCO2e.
For example, options like locomotive auxiliary engines and providing shore power at port
facilities typically have an upfront capital investment to purchase a more efficient engine, and the
cost-savings results from reduced fuel usage compared with the original equipment. The length
of payback periods for this capital investment is often the most important question when
considering the feasibility of this type of option. Two examples of cost-effectiveness analyses for
providing shore-power at a port and applying idle control technologies on switcher locomotives
are provided below.
Shore-power is becoming a significant part of the green port strategies being implemented at
ports on the west coast of the United States. For example, the Port of Long Beach has adopted a
green port policy that is intended to guide the port’s operations in a green manner. The port has
committed to providing shore-power to all new and reconstructed container terminal berths and
other berths, as appropriate. Through lease language, the port will require selected vessels to use
shore-power and all other vessels to use low-sulfur diesel in their auxiliary generators. The
primary method for providing shore-power at California ports is referred to as cold ironing. Cold
ironing refers to shutting down auxiliary engines on ships while in port and connecting to
electrical power supplied at the dock. Without cold ironing, auxiliary engines run continuously
while a ship is docked, or hotelled at a berth to power lighting, ventilation, pumps,
communication, and other onboard equipment. Ships can hotel for several hours or several days.
In an example of cold ironing, an analysis was done on the cost-effectiveness of three ships that
each visited port 17 times during the year. On every trip they were electrified for their 60 hours
in port, saving a total of 1,478 metric tons of fuel. These fuel savings resulted in a GHG
reduction of 4,741 tons of carbon dioxide equivalent (tCO2e). Given the estimated annual costs
of $1,583,000, this means that there are costs of $334/tCO2e avoided through fuel consumption.
However, the production of electricity for use in the ship will reduce the GHG savings with this
approach. Using Maryland emissions factors, the GHG benefits of this program would be
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reduced to only 1,051 tCO2e annually. This would mean a cost of $1,506/tCO2e reductions from
the cold ironing method.
There are several other important factors to consider on the issue of cold ironing. This process
has significant up-front costs. While the analysis above considers the annual costs of the program
over a 10-year period, the initial costs are considerable. In this example, the port requires an
initial investment of $4.5 million to provide electrification, and each of the three ships must
undergo a $1.5 million modification to accept electricity from the ports. If very few ships make
this modification, then the costs per tCO2e would increase dramatically. Labor and electricity are
also part of the cost estimate, though these are less of a problem in terms of upfront capital.
Finally, the example is of ships that use the port 17 times a year. If a ship does not frequent a
particular port more than a few times a year, it is unlikely that they would want to undertake the
modification. And even if the ship were equipped to engage in cold ironing, the benefits of such
a case would be far reduced.
Switcher locomotives are used to move materials within a rail yard. Switcher locomotives are
idling approximately 12 hours a day, to avoid problems with shutdown and possible freezing in
cold weather. Installing auxiliary engines in these locomotives can decrease fuel consumption,
which helps reduce GHG emissions, as well as reducing local air pollutants and noise. This
reduction is achieved through reduction of fuel consumption while idling. Installing an auxiliary
engine is highly cost-effective, with a payback period of 2 to 2.5 years without taking any
environmental benefits into account.
Idling with the locomotive’s main engine takes about 3 gal/hour in warm weather and
11 gal/hour in cold weather (a higher setting is required to keep the engine from freezing).
Assuming 4 months of cold weather a year, and an average of 335 active days annually for a
locomotive, this would result in a savings of 19,564 gallons of diesel fuel. For a railyard in a
warmer climate where no warm weather idling is ever used, then 8,844 gallons of fuel would be
saved annually.
This modification has an upfront capital cost of $35,500. Using a 5% discount rate and a 10-year
life for the engine, this would mean annualized costs of $4,597.25. In a cold climate, the
auxiliary engine would have an annualized savings of 19,564 gallons. This would be a GHG
emissions reduction of 200.54 tCO2e. Even in the scenario of a warmer climate, with no coldweather idling, there would still be an emissions reduction of 90.65 tCO2e over the year.
When avoided fuel costs are taken into account, the low costs of this program become obvious.
Given that 19,564 gallons of fuel are saved annually in the cold weather scenario, using Annual
Energy Outlook (AEO) energy prices, this would be a net annual savings of over $42,000. This
would mean a net savings of $209.45 for every tCO2e avoided. In the less optimistic warm
weather scenario, this would still result in an annual savings of nearly $16,500, or $181.66/tCO2e
avoided.
Costs of alternative fuels strategies for off-road equipment would be expected to be similar to
those shown under the cost analysis for TLU-4.
When creating the net present value (NPV) estimate for TLU-10, the quantifiable emissions
reductions possible through cold ironing of boats and alternative engines in locomotives did not
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reach the emissions reductions goal. Emissions from non-road sources were estimated at 2.95
MMtCO2e in Maryland in 2020, but of these, only 0.93 were from ships in harbor and 0.06 were
from rail. For the ships, this number was further reduced because only 30% of emissions come
from OGVs while hotelled. The alternative engines in locomotives could only reduce idling
emissions of switcher locomotives, which make up only 9% of total rail emissions. It is likely
that other technologies do exist to reduce off-road emissions, but they are not quantified in this
analysis.
On-road
We assume that the new technologies reduce emissions by 7.5% in 2020, with a smooth ramp-up
to 2020. Table H-11 shows the path to implementation and the expected emissions savings that
result from these on-road technology improvements.
Table H-11: On-road Emissions Reductions through Transportation Technologies
Year
Onroad
Emissions
(with LEV
standards)
Reduction
Pathway
Emissions
Reductions
(MMtCO2e)
2010
31.98
0.00
2011
32.24
0.00
2012
32.32
0.5%
0.16
2013
32.23
1.0%
0.32
2014
32.09
1.5%
0.48
2015
31.95
2.5%
0.80
2016
31.85
3.5%
1.11
2017
31.75
4.5%
1.43
2018
31.70
5.5%
1.74
2019
31.72
6.5%
2.06
2020
31.81
7.5%
2.39
Total
10.50
LEV = low emission vehicle; MMtCO2e = million metric tons of carbon dioxide equivalent.
Given the difficulties in improving vehicle technologies and the time lag that often results in
such measures, the policy was not predicted to achieve reductions until 2012, growing by 0.5%
until 2014 and then growing 1% every year until 2020. A variety of technology measures are
available to provide these types of reductions, such as improved valve and cylinder operations,
improved transmissions, higher efficiency fuel combustion and improved vehicle accessories
(such as air conditioning compressor, tires, and alternator) (CCAP).
Data Sources:
California Air Resources Board (ARB). 2006 (Mar.). Evaluation of California Ocean-Going
Vessels at California Ports, Stationary Source Division, Project Assessment Branch.
US EPA. 2005 (June). Locomotive switcher idling and idle control technology. Available at:
http://www.epa.gov/NE/eco/diesel/assets/pdfs/locomotive-factsheet.pdf
Appendix D-4 Page 69
Maryland Climate Action Plan Appendix D-4
US EPA. 2004 (Mar.). Case study: locomotive idle reduction project. Available at:
http://www.epa.gov/smartway/documents/420r04003.pdf
Center for Clean Air Policy. 2007. CCAP Transportation Guidebook. Part 2 Vehicle Technology
and Fuels. Available at:
http://www.ccap.org/safe/guidebook/downloads/CCAP%20Transportation%20Guidebook%20(2)
.pdf
Quantification Methods: For example, full LCA with supply/demand equilibrium adjustments
on TWG approval.
Key Assumptions: The cold-ironing project estimate makes assumptions regarding the level of
use of cold ironing facilities, the GHG emissions of OGVs, and the amount of emissions from
OGVs while in the harbor. These estimates were based on previous analyses of emissions
reduction projects in New York and Long Beach. If the factors involved in Maryland harbors are
significantly different, then the costs and emissions savings would likely change.
The locomotive idling project makes assumptions of the fuel savings and level of use of an
auxiliary engine on a locomotive. These estimates are based on analyses done by the US EPA,
and from a case study in Chicago. Maryland may have significantly different factors, which
would change the estimates of costs and emissions savings.
Key Uncertainties
New US EPA emission standards affecting rail locomotive and commercial marine vessel criteria
pollutant emissions have recently been promulgated. These emission standards are expected to
reduce fine particulate matter (PM) and nitrogen oxides (NOx) emissions after 2010.
Additional Benefits and Costs
Cold ironing applied in the Port of Baltimore would provide significant co-benefits via reducing
criteria air pollutant emissions, including NOx, PM, volatile organic compounds (VOC), and
sulfur dioxide (SO2). Locomotive idling reduction can have co-benefits in the form of decreased
noise, as well as reduced criteria air pollutant emissions such as NOx, PM, VOC, and SO2.
Feasibility Issues
The benefits of cold ironing in the Port of Baltimore depend on the frequency of visits by ships
to that port. Installing auxiliary engines on switchyard locomotives is feasible because it is
already being done within Maryland and in other states.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-4 Page 70
Maryland Climate Action Plan Appendix D-4
TLU-11. Evaluate the Greenhouse Gas (GHG) Emissions Impacts
of Major Projects
Policy Description
The state will require GHG emissions evaluation of all TLU relevant state and local, major
capital projects.
Policy Design
Goals:
Understand the impacts of new capital projects on the Governor’s GHG commitment by
performing a GHG impacts build/no-analysis on all major capital projects.
Where appropriate, the build-no-build will be accompanied by analysis of potential alternatives
(such as, transit-oriented land use and investment); adding toll lanes and express bus; HOT lanes;
and a hybrid transit-oriented HOT lane, or a rail and express bus scenario.
Timing: As soon as this policy can be implemented.
Parties Involved: Seek federal guidance for models and best practices.
Implementation Mechanisms
Develop guidance for the state and other large capital project sponsors to use.
Related Policies/Programs in Place
A key part of the Maryland GHG inventory and forecast is a 2006–2020 VMT forecast that was
developed by the MDE. The MDE VMT forecast used Highway Performance Monitoring
System (HPMS) historical traffic-volume forecasts by county and facility type, for the 1990 to
2005 period, to establish a trend line. An extrapolation of this trend line was used to estimate
VMT for 2006 to 2020. This trend-based extrapolation method provides higher estimates of 2020
Maryland VMT by county than is included in the MPO forecasts for their long range
transportation-planning process in Metro Washington and Baltimore. Because the latest MPO
forecasts include the VMT estimates associated with major projects such as the ICC, Base
Realignment and Closure (BRAC), and I-95 expansion, the higher VMT forecasts in the
statewide VMT forecast used in this process are also expected to include the effects of these
projects. Nevertheless, it is recognized that an extrapolated trend line VMT forecasting method is
too aggregated to allow the group to discern the effects that might be attributable to any single
project.
No consensus was reached about whether it makes sense to develop estimates of the VMT
impacts of the three recent major projects in Maryland on GHG emissions.
However, the TWG members recommend that best practice planning tools be used in the future
to fully evaluate the effects of new major projects to determine the expected effects on GHG
emissions before these projects proceed.
Appendix D-4 Page 71
Maryland Climate Action Plan Appendix D-4
Type(s) of GHG Reductions
N/A; policy does not provide emissions reductions on its own.
Estimated GHG Reductions and Net Costs or Cost Savings
N/A; policy does not provide emissions reductions on its own.
Key Uncertainties
None cited.
Additional Benefits and Costs
None cited.
Feasibility Issues
None cited.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-4 Page 72
Maryland Climate Action Plan Appendix D-4
Acronyms and Abbreviations
AAA
AASHTO
AEO
AFCI
AFV
ANL
ARB
ATM
B&P
B5
BAU
BTL
BRAC
BRT
BWI
C&T
CCAP
CCS
CEC
CEF
CHART
CMAQ
CNG
CO2
CO2e
CTL
CTP
DBM
DHCD
DMU
E10
E85
EISA
EPAct
EPI
EV
ETAAC
F-T
FAME
FCV
FFV
FHWA
FRB
American Automobile Association
American Association of State Highway and Transportation Officials
Annual Energy Outlook
Average Fuel Carbon Intensity
alternative-fuel vehicle
Argonne National Laboratory
[California] Air Resources Board
Active Traffic Management
Baltimore and Potomac
5% bio-diesel fuel blend
business as usual
biomass to liquids
Base Realignment and Closure
Bus Rapid Transit
Baltimore Washington International Airport
cap-and-trade
Center for Clean Air Policy
Center for Climate Strategies
California Energy Commission
carbon emission factor
Coordinated Highways Action Response Team
Congestion Mitigation and Air Quality
compressed natural gas
carbon dioxide
carbon dioxide equivalent
coal to liquids
Consolidated Transportation Program
[Maryland] Department of Budget and Management
[Maryland] Department of Housing and Community Development
Diesel Multiple Unit
10% ethanol fuel blend
a blend of 85% ethanol and 15% gasoline
Energy Independence and Security Act of 2007
Energy Policy Act of 1992
Economic Policy Institute
electric vehicle
[California] Economic and Technology Advancement Advisory Committee
Fischer-Tropsch
Fatty Acid Methyl Ester
fuel cell vehicle
flexible-fuel vehicles
Federal Highway Administration
Federal Reserve Bank [of Richmond]
Appendix D-4 Page 73
Maryland Climate Action Plan Appendix D-4
GHG
GPS
GMAC
GREET
GRH
GSP
GWI
HDV
HEV
HOT
HOV
HPMS
NSRC
ICC
ICE
IRS
ITS
LAB
LCA
LDV
LED
LEM
LEV
LGFS
LUTAQH
MARC
MAROps
MCCC
MCTP
MDE
MDOT
MDP
MDTA
MPO
MTA
MTBE
MTP
MWCOG
MWG
N/A
NAP
NARP
NAS
NCHRP
NESCAUM
greenhouse gas
global positioning system
General Motors Acceptance Corporation
Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation
Guaranteed Ride Home
Gross State Product
global warming intensity
heavy-duty vehicle
hybrid electric vehicle
High-Occupancy Toll
high-occupancy vehicle
Highway Performance Monitoring System
[North Carolina] Highway Safety Research Center
International Code Council
internal combustion engine
Internal Revenue Service
intelligent transportation systems
League of American Bicyclists
life cycle analysis
light-duty vehicle
light-emitting diode
Lifecycle Emissions Model
low-emission vehicle
low greenhouse gas fuel standard
Land Use, Transportation, Air Quality, and Health
Maryland Rail Commuter Service
Mid-Atlantic Rail Operations
Maryland Climate Change Commission
Maryland Comprehensive Transit Plan
Maryland Department of Environment
Maryland Department of Transportation
Maryland Department of Planning
Maryland Transportation Authority
metropolitan planning organizations
Maryland Transit Administration
methyl tert-butyl ether
Maryland Transportation Plan
Metropolitan Washington Council of Governments
Mitigation Working Group
not applicable
National Academies Press
National Association of Rail Passengers
National Academy of Science
National Cooperative Highway Research Program
Northeast States for Coordinated Air Use Management
Appendix D-4 Page 74
Maryland Climate Action Plan Appendix D-4
NOx
Non-SOV
NPV
NRC
NS
OGV
OSG
PAYD
PHEV
PIRG
PM
PSRC
PTA
RFF
RFG
SHA
SO2
SOV
SRTS
TLU
TMD
TMO
TMS
TOD
TRB
TSE
TTF
TWG
UC
UCLA
US DOE
US DOT
US EPA
VMT
VOC
VTPI
WABA
WTW
nitrogen oxides
non-single-occupant vehicle
net present value
National Research Council
Norfolk Southern
Ocean Going Vessels
Office of Smart Growth
Pay-As-You-Drive
plug-in hybrid electric vehicles
Public Interest Research Group
particle matter
Puget Sound Region Council
Parent-Teacher Association
Resources for the Future
reformulated gasoline
[Maryland] State Highway Administration
sulfur dioxide
single-occupant vehicle
Safe Routes to Schools
Transportation and Land Use
Transportation Management Districts
Transportation Management Organizations
Transportation Management Systems
transit-oriented development
Transportation Research Board
Truck Stop Electrification
Transportation Trust Fund
Technical Working Group
University of California
University of California, Los Angeles
U.S. Department of Energy
U.S. Department of Transportation
U.S. Environmental Protection Agency
vehicle miles traveled
volatile organic compounds
Victoria Transport Policy Institute
Washington Area Bicyclist Association
well to wheels
Units of Measure
$/tCO2e
gCO2e/MJ
g/hour
MMt
dollars per ton of carbon dioxide equivalent
carbon dioxide equivalent per megajoule of fuel delivered to the vehicle
grams per hour
millon metric tons
Appendix D-4 Page 75
Maryland Climate Action Plan Appendix D-4
MMtCO2e
tCO2e
million metric tons of carbon dioxide equivalent
tons of carbon dioxide equivalent
Appendix D-4 Page 76
Maryland Climate Action Plan
Appendix D-5
Cross-Cutting Issues
Maryland Climate Action Plan Appendix D-5
Cross-Cutting Issues
Summary List of Policy Option Recommendations
Option
No.
GHG Reductions
(MMtCO2e)
Net
CostPresent
EffectiveValue
Total
ness
2008–2020
2012 2020 2008–
($/tCO2e)
(Million
$)
2020
Policy Option
Level of
Support
CC-1
GHG Inventories and Forecasting
Not Quantified
Unanimous
CC-2
GHG Reporting and Registry
Not Quantified
Unanimous
CC-3
Statewide GHG Reduction Goals and
Targets
Not Quantified
Unanimous
CC-4
State and Local Government GHG
Emissions (Lead-by-Example)
Not Quantified
Unanimous
CC-5
Public Education and Outreach
Not Quantified
Unanimous
CC-6
Tax and Cap Policies
Not Quantified
Addressed
by ES TWG
CC-7
Review Institutional Capacity to Address
Climate Change Issues, Including Seeking
Funding for Implementation of Climate
Action Panel Recommendations
Not Quantified
Unanimous
CC-8
Participate in Regional, Multi-State, and
National GHG Reduction Efforts
Not Quantified
Unanimous
CC-9
Promote Economic Development
Opportunities Associated with Reducing
GHG Emissions in Maryland
Not Quantified
Unanimous
CC-10
Create Capacity to Address Climate
Change Issues in and “After Peak Oil”
Context
Not Quantified
Unanimous
CC-11
Evaluate Climate Change Policy Options to
Determine Projected Public Health
Risks/‌Costs/Benefits
Unanimous
GHG = greenhouse gas; MMtCO2e = million metric tons of carbon dioxide equivalent; $/tCO2e = dollars per metric ton
of carbon dioxide equivalent.
Appendix D-5 Page 2
Maryland Climate Action Plan Appendix D-5
CC-1. GHG Inventories and Forecasting
Policy Description
Greenhouse gas (GHG) emissions inventories and forecasts are essential for understanding the
magnitude of all emission sources and sinks (both natural and those resulting from human
activities), the relative contribution of various types of emission sources and sinks to total
emissions, and the factors that affect trends over time. Inventories and forecasts help inform state
leaders and the public on statewide trends, provide opportunities for mitigating emissions or
enhancing sinks, and help verify GHG reductions associated with the implementation of action
plan initiatives.
Policy Design
The Cross-Cutting Issues Technical Work Group (CC TWG) recommends that the state institute
formal GHG inventory and forecast and GHG reporting functions.
Goals:
• Develop a periodic, consistent, and complete inventory of emission sources and sinks on a
frequent basis. To the degree that data and methods allow, the inventory should include all
natural and man-made emissions generated within the boundaries of the state (e.g., a
production-based inventory approach) as well as emissions associated with energy imported
into and consumed in the state (e.g., a consumption-based inventory approach). The
inventory should, through performance metrics and differences in year-to-year emissions,
provide a way of documenting and illuminating trends in state GHG emissions.
•
Develop a protocol for preparing the statewide emissions and sinks inventory.
•
Develop a periodic, consistent, and complete forecast of future GHG emissions in at least 5and 10-year increments extending at least 20 years into the future. The GHG forecast should
be updated periodically. The GHG forecast should reflect projected growth as well as the
implementation of scheduled mitigation projects. In the forecast of future GHG emissions,
the treatment of uncertainties should be transparent, be as consistent as possible across
sectors and time and, to the extent possible, reflect multiple scenarios. The estimation
methods should be consistent with those used to develop the emissions inventory and should
reflect best practice.
•
Develop a standardized protocol for the periodic forecasting of statewide GHG emissions.
Timing: This function should be implemented as soon as allowed by current funding and
supplemented in 2008 with pertinent appropriation requests. The institutional capability should
be created as soon as possible by Executive Order and by policy and budget legislation. A
supplemental budget should be introduced in the 2008 session of the General Assembly. An
Executive Order should be issued in 2008. To the extent necessary, legislation should be enacted
in 2009.
Appendix D-5 Page 3
Maryland Climate Action Plan Appendix D-5
Parties Involved: All GHG emission sources and sinks (both natural and those resulting from
human activities) should be included in the inventory and forecast.
Other: Not applicable.
Implementation Mechanisms
Seek funding through an FY 2008 supplemental bill and full funding in the FY 2009 budget
request. Current agency actions should be used as a basis for expansion of efforts. A
standardized protocol should be developed. Maryland Department of the Environment (MDE)
does not currently track vehicle emissions, which should be included in the protocol. The
Climate Registry is developing a protocol, but this process is happening slowly.
Related Policies/Programs in Place
MDE currently has 3 full-time equivalents (FTEs) working in the air quality planning and
modeling program. The existing agency program staffing and financing need to be expanded to
address GHGs (see Option CC-7).
Type(s) of GHG Reductions
Not applicable.
Estimated GHG Reductions and Net Costs or Cost Savings
Not applicable.
Key Uncertainties
Long-term projections of GHG emissions may have uncertainties associated with them.
Additional Benefits and Costs
None identified at this time.
Feasibility Issues
Not applicable.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-5 Page 4
Maryland Climate Action Plan Appendix D-5
CC-2. GHG Reporting and Registry
Policy Description
GHG reporting reflects the measurement and reporting of GHG emissions to support tracking
and management of emissions. GHG reporting can help sources identify emission reduction
opportunities and reduce risks associated with possible future GHG mandates by moving up the
learning curve. Tracking and reporting of GHG emissions can also help in the construction of
periodic state GHG inventories. GHG reporting is a precursor for sources to participate in GHG
reduction programs, to provide opportunities for recognition, and to create a GHG emission
reduction registry, as well as to secure “baseline protection” (i.e., credit for early reductions).
A GHG registry enables recording of GHG emissions reductions in a central repository with
“transaction ledger” capacity to support tracking, management, and “ownership” of emission
reductions; establishes baseline protection; enables recognition opportunities; and provides a
mechanism for regional, multi-state, and cross-border cooperation. Properly designed registry
structures also provide a foundation for possible future trading programs.
Policy Design
•
Develop and manage a common GHG emissions reporting system with high integrity that is
capable of supporting multiple GHG emissions reporting and emissions reduction policies for
its member states, tribes, and reporting entities.
•
Provide an accurate, complete, consistent, transparent, and verified set of GHG emissions
data from reporting entities, supported by a robust accounting and verification infrastructure.
•
Ensure that reporting occurs annually on a calendar-year basis for all six traditional GHGs
and, to the extent possible, for black carbon.
•
Require reporting of direct emissions; phase in reporting of emissions associated with
purchased power and heat, and allow voluntary reporting of other indirect emissions.
•
Make every effort to maximize consistency with federal, regional, and other states’ GHG
reporting programs.
•
Verify GHG emissions reports through current certification processes, including federal CFR
Part 75 data quality assurance procedures where applicable. Data not subject to
comprehensive protocols may need third-party certification.
•
Include provisions to exclude de minimis emission sources, where appropriate.
•
Allow project-based emissions reporting when properly identified as such and when
quantified with rigorous consistency.
•
Provide full transparency of reported emissions in the reporting program.
•
Participate in the national Climate Registry, which Maryland has already joined.
•
Strive for maximum consistency with other state, regional, and/or national efforts; provide
flexibility as GHG mitigation approaches evolve; and provide guidance to assist participants.
Appendix D-5 Page 5
Maryland Climate Action Plan Appendix D-5
Goals: Implement a GHG registry for Maryland sources as soon as possible.
Timing: As soon as possible.
Parties Involved: Probably overseen by MDE; costs shared by participants benefiting from the
registry.
Other: Not applicable.
Implementation Mechanisms
•
Build the GHG emission reduction requirements into air quality permits.
•
Address all GHG emissions, not just carbon dioxide (CO2). Develop protocols for reporting.
•
Allow for calculation of GHG emissions, if the MDE determines that is appropriate.
Related Policies/Programs in Place
Annual emission certification requirements for large sources for criteria pollutants and acid rain
sources are available. Need to expand them to more sources and all GHG emissions.
Type(s) of GHG Reductions
Not applicable.
Estimated GHG Reductions and Net Costs or Cost Savings
Not applicable.
Key Uncertainties
The extent to which voluntary reporting will actually occur is unknown. Also there are reporting
difficulties related to monitoring.
Additional Benefits and Costs
None identified at this time.
Feasibility Issues
Continued development of the technology and methodology is needed to accurately monitor and
quantify sources and sinks, both natural and those resulting from human activities.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-5 Page 6
Maryland Climate Action Plan Appendix D-5
CC-3. Statewide GHG Reduction Goals and Targets
Policy Description
Governor O’Malley’s signed Executive Order 01.01.2007.07 in April 2007. It created the
Maryland Commission on Climate Change (MCCC) and established the presumptive GHG
reduction goals for the State. Maryland’s GHG emissions are to be reduced to 1990 levels by
2020 and reduced to 80% of 2006 levels by 2050. An Interim Report to the Governor and
General Assembly (December 2007) resulting from the first phase of the MCCC process
recommends revised goals that are more ambitious than those in the original order. (These
proposed goals are described below.)
After reviewing recent reports issues by the International Panel on Climate Change (IPCC) and a
summary of studies compiled by the Scientific and Technical Working Group, the Mitigation
Working Group has concluded that it is absolutely necessary to adopt “stretch” goals for
reducing Maryland’s GHG emissions. Reductions occurring earlier in time have much more
mitigation value than reductions occurring later in time. Reductions in the 20% to 50% range by
2020 (2006 base) appear to be needed to avoid the IPCC’s most catastrophic forecasts. Specific
targets for GHG reductions by 2012–2015, 2020, and 2050 are essential to provide a framework
for Maryland’s reduction efforts. These goals should be relative to Marylanders’ consumptionbased GHG emissions. Because new data, information, and studies will become available in
future years, the Mitigation Working Group recommends in-depth review of the targets every
4 years.
The goals presented below reflect the recommendations included in the MCCC’s Interim Report
to the Governor.
Policy Design
Goals: By Executive Order and legislation, the Governor and General Assembly should adopt
the following specific goals for reducing Maryland’s GHG emissions:
•
10% below 2006 GHG emission levels (using a consumption-based approach) by 2012
•
15% below 2006 levels by 2015 (both 2012 and 2015 goals to be used as reduction goals for
Maryland’s Climate Action Plan.)
•
25%–50% below 2006 levels by 2020 (25% to be used as the “minimum” enforceable
regulatory driver for the Global Warming Solutions legislation; 50% to be used as a sciencebased, nonregulatory reduction goal for Maryland’s Climate Action Plan.) Programs to
implement the legislation would reward market-based reductions above 25%.
•
90% below 2006 levels by 2050 (a science-based regulatory goal in the Global Warming
Solutions legislation that would provide a driver for research and development of climate
neutral technology, programs, and innovations.)
•
Mid-course reviews (conduct a science-based review of the goals at least every 4 years
starting in 2012).
Appendix D-5 Page 7
Maryland Climate Action Plan Appendix D-5
•
Track progress from 1990 levels.
Timing: The goals should be adopted in 2008.
Parties Involved: All state and county governments and the citizens of Maryland.
Other: The Executive Branch should issue a report to the public every second year, beginning in
2010, summarizing Maryland’s programs and activities for GHG reductions and evaluating
Maryland’s progress in achieving the state’s mitigation targets.
Implementation Mechanisms
Propose a legislative initiative in the 2008 session with these goals included. Include a definition
of GHG in the legislation.
Related Policies/Programs in Place
Governor’s Executive Order and the MCCC Interim Report.
Type(s) of GHG Reductions
Not applicable.
Estimated GHG Reductions and Net Costs or Cost Savings
Not applicable.
Key Uncertainties
General Assembly adoption of the goals during the 2008 session is not ensured. Citizens
embracing their roles in altering habits and choices as needed to achieve the reduction targets.
The degree to which the assumptions to meet targets will hold true is undetermined. Will need to
review underlying assumptions in the biennial reviews and adjust them accordingly in order to
make progress toward achieving targets.
Additional Benefits and Costs
Establishing state GHG reduction goals in Maryland and many other states will encourage the
federal government to adopt a national GHG program. It will give Maryland a head start on
implementing any national program that is eventually put in place. There may also be unforeseen
economic costs associated with implementation of the measures recommended herein.
Feasibility Issues
Timely implementation of all recommendations. Availability of new technology essential to
several GHG reduction programs.
Status of Group Approval
Approved.
Appendix D-5 Page 8
Maryland Climate Action Plan Appendix D-5
Level of Group Support
Unanimous.
Barriers to Consensus
None identified at this time.
Appendix D-5 Page 9
Maryland Climate Action Plan Appendix D-5
CC-4. State and Local Government GHG Emissions (Lead-by-Example)
Policy Description
The State of Maryland and municipal and county governments can provide leadership in moving
the state forward by adopting policies that improve the energy efficiency of public buildings,
facilities, and operations and through procurement processes. The proposed RCI-4 policy
provides energy efficiency targets that are much higher than code standards for new state-funded
and other government buildings, facilities, and operations and also sets targets for existing
buildings. This option identifies energy efficiencies and GHG reductions that can be achieved
through governmental procurement and purchasing processes. Taken together, these measures
can result in significant reductions of GHG emissions by governmental entities. As analyses are
developed by government agencies about their carbon footprints, they can implement the
procurement and purchasing measures presented here, the efficiency measures noted in RCI- 4,
or numerous other options described throughout the report in order to reduce overall GHG
impacts.
The following are potential elements of this policy:
•
Ensure that state and local governments consider comprehensive environmental and public
health impacts as well as energy efficiencies.
•
Set a goal for state and local governments to purchase goods from companies that practice
energy use reduction and sequestration of carbon dioxide.
•
Encourage citizens to place less emphasis on consumption and promote the use of materials
that are compostable, recyclable, and reusable.
•
Ensure that contracting procedures do not discriminate against reusable, recycled, or
environmentally preferable products with sufficient and specific justification.
•
Review environmentally preferable products to determine the extent to which they may be
used by state and local governments and their contractors.
•
Review and revise contracting procedures to maximize the specification of designated
environmentally preferable products where practicable.
•
Adopt purchasing specifications that comply with U.S. Environmental Protection Agency
Comprehensive Procurement Guidelines for preferred products.
•
Use Recovered Materials Advisory Notices (RMAN) as a reference for determining the
recycled content specifications for these products.
•
Make sure that these initiatives do not adversely impact public health.
Policy Design
Goals: State and local government lead-by-example initiatives described here and in the RCI
TWG Appendix will serve as models for achieving significant GHG reductions through
procurement and other processes.
Appendix D-5 Page 10
Maryland Climate Action Plan Appendix D-5
Timing: See above.
Parties Involved: State and local governments, Maryland Municipal League, Maryland
Association of Counties, Public Service Commission, and environmental advocacy
organizations.
Other: Keep public health issues in mind.
Implementation Mechanisms
•
Evaluate and minimize GHG emissions along the entire supply chain and increase the
efficiency of operations through purchasing and end-of-life disposal or recycling. Establish
policies for purchasing only energy efficient products and services by specifying ENERGY
STAR–certified and other efficient equipment and appliances, by stocking only energy
efficient and environmentally preferable products in Central Stores, and by planning for endof-life disposal of equipment and other goods when initial purchase is made. Purchase items
that can be recycled rather than thrown away.
•
Develop and use renewable energy resources. Evaluate the potential for direct use of solar,
wind, biomass, geothermal, and hydro power to meet the needs of state government
operations. Take advantage of these renewable resources whenever it is cost-effective to do
so and as a means to lead by example in investing in these systems when it is practical to do
so.
•
Implement by December 31, 2008, a requirement that state-owned or leased facilities use life
cycle costing, including full consideration of future energy costs, in the selection and
implementation of building designs and components for both new and renovated space or for
the selection of replacement components. Require that the most cost-effective design,
equipment, or component options be chosen.
•
Evaluate and minimize GHG emissions along the entire supply chain and incorporate
consideration of comprehensive environmental impacts into state and local government
purchasing and contracting practices.
•
Purchase items that can be composted, recycled, or reused rather than thrown away.
•
Purchasing and contracting practices should consider comprehensive environmental impacts
as well as energy efficiency. (Such as products’ embodied carbon and recycled content;
products that are produced and available locally and the GHG track record of suppliers.)
Related Policies/Programs in Place
Montgomery County Government and Board of Education, Bill 17-06, and Green School Focus.
Type(s) of GHG Reductions
Not applicable.
Estimated GHG Reductions and Net Costs or Cost Savings
Data Sources: Not applicable.
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Quantification Methods: Not applicable.
Key Assumptions: Not applicable.
Key Uncertainties
Government determination to adopt and implement the required practices.
Additional Benefits and Costs
Helps establish and stimulate a green services and products industry in Maryland.
Feasibility Issues
Implementation costs of start-up for public–private sectors, depending on the level of
certification and life cycle costs.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
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CC-5. Public Education and Outreach
Policy Description
Public education and outreach is vital to fostering broad awareness of climate change issues and
effects (including co-benefits, such as clean air and public health) among the state’s citizens.
Such awareness is necessary to engage citizens, businesses, and institutions in actions to reduce
GHG emissions. Public education and outreach efforts should be designed to reinforce state
climate change policies and build upon existing outreach on climate change and related issues.
Due to the positive-feedback nature of climate change, massive, early actions are imperative. For
example, a ton of carbon dioxide emission reduction this year is more effective in slowing
warming than the same reduction the next year and is much more effective than the same
reduction 5 years later. For this reason, the proposed efforts focus on energy conservation and
efficiency—which can be implemented now and have immediate effects—and purposely leave
out renewable energies and new climate-friendly technologies. These technologies may require
substantial investments and may not be economically viable at present. The TWG recommends
that they be considered when the policies are updated in the future. Furthermore, because early
actions are important, the TWG recommends that the state not wait to perfect its plans before
implementation. Quick implementation requires that the state plan a little, do a little, and let
actions, results, and mistakes help stimulate more widespread actions.
Achieving a meaningful reduction in GHG emissions requires substantial efforts in conservation
and energy efficiency. This means behavioral and life style changes in a broad spectrum of the
public. State-sponsored public education and outreach alone will not result in behavioral and life
style changes in the public. Repeated community actions, combined with economic incentives
and disincentives provided by other state climate change policies, are the foundation for
behavioral and life style change. This public education and outreach policy is designed to
provoke such actions.
Policy Design
Segments of the public engaging in different activities have different concerns about climate
change; the TWG recommends that public education and outreach efforts deliver messages to
them in different ways. Many elements of the education and outreach efforts described below are
either underway or ready to go. The state should consider forming a task force on climate
education and outreach to fast-track implementation of many of these items.
The TWG recommends that the state build upon current educational efforts and action
campaigns of state agencies, utilities, and nonprofit organizations. These organizations
understand their offerings; enhanced resources from the state will reinforce their efforts to
encourage Maryland residents and businesses to take action. The combination of efforts by the
state, nonprofits, educational institutions, and utilities should ensure that public education and
outreach efforts reach all segments of the public. Organizations should also ensure that they
provide scientifically based factual information to users.
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The TWG recommends that the state tap into the science and technology expertise from
institutions in the state (e.g., The Johns Hopkins University School of Public Health, Goddard
Space Flight Center, National Oceanic and Atmospheric Administration, and The University of
Maryland) to develop information needed for public education and outreach. Many scientists
from these institutions are deeply concerned about climate change and are disappointed at the
lack of visible leadership on this issue from all levels of government thus far. They will be eager
to volunteer their services when they are called upon.
Environmental nonprofits and environmental organizations within the faith communities are also
poised to support action initiatives from the state when it shows visible leadership and the
urgency that climate change calls for. The TWG recommends that the state tap into their support
to organize massive community actions in conservation and energy efficiency.
1. State, County, and Local Government Initiatives
Educate and coordinate legislatures and agencies on climate change, conservation, and energy
efficiency for government facilities, operations, and transportation. For example, achieve
measurable GHG reduction through
•
Lighting, indoor temperature, insulation, hot water temperature, and water consumption;
•
Reducing paper consumption (e.g., by printing multiple slides on a page and using both sides
of the paper);
•
Reducing consumption of single-use containers (e.g., drinks in plastic bottles and cans);
•
Using fuel-efficient vehicles; and
•
Growing trees in place of lawns.
Goals: Legislatures and government agencies reinforce and further the state goals and serve as
role models for citizens in conservation and energy efficiency; measurable GHG emission
reduction.
Timing: Complete a plan in 1 month, and start implementation in 3 months.
Parties Involved: State, county, and local government agencies and legislatures.
Implementation Mechanisms:
•
Develop informational material (brief, specific, and actionable guidelines) appropriate for
this target audience.
•
Deliver information and guidelines on climate friendly measures to department secretaries,
managers, and building and grounds managers to stimulate actions in conservation and
energy efficiency.
•
Conduct periodic inspections to reinforce guidelines.
Cost: Not available at this time.
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2. State K-12 Education Initiative
Develop Maryland-specific lessons on climate change, energy conservation, and energy
efficiency aligned with the Voluntary State Curriculum and Core Learning Goals. The modules
will reflect age-appropriate inquiry and problem-based learning concepts and activities that result
in actions in conservation and energy efficiency. Modules or lessons may include
•
Climate change science,
•
Climate change and its implications on natural and human systems (e.g., social, political, and
public health impact),
•
Renewable energies and climate-friendly technologies, and
•
Individual and group actions that positively and negatively affect natural systems.
Encourage schools in other states to adopt these teaching modules.
Goals: High awareness in climate change and climate-friendly behavior in students and their
families.
Timing: Complete the plan in 2 months, issue grants to develop teaching modules in 4 months,
and start delivering teaching in the 2009 school year.
Parties Involved: Maryland State Department of Education (MSDE), MDE, and county school
boards.
Implementation Mechanisms: Delegate the MSDE to coordinate this initiative. Issue grants to
experts to develop Maryland-specific teaching modules. Identify existing teaching materials that
address general climate change concepts and make these available through the MSDE
Environmental Education Web site. Set up a Web site (e.g., as part of the MSDE Web site) to
host modules for teachers to download to eliminate distribution costs.
Delegate community colleges and state public colleges and universities to train teachers.
Cost: Not available at this time.
3. Governor’s Regional Environmental Education Network (GREEN)
The MSDE has been planning for the formation of this group (the plan has not yet been
presented to the Governor). This group, with county and local chapters, can coordinate
environmental groups into concerted efforts and draw higher visibility to climate actions from
the public. This group will attract volunteers from
•
Environmental nonprofits,
•
Faith communities and social and civic groups,
•
K-12 school students in fulfilling community services,
•
College voluntary interns, and
•
Adult volunteers.
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This group will call on and coordinate environmental nonprofits (e.g., Sierra Club, Chesapeake
Bay Foundation) and environmental organizations in the faith communities (e.g., The EcoJustice Program, Greater Washington Interfaith Power and Light) to educate and organize the
larger populations for widespread conservation and energy efficiency actions.
Goals: High awareness on climate change and climate-friendly behavior in citizens and
widespread community actions on sustainability and energy conservation; measurable GHG
emission reduction.
Timing: Complete the plan in 1 month, and start implementation in 3 months.
Parties Involved: State and county departments of environment and environmental groups.
Implementation Mechanisms: Start the implementation with a conference of parties interested
in GREEN (e.g., environmental organizations) and establish its charter. With some financial
support from the state government for coordination, the group will be mostly sustained by
volunteers and private donations. Involve the group in other public education and outreach
efforts. Seek support from utilities for training members to conduct energy audits, demonstrate
conservation and energy efficiency, and analyze and present cost savings. Aim to nurture the
group to a level of maturity so that it no longer needs state government support in 3 years.
Cost: Not available at this time.
4. Higher Education Initiative
Recommend guidelines to higher education institutions for
•
Including climate science and climate-friendly technologies (such as renewable energy
development) in their curricula,
•
Partnering with industries to transfer climate-friendly technologies from research to
industries, and
•
Applying climate-friendly measures (conservation and energy efficiency) on campuses.
Goals: High awareness of climate change and climate-friendly behavior in students, widespread
institutional and student actions on conservation and energy efficiency, and measurable GHG
emission reduction.
Timing: Complete the plan in 1 month, and complete the development of guidelines within
another 4 months; deliver the guidelines to higher education institutions within 6 months of start.
Parties Involved: Statewide higher education institutions.
Implementation Mechanisms: Joining the American College & University Presidents Climate
Commitment (ACUPCC) will satisfy the above goals. College and university presidents signing
the Commitment are pledging to eliminate their campuses’ GHG emissions over time, which
involves
•
Completing an emissions inventory;
Appendix D-5 Page 16
Maryland Climate Action Plan Appendix D-5
•
Within 2 years, setting a target date and interim milestones for becoming climate neutral;
•
Taking immediate steps to reduce GHG emissions by choosing from a list of short-term
actions;
•
Integrating sustainability into the curriculum and making it part of the educational
experience; and
•
Making the action plan, inventory, and progress reports publicly available.
All the institutions within the University System of Maryland have agreed to join the ACUPCC.
However, most private institutions and almost all community colleges are not members of
ACUPCC yet. Establish a state goal for all higher education institutions in the state to join the
ACUPCC within 6 months. Delegate early ACUPCC adopters like Frostburg State University
and University of Maryland at Baltimore (UMBC) to coordinate a statewide effort to encourage
all higher education institutions to join ACUPCC.
Cost: Not available at this time.
5. Public Media Initiative
Organize an annual 1-day conference for regional (Maryland and neighboring states) public
media representatives on
•
The state of climate change mitigation in Maryland and the level of attainment of state GHG
reduction goals;
•
Latest climate science and observations;
•
Climate change impacts on public health, regional environment, the Chesapeake Bay, and the
economy; and
•
Applications of climate-friendly technologies.
Develop a Web site to host voluntary experts to answer climate-related questions from
journalists.
Goals: Media information consistent with accepted climate science and latest technologies; high
awareness in climate change and climate-friendly behavior in citizens.
Timing: Complete the plan in 1 month, and organize the first annual conference within
6 months.
Parties Involved: MDE and University of Maryland College of Education at College Park.
Implementation Mechanisms: Delegate the College of Journalism at College Park to plan and
organize this annual conference. Invite authoritative panelists in climate science, climate impacts
on public health, environment, industries, economy, renewable energy, and climate-friendly
technologies. These experts can be tapped from institutions such as The Johns Hopkins
University School of Public Health, Goddard Space Flight Center, National Oceanic and
Atmospheric Administration, renewable energy industry, insurance companies, and the
University of Maryland.
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Cost: Not available at this time.
6. Commercial and Homeowners Initiative
Collaborate with county departments of environment and utilities to educate and stimulate
commercial organizations (Chamber of Commerce, business owners, building industry, and
building owners and tenants), apartment tenants, and homeowners to adopt climate-friendly
measures and promote climate-friendly products. Deliver information (e.g., short seminars) on
the climate crisis and call for citizens’ actions in conservation and energy efficiency. Perform
energy and environment audits of homes and buildings and provide specific recommendations
for improvements such as
•
Lighting, indoor temperature, insulation, and hot water temperature with measurable GHG
emission reduction;
•
Reducing paper consumption (e.g., by printing multiple slides on a page and using both sides
of the paper);
•
Reducing consumption of single-use containers (e.g., drinks in plastic bottles and cans); and
•
Growing trees in place of lawns.
Goals: High awareness of climate change and climate-friendly behavior in these organizations;
measurable GHG emission reduction.
Timing: Complete the plan in 1 month, and start implementation in 3 months.
Parties Involved: State and county departments of environment, utilities, and students.
Implementation Mechanisms: Collaborate with utilities to develop informational material and
guidelines that target different audiences (e.g., commercial office buildings, homes, and
apartments). Organize members of GREEN to conduct energy audits, demonstrations, and costsaving analysis for business organizations, commercial buildings, and homes. Identify students to
do community service projects.
Cost: Not available at this time.
7. Transportation Initiative
Educate and encourage transportation operators (buses, taxis, limousines, trucks, boats) to adopt
climate-friendly measures such as
•
Planning routes and avoiding traffic congestion using global positioning system (GPS)
devices,
•
Turning off the engine while waiting, and
•
Using renewable fuels.
Goals: High awareness of climate change and climate-friendly behavior in transportation
operators; measurable GHG emission reduction.
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Timing: Complete the plan in 1 month, and start implementation in 3 months.
Parties Involved: State and county departments of transportation.
Implementation Mechanisms: Collaborate with transportation trade associations to develop
informational material and guidelines that target different audiences (e.g., truck drivers and bus
drivers). Organize members of GREEN to conduct demonstrations and cost-saving analysis.
Cost: Not available at this time.
8. Agriculture and Forestry Initiative
Develop and distribute guidelines to encourage farmers and forestry operators to practice
climate-friendly measures. Develop a Web site to host voluntary experts to answer climaterelated questions from this target audience.
Goals: High awareness in climate change and climate-friendly behavior in agriculture and
forestry, measurable GHG emission reduction, carbon capture.
Timing: Complete the plan in 1 month, and start implementation in 3 months.
Parties Involved: State and county departments of agriculture, State Cooperative Extension.
Other: Not applicable.
Implementation Mechanisms
Collaborate with the Agricultural Cooperative Extension Office (at the University of Maryland at
College Park) to develop and distribute climate-friendly guidelines.
Related Policies/Programs in Place
See above descriptions and note that education and outreach initiatives are also included with
selected policy options of other TWGs.
Type(s) of GHG Reductions
Not applicable.
Estimated GHG Reductions and Net Costs or Cost Savings
Not applicable.
Key Uncertainties
None identified.
Additional Benefits and Costs
None identified at this time.
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Maryland Climate Action Plan Appendix D-5
Feasibility Issues
Not applicable.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
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CC-6. Tax and Cap Policies
Assigned to Energy Supply Technical Work Group.
Appendix D-5 Page 21
Maryland Climate Action Plan Appendix D-5
CC-7. Review Institutional Capacity to Address Climate Change Issues, Including
Seeking Funding for Implementation of Climate Action Panel Recommendations
Policy Description
Addressing myriad challenges posed by climate change and implementing the numerous
recommendations emanating from this process will be a long-term endeavor for the State of
Maryland. To do this in a strategic and cost-effective way, it is important to review the state’s
capacity in areas such as finances, governance, authority, expertise, and technology.
Enactment of legislation and adoption of policies to mitigate GHG emissions is the essential first
step for Maryland. Additionally, it is necessary that the State create the governance and
organizational capacity to execute GHG mitigation policies, implement programs, monitor and
analyze results, and modify and update policies and programs as necessary over time.
Additional agency resources will likely be required to implement some aspects of the Maryland
climate protection strategies. The state needs to identify appropriate governance mechanisms,
agency capabilities, staffing, and funding for effective implementation and enforcement of GHG
mitigation programs. Financial mechanisms will also be needed to stimulate investment in
developing cost-effective climate solutions.
Policy Design
Goals: The governance structure requires involvement at the highest levels of the Executive
Branch. Agency organizational and staffing capacity must be adequate to oversee and carryout
comprehensive GHG mitigation programs and activities. To this end, successful state
institutional capacity might include the following elements:
•
A member of the Governor’s staff assigned as liaison for GHG policies.
•
A department secretary assigned as the lead official for coordinating GHG mitigation.
activities.
•
A sub-cabinet committee for coordination of GHG programs and activities across
departments and agencies.
•
A departmental agency that is tasked with implementing key GHG mitigation programs and
activities, serving as a coordinating point with respect to programs and activities housed in
other agencies, analyzing and evaluating the overall effectiveness of GHG mitigation efforts,
recommending changes and improvements to the efforts, and generally exercising primary
responsibility for promoting successful GHG mitigation.
•
Assignment of responsibility to all departments to consider GHG consequences when making
decisions about departmental policies, programs, and activities.
•
Full funding for the lead agency and all departments to carry out GHG responsibilities.
•
An innovative state funding mechanism to stimulate investment in cost-effective climate
change solutions.
Appendix D-5 Page 22
Maryland Climate Action Plan Appendix D-5
•
Identification of impediments that lenders place on financing climate-friendly projects.
•
A research and development (R&D) program to address pertinent GHG technical issues in
Maryland.
•
Creation of institutional capacity and R&D efforts that remain in place to carry through to
achievement of the 2050 goals.
Timing: 2008 and 2009.
Parties Involved: Governor’s Office, General Assembly, MDE, and other Executive
Departments and agencies within the state.
Other: In the office of every department secretary or agency head, a staff member must be
assigned responsibility for ensuring that GHG mitigation objectives are integrated into the
decision-making process of that department or agency.
The Department of Economic Development should be assigned responsibility for developing (for
legislative enactment) a funding mechanism to stimulate investment in cost-effective climate
change solutions.
Implementation Mechanisms
•
The institutional capability should be created as soon as possible by Executive Order and by
policy and budget legislation during 2008–2009.
•
A supplemental budget should be introduced in the 2008 session of the General Assembly
with a full funding request submitted for the FY 2009 budget cycle.
•
Legislation should be enacted in 2008 and/or 2009.
•
During 2008 the Maryland Department of Business and Economic Development (DBED)
should develop cost-effective proposals for innovative financing programs such as the
Revolving Loan Fund and loan guarantees. To assist in this effort, a public–private
partnership process should be convened to analyze potential creative funding mechanisms. It
should examine creative funding solutions such as using Regional Greenhouse Gas Initiative
(RGGI) funds, aligning investors, financing up-front costs with out-year savings, creating
incentives and other stimulus ideas, removing barriers and formulating financial policies that
promote GHG reductions.
Related Policies/Programs in Place
Existing statutes and budgets.
Type(s) of GHG Reductions
Not applicable.
Estimated GHG Reductions and Net Costs or Cost Savings
Not applicable.
Appendix D-5 Page 23
Maryland Climate Action Plan Appendix D-5
Key Uncertainties
Commitment of state officials to make funds available for all GHG reduction programs during a
period of tight budget constraints. Support of citizens for funding all programs during a period
when taxes have increased and other programs are subject to funding reductions.
Additional Benefits and Costs
None identified at this time.
Feasibility Issues
None identified.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-5 Page 24
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CC-8. Participate in Regional, Multi-State and National GHG Reduction Efforts
Policy Description
Regional approaches undertaken in collaboration with partner states or other organizations can
offer broader and more economically efficient opportunities to reduce GHG emissions across
Maryland’s economy. Maryland is already a member of the Northeast States RGGI. There are
other options for broadening Maryland’s regional, market-based GHG reduction strategies that
should be considered, such as the Clean Cars Initiative.
The Governor and the Maryland General Assembly should aggressively push for federal action
to reduce GHGs. Global warming is a problem that requires national and international action. An
aggressive approach to GHG reductions within the United States would have a significant effect
on the international reductions needed to begin reversing global warming trends. Ultimately,
many of the climate protection issues need to be addressed at the national level, and Maryland
needs to help shape those national initiatives.
Policy Design
First, work through the RGGI process to address CO2 emissions from power plants, and then
address GHG emissions from other sources.
Goals: Develop a regional cap-and-trade program for GHGs in the northeast.
Timing: June 2008 auctions and January 2009 RGGI start-up.
Parties Involved: Nine states in the RGGI.
Other: Not applicable
Implementation Mechanisms
Maryland is planning to participate in June 2008 RGGI auctions and is developing the
regulations needed to do so.
Related Policies/Programs in Place
RGGI.
Type(s) of GHG Reductions
Not applicable.
Estimated GHG Reductions and Net Costs or Cost Savings
Not applicable.
Appendix D-5 Page 25
Maryland Climate Action Plan Appendix D-5
Key Uncertainties
There are many unknowns about what types of federal programs will eventually be developed in
2009 and beyond.
Additional Benefits and Costs
It is acknowledged that regional efforts typically are more effective than individual states acting
alone.
Feasibility Issues
Feasibility depends on the nature of future federal legislation or implementation of regional
initiatives such as the RGGI.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-5 Page 26
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CC-9. Promote Economic Development Opportunities Associated With
Reducing GHG Emissions in Maryland
Policy Description
There are numerous economic and business opportunities that can arise from implementing a
comprehensive GHG reduction strategy for Maryland. A variety of job creation possibilities are
implicit in the MCCC recommendations for new approaches to transportation, land use, green
construction, recycling and reuse, and energy-efficient products and services. The state should
work with public and private entities to identify, promote, and finance these opportunities for
economic development and job creation. The state should also work to keep existing green jobs
in Maryland and prevent them from moving off-shore.
The growth of the “green industry” has the potential to benefit low- to mid-skill workers who can
no longer depend on traditional manufacturing jobs. Since green jobs require applied technical
skills, they generally pay decent wages. Unlike blue-collar jobs, many green-collar jobs require
local employees and cannot be outsourced.
Another component of economic development is the promotion of buying locally produced foods
and products. Consumer support for the local economy helps sustain Maryland businesses, jobs,
and the tax base while reducing the consumption of fuel (and carbon dioxide emissions) in the
transportation of foods and products over great distances.
Policy Design
Targeted business promotion and job creation should be a part of Maryland’s effort to mitigate
GHG emissions. Maryland should make every effort to establish itself as a leader in developing
green industry.
In Maryland, job creation opportunities include designing and constructing green buildings;
weatherizing existing buildings; retrofitting older buildings with energy efficient appliances and
technologies; expanding the construction, maintenance, and operation of common-carrier and
public transportation networks and systems; designing, constructing, and operating windmills,
biomass generators, and solar collectors; and R&D on a wide array of new practices and
technologies that can abate GHG production.
Promoting consumption of locally produced foods and goods will strengthen the Maryland
economy.
Goals: By 2012 create 2,500 new jobs tied to green industry and energy efficiency.
Timing:
2008—Maryland DBED and task force develop recommendations.
2009 and 2010—Implementation of recommendations and delivery of training programs,
financing mechanisms and loans to stimulate targeted businesses.
Appendix D-5 Page 27
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Parties Involved: Maryland DBED, county development offices, state and local chambers of
commerce, labor unions, technical and trade schools, community colleges, Job Opportunities
Task Force, Chesapeake Sustainable Business Alliance.
Implementation Mechanisms
Immediately, the Maryland DBED should be assigned responsibility for establishing a task force
to identify and promote green industry opportunities, markets, and financing mechanisms. The
task force should include economic development officials and representatives from business,
industry, labor unions, think tanks, community colleges, and other institutions that offer job
training. The task force should also include others with appropriate interest in and knowledge
about labor and industry, energy efficiency and environmental conservation, skills development,
and business finance and loan programs. The task force should promote use of public–private
partnerships and should issue its initial report and recommendations by December 31, 2008.
Maryland DBED should also initiate staff activities to
•
Emphasize a green-collar jobs component of employment development,
•
Promote job training for green-collar jobs,
•
Work with labor unions and technical schools to encourage green skills training,
•
Identify new financing mechanisms and sources of seed money to stimulate and incubate
green business development,
•
Examine the potential for economic development opportunities of promoting energy
efficiency,
•
Promote consumer choice for foods and goods produced in Maryland,
•
Identify what measures the state can take to promote greater R&D in the field and to attract
green industries.
Related Policies/Programs in Place
Maryland and county economic development programs.
Type(s) of GHG Reductions
Not applicable.
Estimated GHG Reductions and Net Costs or Cost Savings
Not applicable.
Key Uncertainties
The speed with which businesses and consumers will adopt green practices.
Appendix D-5 Page 28
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Additional Benefits and Costs
Provides training to the green-collar work force. If selected industries are forced to move offshore, then global GHG emissions may rise due to a lack of comparable controls outside the
United States.
Feasibility Issues
Sources of funds to pay for job training programs.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-5 Page 29
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CC-10. Create Capacity to Address Climate Change in an “After Peak Oil” Context
Policy Description
Oil is a finite resource, and many respected scientists and industry analysts project that we will
reach the top of the bell curve of oil production—the “peak” of oil production—soon, if we have
not already done so. Once we have passed the peak, termed after peak oil, oil will become ever
more costly. This cost will be manifest in higher prices for a barrel of crude oil as well as in the
higher environmental and health costs of extracting oil from nontraditional sources, such as tar
sands, which require far more energy to extract and will result in even greater GHG emissions.
Because our society has been constructed to depend on an endless supply of inexpensive oil, the
eventual lack of inexpensive oil will have profound impacts on all aspects of our society. In
particular, GHG emissions could greatly increase as a result of society’s reliance on the least
expensive alternative to oil, which would be coal. Moreover, projections of GHG emissions over
time have generally not factored in the increased emissions from the use of more coal or the
increased emissions from the use of nontraditional fossil fuels as the demand for energy outstrips
the supply of oil.
Any hope of successfully achieving the state’s GHG emission reduction goals will depend on
effectively avoiding the easy energy shortage solutions of relying on more coal or encouraging
the use of nontraditional fossil fuels.
Maryland should take a strategically proactive stance to deal with after peak oil by establishing a
State After Peak Oil Advisory Council of experts and stakeholders to review and evaluate all
proposed climate change and energy-related policies and legislation for their appropriateness and
sensibility in the context of shrinking supplies of affordable oil.
Policy Design
Goals: By 2010, the State of Maryland will have an After Peak Oil Advisory Council that
reviews and evaluates all proposed climate change and energy-related policies and legislation.
The recommendations of the Council should be considered and concerns should be addressed
before the proposed policy or legislation moves forward.
Timing: By 2009, the Governor will appoint a core group of Council members representing
major stakeholders and content experts. Additional Council members will be recruited by a
nonpolitical process. By 2010, the Council will have finalized their mechanism of operation.
Parties Involved: All state agencies, energy producers, consumers, environmentalists, and
health professionals.
Other: Examine both short-term and long-term aspects of this challenge.
Implementation Mechanisms
Create the Advisory Committee and make it operational.
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Related Policies/Programs in Place
None.
Type(s) of GHG Reductions
Not applicable.
Estimated GHG Reductions and Net Costs or Cost Savings
Not applicable.
Key Uncertainties
The timing of peak oil and the rate of decline once peak oil has been reached are uncertainties.
The rate of change and the price of the remaining supplies of oil will depend on many factors,
including global demand, stability of certain geopolitical regions that currently have oil supplies,
development of new technologies, and other factors that the state will have little control over.
However, planning now for how to handle these events will help the state determine reasonable
alternatives. There will be uncertainties associated with the currency exchange as it relates to the
value of the dollar.
Additional Benefits and Costs
None identified at this time.
Feasibility Issues
No barriers to feasibility except an initial need to explain the situation and the need for planning
and action on a topic that is not well known or understood by many.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-5 Page 31
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CC-11. Evaluate Climate Change Policy Options to Determine
Projected Public Health Risks/Costs/ Benefits
Policy Description
Climate change will have profound and largely negative effects on the health of Maryland’s
citizens. Dealing with these negative effects will be costly in terms of actual dollars spent for
health care by state government, private businesses, and individuals; increased burden of disease
on individuals; time off work and out of school; and lost productive years of life. However, many
strategies for reducing GHG emissions have beneficial effects on health, such as improved air
quality.
Because the potential risks to health of unmitigated climate change are so extreme and the
potential benefits to health of certain policies to reduce GHG emissions are significant, these
risks, costs, and benefits should be considered for all climate change and energy policies. It is
also conceivable that policies to reduce GHGs could have unintended negative side effects on
health.
To ensure that these risks, costs, and benefits are evaluated in a systematic manner, Maryland
should establish a State Climate Change Environmental Health and Protection Advisory Council
of content experts and stakeholders to review all climate change and energy-related policies and
legislation for health benefits and risks to all Maryland’s citizens. Careful attention should be
given to vulnerable populations such as children and older people.
Policy Design
Goals: By 2010, Maryland will have a State Climate Change Environmental Health and
Protection Advisory Council to review and evaluate all proposed climate change and energyrelated policies and legislation. The recommendations of the Council should be considered and
concerns should be addressed before the proposed policy or legislation moves forward.
Timing: By 2009, the Governor will appoint a core group of Council members representing
major stakeholders and content experts. Additional Council members will be recruited by a
nonpolitical process. By 2010, the Council will have finalized their mechanism of operation.
Parties Involved: All state agencies, energy producers, consumers, environmentalists, and
health professionals.
Other: Note that the Maryland Adaptation process is also addressing public health–related issues
associated with climate change.
Implementation Mechanisms
Create the Advisory Council and make it operational.
Related Policies/Programs in Place
Public health is also being addressed in the Adaptation process.
Appendix D-5 Page 32
Maryland Climate Action Plan Appendix D-5
Type(s) of GHG Reductions
Not applicable.
Estimated GHG Reductions and Net Costs or Cost Savings
Not applicable.
Key Uncertainties
There are many uncertainties regarding the health effects of climate change. Forming an
Advisory Group that is charged with exploring data as they become available and using its
collective expertise to protect the public’s health will likely improve outcomes.
Additional Benefits and Costs
None identified at this time.
Feasibility Issues
No barriers to feasibility.
Status of Group Approval
Approved.
Level of Group Support
Unanimous.
Barriers to Consensus
None.
Appendix D-5 Page 33
Maryland Climate Action Plan Appendix D-5
Acronyms and Abbreviations
ACUPCC
CC
CO2
DBED
FTE
GHG
GPS
GREEN
IPCC
MCCC
MDE
MMtCO2e
MSDE
R&D
RGGI
RMAN
TWG
UMBC
American College & University Presidents Climate Commitment
Cross-Cutting Issues [TWG]
carbon dioxide
[Maryland] Department of Business and Economic Development
full-time equivalent
greenhouse gas
global positioning system
Governor’s Regional Environmental Education Network
International Panel on Climate Change
Maryland Commission on Climate Change
Maryland Department of the Environment
million metric tons of carbon dioxide equivalent
Maryland State Department of Education
research and development
Regional Greenhouse Gas Initiative
Recovered Materials Advisory Notices
Technical Work Group
University of Maryland at Baltimore
Units of Measure
$/tCO2e
dollars per metric ton of carbon dioxide equivalent
Appendix D-5 Page 34
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