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PAYNE INSTITUTE COMMENTARY SERIES: STUDENT VIEWPOINT

Colorado Emission Reduction Targets: Lofty Goals or Reachable Targets? By Anna Evans

December 12, 2019

Abstract With trifecta control of the Colorado state government, Democrats passed fourteen new bills in May

of 2019 regarding energy efficiency, electrification of transportation, utility, and climate policy. One

notable bill is House Bill 19-1261, the Climate Action Plan, which focuses on reduction of

greenhouse gas emissions. The goal is statewide reduction of greenhouse gas emissions of 26% by

2025, 50% by 2030, and 90% by 2050 relative to 2005 emissions (General Assembly, 2019). The

policy action was catalyzed by the threat of climate change and its potential effects on the people of

Colorado. This paper is an evaluation of Colorado’s relative position in setting emission reduction

targets, an analysis of Colorado’s potential reduction strategies, and looking specifically at the effects

that improved insulation or the adoption of LED lighting in residential homes would have on

residential emissions.

Keywords Colorado, climate change, emission reduction, policy

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1. Introduction Colorado’s “HB 19-1261: Climate Action Plan to Reduce Pollution” was one of fourteen emissions

and environmentally related bills during the 2019 legislative session. Colorado’s Renewable Energy

Standard (2004) and Clean Air Clean Jobs Act (2010) focused on decreasing emission from utility

companies, but this is the first broad effort to reduce emissions from all sectors.

A catalyst of this broad environmental effort stems from the of the awareness of climate change.

The Pew Research Center states that 59% of Americans say they have been affected by climate

change in some way and that 44% of Americans think that dealing with climate change should be a

top priority for the government (Funk, 2019). Societal attention shifts the policy process (Weible,

2019) and Colorado is a prime example of this effect on policy priorities. As HB 19-1261 bill

declares, the 2019 bills were spurred by climate change and its noticeable effects on Coloradans:

“Colorado is already experiencing harmful climate impacts, including declining snowpack,

prolonged drought, more extreme heat, elevated wildfire risk and risk to first responders,

widespread beetle infestation decimating forests, increased risk of vector-borne diseases,

more frequent and severe flooding, more severe ground-level ozone pollution causing

respiratory damage and loss of life, decreased economic activity from outdoor recreation

and agriculture, and diminished quality of life” (General Assembly, 2019).

Colorado’s greenhouse gas (GHG) emission reduction targets are based on the Paris Agreement

goals (General Assembly, 2019) and are in line with the IPCC report’s emission reduction

recommendations to stay below a 1.5°C global temperature increase (“Summary for Policymakers,”

2018). The goals are not based on technological, societal, or economic factors, but are the estimated

reductions needed to mitigate the effects of climate change.

With the Colorado legislature putting the emission reductions goals into a bill, the next step is for

the Air Quality Control Commission (AQCC) to implement rulemaking to reach the targets. The

first step is to model the energy, emissions, costs, and economics of potential ways to reduce

Colorado’s emissions. The AQCC has contracted this technoeconomic modeling work to Energy +

Environmental Economics, Inc (E3). By September 30, 2019, E3 will have a roadmap with

scenarios of how Colorado could reduce its emissions (Toor, 2019). When the roadmap is

complete, rulemaking will be implemented by the AQCC.

The actual implementation of the emission reduction policy is not outlined in the bill and the plans

are unknown at the time of this report. The lack of plans poses a danger of having goals but no

action to make them a reality. With this danger in mind, this paper looks at Colorado’s temporal

ranking in emission reduction targets, analyzes the proposed strategies and their effect on emissions,

and calculates potential emission impacts from upgrades in the housing sector.

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2. Colorado Relative to Other Locations: Methodology, Results, Discussion

2.1 Methodology HB 19-1261 is Colorado’s first declaration of emission reduction goals. To visually understand

where Colorado fits in the overall movement of these declarations in the US and globally, see Figure

5: “Greenhouse Gas Emission Reduction Targets” in Appendix A (“U.S. State Greenhouse Gas

Emissions Targets,” 2019; “Paris,” 2017). The figure shows a timeline of emission reduction goals

from the base emission year of 1990 to the final goals in 2050. For goals that have already passed or

are coming in 2020, an X in the box indicates the goal was not met or is likely to not be met, while a

darker border indicates the goal was met or is likely to be met.

Shown in the figure are the twenty states plus the District of Colombia that have made emission

reduction goals. Of the 192 countries that made intended nationally determined contributions

(INDC) targets for the 2015 Paris Agreement, the top eight polluting countries that account for 2/3

of global GHG emissions, are also shown (“Paris 2015,” 2017).

Figure 5 provides an idea of the relative goals set and shows which have been met, it does not show

quantitative amounts of each reduction. The actual amount of reduction depends on historical

emission levels and the chosen base year. The older a base year, the more difficult the emission

reductions are because of the smaller starting emissions level of the base year.

2.2 Results & Discussion The “Greenhouse Gas Emission Reduction Targets” table in Appendix A highlights 3 main points:

1. Relative to other locations, Colorado is not at the forefront of enacting emission reduction goals Colorado was the 19th state to make emission reduction goals. The first goal was made

by New Hampshire in 2001 and California had three iterations of goals between 2005

and 2018 before Colorado had one (“U.S. State Greenhouse Gas Emissions Targets,”

2019). The majority of US states have not made any reduction goals and the federal

government is in the process of withdrawing from the Paris Agreement, so although not

a leader, Colorado is making progress where the majority of others are not.

Colorado is the 23rd largest emitter of GHGs in the US with 16 of the top 23 emitting

states not having any emission reduction targets (“State-Level,” 2019), making it a leader

in emission reduction relative to most of the US.

2. There is a lack of goals between 2030 and 2050 to bridge the time between the reduction targets.

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Having a large gap of emission goals shows the uncertainty of the emission reduction

process. Colorado Representative Chris Hansen mentioned in his unofficial lecture to

the Energy Policy class at the Colorado School of Mines that Colorado would make

additional emission reduction targets as the 2030 goal is approached (Hansen, Chris,

2019). This indicates that as time progresses, the policies will be reactive to future

situations as opposed to making concrete plans ahead of time. Being flexible and

focused on the short term in an area that needs mandatory reductions and long-term

thinking is dangerous. A key towards meeting the emission goals in 2050 for Colorado is

to bridge the gap between the 2030 goal and the 2050 goal by creating paths to meet the

2050 goal.

3. The emission reduction goals go out to 2050, but not beyond. This could be due to the IPCC goals not extending beyond 2050 and setting this

precedent, the difficulty of projecting climate or emission related analysis beyond 2050,

or it simply provides a nice round number. With the goals being set with the intention

of figuring out how to reach them, as opposed to figuring out what can be done and

then setting goals accordingly, any year could have been picked in place of 2050.

The “Greenhouse Gas Emission Reduction Targets” figure highlights the relative goals and shortcomings of global emission reduction goals, but future work could include normalizing the base years. This will inform the actual level of emission reductions each goal represents.

3. Modeling Colorado’s Potential GHG Reductions: Methodology, Results, Discussion

3.1 Methodology Colorado has emission reduction goals, but at the time of this paper, the plans for actual

implementation are undetermined. As of 2018, emissions were declining in Colorado, but are

projected by the AQCC to level out again by 2030 based on business as usual energy use (Heald,

2019). The green line in Figure 1 shows what path Colorado emissions would need to follow to

reach the HB 19-1261 policy goals.

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Figure 1: Colorado historical, business as usual, and goal GHG emissions as of 2018. (Heald, 2019; “General Assembly,” 2019).

Tracking the green line will require 90% emission reductions by 2050. To understand potential

reductions, the policy model created by Energy Innovation: Policy and Technology, LLC was used

(“Policy Solutions,” 2019). The policy levers pulled were based on Colorado’s unofficial strategies

for pollution reduction from the AQCC, Colorado Energy Office (CEO), and Xcel Energy,

Denver’s largest utility.

Will Toor of the CEO spoke at the November 21, 2019 AQCC meeting and stated that meeting the

2025 26% reduction goal will depend on coal closure timing. Then, the closures of coal plants and

well as emission reduction in the oil and gas sector and greater electrification of transportation

would enable Colorado to reach the half of the 2030 emission reduction target. The rest of the

reductions must come from 1/3 reduction in all other emitting sectors (Will Toor, Greenhouse Gas,

2019). For the 2050 goals, Will Toor states that 100% electrification of heating will be a key, plus

Xcel Energy has set a goal to be 100% renewable energy by 2050 (“A Carbon Free Future, 2019)

which will reduce emissions in the electricity production sector.

A 2015 baseline of which sectors produce the most GHG emissions can be seen in Figure 2. Based

on Will Toor and the AQCC’s unofficial reduction strategies, they recognized and are focusing on

the major emission sectors: electricity production and transportation.

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20

40

60

80

100

120

140

160

1980 1990 2000 2010 2020 2030 2040 2050 2060

MIL

LIO

N M

ETR

IC T

ON

S C

O2

E

Year

Colorado GHG Emissions (2018)

Actual Goal Projected

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Figure 2: Colorado GHG emissions by sector in 2015 (Heald, 2019)

3.2 Results & Discussion The model by Energy Innovation of the potential effect various policies have on GHG emissions

shows that Colorado will not meet its 2025, 2030, or 2050 targets based on the current AQCC,

CEO, and Xcel Energy implementation strategies (Figure 3).

The inputs into the model to represent the strategies were optimistic with the following (“Policy Solutions, 2019):

500MW of electricity production from coal retired per year

8% grid scale electricity storage

20% subsidy of EVs

100 chargers/100,000 people (increased from 20 chargers/100,000 people)

50% reduction in EV charging concern Matching the policies and the inputs to the model are inexact, the exact implementation plan is

unknown, and the model is not specifically made for Colorado and its characteristics, but the gap in

projection and goal emission reductions is substantial. Based on this model, Colorado will be at a

33% GHG reduction in 2050, as opposed to its goal of 90%.

Electricity Production

28%

Transportation22%

Heating20%

Natural Gas and Oil

12%

Agriculture9%

Mining2%

Industrial4%

Waste3%

COLORADO GHG EMISSIONS BY SECTOR (2015)

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Figure 3: Model of GHG reduction based on potential Colorado policy implementations (“Policy Solutions,” 2019)

For Colorado to reach its goals, large scale changes to emissions will be required and quickly. The

longer the transition is delayed, the steeper Colorado will have to bend the emissions curve in the

future. Based on the model, additional levers that would significantly reduce emissions are a carbon

tax on electricity generation, a carbon tax on transportation fuels, electrifying residential heating.

Carbon taxes on residential and commercial buildings, reducing subsidies on coal, and research and

development have a much smaller effect on GHG emissions in the model.

With the transportation sector projected to account for 33% of Colorado’s state CO2 emissions by

2020 (“Programs,” 2018), electrification of transportation will be a key. In the 14 new Colorado bills

there are four that address the electrification of the transportation sector: SB 19-077 Public Utility

Implementation of an Electric Vehicle Infrastructure Program (“Electric Motor Vehicles Public

Utility Services”, 2019), HB 19-1159 Modify Innovative Motor Vehicle Income Tax Credits

(“Modify,” 2019), HB 19-1198 Powers and Duties of the EV Grant Fund (“Electric Vehicle Grant

Fund,” 2019), and HB 19-1298 Electric Motor Vehicle Charging Station Parking (“Electric Motor

Vehicle Charging Station Parking,” 2019). Also, SB 19-181 addresses emissions in the oil and gas

sector, though no specific reduction goals are given (“Protect Public Welfare Oil And Gas

Operations”, 2019).

Colorado will need to do more than address coal fired power plants and electrify transportation.

There are a variety of sector contributing to Colorado’s emissions and each will need to be reduced

to meet the goals. The next section analyzed potential emission reductions from the residential

building sector.

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4. Emission Reduction Potential of Residential Building Upgrades: Methodology, Results, Discussion

4.1 Methodology Energy Innovation’s model showed that Colorado will have to make extreme changes in every

sector to reach its emission reduction goals. One sector that is attributed to 23% of total Colorado

energy consumption (“Total Energy Consumption,” 2017) and attributed with over 20% of

Colorado GHG emissions is the residential building sector (Heald, 2019).

Figure 4: CO2e emissions consumption by sector for Colorado in 2015. 22% of emissions are attributed to residential buildings (Heald, 2019)

Residential Buildings Residential buildings consume two types of energy: primary and secondary. Primary consumption is

the direct use of an energy source, such as burning natural gas to heat a home. Secondary

consumption is indirect use of energy, such as consuming electricity that was produced by burning

natural gas at a power plant. 2/3 of GHG emissions attributed to the residential sector are from

secondary consumption, where the GHGs were produced at electricity generating facilities (“Sources

of Greenhouse Gas Emissions,” 2019).

Reducing Emissions: To reduce emissions in the residential sector, there are four options. The options are not mutually

exclusive and can be implemented simultaneously:

1) Upgrade housing efficiency

Takes advantage of the large inefficiencies residential buildings have

This strategy decreases the energy needed and therefore the emissions created.

22%

19%

27%

33%

COLORADO CO2E EMISSIONS BY SECTOR (2015)

Residential Commercial Industrial Transportation

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Upgrading to a more efficient home reduces energy demand, without sacrificing the

functionality of the home. Increasing housing efficiency can range from adding better

quality insulation and more energy efficient windows to buying a more efficient air

conditioner or installing LED lighting. These home upgrades are made independently by

homeowners and can be incentivized by utility companies or cities. Many of these upgrades

are cost effective with short payback periods, but there are some market barriers to

implementation.

A reduction in emissions assumes the grid has lower emissions than the fossil fuels would

have burned in the home, with the overall emission reduction depending on how the

electricity is being generated. This is where strategy number 3 is important.

2) Switch to cleaner energy sources used to heat residential building air and water

Takes advantage of the large inefficiencies of heating air/water with fossil fuels

This strategy changes the source of heat from fossil fuels and therefore the emissions created.

Reducing direct emissions from heating can be accomplished by switching from a fuel oil heater to an electric heat pump powered or from a natural gas water heater to an electric water heater. Like other home efficiency upgrades, these upgrades are made independently by homeowners and can be incentivized by utility companies or cities. Many of these upgrades are cost effective with short payback periods, but there are some market barriers to implementation. Like strategy number 1, this emission reduction strategy depends on how the electricity is being generated. It assumes the grid has lower emissions than the fossil fuels would have burned in the home, which is where strategy number 3 is important.

3) Switch to cleaner electrical power generating sources

Takes advantage of the technology advancements making renewable energy sources cheaper than fossil fuels to generate electricity

This strategy does not decrease the energy produced, but decreases the emissions created.

For indirect energy use, switching to cleaner sources of electricity production involve

changing the energy sources of the grid. In Colorado, the portfolio for Denver’s utility

provider Xcel Energy is 45% coal fired, 35% natural gas, 18% non-hydroelectric renewables,

and 3% hydroelectric (“Colorado Energy Estimates,” 2019). Xcel Energy has set a goal to

change these percentages to be 100% renewable energy by 2050 (“A Carbon Free Future,

2018). Changing electricity sources away from fossil fuels will decrease emission rates for

the residential sector.

Moving away from coal to less carbon intensive energy sources is the most effective way to

reduce CO2 emissions from electricity generation

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4) Shift the time that certain loads demand energy

Takes advantage of the varying amounts of emissions created by electricity production throughout the day.

This strategy does not decrease the energy produced, but decreases the emissions created.

Another strategy that has become technologically viable is demand response. Rather than

generating electricity supply to match demand, the demand is adjusted to match the supply.

Shifting this demand to parts of the day where the demand is met by cleaner electricity

generating sources would reduce emissions.

The first step in all of these emission reduction strategies is to quantify the change in emissions that

housing upgrades will have on overall Colorado emissions. The model below focuses on two

separate upgrades focused on emission reduction strategy #1: improved insulation and switching to

LED lighting

Housing Upgrades Model:

The National Renewable Energy Laboratory (NREL) has developed software called ResStock that

creates physics-based energy models of homes to represent the entire U.S. residential stock

(“ResStock Analysis Tool,” 2019). ResStock looks at US housing characteristic data such as

geometry, location, insulation, lighting loads, window size, type of air conditioner, if the home has a

pool, number of refrigerators, and other energy related home characteristics. ResStock takes these

housing characteristics probability distributions to create a model of the single-family homes in the

US. The house models are then put into an energy modeling software and a variety of outputs can

be calculated, including building energy demand, energy costs, and heating loads.

Using ResStock, a simulation was run where 100% of Colorado homes added R-13 drill-and-fill

insulation in their homes, making the heating envelope of the homes more efficient. The effects on

natural gas consumption for heating and its corresponding effects on emissions produced were

calculated.

A second simulation was run with 100% of Colorado homes switching to LED lighting, decreasing

the electricity consumption for lighting. The effects on natural gas consumption for heating and its

corresponding effects on emissions produced were calculated.

4.2 Results & Discussion

Simulation one upgraded all homes to better insulation, R-13. This upgrade resulted in a 28%

decrease in energy use (btu) and a corresponding 711,000 kg reduction in greenhouse gases. In

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2018, Colorado emitted 127 million kg of greenhouse gases, so the state emission reduction with

better building insulation would be 0.56%.

Simulation two upgraded all homes to LED lighting. This upgrade resulted in a 10% decrease in

energy use (kWh) and a corresponding 1.3 million kg reduction in greenhouse gases. Relative to

2018 Colorado GHG emission levels, this is a 1.04% decrease in state emissions.

Both simulations assume instant, 100% adoption of the upgrades. Actual implementation will take

more time and be less than 100% but ResStock shows that to reduce the emission from heating,

larger upgrades will need to take place. These minimal emission reductions highlight the need for a

diverse set of reduction strategies. Incremental 1% reductions from upgrades plus the other three

residential emission reduction strategies will be needed for actual implementation of the policy

reduction goals.

A crucial step for implementation is balancing potential upgrades with the economic cost of

upgrades. Adding insulation or LED lighting to homes does reduce emissions, but the cost to

Coloradans must be balanced. Other policy levers, such as subsidies or tax credits could be pulled,

but finding the lowest cost and largest impact upgrades will have the least complicated transition.

Future work is needed to analyze other residential building upgrades, the implementation costs, and

the impacts on emissions.

5. Conclusion Colorado has adopted policies to set emission reduction goals for 2025, 2030, and 2050. The

policies do not have specific strategies to reach these goals, but Colorado is expected to have a

roadmap to follow by next September. In addition to the proposed strategies, the social, economic,

and cultural challenges will need to be addressed. During a phone call with an advisor of Colorado

Speaker of the House KC Becker, the advisor stated that the hardest challenge will be the social

changes for the 2030 and 2050 emission reductions. Habits and norms will have to be changed and

though technology may smooth this transition, Coloradans will have to make life changes as well

(Speaker KC Becker, 2019). Her words highlight the complexity of this emission reduction

challenge.

In Colorado, the emission reduction goals are set and the next step is road mapping potential

implementation paths. Based on modeling and the magnitude of the GHG emissions issue,

emission reductions will be vital in each sector and Colorado’s roadmap from 2020 to 2050 needs to

reflect this. With whatever path it chooses, Colorado is officially one of the places testing emission

reduction design and working to push the frontier of emission reduction and climate change

mitigation. The more strategies are tried and learned from in this unknown space, the better for the

climate of Colorado and the world.

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“Electric Motor Vehicles Public Utility Services.” Electric Motor Vehicles Public Utility Services | Colorado General Assembly, 3 May 2019, leg.colorado.gov/bills/sb19-077.

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“Protect Public Welfare Oil And Gas Operations.” Protect Public Welfare Oil And Gas Operations | Colorado General Assembly, 3 May 2019, leg.colorado.gov/bills/sb19-077.

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Appendix A:

Greenhouse Gas Emission Reduction Targets

Figure 5: Emission reduction goals 1990-2050 in the US and for the top 8 polluting countries in the world. (“U.S. State Greenhouse Gas Emissions Targets,” 2019; “Paris 2015,” 2017)

Legend:

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ABOUT THE AUTHOR Anna Evans, PhD Student, Advanced Energy Systems After graduating from the Colorado School of Mines with a degree in mechanical engineering, Anna went and played professional soccer in Sweden for two years. Returning from overseas, she worked in Colorado as a forensic engineer reconstructing vehicle accidents. She enjoyed solving the cases and helping those that had been harmed, but wanted to work in something that would have an impact on a larger scale. Anna is now at the Colorado School of Mines in the Advanced Energy Systems PhD program to help grow renewable energy and make society more sustainable. The focus of her PhD research is still being determined, but she is looking into circular economies, renewable energy in developing countries, or smart cities as potential areas of work.

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ABOUT THE PAYNE INSTITUTE The mission of the Payne Institute at Colorado School of Mines is to provide world-class scientific insights, helping to inform and shape public policy on earth resources, energy, and environment. The Institute was established with an endowment from Jim and Arlene Payne, and seeks to link the strong scientific and engineering research and expertise at Mines with issues related to public policy and national security. The Payne Institute Commentary Series offers independent insights and research on a wide range of topics related to energy, natural resources, and environmental policy. The series accommodates three categories namely: Viewpoints, Essays, and Working Papers.

For more information, visit PayneInstitute.MINES.edu.

DISCLAIMER: The opinions, beliefs, and viewpoints expressed in this article are solely those of the author and do not reflect the opinions, beliefs, viewpoints, or official policies of the Payne Institute or the Colorado School of Mines.