On February 14, 2002, President Bush announced his Global Climate Change policy,committing to reduce the greenhouse gas (GHG) intensity of the U.S. economy by18 percent by 2012. GHG intensity measures the ratio of GHG emissions to eco-

nomic output. This approach focuses on reducing the growth of GHG emissions, whilesustaining the economic growth needed to finance investment in new, clean energy tech-nologies. It sets the United States on a path to slow the growth of GHG emissions, and—as the science justifies—to stop and then reverse that growth. This chapter providesprojections for national emissions under the Global Climate Change policy.

MEETING THE PRESIDENT’S TARGET FOR REDUCING U.S. GHG INTENSITYThe President’s commitment to reducing GHG intensity represented a 4 percentage

point improvement in absolute terms over the projected U.S. Business As Usual GHG in-tensity improvement.1 This corresponded to a reduction in GHG emissions of 367 tera-grams of carbon dioxide equivalent (Tg CO2 Eq.) by 2012 relative to Business As Usualprojections, and more than 1,833 Tg CO2 Eq. in cumulative GHG reductions between2002 and 2012.2 The President’s Global Climate Change policy focuses on reducing emis-sions through technology improvements and dissemination, demand-side efficiency gains,voluntary programs with industry, and shifts to cleaner fuels.The President’s GHG intensity improvement target was developed using the best avail-

able data, including GHG projections from the U.S. Environmental Protection Agency(EPA), and GHG and economic projections from the Energy InformationAdministration(EIA), an independent statistical and analytical agency within the U.S.Department of En-ergy (DOE). These data have been updated in the present report to reflect actual GHGemissions and gross domestic product (GDP) data for the years 2002 through 2004 andprojections of both emissions and economic growth based on the latest available U.S. gov-ernment analyses from EIA and EPA.Themost recent projections published in theAnnualEnergy Outlook 2006 (AEO) (U.S. DOE/EIA 2006a) incorporate the effects of many poli-cies enacted through October 2005 and also use much higher oil prices than in previousanalyses. These updates result in lower projected energy consumption and lower CO2emission projections, as compared to previous editions of the AEO.

5 Projected GreenhouseGas EmissionsProjected GreenhouseGas Emissions

1 At the time of President Bush’s announcement in 2002, the estimated GHG intensity of the U.S. economy was 671 metrictons of carbon dioxide equivalent (t CO2 Eq.) emissions per million dollars of gross domestic product (GDP). The GHGintensity was projected to decrease to 578 t CO2 Eq. emissions per million dollars of GDP in 2012 under a Business AsUsual scenario based on existing polices and efforts—a decline of 14 percent. See <www.whitehouse.gov/news/releases/2002/02/addendum.pdf>.

2 In the metric used at the time of the President’s announcement, million metric tons of carbon equivalents (MMTCE), thiscorresponded to a reduction of more than 100 MMTCE in 2012 and more than 500 MMTCE from 2002 through 2012, overand above the Business As Usual projection. (One teragram (Tg) equals one million metric tons (Mt). Carbon dioxideequivalents can be converted to carbon equivalents by multiplying by the ratio of their atomic masses (12/44): 367 Tg CO2Eq. = 367 Mt CO2 Eq. = 100 MMTCE.)

CHAPTER 5—PROJECTED GREENHOUSE GAS EMISSIONS 61CHAPTER 5—PROJECTED GREENHOUSE GAS EMISSIONS 61

U.S. greenhouse gas intensity under Full Implementation of Climate Programs andMeasuresis projected to meet the President’s target for 2012. The GHG emission reduction in 2012 isprojected to be 407 Tg CO2 Eq. (111MMTCE), and the cumulative GHG emission reduction from2002 through 2012 is projected to be 2,225 Tg CO2 Eq. (607 MMTCE), relative to projectedemissions under Business As Usual conditions. From 2002 through 2012, GHG emissions areexpected to rise by 11 percent to 7,709 Tg CO2 Eq.

Note: One teragram (Tg) equals one million metric tons.

dustry and tax incentives on renewablesand cogeneration, are expected to furtherreduce GHG intensity by 2012. Using thelatest available data, these additional meas-ures—as outlined in Chapter 4 of this re-port—are accounted for in the FullImplementation of Climate Programs andMeasures baseline. The calculation of over-all reductions in GHG emissions due tothe federal climate programs is based onthe methodology originally presented inthe 2002 Climate Action Report (CAR)(U.S. DOS 2002).Based on actual data from 2002

through 2004 (U.S. EPA/OAP 2006c), Fig-ure 5-1 contains two projections: the GHGintensity associated with the Business AsUsual projection and the additional GHGintensity improvement resulting from theFull Implementation of Climate Programsand Measures.3 The influence of U.S. poli-

cies and measures in encouraging the de-velopment and use of cleaner, more effi-cient technologies can be seen in thereduction of GHG intensity over the pe-riod examined. Other important factorsimproving U.S.GHG intensity include thesubstitution of fuels that emit lower vol-umes of GHGs and changes in the com-position of GDP to goods and serviceswith fewer fuel inputs.

ASSUMPTIONS USED TO ESTIMATEFUTURE GREENHOUSE GASEMISSIONSEIA’s AEO 2006 provided the baseline

projection of energy-related CO2 emis-sions (U.S.DOE/EIA 2006a). This baselinepartially reflects the impact of the energy-related policies and measures discussed inChapter 4. Federal agencies with direct re-sponsibility for implementing polices andmeasures adjusted theAEO 2006 referencecase to reflect their own estimates of theexpected impacts of their programs. EPAprepared the emission projections forsource categories other than CO2 emis-sions resulting from fossil fuel consump-tion (U.S. EPA/OAP 2006b), and the U.S.Department of Agriculture (USDA) pre-pared the estimates of carbon sequestra-tion rates based on the carbonsequestration models developed for theU.S. inventory (U.S. EPA/OAP 2002). Theprojections reflect long-run trends and donot attempt to mirror short-run depar-tures from those trends.The AEO 2006 presents medium-term

scenarios of energy supply, demand, andprices through 2030 (U.S. DOE/EIA2006a), based on results from EIA’s Na-tional EnergyModeling System (NEMS), apublicly shared and well-documentedmodel. The AEO 2006 cases reflect an in-tegrated analysis of CO2 emissions, ac-counting for interaction and feedbackeffects in energymarkets and the economy.

Given Full Implementation of ClimatePrograms and Measures, and based on re-cent U.S. government forecasts that reflectcurrent economic conditions, the UnitedStates is projected to exceed the President’s18 percent goal by 2012. The gross 686 tCO2 Eq. emissions per million dollars ofGDP emitted in 2002 are projected to belowered to 559 t CO2 Eq. per million dol-lars GDP in 2012—an 18.6 percent reduc-tion in GHG intensity. Over the sameperiod from 2002 to 2012, while GHG in-tensity is declining, total gross GHG emis-sions are expected to rise by 11 percent to7,709 Tg CO2 Eq.Since 2002, the President has expanded

existing measures and has implementednew short- and long-termmeasures to re-duce GHG intensity. The short-termmeasures, such as voluntary reductions ofmethane and fluorinated gases from in-

FIGURE 5-1 Historical and Projected U.S. Greenhouse Gas Intensity

3 Some of the impact of existing national policies andprograms is already being captured in the Business AsUsual projection, as described in the following sectionof this chapter.

62 U.S. CLIMATE ACTION REPORT—200662 U.S. CLIMATE ACTION REPORT—2006

In some cases, however, the AEO uses as-sumptions about technology diffusion andadoption rates that differ from the as-sumptions used for the independent poli-cies and measures estimates in Chapter 4of this report.The reported effects of the individual

policies and measures in Chapter 4 arebased on assumptions regarding the adop-tion and impacts of eachmeasure. Becausethis approach differs from the approachimplicit in NEMS, a precise mapping tothe emission reductions from individualpolicies and measures against the aggre-gate estimates developed in the AEO casesis not possible. There are two distinct chal-lenges. First, the energy-related measuresdescribed in Chapter 4 are already partiallyreflected in the AEO results (for example,the 2003 corporate average fuel economy(CAFE) increase for light trucks). Second,the impacts reported in Chapter 4, whichare typically estimated on a stand-alonebasis, recognize fewer interactions andcompetitive effects within and among theeconomic sectors in which the individualmeasures are applied. In contrast to theNEMSmodel, which addresses interactioneffects between a comprehensive set of eco-nomic variables and policies, the modelsused in projecting the direct impacts ofChapter 4 policies andmeasures are partialequilibrium models that do not representthe economy as a whole. The Chapter 4programs and measures effects do notreflect interactions between competitive al-ternatives, which could include overlap-ping, double counting, or synergistic effects.To address these challenges, the mitigationimpacts of all policies and measures as re-ported in Chapter 4 were adjusted down-ward by 25 percent or greater4 and thensubtracted from the appropriate baseline togenerate the projections in this chapter.This adjustment was necessary to addressthe possible interactions between the poli-cies and measures as well as uncertainty inmarket responses, and the potential forsome portion of the mitigation impact ofthe policies andmeasures to already be cap-tured in the Business As Usual baseline.

The AEO 2006 projects a decliningratio of emissions to GDP by incorporat-ing the enacted regulatory and fiscal poli-cies as well as the impacts—includingcosts—of technology dissemination.5 Thedegree of technology improvement re-flected in the projections is internally gen-erated in the modeling process based onEIA’s judgment about the availability, cost,and performance of technologies, theirrates of adoption, and their potential forefficiency improvement. The assumptionsunder which the AEO 2006 estimates wereprepared include real GDP growth of 3.0percent annually from 2004 through 2030,without specific regard to interim businesscycles. Based on the AEO 2006 referencecase estimates, the average U.S. cost of im-ported crude oil in real 2000 dollars is pro-jected to be just over $41 per barrel by2020.6 To support projections of increased

demand, natural gas supplies are supple-mented with growing imports—in partic-ular, liquefied natural gas—and domesticunconventional production. The naturalgas wellhead price is projected to be $4.49per thousand cubic feet in 2020 in real2000 dollars. EIA’s projection assumes thatcurrent laws and regulations will continuein force, but it does not anticipate meas-ures not yet enacted or implemented.Table 5-1 presents several measures of theU.S. economy that generate estimates ofenergy consumption and related carbonemissions for 2020, and compares the val-ues used in the 2002 CAR to those reliedupon for this report (2006 CAR). In thisreport, 2020 real GDP is somewhat lower,energy intensity per dollar of GDP is no-tably lower, and the prices of natural gasand crude oil are higher than the levels as-sumed in the 2002 CAR.

TABLE 5-1 Comparison of the 2002 CAR and the 2006 CAR Assumptions and ModelResults for the Year 2020

Several measures of the U.S. economy generate energy consumption and related carbonemission estimates. This table compares the values used in the 2002 CAR to those relied uponfor this report.

Factors Assumptions for 2020

2002 CAR 2006 CARReal GDP (billions of 2000 dollars) 18,136 17,541Population (millions) 325 337Energy Intensity (Btus per 2000 dollar GDP) 8,712 6,877Light-Duty Vehicle Miles Traveled (billions) 3,631 3,474Energy Commodity Price/Imported Crude Oil Price

(2000 dollars/barrel) 24.68 41.24Wellhead Natural Gas (2000 dollars/1,000 cubic feet) 3.26 4.49Minemouth Coal (2000 dollars/ton) 12.79 18.52Average Price Electricity (2000 cents/kWh) 6.50 6.64Average Price Gasoline (2000 dollars/gallon) 1.40 1.90

Source: U.S. DOE/EIA 2006a.

4 The effects of the non-CO2 policies and measures in reducing emissions as presented in Chapter 4 were adjusteddownward by 25 percent to generate the projections for 2012 and 2020 presented in this chapter. The effects of the CO2policies and measures were adjusted downward by 25 percent in 2012 and by 50 percent in 2020 to reflect an increasingamount of energy efficiency reductions included in the AEO 2006 reference case.

5 A description of the policies and measures and technology assumptions embodied in the AEO projections can be foundat <www.eia.doe.gov>.

6 While current oil prices are higher, the AEO 2006 reference case does not project the recent growth trend to continue.Alternatively, the AEO 2006 high-price case projects the imported crude oil price to be $73 per barrel in 2020. If this 2007CAR analysis were to use the AEO 2006 high-price case, energy consumption would likely be lower, resulting in lowerU.S. GHG emissions than the projections presented in this chapter.

CHAPTER 5—PROJECTED GREENHOUSE GAS EMISSIONS 63CHAPTER 5—PROJECTED GREENHOUSE GAS EMISSIONS 63

on the latest edition of the AEO producedby EIA’s NEMSmodel.Using the referencecase scenario provided by EIA as a startingpoint, agencies with policy responsibilitythen adjust it to reflect their assessmentsof the additional impact of the policiesand measures, as described above. Fornon-CO2 GHGs and estimates of carbonsequestration, the inventory models de-scribed in Chapter 3 are used to projectemissions based on economic activityfrom the AEO 2006 report.

U.S. GREENHOUSE GAS EMISSIONESTIMATES: 2000–2020Projections for both the Business As

Usual baseline and the Full Implementa-tion of Climate Programs and Measures

scenario are presented in Table 5-2 for theyears 2012 and 2020, along with historicalinventory data for the years 2000, 2002,and 2004. The projections of U.S. GHGemissions described here reflect estimatesof GHG emissions considering nationaltrends in population growth, long-termeconomic growth potential, historical ratesof technology improvement, normalweather patterns, and reductions due toimplemented policies and measures.The total projected levels of U.S. green-

house gas emissions are tallied by combin-ing the CO2 contributions of energy andnonenergy activities with the non-CO2greenhouse gases (which includemethane(CH4), nitrous oxide (N2O), hydrofluoro-carbons (HFCs), perfluorocarbons

Emission projections in this report areconverted to Tg CO2 Eq., in keeping withthe reporting guidelines of the United Na-tions Framework Convention on ClimateChange (UNFCCC). To analyze the non-CO2 gases in the same framework as CO2,this report uses the 100-year global warm-ing potential (GWP) listed in the Intergov-ernmental Panel on Climate Change’sSecondAssessment Report (IPCC 1996b),to determine the relative heat-trappingability of each gas.The 2002 CAR—the analysis used by

the Bush Administration in setting its in-tensity goal—and the analysis presented inthis 2006 CAR use consistent analyticaltechniques. Baseline projections of energy-related CO2 emissions are developed based

U.S. GHG emissions from energy consumption and other anthropogenic sources are projected to grow from historic levels, although emissionsprojected with the Full Implementation of Climate Programs and Measures are lower than under the Business As Usual baseline.

HISTORICAL GHG EMISSIONS PROJECTED GHG EMISSIONSFull Implementation ofClimate Programs

GREENHOUSE GASES Business As Usual Business As Usual and Measures7

20001 20021 20041 20122 2020 20122 2020Energy-Related CO2

3 5,534 5,502 5,657 6,318 6,931 6,060 6,447Nonenergy CO2

4 331 314 331 361 396 361 396Methane 567 560 557 621 667 599 621Nitrous Oxide 416 407 387 383 399 380 397High GWP Gases 135 133 143 434 622 312 417Adjustments5 0 0 0 -3 52 -3 52

Total Gross Emissions 6,982 6,916 7,074 8,115 9,067 7,709 8,330

Sinks6 -760 -769 -780 -776 -675 -806 -709

Total Net Emissions 6,223 6,147 6,294 7,340 8,392 6,903 7,621

GROSS GHG INTENSITY

GDP (billions of 2000 dollars) $10,075 $13,793 $13,793

Gross GHG Intensity 686 588 559

2002–12 Gross GHG Intensity Reduction -14.3% -18.6%

Notes:1 Historical emissions and sinks data are from U.S. EPA/OAP 2006c. Bunker fuels and biomass combustion are not included in inventory calculations.2 2012 data are interpolated when specific data are unavailable.3 Energy-related CO2 projections are calculated from U.S. DOE/EIA 2006a CO2, with any CO2 from nonenergy sources removed.4 Nonenergy CO2 includes emissions from nonenergy fuel use and other industrial emission sources.5 Adjustments include international bunker fuels and emissions in U.S. territories.6 Sinks projections are extrapolated from U.S. EPA/OAP 2006c, with programs and measures projections from the U.S. Department of Agriculture.7 Programs and measures reductions for 2002 are presented in Chapter 4, but are not shown in this table because historical data are used to calculate the GHG intensity in 2002.Programs and measures reductions shown in this table are net of 2002 reductions for the purpose of calculating the reduction in emissions intensity from the initial implementationof the President’s policy in 2002.

TABLE 5-2 Historical and Projected U.S. Greenhouse Gas Emissions From All Sources (Tg CO2 Eq.)

64 U.S. CLIMATE ACTION REPORT—200664 U.S. CLIMATE ACTION REPORT—2006

(PFCs), and sulfur hexafluoride (SF6)),and then aggregating these using equiva-lence factors. Because some types of GHGemissions cannot be attributed to a partic-ular economic sector, the totals are re-ported in aggregate.U.S. GHG emissions from energy con-

sumption, industrial and agricultural ac-tivities, and other anthropogenic sourcescontinue to grow from 2002 levels asshown in Table 5-2. Gross emissions areprojected to rise under the impetus ofpopulation and economic growth. Underthe Business As Usual path, total gross U.S.GHG emissions would be expected to rise30 percent between 2000 and 2020. How-ever, in the Full Implementation of ClimatePrograms andMeasures case, emissions areprojected to rise from 6,982 Tg CO2 Eq. in2000 to 8,330 Tg CO2 Eq. in 2020, agrowth of 19 percent. Increased efforts touse cleaner fuels, more efficient technolo-gies, and better management methods foragriculture, forestry, mines, and landfillsare projected to keep the growth of GHGemissions below the concurrent growth ofthe U.S. economy.Moreover, emissions ofsome non-CO2 greenhouse gases—e.g.,methane and industrial gases associatedwith the production of aluminum andHCFC-22—have declined from 1990 lev-els and are projected to remain below 1990levels out through 2020.The projected emission levels with full

programs and measures for the year 2020are lower than the levels projected for thesame year in the 2002CAR.Conversely, theactual level of net emissions reported for2000 is higher than the projected value inthe 2002 CAR, mainly due to a revision ofthe available sinks. The sections that followpresent more detailed projections of spe-cific categories of total U.S.GHGemissions.

CO2 Emissions

Energy CO2 EmissionsFrom 2000 to 2020, total CO2 emis-

sions—as calculated with Full Implementa-tion of Climate Programs and Measures—are projected to increase by 17 percent to an

absolute level of 6,843 Tg CO2. The esti-mated level of U.S. CO2 emissions fromfossil fuel combustion for the year 2020 is6,447 Tg CO2. These rising absolute levelsof CO2 emissions occur against a back-ground of growing population and GDP.

Nonenergy CO2 EmissionsNonenergy sources of CO2 emissions

include natural gas production and pro-cessing, cement production, and wastehandling and combustion. These CO2emissions are subject to increasing volun-tary control, as U.S. firms use recapturetechnologies to reduce their emission lev-els. Because the underlying sources are sovaried, there is no clear projectionmethodavailable other than historical extrapola-tion. These nonenergy CO2 emissions areprojected to grow by 1 percent annually,from 331 Tg CO2 in 2000 to 396 Tg CO2in 2020. The total nonenergy CO2 emis-sion estimates in this 2006 CAR are ap-proximately two and a half times higherthan in the 2002 CAR. This is due to theinclusion of significantly more nonenergysources of CO2 emissions.

7

Non-CO2 Greenhouse Gas EmissionsEmissions other than CO2 include

(1) CH4 emissions from natural gas pro-duction and transmission, coal mine op-eration, landfills, and livestock operations;(2) N2O emissions from agriculture and,to a lesser degree, transportation; and (3)HFC, PFC, and SF6 gases from industrialactivities and, in some cases, the life cyclesof the resulting products.

MethaneWith full programs andmeasures, total

CH4 emissions are estimated to increasefrom 567 Tg CO2 Eq. in 2000 to 621 TgCO2 Eq. in 2020 (U.S. EPA/OAP 2006a),primarily due to increases in natural gasusage. The projection of total CH4 emis-sions presented in this report is lower thanthat reported in the 2002 CAR in absolute

terms. This is primarily due to an im-proved inventory accounting model forthe landfill sector, which substantially low-ered projected emissions from the sector.

Nitrous OxideN2O emissions are expected to decline

from 416 Tg CO2 Eq. in 2000 to 397 TgCO2 Eq. in 2020. The largest single sourceof these emissions is agricultural soils.Emissions of N2O from transportation arealso expected to decrease over this period(U.S. EPA/OAP 2006b).

HFCs, PFCs, and SF6Emissions of HFCs, PFCs, and SF6 are

projected to rise from 135 Tg CO2 Eq. in2000 to 417 Tg CO2 Eq. in 2020 (U.S.EPA/OAP 2006b). This increase stemslargely from the use of HFCs as replace-ments for ozone-depleting substances.Growth in the use of HFCs will allow rapidphase-out of chlorofluorocarbons (CFCs),hydrochlorofluorocarbons (HCFCs), andhalons in a number of important applica-tions where other alternatives are notavailable.HFCs are expected to be selected for

applications where they provide superiortechnical reliability or safety (low toxicityand flammability) performance. In manycases,HFCs provide equal or better energyefficiency compared to other available al-ternatives. Moreover, their acceptance inthe market will reduce long-term net en-vironmental impacts, because HFCs areexpected to replace a significant portion ofpast and current demand for CFCs andHCFCs in insulating foams, refrigerationand air-conditioning, propellants used inmetered dose inhalers, and other applica-tions. Emissions of HFCs, PFCs, and SF6from all other industrial sources are ex-pected to be reduced significantly below1990 levels, despite high growth rates ofmanufacturing in some sectors.

7 Since the 2002 CAR, the following CO2 sources have been added to the U.S. inventory: nonenergy use of fuels, iron andsteel production, ammonia production and urea application, petrochemical production, titanium dioxide production,phosphoric acid production, and ferroalloys.

CHAPTER 5—PROJECTED GREENHOUSE GAS EMISSIONS 65CHAPTER 5—PROJECTED GREENHOUSE GAS EMISSIONS 65

jected to increase by 2020, according toUSDA estimates.

KEY UNCERTAINTIES AFFECTINGPROJECTED GREENHOUSE GASEMISSIONSAny projection of future emissions is

subject to considerable uncertainty. In theshort term (less than 5 years), the key fac-tors that can increase or decrease esti-mated net emissions include unexpectedchanges in retail energy prices, shifts in thecompetitive relationship between naturalgas and coal in electricity generationmar-kets, changes in economic growth, abnor-mal winter or summer temperatures, andimperfect forecastingmethods.Additionalfactors may influence emission rates overthe longer term, notably technology devel-opments, shifts in the composition of eco-nomic activity, and changes ingovernment policies.

Technology DevelopmentForecasts of net U.S. emissions of

GHGs take into consideration likely im-provements in technology over time. Forexample, technology-based energy-efficiency gains, which have contributed toreductions in U.S. energy intensity formore than 30 years, are expected to con-tinue. However, while long-term trends intechnology are often predictable, the spe-cific areas in which significant technologyimprovements will occur and the specificnew technologies that will become domi-nant in commercial markets are highlyuncertain, especially over the long term.Unexpected scientific and technical

breakthroughs can cause changes in eco-nomic activities, with dramatic effects onpatterns of energy production and use.Such breakthroughs could enable theUnited States to considerably reduce fu-ture GHG emissions. While U.S. govern-ment and private support of research anddevelopment efforts can accelerate the rate

of technology change, the effect of suchsupport on specific technology develop-ments is unpredictable.The AEO 2006 Business As Usual

baseline referenced in this report assumescontinuing improvement of energy-consuming and -producing technologies,consistent with historical trends. In theAEO 2006 high technology growth case,energy use in 2020 is projected to be 5 per-cent lower than in the reference case, whileCO2 emissions are projected to be 5 per-cent (or 385 Tg) lower than in the refer-ence case.

Regulatory or Statutory ChangesThe current forecast of U.S.GHG emis-

sions does not include the effects of anylegislative or regulatory action that was notfinalized before October 31, 2005. Conse-quently, the forecast does not include anyincrease in the stringency of equipmentefficiency standards, even though exist-ing law requires DOE to periodicallystrengthen its existing standards and issuenew standards for other products. Simi-larly, the forecast does not assume any fu-ture increase in new building or auto fueleconomy standards, even though such in-creases are either required by law or underconsideration in various states. For exam-ple, while the AEO 2006 includes theCAFE standards for light trucks covering2005–07 and finalized in 2003, the morerecent standards covering 2008–11 werenot finalized in time to be incorporated.

Energy PricesThe relationship between energy prices

and emissions is complex. Lower energyprices generally reduce the incentive forenergy conservation and tend to encour-age increased energy use and related emis-sions. However, a reduction in the price ofnatural gas relative to other fuels could en-courage fuel switching that could, in turn,reduce carbon emissions. Alternatively,

Carbon SequestrationU.S. forests and agricultural soils ac-

count for a significant removal of CO2from the atmosphere, representing 11 per-cent of total gross U.S. CO2 emissions in2000. This net removal—or sequestra-tion—is related to a continuation of trendsin land use and land management ob-served throughout the 1990s in theforestry and agriculture sectors, includingthe reforestation and regeneration of pre-viously cleared forests and expanded useof no-till and reduced-tillage systems inagriculture.While significant in quantity, the car-

bon sequestration that occurred in U.S.forests and agricultural soils prior to 2000occurred in the absence of government in-centives to sequester carbon. Since 2000,the U.S. government has implemented anumber of innovations in its farm sectorconservation programs to encourage pri-vate landowners to voluntarily adopt landuses and management practices that se-quester additional carbon in forest systemsand agricultural soils. Examples include aprogram to plant 203,250 hectares(500,000 acres) of bottomland hardwoodforest (primarily in the Mississippi RiverValley) and revised ranking criteria for pri-oritizing lands offered for enrollment inUSDA’s Environmental Quality IncentivesProgram and Conservation Reserve Pro-gram. These revised criteria allow federalprogram managers to give additionalweight to bids that include the implemen-tation of activities and/or practices that se-quester carbon.Table 5-2 shows both recent historical

data and projections for 2012 and 2020 forannual carbon sequestration (i.e., sinks) inU.S. forests and agricultural soils.8 Seques-tration associated with forests includescarbon stored in the forest ecosystem,wood products in use, and wood productsin landfills. Annual carbon sequestrationdue to innovative farm conservation pro-grams (e.g., encouraging landowners toadopt carbon-sequestering land usesand/or management practices) is pro-

8 The projections for carbon sequestration are lower than the corresponding projections in the 2002 CAR due to revisedinventory methods. An explanation of the revision has been provided to the UNFCCC in the 2002 edition of the Inventoryof U.S. Greenhouse Gas Emissions and Sinks (U.S. EPA/OAP 2002), available at <http://yosemite.epa.gov/oar/globalwarming.nsf/content/ResourceCenterPublicationsGHGEmissionsUSEmissionsInventory2002.html>.

66 U.S. CLIMATE ACTION REPORT—200666 U.S. CLIMATE ACTION REPORT—2006

coal could become more competitive vis-à-vis natural gas, which could increaseemissions from the power sector.TheAEO 2006 projections reflect a shift

in oil market assumptions, with projectedoil prices substantially higher than in pre-vious editions (U.S. DOE/EIA 2006a).However energy and oil price projectionsare subject to significant uncertainty. De-creases in delivered energy prices could re-sult from increased competition in theelectric utility sector or improved technol-ogy. On the other hand, energy price in-creases could result from the faster thanexpected depletion of oil and gas re-sources, or from political or other disrup-tions in oil-producing countries.

Economic GrowthEconomic growth increases the future

demand for energy services, such as vehiclemiles traveled, amount of lighted and ven-tilated space, and process heat used in in-

dustrial production.However, growth alsostimulates capital investment and reducesthe average age of the capital stock, in-creasing its average energy efficiency. Theenergy-service demand and energy-efficiency effects of economic growth workin opposing directions.However, the effecton service demand is the stronger of thetwo, so that levels of primary energy useare positively correlated with the size of theeconomy.In addition to the reference case cited

previously, the AEO 2006 provides highand low economic growth cases. The high-growth case raises the GDP growth rate by0.5 percentage points to 3.5 percent, whilethe low-growth case reduces the GDPgrowth rate by 0.6 percentage points to 2.4percent.• In the high-growth case, 2020 energyuse is 5 percent higher than in the refer-ence case. By 2020, carbon emissions

from energy use are 423 Tg CO2 (6.1percent) greater than in the referencecase.• In the low-growth case, 2020 energy useis 6 percent lower than in the referencecase.By 2020, carbon emissions from en-ergy use are 399 Tg CO2 (5.8 percent)lower than in the reference case.

WeatherEnergy use for heating and cooling is di-

rectly responsive to weather variation. TheAEO forecast of CO2 emissions assumes30-year average values for population-weighted heating and cooling degree-days.Unlike other sources of uncertainty, forwhich deviations between assumed and ac-tual trends may follow a persistent courseover time, the effect of weather on energyuse and emissions in any particular year islargely independent from year to year.