Stronger Clean Energy Policies, Carbon Trading Could Yield Significant Economic Rewards for Minnesota
DULUTH (February 23, 2016)—New analysis released today by the Union of Concerned Scientists (UCS) shows that strengthening Minnesota’s clean energy policies, together with a national carbon emissions trading program, provides a cost-effective way for the state to cut global warming emissions, deliver significant health and economic benefits to residents, and comply with the Environmental Protection Agency’s Clean Power Plan.
Earlier this month, the U.S. Supreme Court issued a stay regarding implementation of the Clean Power Plan until the rule’s content is evaluated. Acknowledging the benefits and economic incentives that come from investing in cleaner energy sources, Governor Dayton and local utilities like Xcel Energy have wisely said they will move forward with crafting the state’s compliance plan. This will ensure Minnesota maintains its strong momentum transitioning to low-carbon energy while waiting for the Clean Power Plan to be legally resolved.
“The Supreme Court’s procedural decision doesn’t change the reality of climate change or the urgent need to curb our use of carbon-producing energy sources,” said Sam Gomberg, energy analyst at UCS. “Our analysis confirms investing more in renewables and energy efficiency to cut carbon emissions makes strong economic sense.”
The UCS analysis found that participation in a national carbon emissions trading program, along with strengthening the state’s energy efficiency and renewable energy standards would:
- Reduce the typical Minnesota household’s electricity bill 7 percent in 2030 for an annual savings of more than $50 per household;
- Lower overall electricity expenditures every year through 2030, saving Minnesota more than $745 million between 2016 and 2030;
- Lead to more than $1 billion in additional energy efficiency improvements to benefit Minnesota consumers;
- Generate an average of $205 million annually in revenue from the sale of carbon allowances that could be invested in Minnesota’s economy;
- Spur more than 4,500 megawatts of new wind and solar capacity in Minnesota by 2030 to generate more than $4.6 billion in total new capital investment;
- Yield health and economic benefits worth an estimated $111 million cumulatively through 2030 through avoided carbon dioxide, sulfur dioxide, and nitrogen oxide pollution.
“Minnesota’s long history of clean energy leadership has well-positioned the state to take the next step towards a truly diversified electricity portfolio that prioritizes energy efficiency and renewables,” said Gomberg. “Minnesota has the opportunity to enact policies that drive billions in capital investments, reduce consumer costs, and improve public health. That’s something everyone should be able to support.”
While more than 20 percent of the state’s energy generation came from renewables in 2014, much of the state’s potential remains untapped. According to a recent U.S. Department of Energy study, Minnesota has the technical potential to generate 10,000 terawatt-hours of electricity from its renewable energy resources, or the equivalent of 180 times the state’s current electricity generation.
Based on the analysis, UCS recommends that Minnesota continue to move forward with developing a strong carbon reduction plan that includes strengthening the state’s energy efficiency and renewable energy standards and establishing a carbon trading program with the auctioning of carbon allowances.
Today, the Minnesota Pollution Control Agency is hosting a listening session to discuss the Clean Power Plan. UCS experts and members will also be in attendance and available to the media. The event will be at the University of Minnesota Duluth’s Engineering Building starting at 5:30 p.m.
Click here to view a related blog post on this analysis by Sam Gomberg.