Energy Policy Solutions Helps Policymakers Cut Pollution and Save Money

Many policymakers understand the importance of reducing greenhouse gas emissions and other dangerous pollutants, but they face a bewildering variety of policy options that may—or may not—help achieve this goal. How useful is a carbon tax? What about vehicle fuel economy standards? Are subsidies for wind and solar energy cost-effective? How valuable is it to promote research and development?

Policymakers have limited time and political capital, so they need a way to sort through dozens of energy and environmental policies to find the ones that will do the most to cut pollutant emissions, and which will do so at the lowest cost or greatest savings. There has never been a reliable, unbiased way to quantify and assess how numerous policies can work—not just on their own, but as they interact with one another.

For two years, Energy Innovation LLC worked to build a tool that does just this, and on October 20, the Energy Policy Solutions project was publicly launched. Our goal is to provide quantitative, objective information about the emissions reductions and financial costs and savings that would result from combinations of different energy policies. The centerpiece of the project is the Energy Policy Simulator, a tool that allows you to design policy packages and see, immediately, their effects on the environment, the economy, energy supply, and more.

This model is no black box: we want everyone to be able to see how it works, check its data, and even make changes, should they so desire. For this reason, we have made the model free for anyone to download, and we have populated it with public, carefully-cited U.S. data. Along with the model, we’ve created an online interface that visualizes the model’s findings and makes it easy for anyone to make their own policy packages and observe their impacts without needing to download the full model.

We’ve made a brief video that provides an overview of the online interface for the Energy Policy Simulator. You can check it out below:

Project origins and internationalization

While smart energy policy for the United States is a crucial task, it is important that other countries put in place policies that lead them to affordable, safe, clean, and reliable energy as well. The Energy Policy Simulator was originally developed for China’s central government, to help select policies that could meet China’s emissions reduction goals, particularly in the 13th Five-Year Plan (covering years 2016-2020). Energy Innovation LLC worked with two research institutes inside the Chinese government: the National Center for Climate Change Strategy and International Cooperation (NCSC) and the Energy Research Institute (ERI), both of which provided much of the input data used in the Chinese version of the model. This version was finished and handed over to NCSC and ERI in May 2015. As we did for the U.S., we also developed a website and online interface for the China model (with limited information and capabilities, due to the proprietary nature of the input data).

The model can be adapted to simulate energy policies in any country by replacing the relevant input data. In the future, we hope that our tool can be useful to governments or organizations from other countries beyond the U.S. and China, currently the world’s top two greenhouse gas emitters. Climate change is a global problem, and we need people from around the world to help solve it.

Findings

We have already used the Energy Policy Simulator to design several policy packages, including packages that achieve the EPA’s Clean Power Plan targets and the U.S. 2025 emissions target. Our analysis shows that meeting the Clean Power Plan is a relatively easy task and can save the U.S. $40 billion by 2030. Meeting the 2025 emissions target, however, will be a more difficult task. But the economic and social benefits can be enormous with the right set of policies in place. We have also looked at the cost of delaying policy action until 2020, rather than starting in 2016. By waiting four more years to act on climate change, the U.S. will end up emitting billions more metric tons of cumulative CO2e and spend an additional $400 billion in trying to meet its emissions targets.

We hope you’ll give the Energy Policy Simulator a try! With a package of smart energy and emissions policies, the U.S. can realize its goals for a clean, affordable, and reliable energy system.