Kevin Rennert’s research while affiliated with Resources for the Future and other places

Emissions reductions may be met with relatively small costs

The Inflation Reduction Act subsidizes the deployment of clean electricity, hydrogen production, and carbon capture and storage, which could enable additional actions by other federal, state, and local policymakers to reduce emissions. Power plant rules finalized by the Environmental Protection Agency (EPA) in 2024 are one such example of complementary policies. The rules establish emissions intensity standards, not technology mandates, meaning power plant owners can choose from a range of technologies and control options provided that emissions standards are met. This flexibility makes electricity systems modeling important to understand the potential effects of these regulations. We report below a multi-model analysis of the EPA power plant rules that can provide timely information, including for other countries and states, on emissions impacts, policy design for electricity decarbonization, power sector investments and retirements, cost impacts, and load growth. We also discuss related technical, political, and legal uncertainties.

The Inflation Reduction Act (IRA) is regarded as the most prominent piece of federal climate legislation in the U.S. thus far. This paper investigates potential impacts of IRA on the power sector, which is the focus of many core IRA provisions. We summarize a multi-model comparison of IRA to identify robust findings and variation in power sector investments, emissions, and costs across 11 models of the U.S. energy system and electricity sector. Our results project that IRA incentives accelerate the deployment of low-emitting capacity, increasing average annual additions by up to 3.2 times current levels through 2035. CO2 emissions reductions from electricity generation across models range from 47-83% below 2005 in 2030 (68% average) and 66-87% in 2035 (78% average). Our higher clean electricity deployment and lower emissions under IRA, compared with earlier U.S. modeling, change the baseline for future policymaking and analysis. IRA helps to bring projected U.S. power sector and economy-wide emissions closer to near-term climate targets; however, no models indicate that these targets will be met with IRA alone, which suggests that additional policies, incentives, and private sector actions are needed.

If goals set under the Paris Agreement are met, the world may hold warming well below 2 C; however, parties are not on track to deliver these commitments, increasing focus on policy implementation to close the gap between ambition and action. Recently, the US government passed its most prominent piece of climate legislation to date, the Inflation Reduction Act of 2022 (IRA), designed to invest in a wide range of programs that, among other provisions, incentivize clean energy and carbon management, encourage electrification and efficiency measures, reduce methane emissions, promote domestic supply chains, and address environmental justice concerns. IRA's scope and complexity make modeling important to understand impacts on emissions and energy systems. We leverage results from nine independent, state-of-the-art models to examine potential implications of key IRA provisions, showing economy wide emissions reductions between 43-48% below 2005 by 2035.

Economy-wide emissions drop 43 to 48% below 2005 levels by 2035 with accelerated clean energy deployment.

The social cost of carbon dioxide (SC-CO2) measures the monetized value of the damages to society caused by an incremental metric tonne of CO2 emissions and is a key metric informing climate policy. Used by governments and other decision-makers in benefit-cost analysis for over a decade, SC-CO2 estimates draw on climate science, economics, demography, and other disciplines. However, a 2017 report by the US National Academies of Sciences, Engineering, and Medicine1 (NASEM) highlighted that current SC-CO2 estimates no longer reflect the latest research. The report provided a series of recommendations for improving the scientific basis, transparency, and uncertainty characterization of SC-CO2 estimates. Here we show that improved probabilistic socioeconomic projections, climate models, damage functions, and discounting methods that collectively reflect theoretically consistent valuation of risk, substantially increase estimates of the SC-CO2. Our preferred mean SC-CO2 estimate is $185 per tonne of CO2 ($44-413/t-CO2: 5-95% range, 2020 US dollars) at a near-term risk-free discount rate of 2 percent, a value 3.6-times higher than the US government’s current value of $51/t-CO2. Our estimates incorporate updated scientific understanding throughout all components of SC-CO2 estimation in the new open-source GIVE model, in a manner fully responsive to the near-term NASEM recommendations. Our higher SC-CO2 values, compared to estimates currently used in policy evaluation, substantially increase the estimated benefits of greenhouse gas mitigation and thereby increase the expected net benefits of more stringent climate policies.

Many studies project that climate change is expected to cause a significant number of excess deaths. Yet, in integrated assessment models that determine the social cost of carbon (SCC), human mortality impacts do not reflect the latest scientific understanding. We address this issue by estimating country-level mortality damage functions for temperature-related mortality with global spatial coverage. We rely on projections from the most comprehensive published study in the epidemiology literature of future temperature impacts on mortality (Gasparrini et al. in Lancet Planet Health 1:e360–e367, 2017), which estimated changes in heat- and cold-related mortality for 23 countries over the twenty-first century. We model variation in these mortality projections as a function of baseline climate, future temperature change, and income variables and then project future changes in mortality for every country. We find significant spatial heterogeneity in projected mortality impacts, with hotter and poorer places more adversely affected than colder and richer places. In the absence of income-based adaptation, the global mortality rate in 2080–2099 is expected to increase by 1.8% [95% CI 0.8–2.8%] under a lower-emissions RCP 4.5 scenario and by 6.2% [95% CI 2.5–10.0%] in the very high-emissions RCP 8.5 scenario relative to 2001–2020. When the reduced sensitivity to heat associated with rising incomes, such as greater ability to invest in air conditioning, is accounted for, the expected end-of-century increase in the global mortality rate is 1.1% [95% CI 0.4–1.9%] in RCP 4.5 and 4.2% [95% CI 1.8–6.7%] in RCP 8.5. In addition, we compare recent estimates of climate-change induced excess mortality from diarrheal disease, malaria and dengue fever in 2030 and 2050 with current estimates used in SCC calculations and show these are likely underestimated in current SCC estimates, but are also small compared to more direct temperature effects.