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The decarbonization gap that's splitting Colorado Democrats

A new analysis offers criticism — and potential solutions — in the battle between an incentives-based approach and demanding mandatory emissions limits.

Jeff St. John
Jeff St. John
5 min read
The decarbonization gap that's splitting Colorado Democrats

What’s the best way for Colorado to hit its goals of cutting greenhouse gas emissions in half by 2030 and by 90 percent by 2050? Can voluntary actions and incentives alone get it there? Or does the state need enforceable mandates and emissions caps, not just for its energy sector, but for transportation, industry and buildings as well?

These questions are causing a political schism in the state, pitting Democratic Governor Jared Polis, who has endorsed the incentives and voluntary actions route, against state Democratic lawmakers and environmental groups supporting Senate Bill 200. The legislation would give the Colorado Air Quality Control Commission power to set and enforce emissions caps across economic sectors.

Supporters of the bill point to multiple studies showing that the state’s current policies can’t get it close to achieving its carbon-reduction targets. Polis, who campaigned on a clean energy platform and signed into law the 2019 Climate Action Plan setting the state’s targets, has threatened to veto SB 200 on the grounds that it gives “dictatorial” powers to a board that doesn’t answer to voters. As an alternative, Polis has promised to enact policies that lower emissions without strict mandates that could harm the economy.

Now a new report adds to data indicating that Colorado’s existing policies aren’t likely to achieve the state’s goals, while making the case that stronger actions could yield significant economic benefits. Perhaps more importantly, it’s based on a data analysis tool that lawmakers and advocates can use to model which combinations of policies stand a chance of reaching those goals — and do so quickly enough to inform debate in this year’s legislative session.

Friday’s release of modeling from Energy Innovation and RMI’s Energy Policy Simulator tool shows that stronger policies in the domains of electricity, transportation, buildings, industry, land and agriculture could generate more than 20,000 new jobs and $3.5 billion in economic activity per year by 2030.

The analysis is built on an “open-source, transparent model that uses government data to test how different policies can cut greenhouse gas emissions,” Robbie Orvis, Energy Innovation’s director of energy policy design and co-author of Friday’s report, said in a Monday email. “This includes the ability to evaluate policies that are part of the state’s existing [greenhouse gas] roadmap or to evaluate how strong policies adopted by other states would help lower emissions if adopted in Colorado.”

Right now, the analysis indicates that current plans from the Polis administration, while better than a "business-as-usual" forecast, won’t achieve the kind of deep emissions cuts that will be needed to hit the targets it set in 2019.

Those plans are laid out in Colorado’s Greenhouse Gas Pollution Reduction Roadmap released in January. That report, commissioned by Polis and conducted by state agencies, finds that “previous and ongoing” policy would only achieve about half the emissions reductions by 2030 that are called for in the state’s goals.

To help close the gap, the roadmap lays out a series of policies, including some that Polis has said he will pursue in legislation in lieu of SB 200’s emissions-caps approach. Those include: pressing the state’s major utilities to follow through on existing pledges to cut carbon emissions by 80 percent from 2005 levels by 2030; public investments and incentives for electric vehicles and greenhouse gas pollution standards for transportation planning; new building codes and regulated utility mandates to support the switch from natural gas to electric buildings; and new regulations to reduce carbon and methane emissions from the state’s oil and gas sector.

But according to Friday’s report, this mix of "legislation, utility commitments, and executive action in 2019 and 2020” still falls short of setting Colorado on a path to reach a level of greenhouse gas emissions consistent with limiting global warming to 1.5 degrees Celsius over the coming century. That’s the target set by the United Nations' Intergovernmental Panel on Climate Change and endorsed by President Joe Biden’s commitment under the Paris climate accord to cut nationwide carbon emissions in half by 2030.

Image credit: Energy Innovation and RMI

Dueling models, diverse policies

Similar findings have come from a host of studies cited by the Environmental Defense Fund, Colorado Sierra Club, Western Resource Advocates, Earthjustice, Conservation Colorado and other groups pushing for more mandatory restrictions on emissions.

Just what the ideal mix policies should be, and how they’ll interact with each other to reach Colorado’s goals in a way that shares cost burdens and environmental benefits equitably across the state, is open for debate, however.

According to a September 2020 report from Evolved Energy, GridLab, the Sierra Club and the Natural Resources Defense Council, hitting the state’s goals will require at least 90 percent reductions in energy-sector emissions, an even faster shift to electric vehicles and buildings, and cutting not just methane emissions but overall production levels for oil and gas.

Similar in-depth modeling from consultancy E3 has informed the state’s greenhouse-gas roadmap. In a statement to E&E News, Will Toor, executive director of the Colorado Energy Office, defended the state’s analysis against criticisms from SB 200 backers and questioned whether Energy Innovation and RMI had taken into account the full range of actions being proposed by Gov. Polis.

A key question in this debate is whether incentive-based regulations can reliably achieve the same level of emissions cuts as mandates. Energy Innovation and RMI’s model found that big reductions in emissions from Colorado utilities under a proposed state clean energy standard, for instance, were at risk of being offset by increased emissions from its industrial and building sectors, which lack similar commitments.

Setting a 2030 deadline for sales of electric-only models of new building equipment, including heat pumps and induction stoves to replace their natural-gas-fueled alternatives, could push those sectors’ emissions downward, the model indicates. Aggressive actions to stop methane leakage from oil and gas wells and pipelines, which may be responsible for half the greenhouse gas emissions of Colorado’s industrial sector, are also critical, as is electrifying as many industrial systems as possible, and then converting the rest to run on green hydrogen.

The report also proposes mandating that all light-duty vehicles be electric by 2035 and all freight trucks by 2045 in order to drive more significant reductions in transportation emissions. That’s compared to the state’s GHG Roadmap scenario, which models an EV sales standard that reaches 43 percent of light-duty vehicle sales and 5 percent of heavy-duty vehicle sales by 2030.

Linking specific policies to their emissions, health and economic impacts is a complex matter, as is forecasting the combined effect of market-based incentives, voluntary industry actions and government mandates. Energy Innovation and RMI’s report emphasizes that its Energy Policy Simulator doesn’t claim to replace the more “granular analytical approaches” used by more in-depth models.

But it can provide highly useful findings at a far lower cost and with far faster results than those more computing-intensive analyses, Kyle Clark-Sutton, manager of RMI’s State Policy and Analysis Initiative and a co-author of Friday’s report, said in a Monday interview. (Disclosure: RMI is a financial backer of Canary Media.)

“The energy policy simulator tool has been used, and is currently being used, by a number of states to evaluate climate policies” including Nevada, and is being beta-tested in many others, he said. While it’s not a replacement for more complex models, “the pace of climate change today necessitates moving faster than those workcycles allow us to.”

(Article image courtesy of Kait Herzog)

decarbonizationColoradocarbon emissionsclimate changeutilitiesclimate legislation

Jeff St. John

Jeff St. John covers technology, economic and regulatory issues influencing the global transition to low-carbon energy. He is former managing editor and senior grid edge editor of Greentech Media.