Energy Efficiency, Economic Development and Reduced Emissions: An Action Plan for Minnesota

This report presents a clear plan of action for improving Minnesota's energy and economic efficiency. Unlike most energy plans, the Action Plan focuses on the economic benefits of the recommended actions and views the environmental benefits as a direct outcome of greater efficiency. Recommended in the Action Plan is a comprehensive set of 61 strategies utilizing market incentives, regulatory changes, and education to improve energy efficiency and reduce greenhouse gas emissions in each energy using sector of Minnesota. Implementation measures and potential funding sources are identified for each strategy, and information on the potential savings in greenhouse gas emissions are provided. Reduction strategies address emissions of carbon dioxide (C02), methane (CH4), and nitrous oxide (N20). Nineteen measures in this comprehensive plan are highlighted as priority action strategies for which rapid and aggressive implementation is recommended to policy makers.

This is the second of two reports prepared through the Increasing Energy Efficiency and Reducing CO2 Project, funded by the Legislative Commission on Minnesota Resources. The first report, Inventory and Projections of Minnesota Greenhouse Gas Emissions, identifies the major contributors to greenhouse gas emissions in Minnesota, from 1990 to 2010. There is much misinformation about climate change and the greenhouse effect, but actually the greenhouse effect is well understood. Greenhouse gases in the atmosphere have an important influence on the climate of our planet. It has been estimated that at current growth rates in the emissions ofgreenhouse gases, we can expect a doubling of the pre-industrial concentration of CO2 by about 2030. Most of the general circulation models show an increase in annual average global temperature of 1.5 to 4.5 degrees Celsius (2.7 to 8.1 degrees Fahrenheit), with a best estimate of2.5 degrees. Despite the uncertainty that exists as to the degree and timing of the climate change that may be experienced, the potentially serious risk of catastrophic consequences indicated by scientific theories provides cause enough for action. The global climate change issue continues to gain importance on the international and national agenda and calls for action are heightening even at the local levels. For example, the Minneapolis and Saint Paul City Councils adopted a CO2 reduction plan in December, 1993.

Energy is crucial to Minnesota's economy. When used inefficiently, the full potential of our economy cannot be realized. The strategies in this Action Plan focus on increasing the productivity of many different sectors and areas of Minnesota's economy by cost-effectively increasing the efficiency with which we produce and use energy. Although the strategies are designed to be aggressive and make significant reductions in emissions, they do not come at the expense of economic growth. The strategies are intended to achieve significant reductions using actions that provide leverage against the potentially devastating effects of climate change, and at the same time are beneficial even if these effects do not fully materialize. Existing barriers and needs to increase energy efficiency were addressed in the development of the strategies. Coordination of the goals of this project with ongoing major decision-making processes in Minnesota present an opportunity to make significant reductions cost-effectively.

Emissions of the greenhouse gases mentioned above are projected to increase by over 39 percent between 1990 and 2010. To address this growth, recommended strategies cover the industrial, commercial, residential, agricultural, energy producers/distributors/service providers, forestry and transportation sectors. Through aggressive implementation of the strategies presented in this Action Plan, it is estimated that over 36 million metric tons in potential CO2 equivalent savings can be achieved. This is a 25 percent reduction from the estimated 2010 emissions of 144 million metric tons, and almost 4 percent above the estimated 1990 emissions of 104 million metric tons.

The industrial/commercial strategies exhibit the greatest potential to reduce emissions, contributing 36 percent to the total Action Plan reductions. Second at 30 percent is the energy producers/distributors/service providers sector. Commercial/residential contributes 16 percent, whicle agriculture and forestry make up 2 percent of reductions. All of these sectors contribute to reductions at a share close to their contribution to overall emissions. The exception is the transportation sector. While transportation is responsible for about 32 percent of Minnesota's C02 emissions, it contributes only 16 percent to the Action Plan reduction total.

Despite the aggressive strategies this plan recommends, more focused efforts to develop strategies must be made in the transportation sector. If automobile travel (85 percent of vehicle miles traveled) could be stabilized at expected 2000 levels, an additional 3.5 million metric tons could be saved over current Action Plan reduction estimates, which would stabilize Minnesota's emissions at 1990 levels. This level of reductions would be difficult for Minnesota to achieve on its own, and would require action at the national level. Increases in fuel efficiency would also make reductions easier to achieve in this sector. Again, national action is necessary to achieve these types of reductions.

An attempt has been made in this report, using available examples and studies, to quantify a range of some of the potential economic benefits to Minnesota of implementing these strategies. Based on studies conducted by Economic Research Associates (1993) and the Union of Concerned Scientists (1993), the savings from implementation of strategies related to electric energy efficiency and renewable energy alone would create between 8,200 and 15,500 additional permanent jobs in Minnesota by 2010. The creation ofthese jobs can go a long way toward not only strengthening Minnesota's economy, but local and regional development as well.

Full implementation of the Action Plan is critical to Minnesota's efforts to reduce growth in greenhouse gas emissions, but no strategy should be implemented without considering its linkage to the others, and its role in addressing overall emissions. Implementation efforts are already underway for some of these strategies. However, others will require anywhere from a little push, to a great deal of persistence and advocacy to be successfully implemented. The success of the Action Plan depends on the cooperation ofthe many different sectors and interests that make up Minnesota's private and public institutions as well as its citizens. In addition to the implementation of the action strategies recommended in this report, the State should establish an organized implementation and monitoring system to promote and evaluate its success. An annual or biennial inventory of greenhouse gas emissions should be undertaken through this effort, as well as coordination and tracking of implementation efforts.

Energy efficiency is good energy policy, good economic policy, and good environmental policy, and is the cornerstone ofour response to the threat of climate change. 

Full Report (PDF)
Energy Efficiency, Economic Development and Reduced Emissions: An Action Plan for Minnesota