Completed February 2015
The Climate Subcommittee of the Minnesota Environmental Quality Board (EQB) lead a project to evaluate a variety of strategies for their potential to grow our economy and reduce greenhouse gases that contribute to climate change, an initiative known as Climate Solutions and Economic Opportunities (CSEO).
The goal of the project was to provide multiple opportunities for stakeholders to share ideas, information and perspectives that helped to inform decisions about potential near-term (2015–2030) actions to reduce greenhouse gas emissions. Environmental Initiative worked on behalf of the Subcommittee to engage stakeholders in this effort. A series of large informational events and smaller working sessions were held between November 2014 and February 2015.
Background and Goals
Minnesota is widely considered a national leader when it comes to climate and energy policy, particularly thanks to the Next Generation Energy Act of 2007, which included aggressive goals and associated milestones to reduce statewide greenhouse gas emissions across all sectors.
Since passage of the legislation, Minnesota has made progress in reducing emissions, particularly in key sectors like electricity generation and use, yet reaching the long-term goal of an 80 percent reduction in greenhouse gas emissions from 2005 levels will require significant additional action.
In order to meet those goals, the Climate Subcommittee of the Environmental Quality Board (EQB) led a process to inform the public and policy makers as they look for opportunities that will simultaneously grow our economy and reduce greenhouse gases.
CLIMATE SOLUTIONS AND ECONOMIC OPPORTUNITIES ANALYSIS
Following passage of the Next Generation Energy Act, stakeholders engaged in a collaborative process known as the Minnesota Climate Change Advisory Group (MCCAG), facilitated by the Center for Climate Strategies (CCS), to compile and evaluate a set of recommended policy options to reduce greenhouse gas emissions. While some of the MCCAG recommendations and policy options have been implemented in full or in part, many have yet to be translated into action.
In the first phase of the Climate Solutions and Economic Opportunities (CSEO) process, the EQB Climate Subcommittee—made up of the Pollution Control Agency, the Department of Commerce, the Department of Health and citizen members—worked with CCS and experts from across state government to analyze an updated set of Minnesota-specific strategies. These strategies cut across economic sectors, including electric supply; commercial, residential and industrial demand-side energy management; transportation and land use; agriculture; forestry; and water and waste management. The analysis looks at each strategy’s:
- Potential to reduce greenhouse gases,
- Projected societal costs and savings and
- Projected indirect effects on the economy
The analysis was designed through a process of interagency collaboration and public input, including an EQB Climate Subcommittee meeting in which the subcommittee solicited new ideas from stakeholders that were not examined in 2008. Options were considered and narrowed based on data limitations and the expertise of CCS and agency staff. Some of the strategies that were analyzed are in statute or are taken from publicly vetted state agency plans. However, some of the options had not had previous examination and the analysis aims to provide more information that will inform ongoing discussions.
Engagement of stakeholders is critical to the development of greenhouse gas emissions reduction activities that are both politically viable and poised for successful implementation. Following completion of the CSEO analysis, Environmental Initiative convened a set of meetings in which the EQB and CCS will share the results and gather feedback. While it is not expected that all of the options being explored will be formally proposed, the intention is to provide multiple opportunities for stakeholders to share ideas, information and perspectives on what it would look like to implement the strategies analyzed in CSEO. For each of the proposed emissions reduction opportunities, stakeholder discussions explored:
- The environmental, health, economic and social justice dimensions,
- The role of local, state, and federal governments; the role of the private sector; and the role of individual citizens in implementation,
- Opportunities for partnership across sectors and
- Any barriers that may exist to implementation, including needs for further research and development.
A series of large informational events and smaller working sessions to obtain input and discuss emissions reduction options were held between November 2014 and February 2015.
The Climate Solutions and Economic Opportunities (CSEO) analysis was part of an evaluation of policy options from across Minnesota’s economic sectors for their potential to grow our economy and to reduce greenhouse gases that contribute to climate change. Some of the strategies that were analyzed are in statute or are taken from publicly vetted state agency plans. However, some of the options had not had previous examination and the analysis aims to provide more information that will inform ongoing discussions.
Not all of the policy options analyzed will be proposed or implemented, but the analysis, along with associated stakeholder input, will inform policy makers with timely and relevant information.
You can learn more about the selection, design and principles for quantification of policy options in a technical memo from the Center for Climate Strategies, who performed the analysis. You can also access a copy of the presentation on the analysis and initial results.
Policy options were categorized based on impacted economic sector:
- Energy Supply
- Demand Side Energy Efficiency
- Forestry Management
- Land Use and Transportation
- Waste and Water
Legislation passed in 2013 required an investigation into the impacts of and enhancements necessary to support higher levels of renewable energy use in Minnesota, starting with increasing the Renewable Energy Standard (RES) to 40 percent by 2030, and to higher proportions thereafter (MN Laws 2013, Chapter 85 HF 729, Article 12, Sections 1, 4, and 7). State legislation also sets the goal that by 2030, ten percent of the retail electric sales in Minnesota be generated by solar energy (MN Stat. §216B.1691).
Of the 24 utility-owned coal-fired boilers operating in Minnesota, most have been retrofitted to meet Clean Air Act requirements (1758 MWs), repowered with natural gas (776 MWs) or retired or scheduled for retirement by 2020 (734 MWs). The objective of this policy is to establish coal-fired boiler repowering or retirement options for the largest CO2-emitting electric generating units in Minnesota.
DEMAND SIDE ENERGY EFFICIENCY IN HOMES, COMMERCIAL BUILDINGS AND INDUSTRIAL ACTIVITIES
Combined heat and power (CHP) systems reduce fossil fuel use and greenhouse gas emissions by recovering heat that is normally wasted in the power production process. This policy option would leverage existing regulatory frameworks and develop new standards to be included in existing policies.
Operating and maintaining buildings involves the consumption of large amounts of energy. The objective of this policy is to provide a timeline, with multiple requirements, that would get all Minnesota buildings to net zero energy use by 2030. Policy elements include early compliance with SB2030 for all new or renovated public facilities; the development of appendix building code chapters, consistent with SB2030 guidelines, that can be adopted by local jurisdictions for all buildings within their limits; and incentives and education for private sector building owners to comply early with SB2030.
The Next Generation Energy Act of 2007 established an Energy Efficiency Resource Standard through the existing Conservation Improvement Program (CIP) for electric and natural gas utilities in Minnesota, including investor-owned utilities, electric cooperatives, and municipal utilities (see Minn. Stat. §216B.241 subd 1c.). The objective of this policy option is to increase those natural gas and electric utility efficiency requirements.
Minnesota’s Renewable Energy Standard has played a critical role in driving renewable electricity deployment over the past several years. However, this standard only addresses electricity. Significant opportunity exists to transition heating load to include in-state renewable energy resources, resulting in reduced greenhouse gas emissions. The objective of this policy option is to set a statewide goal for implementation of thermal renewable technologies in order to promote adequate and diverse thermal energy supplies, at a reasonable cost, with minimal impact on the environment. Co-benefits of this policy option include increased energy security and affordable energy access for Minnesotans.
Nitrogen is essential for plant growth. However, due to its mobility in the environment, it contributes greenhouse gases to the atmosphere primarily in the form of nitrous oxide. This policy option addresses organic and inorganic nitrogen through nitrogen fertilizer management.
Soils can both store and release carbon, depending upon natural conditions and soil management practices. This policy option would support the implementation of practices to enhance the storage of carbon in agricultural soils through the use of cover crops and legumes or hayland.
This policy option includes actions to incentivize the production of advanced biofuels and their use within the state, which goes toward meeting the liquid petroleum replacement goals in Minn. Stat. 239.7911 (replace gasoline with renewable biofuel in the entire fuel supply: 14 percent by 2015, 18 percent by 2017, 25 percent by 2020, and 30 percent by 2025). It also seeks to address issues such as federal vehicle fuel economy requirements and infrastructure needs for higher biofuel blends.
Peatlands store 37 percent of all carbon stored in the state. Warmer, drier conditions and increased fire risk pose a threat to this storage. Although understanding the greenhouse gas dynamics of Minnesota’s various wetlands requires additional study, we can limit greenhouse gas emissions from peatlands by restoring hydrological regimes on peatlands that are altered by ditching, draining or road crossings, and by targeting farmed peatlands for conservation programs.
Minnesota’s public and private forests sequester a significant portion of its CO2 emissions and vast amounts of carbon are stored in forest biomass, soils and wood products. Minnesota’s forests can also provide a renewable, low-carbon energy source and expand the potential for long-term carbon storage in building products. This policy option would advance these goals and make forest ecosystems more resilient to changes in climate by accelerating pre-commercial and commercial thinning.
Trees in urban and community forests reduce greenhouse gas emissions by storing and sequestering carbon and by reducing energy use for heating and cooling. Strengthening tree canopies through planting and ongoing maintenance will provide many environmental and health benefits in addition to climate change mitigation.
Landscape-scale disturbances (e.g. windthrows, fires, pest and disease outbreaks that cover tens to hundreds of thousands of acres) are becoming more frequent. Dedicated resources for responding to these disturbances on state, county and private lands quickly will restore carbon sequestration and other ecosystem services (e.g. water quality maintenance, erosion control) and minimize fire risk and other negative impacts.
This policy would use existing easement and restoration programs to maintain and restore permanent vegetative cover. Conservation easements maintain perennial vegetative cover (prairie, wetlands, forest, hay and pasture), which helps sustain high levels of carbon sequestration. Easements also support restoration efforts re-establish perennial vegetation to increase carbon sequestration. Such efforts would provide many water quality and other co-benefits in addition to climate change mitigation.
LAND USE AND TRANSPORTATION
The transportation pricing policy options look at several related policies designed to provide reliable funding for roads and bridges in the state, reduce per capita driving and encourage the purchase of more fuel-efficient vehicles.
This policy option assumes that three-quarters of new residential development and nonresidential development in the metro region will locate in medium- or high-density areas with compact urban form. This strategy would reduce vehicle miles traveled and resulting greenhouse gas emissions from transportation; lower greenhouse gas emissions through compact building efficiencies; and avoid greenhouse gas emissions by economizing on infrastructure needs (for example, road building). A suite of supporting policies and actions at the state and local levels would maximize the potential of this strategy. The impact of this policy is relatively slow-moving but long-lasting, and carries many co-benefits such as more active living, greater variety of lifestyle choices and alignment of development with demographic changes.
The Metropolitan Council is currently updating the region’s long-range transportation plan, known as the 2040 Transportation Policy Plan (2040 TPP). This plan is multimodal in character, addressing highway, transit, transitways, pedestrian facilities, bicycle facilities, freight and aviation. Of the numerous objectives in the plan, those that are particularly relevant to CSEO call for reducing transportation-related air emissions; additional MnPASS managed lanes; additional transitways and arterial bus rapid transit lines; increased use of transit, bicycling, and walking; and increased availability of multimodal travel options.
Electric Vehicles/Zero Emission Vehicle Standard
Electric vehicles have zero emissions from the tailpipe and are four times more energy efficient than gas-powered vehicles. They can be powered by wind or solar and electricity generated off-peak to advance both cleaner transportation and electricity production. Ten states are jointly implementing zero emission vehicle (ZEV) standards, through the use of sales quotas, in order to meet greenhouse gas reduction goals by increasing ZEV use. This policy option assumes that Minnesota would join these states in this national regulatory effort to increase use of electric vehicles in place of gas-powered vehicles.
Publicly-owned treatment works (POTWs) plants are among the largest energy consumers in Minnesota. To reduce energy consumption, this policy option would require a 25 percent reduction in energy purchases by 2025. The energy reduction goal would be technology-agnostic and represent composite energy savings for a POTW (or group of POTWs with a single owner). Financial incentives would be available, including but not limited to:
- Changes to state law and rules related to Public Facilities Authority (PFA)-administered state revolving loan funds and wastewater infrastructure funds,
- The Minnesota Department of Commerce obtaining federal funding (or state bond funds) and
- Alternative Conservation Improvement Program (CIP) funding being made available to POTWs.
Using economic, partnership, policy, planning and regulatory tools, this policy option would bring total recycling rates (that is, separation and utilization of metals, glass, plastic, paper, food and yard waste) up from the current statewide recycling rate of 50 percent (in 2012) to a 75 percent rate by 2030. Using the same tools listed above, it would also cut average per-capita waste generation by three percent every year after 2020 through reduction and reuse.
Technical reference documents associated with the Climate Solutions and Economic Opportunities (CSEO) analysis can be found below.
In the first phase of the CSEO process the Minnesota Environmental Quality Board Climate Subcommittee worked with the Center for Climate Strategies (CCS) and experts from across state government to analyze an updated set of Minnesota-specific strategies to reduce greenhouse gas (GHG) emissions. These strategies cut across economic sectors, including: electric supply; commercial, residential and industrial demand-side energy management; transportation and land use; agriculture; forestry; and water and waste management. The analysis will look at each strategy’s:
- Potential to reduce greenhouse gases
- Projected societal costs and savings
- Projected indirect effects on the economy
CENTER FOR CLIMATE STRATEGIES ANALYSIS (METHODS AND RESULTS)
- Technical memo: Selection, design and principles for quantification of policy options (PDF)»
- Center for Climate Strategies: Presentation of initial results – Nov 20, 2014 (PDF) »
- Results of the CCS Analysis by Sector (PDF) »
BUSINESS AS USUAL (BAU) PROJECTIONS OF GREENHOUSE GAS EMISSIONS
Business as Usual GHG Projections Technical Support Documents:
- Minnesota Statewide Greenhouse Gas Forecast – Mar 31, 2015 Draft (PDF) »
- Minnesota Commercial Sector Greenhouse Gas Forecast – Jan 20, 2015 Draft (PDF) »
- Minnesota Electric Power Sector Greenhouse Gas Forecast – Jan 20, 2015 Draft (PDF) »
- Minnesota Industrial Sector Greenhouse Gas Forecast – Jan 20, 2015 Draft (PDF) »
- Minnesota Residential Sector Greenhouse Gas Forecast – Jan 20, 2015 Draft (PDF) »
- Minnesota Transportation Sector Greenhouse Gas Forecast – Jan 20, 2015 Draft (PDF) »
- Minnesota Feedlot/Livestock Sector Greenhouse Gas Forecast – Feb 1, 2015 Draft (PDF) »
- Minnesota Waste Management Sector Greenhouse Gas Forecast – Mar 17, 2015 Draft (PDF) »