Energy and Climate in New Jersey
Energy Sustainability Project Final Report
October 2007 NJSSI Board of Governors honorary co-chairs: James J. Florio — Former Governor, State of New Jersey Christine Todd Whitman — Former Governor, State of New Jersey board members: Dr. Clinton J. Andrews (Co-Chair) — Director of the Urban Planning and Policy Development Program, E.J. Bloustein School of Planning and Public Policy, Rutgers University Ms. Dorothy P. Bowers — Retired, former Vice President of Environmental and Safety Policy for Merck & Co. Mr. John Cusack — Executive Director of the NJ Higher Education Partnership for Sustainability (NJHEPS) Ms. Jeanne M. Fox— President of the NJ Board of Public Utilities The Rev. Fletcher Harper — Executive Director, GreenFaith Mr. George Hawkins — Executive Director of New Jersey Future Ms. Lisa Jackson — Commissioner, NJ Department of Environmental Protection Ms. Jane M. Kenny — Partner, The Whitman Strategy Group Mr. Kris Kolluri — Commissioner, NJ Department of Transportation Dr. Mark G. Robson — Chair of the Department of Environmental and Occupational Health, Associate Dean, UMDNJ School of Public Health Dr. Joseph J. Seneca — Chair, NJ Council of Economic Advisors; University Professor, E.J. Bloustein School of Planning and Public Policy, Rutgers University Dr. Daniel Watts (Co-Chair) — Director of the York Center for Sustainability, New Jersey Institute of Technology Mr. Scott A. Weiner — CEO, NJ Schools Construction Corporation Mr. Tom Wright — Executive VP, Regional Plan Association
NJSSI Board of Advisors Dr. Henry Coleman — Associate Professor and Director of the Center for Government Services, E.J. Bloustein School of Planning and Public Policy, Rutgers University Ms. Pamela Frank — Sun Farm Network Mr. Randy Haviland — Retired, former Director of Environmental, Health and Safety, Johnson & Johnson, Inc. Ms. Pam Hersh — VP, Princeton Health Care System Mr. David Moore — Retired, former Director of the New Jersey Conservation Foundation Mr. Matt Polsky — Director of the Land Trust, Passaic River Coalition Mr. John Weingart — Associate Director, Eagleton Institute of Politics; Chair, Highlands Water Protection and Planning Council Dr. Donald Wheeler — Former Executive Director, NJ Higher Education Partnership for Sustainability (NJHEPS)
citation: New Jersey Sustainable State Institute, 2007, “The Energy Sustainability Project Report.” (New Brunswick, New Jersey: New Jersey Sustainable State Institute) July 2007. This report was produced and published by the new jersey sustainable state institute Portions of this report may be quoted for non- 33 Livingston Avenue, Suite 100 commercial purposes if proper citation is made New Brunswick, NJ 08901 with full source information. 732.932.5475 x531 www.njssi.org This summary report shares the major findings Copyright 2007, All rights reserved. of the full report. Both of these reports, with additional results and analytical details, can be accessed on the New Jersey Sustainable State Institute website: www.njssi.org. Table of Contents
Executive Summary ...... Steering Committee Statement ...... The Future of New Jersey ...... About NJSSI ...... Energy for New Jersey ...... Policies and Technologies ...... environmental target: ...... 8
figure 1: CO2 Emissions from energy ......
figure 2: CO2 per capita ...... figure 3: Criteria air pollutants ...... figure 4: Percentage of energy derived from renewable sources ...... economic target: ...... figure 5: Energy expenditures as a percentage of personal income ...... figure 6: Energy consumption per dollar of Gross State Product ...... figure 7: Energy usage per capita ...... figure 8: Transportation efficiency in fleet miles per gallon ...... security target: ...... figure 9: Percentage of energy generated from New Jersey Sources ...... figure 10: Percentage of the total electricity consumed in New Jersey that is generated within New Jersey ...... figure 11: Percentage of energy consumed in New Jersey from imported fossil fuels ...... Scenarios for the Future ...... figure 12: Illustrative Policy Bundle ...... Additional Scenarios for the Future ...... A Call to Action ...... Acknowledgments and Project Team ...... Statement from the The Energy Sustainability Project Report Steering Committee
Executive Summary we believe that achieving sustainable development in the energy sector is of critical importance to the future of New Jersey. This will require us to balance the interrelated issues of environmental impacts, economic performance, and energy security. in 2006, njssi convened a group of leaders from environment and We believe that the indicators and targets in this report are a fair and balanced representation of what we must achieve in each of these areas. industry, state and local government, and academia, in a process • The indicators provide a meaningful way to track progress on these critical issues. to understand and reach agreement about the future of energy and • By looking at all of the indicators together, we can better under- climate issues in New Jersey. NJSSI supported the deliberation with stand the tradeoffs among the key issues we face and the impact of different policy options. advanced research and modeling, and held public conferences and • Achieving the targets identified in this report will require concerted meetings throughout New Jersey to provide public input. action from everyone in New Jersey including the legislature, state This summary report contains the results of that deliberation in government, the business community, local governments and civic organizations, and citizens from all walks of life. the form of a set of key energy indicators that track the issues that Ms. Sandy Batty, Association of NJ Environmental Commissions we must address, and the associated key targets that New Jersey Dr. Martin Bierbaum, Municipal Land Use Center should achieve. The full project report with references and analytical Mr. Laurence Downes, New Jersey Resources details is available at www.njssi.org. Mr. William Dressel, NJ League of Municipalities Mayor Meryl Frank, Borough of Highland Park Ms. Pamela Frank, Sun Farm Network Rev. Fletcher Harper, GreenFaith A diverse set of stakeholders has endorsed these energy should not rise above %, and the largely implemented by . indicators and targets as a fair representation of what percentage of income in New Jersey devoted to • After , the gains from Mr. Richard Johnson, Matrix Development Group we must achieve in New Jersey’s energy sector if we energy should not go higher than the average of known policies will be over- Mr. Ralph LaRossa, PSE&G want to sustain our environment and quality of life our peer states in the neighboring states. taken by growth in population Mr. Anthony Marchetta, LCOR, Inc. in the future. Note that the modeled scenarios and 3. % of New Jersey’s energy needs should be and economic activity, and Mr. Luis Martinez, Esq., Natural Resources Defense Council policy combinations (p ) are not endorsed by the derived from New Jersey sources by the year . GHG emissions will begin to Mr. Michael McGuinness, National Assoc. of Industrial & Office Properties stakeholders as specific policy recommendations. rise. To reach the and Rather, these modeled scenarios are illustrative The project showed the impact of an illustrative targets, we must expand the Mr. David Moore examples of what can be achieved with existing aggressive policy scenario on achieving the targets. deployment of known policies Mr. Carlos Rodrigues, Regional Plan Association policy tools. Frank and open debate is now required This scenario included the following energy policy and develop new and as yet The Honorable Robert Smith, NJ Senate to select the appropriate policies to achieve our strategies: advanced bio-fuels, significant energy unknown solutions and have Mr. Scott Weiner, Schools Construction Corporation them ready to be implemented sustainable energy targets. NJSSI will track and efficiency gains, and new energy taxes. The Honorable John Wisniewski, NJ Assembly report New Jersey’s progress toward these targets to by . ensure we stay on track. key conclusions: • Policies addressing climate • The project selected and endorsed the same change are also likely to help the three indicators and their targets: greenhouse gas emissions targets as described in address energy security concerns.
1. Reduce carbon dioxide (CO2) emissions from the the New Jersey Global Warming Response Act. • Implementation of an aggressive energy sector to their level by and by • Aggressive implementation of policies such as policy scenario such as that % from the level by . (Assuming a increased energy efficiency of buildings and espec- described in this report is linear annual decline from through , ially motor vehicles, energy taxes, and the use of unlikely to have a dramatic the interim goal is a reduction of about % advanced bio-fuels, can achieve the GHG adverse impact on New Jersey’s from the emissions level.) target. But it will take a concerted effort: we must economic growth. 2. The percent of income in New Jersey spent on begin now and we must have these strategies
| energy sustainability report | october 2007 | 2 3 About the New Jersey Energy Sustainability Project Sustainable State Institute
The Future of New Jersey The New Jersey Sustainable State Institute’s (NJSSI) mission is to provide decision makers and all New Jersey citizens with a clear picture of where we are, where we are headed, and what we need to achieve to be sustainable. From global warming to urban sprawl driving forces to social inequities, most sustainability issues are complex, how is new jersey doing? technical, and manifest slowly over a long period of time. We help Thirty years from what kind of new jersey are we 1 2 An analysis of our NJ indicators New Jersey citizens and communities make sense of the future, now, we expect to environment economy leaving to future generations? shows results are decidedly mixed. have one or even and identify actions to ensure our future is a bright one. two million more “Sustainability,” or “sustainable people living in environment—New Jersey’s NJSSI’s current activities include: development,” means protecting the wildlife and natural environment New Jersey. The 3 • Reporting 11 key goals and 41 indicators that show all New overall level of resources and systems that support us 1are increasingly stressed by Jerseyans where we are, where we are headed, and what we economic activity society population growth, consumption, must achieve as a state to be sustainable. is likely to have at today so that they will be available to and suburban sprawl. New Jersey • Assisting municipalities to understand what sustainability least doubled. This future generations. It means preserving is producing less local pollution means for them in local, regional, and global contexts, and will lead to a than in the s and the environ- helping them achieve it. greater demand our civilization and the things we hold ment we experience every day is, • Developing targets that define what levels of performance are for energy, housing, for the most part, cleaner. needed to be sustainable in the future. mobility, and dear in perpetuity while enhancing the long-term impacts of our economically. If knowledge is Unfortunately, since New Jersey • Working with state-wide leaders to generate new data and amenities. Now is our quality of life. decisions can result in unbreath- power, NJSSI is dedicated to residents are consuming more, the time to plan so identify and address the greatest gaps in our knowledge of The three-ring symbol able air, a floundering economy, ensuring that all New Jerseyans some of our local gains may be that we can avoid sustainability in New Jersey. outages, crowding, represents a sustainable state. decaying cities, choking traffic have the power to act for a better due to exporting our pollution • Conducting analysis for New Jersey state agencies to establish congestion, and Each ring represents one of the congestion, loss of wildlife and future. and polluting activities, forcing policies for achieving sustainable development, devise indicators a poorer quality three systems that support open space, and unsafe neighbor- NJSSI created a set of key others to deal with these problems. to track progress, and create better decision making systems. of life. humanity: the economy, the hoods. However, if we get serious goals and indicators that tell us environment, and our society. about living with the future in how we are doing in achieving economy—As a whole, New NJSSI began in 1995 as a project of the non-profit organization Each of these rings overlaps the mind, we have the possibility of each of our environmental, social, Jersey is economically better off New Jersey Future, working in combination with the State of New other two. To be sustainable— passing on to our children a New and economic goals. These goals 2than it has been in the past. Jersey and a coalition of business and public interest groups. They that is, to have an equitable and Jersey that is secure and offers a and indicators were selected Personal incomes are high. launched a high-profile public process to develop long-term goals prosperous civilization in the high quality of life. through an open, public dialogue However, the state is less equitable and indicators for achieving sustainable development in New future—each of these systems Seeing things differently is the that included leading scientists, than it was in the s, with a Jersey. The process yielded 11 goals and 41 indicators covering must be healthy and in balance. first step toward doing things environmental and business widening gap between richer and economic, social and environmental issues. In 2000 the NJ We cannot degrade any one of the differently. interests, poverty and education poorer residents. Department of Environmental Protection took over the effort and systems that supports us without advocates, state government, produced a report “Governing With the Future In Mind” that adversely affecting the other two. seeing the big picture and over a thousand citizens from society—Crime continues to detailed, agency by agency, what the Government of New Jersey This is the essence of sustain- Unfortunately, it is difficult to all walks of life. Entitled the generally trend downward since was doing to achieve a Sustainable State. able living. Beautiful beaches understand and track many of the “Sustainable State Goals and 3 and schools have sustained mean little if you cannot afford most pressing sustainability issues. Indicators,” they can be found a high level of performance as a To insulate the effort from the political process, and to ensure the to get there. A good job doesn’t One cannot sense if greenhouse on our website at www.njssi.org whole. Despite some gains, the indicators and targets were free of real or perceived bias by state mean much if you have to worry gases are accumulating in the and in our signature report Living Legislature contains fewer women government or an advocacy group such as New Jersey Future, it about your safety on the walk atmosphere by sniffing the air. With the Future In Mind. If we and minorities than the popula- was decided that the effort needed an independent home. In home. A safe, friendly neighbor- Similarly, without some trusted want a secure and prosperous tion overall. Gains in average pay 2002, with an appropriation from the State Legislature, NJSSI hood isn’t a haven if its air is not way to track progress we cannot future it is imperative that we for minorities and women seem to was founded as an independent institute to be housed at the breathable. know if our state is building a consider our impact today on be closing in on those for white Bloustein School at Rutgers University and co-managed by the Sacrificing the future to benefit dangerously large financial debt, if these long-term trends when we men, but progress has slowed. York Center for Environmental Engineering and Science at the the present is the opposite of wildlife is declining too much or shop, when we vote, and when Voter turnout and knowledge of New Jersey Institute of Technology. sustainability. Failing to consider if our fellow citizens are struggling we choose where and how to live. government are near all-time lows.
| energy sustainability report | october 2007 | 4 5 An Aggressive Policy Scenario: Clean, Affordable, Secure Understanding the Tradeoffs
Energy for New Jersey This report describes a set of targets toward which New Jersey should strive if we want to achieve sustainability in the energy sector. A problem arises if one target is narrowly pursued at the the r/econ™ model expense of another target. For example, pursuing cheap energy for economic well-being is not sustainable if it dangerously The R/ECON model increases levels of greenhouse gases in the atmosphere. provides quarterly we believe that energy is the most 1 2 modeling efforts, and ultimately Sustainability means that all the critical issues we face must projections of global warming efficiency pressing issue to be addressed if we selected the indicators and targets be balanced and addressed together. economic condi- that form the core of this report. tions in New Jersey want to ensure a sustainable future. for use by public A list of the Committee members To understand if our targets adequately balance the three Despite increased concern over global appears on the inside back cover facets of sustainable energy, NJSSI developed an illustrative policy and private decision 3 makers. R/ECON is warming and rising energy prices, most of this report. scenario in the R/ECON model that represents a very aggressive, a computer-based, security but plausible, course of action for New Jersey. This policy scenario macro-economic people do not have a trusted and simple future projections: is primarily targeted at reducing greenhouse gas emissions. model containing scenario modeling Our modeling projects the impact of implementing this policy more than 200 way to understand whether we are To support the deliberations of scenario on each indicator. We observe the tradeoffs among econometric heading for an energy crisis, and if so the Steering Committee, NJSSI environmental, economic, and security factors by examining how equations that engaged in a major research and closely the policy scenario approaches each target. are based on 30+ what must be done to avoid it. To Indicators are measures for stable supplies of oil, natural gas, modeling effort. NJSSI modeled years of state and provide answers, the NJ Board of tracking progress on things we and electricity. From local air different future scenarios by This policy scenario is not intended to be implemented directly. national trend data. Public Utilities (BPU) funded care about. Targets specify the pollution, with its harmful health adapting a powerful New Jersey- For this project, the Rather, it illustrates the impacts of several aggressive yet R/ECON model was NJSSI to initiate a public dialogue indicator levels that we want to effects, to dramatic impacts of specific econometric model plausible strategies between now and 2036. enhanced to and fact-finding process to create reach by certain dates. In other global warming, no decisions known as R/ECON™, from the incorporate energy indicators and long-term targets words, the targets tell us what we affect the environment more than Center for Urban Policy Research Each of the indicators on the following pages shows our projec- consumption and (to the year ) of sustainable need to achieve, and by when. how we produce and consume at the Edward J. Bloustein School tion of what will happen in New Jersey in a “business as usual” pricing data and development for New Jersey’s The indicators and targets in this energy. As represented in the of Planning and Public Policy, scenario where no new actions are taken, and also in a future the NJ Renewable energy sector. report will illuminate the possible three-ring graphic, to be sustain- Rutgers University. The modeling where the “aggressive policy scenario” is implemented with a ten Portfolio Standard- outcomes and trade-offs of various able, energy must balance security, helped the project’s participants to year phase-in period starting in 2010. The strategies implemented mandates. The support for the energy actions as well as the consequences economics, and the environment. think systematically about the in the illustrative policy scenario are as follows: R/ECON model is master plan of inaction. They are intended future and to see how different periodically updated The effort supports the State of to provide an understandable, how we created the policy scenarios performed relative full-cost energy pricing—The price of energy is increased with national NJ’s forthcoming official Energy trustworthy, and scientifically indicators and targets to the targets. The scenarios are by the environmental externality costs associated with the economic forecast Master Plan (EMP). In relation to defensible picture of what must To establish indicators and targets, described on page . data from Global combustion of fossil fuels. These additional costs in current Insight, Inc. the EMP, this project will educate be achieved to ensure that our NJSSI convened an open dialogue Technical oversight and dollars are approximately of $0.03 per kWh of electricity, $0.58/ citizens about our energy future so supply and use of energy can that included public input, guidance was provided by energy gallon for gasoline, $1.85 per thousand cubic feet of natural gas, they can be better stakeholders in support our quality of life for representatives from industry, sector experts, scientists, and and $1.53 per gallon of heating oil. the EMP process. The project also the long term. the environment, state and local academicians through the project’s provides an independent look at Paralleling the three aspects of government, and scientific experts Expert Advisory Board (listed on high technology and efficiency—Building, transportation, the levels of performance that sustainability on the previous from many disciplines. Energy the inside back cover). This group and industrial energy efficiency improvements are implemented NJ, and the Energy Master Plan, page, we studied the three critical issues of concern were initially reviewed the modeling platform statewide to reduce energy use. must achieve. As an independent aspects of our energy system that identified at a kick-off conference and its underlying assumptions institute, NJSSI will continue to must be balanced if we want to be in May and at public and provided quality control and advanced bio-fuels—Advanced bio-fuels replace 30% of all report our progress toward the sustainable: economy, environment, meetings in the following weeks. assurance on the modeling results. liquid fossil fuels consumed in New Jersey for space heating and targets for the foreseeable future, and security. Our economy depends A Steering Committee composed transportation. Out-of-state cellulosic ethanol, biodiesel, and thereby bringing more consistency on affordable energy to power our of senior NJ stakeholders oversaw similar products replace this percentage of gasoline, fuel oil, and to both energy policies, and policy homes, businesses and cars. Our the project. They guided and other distillate liquid fossil fuels. Although not currently carbon- dialogue, on energy and climate. security depends on reliable and debated the NJSSI research and neutral, advanced bio-fuels are expected to achieve that status by 2020 in this scenario.
| energy sustainability report | october 2007 | 6 7 environmental indicator: Secondary environmental indicators CO2 Emissions from Energy
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Greenhouse Gas Emissions in New Jersey �� Greenhouse gas emissions from the consumption of energy in New Jersey will continue to increase unless we take �� History greenhouse gas aggressive policy actions. Energy use accounts for more than 80% of New Jersey greenhouse gas emissions. �� Baseline emissions �� Aggressive Greenhouse gas the target �� Policy ������������������������������������������ Scenario emissions from ��� Reduction to 1990 level ��
energy use account �������������������������������������� by 2020 and 80% reduction � � for most of New from 2006 level by 2050. �� � Jersey’s contribution ��� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� to global warming. ����������������������� the gap Almost half comes ��������������� figure 2: co2 per capita from motor vehicles, ��� Aggressive policy scenario Continued population growth in New Jersey is likely, so per capita with residential, Aggressive implementation of emissions reductions will be needed to outpace the population commercial, and known policies and technologies growth rate. industrial energy use ��� can reduce emissions sufficiently responsible for much to achieve the 2020 target. ��� of the rest. Methane ��� (see p. 7 for scenario description) emissions contribute ���
about 7% with half �������������������������� The unknown future ��� History of that from landfills, ��� �������
agriculture, and ��������������� After 2020, known policies fail ������������ Baseline ��� wastewater treat- ���������������� to keep up with growth and we Aggressive ment. Nitrous oxide ������������������������������������������ still need to reduce emissions ���������� ��� Policy from chemical ������� ������� dramatically to reach the 2036 Scenario � ����� ����������������� and 2050 targets. production and ��� fertilizer use, and �� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� various fluorine ���
compounds used ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� by industry together figure 1 contribute less figure 3: criteria air pollutants than 5%. Local and regional air pollution emissions of nitrogen oxides, sulfur dioxide, particulate matter and other “Criteria” pollutants regulated by if we do nothing the impact cannot be fully predicted. However, Intergovernmental Panel on the federal government should be reduced to improve human health.
Since the industrial revolution, human activity it is safe to say that global warming is a very real Climate Change, the authoritative ���
has caused carbon dioxide (CO2) and other heat threat to quality of life in New Jersey and to the body on such matters. trapping gasses to accumulate in the atmosphere, basic sustainability of our civilization. ��� enhancing the now famous “greenhouse effect.” reaching the target �� History If emissions are left unchecked, the Intergovern- our recommended target Reaching the target will not be easy. Baseline mental Panel on Climate Change (IPCC) To avert the very worst effects of climate change, Our illustrative aggressive policy �� predicts that average temperatures will rise what scientists refer to as “catastrophic global scenario shows that it is possible Aggressive between three and eleven degrees Fahrenheit in �� Policy warming,” we are endorsing targets for a to achieve the target with Scenario the next years. This could be catastrophic. reduction in New Jersey carbon dioxide emissions concerted effort. But after , �� Globally, it could result in crop failures, food from energy use (measured in metric tons of the gains from these policies are
shortages, the spread of tropical diseases, invasive CO2 equivalent) to million tons per year by overtaken by economic and popula- �� species, major floods, sea level rise, more severe the year and million tons per year by tion growth, so that emissions again ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� storms, and geopolitical conflict. New Jersey will . The target is consistent with that begin to rise. To reach the and figure 4: percentage of energy derived from renewable sources not be spared these impacts, including inland contained in the NJ Global Warming Response targets, a whole new slate of Renewable energy sources such as sun, wind, and sustainable bio-fuels and coastal flooding, mega-storms, spread of new Act when apportioned to the energy sector, and currently unknown technologies do not emit greenhouse gases so we should expand their contribution diseases, and invasive species. The full scope of is in line with the recommendations of the and policies must be identified. to New Jersey’s energy mix.
| energy sustainability report | october 2007 | 8 9 economic indicator: Secondary economic Energy for a strong economy indicators
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��� Efficiency: The percentage of������������������������������������������������������ our income spent on energy ��� ��� This indicator shows us how much of our collective income we spend on our energy needs and how we compare to History ��������������������� ��� other things the states that�� are our biggest economic competitors. We are on par with our neighbors in the mid-Atlantic region. Baseline ��� to consider �������������������������� Aggressive Buildings are becom- �� the target ������������� Policy ������������������������������������������������������ ��� Scenario ing larger, requiring ��� ��������������� 7% of the collective income �� more energy for spent on energy needs. ��� ���������������������������������� lighting, heating, �� ������������ �� ��� cooling, and gadgets. �������������������������� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� This makes efficiency �� legend �� improvements to ���������� ��������������� figure 6: energy consumption per dollar of gross reduce energy use �� ���������� �� state product (in constant year 2000 dollars) per square foot of ������������� ������������ ���������� The overall energy intensity of the economy should decrease. floor space very �� �� �������� important. Analysis ��� shows that resi- �� �������������������������� �� ���������� ��� dential buildings ���������������������� ���������� �� ��������������� ��� are becoming more �� ���������� efficient but com- ��� History �� �������� mercial buildings are �� ��� Baseline not. This represents �������������������������� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ��� Aggressive an opportunity for �� ���������������������� ��� Policy public policymaking, ��������������� Scenario �� because building ��� performance ��� �� standards are very ��� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� much within the ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� control of state and local governments, figure 5 figure 7: energy use per capita (million Btu per year) unlike motor vehicle Energy use per capita should decrease faster than population growth. standards which require federal �� government action. if we do nothing to higher incomes, not cheaper energy. New reaching the target �� The principles of sustainable development tell Jersey businesses generally pay a high price for Although New Jersey currently History us that our economy, environment, and society energy compared to other regions of the country. exceeds the 7% target, our aggres- �� should all be functioning and healthy: no one sive policy scenario achieves this Baseline ��� aspect should be sacrificed for the other two. our recommended target goal with expected economic �� Aggressive Therefore, reducing carbon emissions or We are endorsing two targets for New Jersey. The growth. As a consequence of our Policy Scenario eliminating local smog would be a hollow victory first is that the percent of our income devoted to relative wealth, New Jersey spends � if it plunged New Jersey into economic ruin. energy should not rise beyond %. The second a relatively low percentage of its
At about eight percent of personal income, target is that the percent of income devoted to income on energy. We were not able � current energy costs do not appear to be a signifi- energy in New Jersey should not go higher than to model the economies of our peer ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� cant burden on the economy from a historical states so we cannot show how the the average of neighboring states. This means figure 8: transportation efficiency in fleet perspective. On average, energy consumes less aggressive policy scenario changed that policies that increase the cost of energy must miles per gallon of our income (.%, ) than it does for the be balanced with policies that increase efficiency our status relative to our peers. This MPG should increase faster than vehicle miles traveled increases. neighboring states of New York (.%) and and promote economic growth so as not to over- is something to monitor in the Pennsylvania (.%). However, this is mostly due burden businesses or consumers. future as data becomes available.
| energy sustainability report | october 2007 | 10 11 security indicator: Secondary security Securing NJ’s Energy Supplies indicators �������������������������������������������������������� ��� ����
��� ���������������� Security: Percentage of our energy generated from New Jersey sources ��� ��� ��� History How much of the energy that we consume in New Jersey comes from dependable, controllable, local sources ��� Baseline other security like solar, wind, and bio-fuels? Not much. ���
measures: �� ��� Aggressive Another way that the target Policy �������������������������������������������������������� ��� Scenario New Jersey can ��� 10% of energy from ��� enhance its energy �� local sources. ��� security is to increase ���������������� � �� its energy storage ��� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� capabilities. Storage legend� �� can help us cope �������������������������� ������� figure 10: percentage of electricity consumed in new with short interrup- �������� �� jersey that is generated in new jersey tions due to hurri- �������������������������� canes, for example. �� Locally generated electricity is more reliable and less vulnerable to weather problems affecting the power grid. This chart shows that Currently New Jersey ����������������������������������������������� �� has a very large ��������������� New Jersey’s growing New Jersey today has to import roughly 20% of its electricity and that �� heating oil reserve, as � population and economy percentage is expected to increase in the future unless power plant well as significant oil ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� � will place increasing burdens siting difficulties are overcome. refining capacity to �� �������on the state’s energy supply turn petroleum into �������������������������� ��� and delivery infrastructure. If motor fuel and other �������� we do not ensure the future ��� products. However, �������������������������� �� security and adequacy of this the state’s storage ��� infrastructure, we leave New History capacity for natural ����������������������������������������������� ��� gas is relatively small ��������������� Jersey vulnerable to painful, Baseline �� costly disruptions. and the proposed ��� Aggressive ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� liquefied natural gas Policy (LNG) facility is cur- ��� Scenario
rently awaiting the figure 9 ��
outcome of litigation. ����������������������������������������� Electricity storage is �� not currently cost- ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� effective on a large domestic supplies are also vulnerable. Our nuclear Currently the local sources of scale: New Jersey has if we do nothing figure 11: percentage of energy consumed in new jersey New Jersey’s quality of life depends upon uninter- power plants require new fuel from outside New energy, mostly renewable, are a small pumped stor- that comes from imported fossil fuels age (water) facility rupted access to reasonably priced, clean energy. Jersey. And our hot summer days show that even growing in response to an aggres- Oil imports from politically unstable regions are an especially vulnerable which is located at Energy vulnerability results when local energy the electricity grid is not immune. sive state policy. However, even Yards Creek. supplies are inadequate or when the sources of though our illustrative policy part of New Jersey’s energy supply. The chart shows that about 25% of New Jersey’s energy now comes from imported fossil fuels. That pattern imported energy are insecure. New Jersey has no our recommended target scenario is overlaid on top of coal, oil, gas or uranium reserves—it is an energy NJSSI endorses a target of % of energy derived current policies, it does not achieve is likely to persist into the future unless we take policy actions aimed at consumer state rather than a producer state. Our from local primary sources by the year . the % target. After , contin- reducing import dependence. only strictly local sources of energy include solar, Currently less than % of energy used in New ued aggressive efforts will be need- wind, tidal, hydroelectric, geothermal, and Jersey comes from local sources. The New Jersey ed to achieve the target. The biomass. This makes New Jersey and its economy Renewable Portfolio Standard mandates a .% table on page includes an alter- highly dependent on interstate flows of electricity solar contribution of electricity by and we nate scenario featuring super-high and natural gas and petroleum flows from around believe that an order of magnitude increase from efficiency technology that more the world. Instability in the Middle East and represents an appropriate target for . closely achieves the % target. Africa has made oil prices and supplies volatile. The good news is that activities to Natural gas and petroleum interruptions following reaching the target increase our local energy security Hurricane Katrina in have shown that Reaching the target will require concerted effort. can also benefit the environment.
| energy sustainability report | october 2007 | 12 13 Additional Scenarios for Scenarios for the Future the Future
This table summarizes the year 2036 impacts on the indicators for the scenarios that were modeled in this study. Note that no Illustrative Policy Bundle one scenario achieves the desired target: success requires Clearly the greatest��� driver of new energy policy is the threat of global warming. The following graph illustrates political commitment on a broad policy front. the nuclear issue the components of the Aggressive Policy Scenario presented on page and shows the impact each������������������ of the three main strategies has on greenhouse gas emissions. ��������������� New Jersey’s nuclear ��� scenario description environmental economic security power plants gen- �������������������������������� ������������������ the target indicator indicator indicator ���������������������������������� ������������������������ value value value erate almost half of ��������������� 10% reduction below (Units: Million (Units: (Units: % of ��� the electricity that ��� current levels by 2020, tons of CO2) Energy as energy from ������������������ % of Income) local sources) ������������������ 45% reduction by 2036, and we consume with ����������������� ��������������� 80% reduction by 2050. 2036 Target: 2036 Target: 2036 Target: no GHG emissions. ��� ��� The electricity that �������������������������������� ������������������ 66 or less 7% or less 10% or more ���������������������������������� ������������������������ we import from the ��������������� ������������������������� legend Base case Business as usual, keep 170 4.8% 2.0% out-of-state grid ��� ��� ������������������ ������� current policies results in 50% more ����������������� �������������������������� ������� �������� Low growth Base case but with high 151 5.3% 2.1% GHG emissions on energy prices, low ��� ��� average than ����������������������� inmigration ��������������� ���������������������������������������� locally-produced ��������������� High growth Base case but with low 186 4.7% 2.0% electricity. What role ��� ���������������������������������������� �� ����������������� energy prices, high in- ������� migration should nuclear ��������������� �������������������������� �������������������������� ������� �������� power play in New ����������������� Full cost energy Using taxes and fees, 126 6.6% 5.1% ��� �� ����������������������� pricing internalize the external Jersey’s energy mix? environmental costs of ���� ���� ���� ���� ���� ����������������������� ���� ���� ���� ���� ���� ��������������� What would be the ��������������� using fossil fuels
���������������������������������������� ����������������� impacts on New �� Medium carbon Impose a tax of $50 per 131 4.9% 5.1% Jersey if the Oyster ��������������� �������������������������� tax ton of CO2 emitted ����������������� Creek power plant High carbon tax Impose a tax of $200 per 81 5.3% 5.1% �� ton of CO2 emitted were not re-licensed ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� in 2009? Research High efficiency Using regulations, 153 4.3% 2.1% and public dialogue improve energy use in buildings, industry and are needed to figure 12: impact of the aggressive policy scenario strategies on co2 emissions. transportation to cost- address the nuclear effective levels (about 10%) issue. Super high Using regulations require 98 3.1% 5.4% efficiency the use of best available additional scenarios for the future may not fully capture the impacts of the imposed that-we-know for a new one? energy efficiency technologies In addition to the policies and technologies state-level energy policies because of the strong And what of the energy tech- included in the illustrative aggressive policy influence of the national trend data in the model. nologies that are now only dreams? Advanced Replace 30% of current 143 4.9% 3.5% biofuels liquid fossil fuel use with scenario, we explored several others. Many of Who will fund the basic energy biofuels
them provided interesting insights. The impact recommendations for future research research and development that is Super advanced Replace 85% of current 92 5.3% 3.5% of these alternate policy scenarios on each of our As with most research efforts, our investigation required now in order to develop biofuels liquid fuel use with biofuels key indicators is summarized in the chart on the identified gaps in our knowledge and suggested “disruptive,” game-changing energy facing page. Smart growth Hold vehicle miles trav- 146 4.3% 4.0% a number of areas for further inquiry. solutions in a timely manner? eled per capita constant New Jersey’s economy is tightly linked to the The transportation sector is a major contribu- The answers to these questions No more NIMBY Meet all growth in 131 4.3% 3.4% national economy and to the trajectories of tor to GHG emissions yet vehicle efficiency are critical to the sustainability of electricity demand from population and economic growth, and energy (MPG) remains low and vehicle miles travelled New Jersey, its neighbors, and the power plants built in New Jersey prices. Most of the scenarios shown here assume are increasing. The interaction of land use world. Illustrative Full cost, high efficiency, 117 6.1% 5.5% that by , New Jersey’s population will grow patterns, smart growth policies, transportation Further details for the scenarios, aggressive policy 30% biofuels to over million people, the Gross State Product issues, and energy usage need greater study. Liquid the modeling process, and all aspects bundle
will grow .% annually, gasoline prices will biofuels present an attractive alternative to of the project may be found in the Super-aggressive Super high efficiency, 72 2.9% 8.4% roughly double, and the existing nuclear power petroleum products. Are they really the panacea full report at www.njssi.org. policy bundle smart growth, 30% biofuels plants will be re-licensed. The R/ECON model they seem or will we be trading the problem-
| energy sustainability report | october 2007 | 14 15 A Call to Action
the future will be created by active and concerned citizens, consumers, businesses, workers, and investors in New Jersey. NJSSI’s job is to help people understand what the future may hold, and how their actions will influence the future. The rest is up to you.
The scenarios explored in this report illustrate a begins now. NJSSI will do its part to keep everyone range of possibilities for New Jersey’s future. It is informed of New Jersey’s progress, or lack thereof. clear that energy efficiency for transportation and But New Jersey’s success or failure depends on the buildings, energy production from renewables, and daily decisions of regular citizens in grocery stores, basic energy research are necessary components auto dealerships, and real estate brokerages, and as of any New Jersey energy future. And the debate we go to the polls to hold our leaders accountable for over the role of nuclear power will continue as it making progress. should. We hope that this report has sparked your The stakes are high: New Jersey will only become imagination and interest, and perhaps firmed your sustainable if we work hard together to create a clean, resolve to work for a better future. The real work affordable, and secure energy future. of crafting a shared vision and implementing it
Additional Information Emissions Source Data Disclaimer: This summary report shares the major findings of Emissions data for greenhouse gases and their the full project report. Both of these reports with constituent parts are available from a number of additional results, analytical details, and full citations sources. As reporting procedures and measuring can be accessed on the New Jersey Sustainable State techniques improve, these numbers can change. Institute website: www.njssi.org. Not all sources update their data at the same time, potentially leading to apparent discrepancies between the data sources. For this study, we have used emissions data from the U.S. Energy Information Administration.
| energy sustainability report | october 2007 | 16 Acknowledgements Our special thanks to the New Jersey Board of Public Utilities for its funding of this project. Through their vision and leadership, the Board’s executives and staff have demonstrated their commitment to results-based management and to a sustainable future for the people of New Jersey.
The Project Team Prof. Clinton Andrews: Principal Investigator, E.J. Bloustein School of Planning & Public Policy Mr. Randall Solomon: Project Manager, NJSSI Mr. Skip Jonas: Project Coordinator, NJSSI Dr. Nancy Mantell: Chief Modeler, Rutgers Center for Urban Policy Research
The Project Steering Committee Ms. Sandy Batty: Association of New Jersey Environmental Mr. Anthony Marchetta: LCOR, Inc. Commissions Mr. Luis Martinez, Esq.: Natural Resources Defense Council Dr. Martin Bierbaum: Municipal Land Use Center Mr. Michael McGuinness: National Association of Ms. Sara Bluhm: New Jersey Business & Industry Association Industrial & Office Properties Mr. Joseph Carpenter: New Jersey Department of Mr. Lance Miller: New Jersey BPU Environmental Protection Mr. Robert Miller: New Jersey DOT Mr. Laurence Downes, New Jersey Resources Mr. David Moore: NJ Conservation Foundation Mr. William Dressel: New Jersey League of Municipalities Ms. Dena Mottola: Environment NJ Mr. Paul Flanagan, Esq.: Office of the Ratepayer Advocate Ms. Anne-Marie Peracchio: New Jersey Natural Gas President Jeanne Fox: New Jersey Board of Public Utilities Mr. Carlos Rodrigues, Regional Plan Association Mayor Meryl Frank: Borough of Highland Park Ms. Seema Singh: Ratepayer Advocate Ms. Pamela Frank: Sun Farm Network The Honorable Robert Smith: New Jersey Senate Rev. Fletcher Harper: GreenFaith Dr. Mark Stout: New Jersey DOT Mr. Karl Hartkopf: New Jersey DCA, Office of Smart Growth Ms. Felicia Thomas-Friel, Esq.: Office of the Ratepayer Ms. Kimberly Holmes, Esq., Ratepayer Advocate Advocate Commissioner Lisa Jackson: New Jersey Department of Mr. Scott Weiner: New Jersey Schools Construction Environmental Protection Corporation Mr. Richard Johnson: Matrix Development Group Ms. Melanie Willoughby: New Jersey Business Commissioner Kris Kolluri: New Jersey Department and Industry Association of Transportation The Honorable John Wisniewski: New Jersey Assembly Mr. Ralph LaRossa: PSE&G Mr. Adam Zellner: New Jersey DEP Ms. Suzanne Leta-Liou: Environment NJ
The Expert Advisory Board
Prof. Richard Brail: E.J. Bloustein School of Planning Dr. Colin Loxley: PSE&G & Public Policy Mr. Bill Mates: New Jersey Department of Environmental Mr. Tim Evans: New Jersey Future Protection Prof. Frank Felder: Center for Energy, Economics, Mr. Robert Miller: New Jersey DOT and Environmental Policy Dr. Bharat Patel: New Jersey Board of Public Utilities Dr. Panos Georgopoulos: Environmental & Occupational Mr. Darren Port: New Jersey Department of Health and Safety Institute Community Affairs Dr. Davood Ghasemzadeh: Independent Consultant Prof. Michael Rothkopf: Rutgers University Mr. Steve Herling: PJM Interconnection Prof. Joseph Seneca: E.J. Bloustein School of Planning Prof. Ben Hobbs: Johns Hopkins University & Public Policy Prof. Radha Jagannathan: E.J. Bloustein School of Planning Ms. Jennifer Senick: Rutgers Center for Green Building & Public Policy Mr. Edward Linky, Esq.: US Environmental Protection Agency report designed by busy bee printing press new jersey sustainable state institute 33 Livingston Avenue, Suite 100 New Brunswick, NJ 08901 732.932.5475 x531 www.njssi.org