Full Title: Toward a New National  Energy Policy: Assessing the Options
Author(s): Alan J. Krupnick, Ian W.H. Parry, Margaret Walls, Tony Knowles, and Kristin Hayes
Publisher(s): National Energy Policy Institute and Resources for the Future
Publication Date: 11/2010



Since the 1950s, the United States has almost tripled its annual energy consumption, following a  trend of substantial U.S. economic growth in the  latter 20th century. Yet with this growth in energy  use have come new challenges—in particular,  our increasing reliance on imported oil, which  can have significant foreign policy implications;  and a documented rise in the level of greenhouse gases accumulating in the atmosphere,  which many scientists believe may lead to a rise in  global temperature, changes in water supply, an  increased threat of extreme weather events, and  other negative consequences on food supply and  human health.

From these twin challenges emerges a clear message: reducing our reliance on traditional fossil  fuels must be central to any strategy to meet the  goals of improving energy security and combating  global warming. Despite numerous congressional  proposals to control GHG emissions and promote alternative sources of energy, we have yet  to pass and implement a comprehensive energy  policy. With the recent volatility in the price of oil,  continued warnings about climate change, and  persistent dependence on oil from governments  often hostile to our interests, the time is ripe for  a rigorous, wide-ranging analysis of U.S. energy  policy options.

Complicating matters is a bewildering array of  policy alternatives. Some are substitutes for one  another and others could reinforce each other;  some directly target oil and others focus on emissions. How should policymakers choose among  them? The analysis presented here helps meet  this challenge. Carried out by Resources for the  Future and the National Energy Policy Institute  with support from the George Kaiser Family  Foundation, it assesses 35 different policies and  policy combinations based on their societal costs  and their ability to reduce oil consumption and  CO2 emissions. Each is evaluated and ranked  using a consistent and rigorous methodology.  The results provide policymakers with a wealth  of valuable information for developing a coordinated national energy policy.

This report provides a comprehensive examination of the study findings, built around three key  chapters: one exploring the effects of oil policy  options, focusing on transportation; another  detailing impacts of policies to reduce CO2, focusing on the electricity sector and energy efficiency;  and a third that examines the results of combining policies to reduce both oil use and CO2 emissions. We also provide considerable detail on our  modeling and methodology, and highlight areas  where future researched may be warranted.