2021 – EAN Annual Progress Report for Vermont – Key Findings

2021 – EAN Annual Progress Report for Vermont – Key Findings

2021 – EAN Annual Progress Report for Vermont – Key Findings

EAN Report Cover

1. Meeting Vermont's energy and emissions commitments is now law

The Global Warming Solutions Act (GWSA) became law in 2020, requiring that Vermont reduce greenhouse gas pollution 26% below 2005 levels by 2025, 40% below 1990 levels by 2030, and 80% below 1990 levels by 2050.

After trending upward between 2010 and 2015, Vermont’s greenhouse gas (GHG) emissions started declining in 2016, a trend that continued through 2018. As of 2018, the latest available data, GHG emissions were 13% below 2005 levels and were equal to 1990 levels. While we are now trending in the right direction, rapid, bold, and comprehensive work is still needed to ensure that we meet Vermont’s responsibility under the GWSA.

Vermont’s increasingly clean electricity purchases played the primary role in achieving this decline, delivering 91% of the net reduction in statewide GHG emissions comparing 2015 to 2018. As of 2019, electricity related GHG emissions were nearly 83% below 1990 levels—primarily due to Vermont’s Renewable Energy Standard (RES), which went into effect in 2017 and requires an increasingly clean and renewable electricity supply through 2032. The RES should help get us more than a third of the way toward meeting our 2025 emissions reduction requirements. However, the RES alone will not be nearly enough: reaching our GWSA requirements for 2025, 2030, and 2050 will require far more progress in the transportation and thermal energy sectors, in particular.

2. Benefits and costs need to be shared more equitably

The impacts of the COVID-19 pandemic on society have been wide-ranging, with the long-term effects still difficult to predict. While we saw a temporary decline in emissions due to pandemic related shutdowns, damaging our economy is not a desirable or sustainable way to meet emissions targets. Instead, we need to quickly move beyond fossil fuels for all our energy needs — an approach that leads to economic health, not economic pain. And we need to make sure that all Vermonters receive the benefits of a clean energy transition.

The pandemic has laid bare existing inequities in our society as low-income and people of color were hit harder than others by both COVID and the related economic crises. Public discourse around racial justice in the summer of 2020 and beyond reminds us that our energy and climate challenges do not exist in isolation from other societal challenges. In fact, they are interlinked and exacerbated by racial and economic inequities.

EAN has been working with Network members to deepen our analysis of energy inequities in Vermont. Efficiency Vermont’s 2019 Energy Burden Report has been a cornerstone of this work; it found the average energy burden (the percentage of household income spent on energy) varies by town from 6% to 20%. Notably the towns with the highest energy burdens are not spending more dollars on energy, but instead have lower median incomes. New analysis by EAN further highlighted how energy burdens break down by income. The lowest-income Vermonters purchase much less energy than upper-income Vermonters, but that energy spending takes up a much greater share of their household budget.

Although data limitations prevented us from analyzing energy issues by race in Vermont, national assessments have shown that structural inequalities in U.S. energy systems cause energy insecurity to disproportionately affect BIPOC (Black, Indigenous, and people of color) households, and Black households in particular, with lasting, generational effects.

The crises of the past year drove home the point that it’s not enough to meet the numerical targets of Vermont’s energy and emissions reduction commitments — how we do so also matters. EAN is committed to creating a more just, thriving, and sustainable future for all Vermonters.

3. Vermont's climate commitments are achievable -- here's our model

The EAN Emissions Reduction Pathways Model (EAN Pathways Model) shows that it is possible to meet the energy portions of our 2025 and 2030 emissions reduction commitments under the Global Warming Solutions Act (GWSA) with currently available energy technologies and proven best practices.

However, while the EAN Pathways Model shows that emissions reductions are technically possible, it will require significant policy action and investments to achieve the scale and pace of change needed. The Model relies mainly on adoption of efficient and renewable technologies along with behavioral changes in transportation to collectively reduce emissions. The Model illustrates what we currently see as the most feasible combination of measures to allow us to reach our GWSA commitments.

The measures in the Model primarily focus on presently proven and available emission reduction measures for which there exist peer-reviewed literature and measured characteristics. This model is also informed by information and insights we have collected about technology adoption curves for key measures, as well as projections around
market development, including timing and availability of supply and technological feasibility to implement. Markets and technologies will, of course, change over time, so options and characterizations are also subject to change, especially over longer time horizons.

It is worth noting that the Model only addresses emissions from the energy sectors and does not attempt to suggest pathways to reduce the 24% of GHG emissions that come from other sectors. Vermont’s agriculture sector is responsible for 16% of GHG emissions, industrial processes for 6%, and waste management for 2%. Each of these sectors also need to reduce their emissions to help reach the GWSA requirements.

Because the vast majority of Vermont’s emissions (74%) come from the transportation and thermal sectors, it is in those sectors that the most significant improvements are needed.

The graphs on here highlight the highest-impact transportation and thermal measures in the Model as of April 2021, and show the scale of change needed by 2025 and 2030 as compared to a 2018 baseline.

The charts on the left show the cumulative emissions reductions that could be achieved using the highest impact measures from the EAN Pathways Model at the scale shown in the figures below. These are just the highest impact measures in the transportation and thermal sectors and sectors and do not include all of the modeled measures needed to achieve the GWSA requirements. We would need ALL of the pathways and measures together at the scale and pace modeled in these figures to reach our GWSA requirements. If we fall short on any of the pathways, other pathways and/or measures would be needed to make up the difference.


4. Vermont's economy will benefit from reducing fossil fuel dependence

Transitioning away from fossil fuels to more efficient, low-carbon technologies will keep money in Vermont and create jobs, while helping reach Vermont’s greenhouse gas reduction commitments. Over the last decade, Vermonters have spent an average of almost $2 billion a year on 100% imported fossil fuels, with 75% of those dollars draining out of Vermont. That is a significant proportion of our approximately $33 billion Gross State Product.1 In 2018, the most recent year for which we have full data, Vermont spent over $1.9 billion on fossil fuels, with over $1.4 billion draining out of our state economy.

In contrast, the efficient and renewable alternatives keep a far higher share of our energy dollars recirculating in Vermont, helping employ our neighbors, and improving our state economy. Vermonters spent over $835 million on electricity in 2018, with over $520 million, or 62% of that amount, recirculating within the state. Similarly, 60% of the
money spent on weatherization and 80% of the money spent on wood heat stay in state. There is room to grow significantly in each of these areas.

Fossil fuel prices are also generally higher and more volatile than electricity and wood prices. That means that a switch to electric vehicles, heat pumps, and/or advanced wood heat often allows consumers to save money year after year with lower-cost, less price-volatile renewable alternatives, while helping to create good, local jobs. Far from a sacrifice, moving beyond fossil fuels is a win-win for Vermont consumers and the Vermont economy.

In 2020 the Vermont Agency of Commerce and Community Development (ACCD) independently analyzed previous modeling by EAN (“The Path to Paris”) that looked at ramping up the seven highest impact thermal and transportation pathways. Although ACCD has not yet analyzed the 2021 EAN Emissions Reduction Pathways Model, their conservative analysis of EAN’s previous model indicated that a rapid, large-scale shift from imported fossil fuels to more efficient and low-carbon sources (primarily electricity) for transportation and heating over the next 15 years could cumulatively:

Reducing GHG emissions can benefit Vermont consumers and workers

Every dollar that we stop sending out of state for imported fossil fuels and instead spend with our local electric utilities not only reduces our climate pollution, it also reinvests in and helps grow the Vermont economy. We have already reached the point where, even on a narrow cost-benefit analysis basis, the vast majority of the time it saves consumers money to purchase an electric vehicle instead of a new fossil fuel vehicle, invest in a heat pump water heater, or choose a heat pump space heating system instead of installing new propane or fuel oil systems. With incentives in place the same can be true for advanced wood heat systems and weatherization. These investments can achieve significant reductions in Vermont’s emissions, as many of them reduce CO2 by 1–4 U.S. tons per household per year.

It is important to note that these costs and savings estimates were calculated at a time of historically low fossil fuel prices in 2020. As fossil fuel prices increase, the energy actions presented here will almost certainly provide an even greater economic benefit for households. Historically, fossil fuel prices have risen higher and proven to be much more price volatile than electricity or wood heat.

Pre-pandemic, 6% of our workforce — approximately 19,000 Vermonters — were employed in the clean energy sector, the highest share of any state in the nation. These jobs tend to pay well, providing a strong foundation to support a family. The median wage for a clean energy job is approximately $27/hour as opposed to the $19/hour statewide median
wage. Even within the same field there is often a premium for working in clean energy. For example, an electrician working in energy efficiency averages a 28% higher hourly rate than the average Vermont electrician.

5. An economy-wide and total energy policy framework is needed

The overarching framework of the Global Warming Solutions Act (GWSA) provides a major opportunity for economy-wide emissions reduction. However, one of the greatest barriers to meeting our renewable energy and GHG emissions reduction commitments is that Vermont policy and regulatory requirements are currently focused primarily on just one of our energy sectors: electricity. Our continued use of fossil fuels to meet our transportation and thermal energy needs means that emissions remain stubbornly high, with these two sectors currently accounting for over 74% of Vermont’s greenhouse gas pollution. A focus on electricity generation and purchases alone is not nearly enough.

If Vermont is going to meet the GWSA requirements, the state will need to establish new policy and regulatory frameworks. It will need to require fossil fuel reduction, promote efficiency, and invest in the adoption of lower-impact transportation and heating alternatives.

Policy also plays an important role in ensuring an equitable energy transition. While some Vermonters have the means to make more climate-responsible purchasing decisions that will also often save them money in the long run, many others lack the funds to make the up-front investment to change their vehicle or heating system. That is why it is imperative that assistance—from incentives to low-interest financing—is provided to lower and middle income Vermonters, so that all benefit from the savings this transition offers.