Energy intensity and carbon emission responses to technological change: The US outlook

Technological progress, energy use, energy intensity, and carbon mitigation are tightly intertwined concepts within the worldwide climate change debat e. The state-of-the-art National Energy Modeling System (NEMS) is used to e xamine, for the United States: (a) the potential role of technological prog ress on energy supply, consumption, and prices in U.S. energy markets and t heir impact on carbon emissions; (b) how "success" on one side of the suppl y or demand equation may reduce the potential benefits of technological pro gress on the other side; and (c) the sensitivity of energy intensity in the U.S. to technological change and adoption. Some of the key findings of the analysis include: (a) technological progress alone (without significant an d effective new policies) is insufficient to achieve reduction of carbon em issions at or near 1990 levels by 2010; (b) successful R&D programs that im prove the availability and market acceptance of cost-efficient transportati on technologies, coupled with successful oil and gas supply R&D programs, c ould have a significant impact on reducing U.S. dependence on imported oil; (c) the annual rate of decline of energy intensity (primary energy used pe r dollar of GDP) between 1996 and 2015 appears to be bounded by 1.25 percen t when real energy prices are relatively stable or gradually rising, even w hen more advanced technologies are made available to the market.