#Scenario Definition

This study considers several scenarios for alternative assumptions about key input parameters. In each scenario, the model is used to solve for a least-cost allocation of resources and technologies to meet projected energy service demands while achieving a specified policy target for emissions. In the Reference scenario, only existing state-level policy targets are included, with no new state or federal policies or incentives. This analysis does not include the specific incentives in the recently enacted Inflation Reduction Act. Each of the other scenarios in this analysis assumes a target of economy-wide net-zero energy-related CO₂ emissions by 2050, which aligns with the stated goals of the Biden administration and several other public and private entities.^[1] As shown in Figure 3, the target for allowable net emissions declines linearly over time from 3.2 GtCO₂ in 2030 (47% below 2005) to zero in 2050. The 2030 target is roughly consistent with the new U.S. goal under the Paris Agreement of a 50–52% reduction in total GHGs by 2030.^[2] Although this analysis does not directly focus on the near-term actions and challenges associated with meeting the 2030 goal, a net-zero target in the 2050 timeframe does have implications for the timing of the transition path, as highlighted in the Trends Over Time section. Modeling of the 2030 target—taking into the potential impacts of the Inflation Reduction Act and other recent developments—is the subject of a parallel study and will inform future analysis under the LCRI.

A key theme explored in this analysis is the important role of flexibility in achieving a net-zero emissions target. In contrast to requiring each sector or industry to achieve net-zero on its own, the target is expressed here as a single economy-wide balance that allows for positive emissions flows in some sectors to be offset by negative emissions elsewhere in the economy. This system perspective emphasizes the value of flexibly allocating emissions reductions (and atmospheric removals) across sectors to find a least-cost overall approach. In this context, atmospheric carbon dioxide (CO₂) removal (CDR), or negative emissions, emerges as a key strategy. Figure 4 summarizes the negative emissions technologies included in this analysis.

Because of the important role of both geologic storage of CO₂ and bioenergy in facilitating negative emissions, and the central role of natural gas in the U.S. energy system, the scenario design summarized in Figure 3 explores key uncertainties around these technologies in particular. There are many other uncertain dimensions that could impact technology pathways to achieve a net-zero emissions target. The modeled least-cost technology mix to achieve decarbonization targets is sensitive to assumptions about future technology developments. Moreover, alternative policy or target formulations, regulatory and market constraints, and other external factors could lead to technology deployments other than the idealized least-cost mix. The scenarios described in this analysis were chosen to show a range of different pathways for low-carbon technologies and to highlight key strategic trade-offs that arise in the context of an economy-wide net-zero framing. These scenarios should not be interpreted as likely or expected futures but rather as illustrative examples of how optimized model results depend on the range of input assumptions. Further LCRI research will build on this analysis to explore a broader range of scenarios around uncertainty in future technology development and other drivers.

#Net-Zero All Options Scenario

The All Options scenario assumes that the full portfolio of clean energy technologies is available, including renewables (solar, wind, and hydropower), nuclear, fossil and bioenergy with carbon capture and storage (CCS), electricity storage (e.g. battery storage and pumped hydro), hydrogen and hydrogen-derived fuels (e.g., synthetic jet fuel and synthetic natural gas), and biofuels (e.g., renewable natural gas and renewable diesel). Direct air capture technologies and opportunities for natural climate solutions are also available in this scenario. Future cost and performance improvements over time are assumed for most technologies, at varying rates (see us-regen-docs.epri.comopen in new window for details). This scenario also assumes sustained low prices for the domestic production of natural gas, similar to recent projections (e.g., the Annual Energy Outlook 2022 Reference case).

#Net-Zero Higher Fuel Cost Scenario

In the All Options scenario, natural gas, advanced cellulosic biofuels, and CCS, among other low-carbon technologies, each play a prominent role in the modeled least-cost net-zero energy system (Figure 12). These results are conditional on several key uncertainties: parts of these technology pathways are not yet proven at scale; cellulosic biomass feedstock supply costs and available quantities are uncertain and subject to land use and other constraints; and recent geopolitical events have raised the possibility of long-term disruptions in global fuel markets. In the Higher Fuel Cost scenario, all technologies are available, but with higher costs for the transport and geologic storage of captured carbon, tighter supply assumptions for bioenergy feedstocks, particularly energy crops and logs, and higher supply costs for natural gas and petroleum, to explore the sensitivity of trade-offs with other low-carbon pathways to these uncertain parameters. Table 1 summarizes the default and alternative assumptions for CO₂ transport and storage, Figure 5 shows the gas price trajectory across scenarios, and Figure 6 shows the default and alternative assumptions for biomass feedstock supply.

#Net-Zero Limited Options Scenario

The Limited Options scenario assumes that geologic storage of CO₂ is not available, whether for technical, regulatory, or other reasons. This limitation leads to a very different strategy for achieving net-zero emissions, as it significantly restricts the potential scale of negative emissions. Additionally, this scenario assumes that bioenergy supply is limited, as in the Higher Fuel Cost case. This scenario assumes reference natural gas and petroleum prices, although the emissions target in this scenario results in much smaller market size for fossil fuels given the limited potential for negative emissions. All other technologies are available in this scenario.

Costs vary by region and application; see https://us-regen-docs.epri.comopen in new window for further details.