Skip Laitner, EPA and Jonathan Koomey, LBNL Laitner.Skip@epamail.epa, 202/564-9833

1. Re-estimating the Annual Energy Outlook 2000 Forecast Using Updated Assumptions about the Internet Economy Skip Laitner, EPA and Jonathan Koomey, LBNL Laitner.Skip@epamail.epa.gov, 202/564-9833 JGKoomey@lbl.gov, 510/486-5974, http://enduse.lbl.gov/ Talk is on the web at http://enduse.lbl.gov/shareddata/NEMSinternettalk001022.ppt Presented at the Earth Technologies Forum Washington DC October 30, 2000

2. Background • Issue: AEO 2000 forecast may not incorporate some important recent trends. • Question: What effect would incorporating such trends have on energy use and carbon emissions in 2010? • Tool: Use LBNL’s version of the National Energy Modeling System (LBNL-NEMS), which we’ve worked with since 1995.

3. Comparison of U.S. Energy Projections:A Difference in Technology Assumptions AEO 2000 Forecast Typical Forecasts Pre-1980 EPA/LBNL Scenario Low-Energy Future Projection Based Upon 1980 DOE Analysis Historical Consumption Source: EPA estimates and 1980 DOE Policy Analysis

4. Recent Trends in U.S. Energy Intensity

5. The Information and Communication Technologies Diffusion Curve Where the economy seems to be right now Where most models seem to focus

6. Methodology • Method: Adjust AEO forecast to account for possible effects of new trends and programs. Postulate changes relative to the AEO 2000 in the following areas: • Paper and cement production (down in 2010 by 7 Mt and 6 Mt, respectively) • Vehicle miles traveled (down about 4% in 2010) • Commercial floor area (down 10% by 2006). • Combined heat and power (up 20 GW by 2010) • Structural change (shift towards IT) • Voluntary programs more fully incorporated

7. Comparison of historical cement, paper and steel production trends to the AEO 2000 scenario Data Sources: LBNL (historical trends), EIA (1999).

8. Results for 2010 • AEO 2000 Forecast = 1787 Million Metric Tons Carbon (MtC) • Downward shifts from the new economy might equal 76 MtC • Reduced Paper and Cement Consumption = 6 MtC • Reduced Transportation Consumption = 15 MtC • Reduced Commercial Building Space = 16 MtC • Increased CHP/DES/Gasification Systems = 8 MtC • Structural change in the Economy = 31 MtC • Voluntary programs may add as much as 40 MtC additional savings. • Incorporating all these effects (including take-back) might reduce carbon emissions by about 100 MtC in 2010, or about 6% below AEO 2000 levels.

9. More Questions than Answers • Would a better definition and measurement of the ICT-sectors either weaken or improve the supposed benefits? • How will competition and innovation within the ICT-sectors affect productivity gains throughout the nation’s economy? How will they impact other inflationary pressures? Will we see managed but positive deconstruction or wild and woolly creative destruction? • Are there other tradeoffs not anticipated by the transition to an information-age economy, including changes in distributional benefits, consumer or producer surpluses, the increased reliance on imported or critical materials, or other environmental and economic impacts? • Will the resources devoted to ICT-infrastructure improvements reduce the opportunities for improvement in other sectors of the economy? • Can we make this positive vision of the future come to pass?

10. Conclusions • Potential effects explored in this analysis are large enough to matter. • Large uncertainties remain in analyzed effects, particularly in those related to systemic effects of E-commerce on resource use. • Other effects not included here • Reduced building construction • Outsourcing of energy services • Changes in other materials use