2022 – EAN Annual Progress Report for Vermont – Key Findings

2022 – EAN Annual Progress Report for Vermont – Key Findings

2022 – EAN Annual Progress Report for Vermont – Key Findings

1. Vermont passed its first Climate Action Plan in 2021

As required by the Global Warming Solutions Act (GWSA) of 2020, the Vermont Climate Council adopted Vermont’s first Climate Action Plan (CAP) in December 2021. The CAP identifies 26 pathways and proposes 64 strategies for necessary action to meet the emissions reduction requirements established in the GWSA. The highest-impact emissions reductions strategy proposed was the Clean Heat Standard, which would require the thermal fuel sector to meet its share of emissions reduction by 2030. The Clean Heat Standard alone would meet over one third of Vermont’s emissions reductions responsibility under the GWSA. Despite being a strong recommendation of the Climate Council and receiving overwhelming support in the legislature, the future of the Clean Heat Standard is uncertain due to a veto by Governor Scott.

In addition, when the CAP was completed, the largest outstanding question was the path forward for reducing transportation emissions. A week and a half before the CAP deadline, the Transportation and Climate Initiative Program (TCI-P), a regional cap-and-invest program focused on the transportation sector, stalled after Connecticut and then Massachusetts pulled their support.

As this report goes to press in the summer of 2022, the Vermont Climate Council is working to identify one or more primary policy recommendations to ensure transportation sector emissions reductions in line with GWSA requirements are achieved, with one or more recommendations expected before the end of 2022. In particular, cap-and-invest strategies such as joining the Western Climate Initiative, and/or performance standard approaches such as a Clean Transportation Standard, are being actively considered.

Financial Savings from CAP

Meeting Vermont’s emissions reduction requirements is a massive opportunity for Vermont consumers and the Vermont economy. When we transition from 100% imported, high cost, price volatile fuels to lower-cost, price stable clean energy, the result is a win-win: more money is kept local and in consumers’ pockets.

The Vermont Pathways Analysis Report (or Pathways Report), produced for the Vermont Climate Council and Vermont Department of Public Service by Cadmus and Energy Futures Group (EFG) projects $6.4 billion in net economic savings and avoided damages between now and 2050 by meeting our emissions reduction commitments. The analysis anticipates the net creation of an average of 220 new jobs added (and subsequently retained) every year over the next three decades, adding up to 109,000 job years in total. The growth in energy efficiency and clean energy jobs will far offset the comparatively few jobs that may be lost at those fossil fuel companies that refuse to transition their business models.

A major priority of the Climate Action Plan is an equitable energy transition for Vermonters. That means policies, programs, and incentives to provide Vermonters with lower and middle incomes with the ability to acquire products and services that allow them to reduce pollution and save money over time. Holistic policy solutions and public funding are necessary to counteract deeply entrenched inequities and energy burdens resulting from fossil fuel dependence. While this transition requires each of us to act, we can’t leave it up to individuals to act alone.





2. VT needs to reduce GHG emissions from transportation and heating to meet our climate requirements

The overarching framework of the Global Warming Solutions Act (GSWA) provides a major opportunity for economy-wide emissions reductions. Historically, Vermont policy and regulatory requirements have primarily been focused on the electricity sector, which has resulted in significant reductions in electricity emissions over recent years. At this point, nearly three-quarters of Vermont’s GHG emissions come from the transportation and thermal sectors. Compared to the U.S. as a whole, Vermont has a higher percentage of emissions coming from the transportation and building/thermal sectors, and less from the electricity sector.

The Vermont Climate Action Plan (CAP) includes many emissions reduction policy recommendations, with a heavy focus on thermal and transportation-related measures. These include pathways ranging from the expansion of residential weatherization and clean heating options, to providing incentives for the purchase of electric vehicles and and expanding infrastructure for transit and non-motorized transportation. While Vermont’s electricity sector can and will become less carbon intensive over time, it is already much lower emitting than that of other states. This enables significant and immediate emissions reductions whenever Vermonters electrify our transportation and heating needs, instead of using fossil fuels.

3. New policies and programs must help reduce energy burdens

The lowest-income Vermonters purchase less energy than upper-income Vermonters — but that energy spending takes up a much greater share of their household budgets.

Energy burden, the percentage of household income spent on energy, is a useful metric for comparing differential effects of energy spending on different communities. Efficiency Vermont’s 2019 Energy Burden Report examined geographic disparities in energy burdens, finding that the average varies by town from 6% to 20%. Notably, the towns with the highest energy burdens do not spend more on energy, they just have lower median incomes.

Challenges related to energy and climate do not exist in isolation from other societal challenges. They are interlinked and exacerbated by racial and economic inequities. Although data limitations prevented us from analyzing energy burden by race in Vermont, national assessments have shown that structural inequalities in U.S. energy systems cause energy insecurity that disproportionately affect BIPOC (Black, Indigenous, and people of color) households, and Black households in particular, with lasting, generational effects.

It is not enough to meet the numerical targets of Vermont’s energy and emissions reduction commitments — it is also very important to change who pays and who benefits. We need to quickly move beyond fossil fuels for our energy needs for both climate reasons and to support long term economic health. We also need to make sure that all Vermonters receive the benefits of the clean energy transition, with most costs borne by those who can most afford it.

4. Climate Council Pathways Analysis shows how VT can meet emissions reduction requirements

The Pathways Report, produced for the Vermont Climate Council and Vermont Department of Public Service by Cadmus and Energy Futures Group (EFG) shows that we can meet our 2025 and 2030 emissions reduction commitments under the Global Warming Solutions Act (GWSA) with currently available energy technologies and proven best practices. Although these emissions reductions are technically possible, they will require significant policy actions and investments. 2022 saw failures to approve key policy changes, including TCI-P and the Clean Heat Standard. Even important investments approved in 2022 do not represent long-term solutions, such as Federal ARPA funding that will expire in 2026 — exactly the time when we need to scale up action and investments to meet our stronger 2030 GHG reduction requirement.

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 action is needed. The graphs on these pages highlight the highest-impact transportation and thermal measures in the Pathways Report, and show the scale of progress needed by 2025 and 2030 compared to a 2020 baseline. Some uptake of these measures would be expected to increase under a business as usual projection given existing policies and programs. However, without significant additional policies and programs, business as usual is not expected to get us anywhere near the requirements of the Global Warming Solutions Act, especially for 2030. The measures highlighted here are just the highest impact measures in the transportation and thermal 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, including but not limited to those in the transportation and thermal sectors, together at the scale and pace modeled to reach our GWSA requirements. If we fall short on any one of them, other pathways and/or measures would need to do even more to make up the difference.

While the climate action investments committed in 2022 are an important start, these dollars alone — mostly federal funds meant to be spent between now and 2026 — will come nowhere near what is necessary to achieve the Pathways Report targets in the absence of additional, overarching policy and higher investments in future years. For example, at approximately $10,000 per project, $80 million for weatherization of Vermont homes may only produce around 8,000 of the 90,000 weatherization projects needed by 2030. The $12 million for EV incentives may only support the purchase of 3,000 additional AEVs — far short of the 127,000 expected to be necessary by 2030.

The graph below shows the GHG reductions that would come from technology adoption at the scale and pace modeled to meet Vermont’s GWSA emissions reduction requirements, according to the Pathways Report.

5. Relying on fossil fuels harms Vermonters and Vermont’s economy

Vermont’s reliance on fossil fuels for 72% of our home heating and 94% of our transportation harms both Vermont consumers and our state’s economy. Fossil fuel prices are, on average, both high cost and highly price volatile. Crude oil prices have ranged from a low of less than $20 per barrel during the early days of COVID in April 2020, to over $100 per barrel during the Russian invasion of Ukraine in March 2022. While Vermonters have no control over the prices of fossil fuels, or what countries are benefiting from our fossil fuel purchases, we can have more control over how much money we spend on energy with efficiency improvements and by switching to non-fossil energy sources that cost less over time and keep more of our energy dollars local.

We can reduce our use of fossil fuels through efficiency measures like weatherizing our homes, buying more efficient vehicles, or by switching to less carbon intensive fuel types like biomass, including wood chips, pellets or cordwood, biodiesel, or renewable natural gas. The best way to get off of fossil fuels is by switching to equipment that does not use fossil fuels at all. All-electric solutions exist for home heating, water heating, transportation, property maintenance, and more. Even on a narrow cost-benefit analysis basis, Vermonters will often save money over the life of the equipment when they replace a piece of fossil fuel equipment with a comparable efficient electric option. Policies and programs can help to alleviate some of the barriers to adoption of non-fossil equipment.

Three quarters of the money we spend on fossil fuels immediately drains out of the state, with only a quarter staying and recirculating in our economy. However, when we use electricity to provide the same services, by driving electric cars or heating with high efficiency electric heat pumps, 70% of the dollars we spend on energy stay and then recirculate in Vermont, helping pay the salaries of Vermonters, including lineworkers, tree-trimmers, and local clean power producers, while strengthening our local economy.

However, Vermont currently imposes higher taxes and fees on electricity while allowing the most polluting energy sources that hold Vermont’s economy back — fossil fuels — to contribute the least to public investment.

6. Meeting Vermont’s climate commitments will only be possible if we grow our climate workforce

Vermont’s climate workforce is made up of approximately 18,900 people who work at least some of the time in climate mitigation, adaptation, or resilience. This includes the 17,502 clean energy workers documented in the 2021 Clean Energy Industry Report, plus climate workers in other sectors such as agriculture and land management, waste management, public transit, education, financing and philanthropy, and selling and servicing electric equipment.

Reaching our climate requirements will require a significant increase in Vermont’s climate workforce. For example, we currently have about 770 people working in weatherization as field workers, office staff, and energy auditors, but we may need more than 6,200 people in those careers by 2030.

Similarly we had around 225 HVAC workers in Vermont in 2020 installing single-zone and multi-zone heat pumps, and will need to double those numbers to more than 450 people in those careers by 2030.

A significant increase in workforce requires long-term, ongoing funding sources to allow businesses to have confidence to expand. It requires training and support for workers and employers. And it also highlights the need for wrap-around services for workers, including affordable housing, transportation, and childcare. A growth in climate careers is good for the state of Vermont and for Vermont workers — but too many employers are currently finding it hard to hire the workers they need.

7. Equipment choices matter: To cut emissions and costs, we have to stop purchasing new fossil dependent vehicles and heating systems

Energy choices — especially the equipment we use to stay warm and to get around — have major implications for both the climate and our pocketbooks. When buying new fossil fuel dependent equipment, a decade or more of pollution, high costs, and price volatility gets locked in — none of which we can afford. In contrast, purchasing a more efficient and clean alternative can save money while reducing pollution. Here are comparisons of the costs and climate pollution that result from different energy equipment choices over their lifetime.