Incorporating upstream emissions into electric sector nitrogen oxide reduction targets

Electricity production is a major source of air pollutants in the U.S. Policies to reduce these emissions typically result in the power industry choosing to apply controls or switch to fuels with lower combustion emissions. However, the life-cycle emissions associated with various fuels can differ considerably, potentially impacting the effectiveness of fuel switching. Life-cycle emissions include emissions from extracting, processing, transporting, and distributing fuels, as well as manufacturing and constructing new generating capacity. The field of life-cycle analysis allows quantification of these emissions. While life-cycle emissions are often considered in greenhouse gas mitigation targets, they generally have not been included in air quality policymaking. We demonstrate such an approach, examining a hypothetical electric sector emission reduction target for nitrogen oxides (NO_x) using the Global Change Assessment Model with U.S. state-level resolution. When only power plant emissions are considered in setting a NOx emission reduction target, fuel switching leads to an increase in upstream emissions that offsets 5% of the targeted reductions in 2050. When fuel extraction, processing, and transport emissions are included under the reduction target, accounting for 20% of overall NO_x reduction goal, the resulting control strategy meets the required reductions and does so at 35% lower cost by 2050. However, manufacturing and construction emissions increase and offset up to 7% of NO_x reductions in electric sector, indicating that it may be beneficial to consider these sources as well. Assuming no legal obstacles exist, life-cycle-based approaches could be implemented by allowing industry to earn reduction credits for reducing upstream emissions. We discuss some of the limitations of such an approach, including the difficulty in identifying the location of upstream emissions, which may occur across regulatory authorities or even outside of the U.S.