The U.S. Electric Power Sector and Climate Change Mitigation

Measured by environmental impact and economic importance, the electricity industry is one of the most important sectors of the American economy. The generation of electricity is responsible for 38 percent of all U.S. carbon dioxide (CO₂) emissions and one third of all U.S. greenhouse gas (GHG) emissions. This sector is the largest single source of these emissions. It is also the largest source of sulfur dioxide (SO₂), oxides of nitrogen (NO_X), small particles, and other air pollutants.

At the same time, electricity is critical to the U.S. economy. Recent annual national expenditures on electricity totaled $250 billion—making the electricity sector’s share of overall GDP larger than that of the automobile manufacturing industry and roughly equal in magnitude to that of the telecommunications industry. Expenditures alone, however, understate the importance of electricity to the U.S. economy. Nearly every aspect of productive activity and daily life in a modern economy depends on electricity for which there is, in many cases, no close substitute. As the most desirable form of energy for many uses, electricity use has grown faster than GDP. The Internet and computers would not operate without very reliable, high-quality electricity. Electricity also plays a major role in delivering modern comforts and easing household tasks, from running heating and cooling systems to washing clothes and dishes. It plays an even more important role in the commercial, manufacturing, and agricultural sectors, where it provides lighting and powers a variety of machines. In short, it is hard to imagine a modern economy functioning without large amounts of reliable, high-quality electricity.