The Last Mile to Net Zero: Why Modeling Every Sector Matters
Achieving net-zero greenhouse gas emissions by 2050 is a challenging, multi-layered goal, especially because reducing the “last miles” of emissions—the final few percent—is substantially more difficult and costly than earlier reductions.
The U.S. Energy Information Administration’s (EIA’s) National Energy Modeling System (NEMS) has long served as a critical tool for forecasting and evaluating U.S. energy markets. However, as the urgency of addressing climate change increases, so too does the need for more comprehensive modeling capabilities—particularly in the area of non-CO₂ greenhouse gas (GHG) emissions. Some forward-looking groups are exploring how these emissions could be integrated into NEMS to better capture the complexities of net-zero scenarios. These enhancements would mark an important step in expanding the model’s capabilities to account for all GHG emissions. Greater engagement across sectors could help ensure that evolving models like NEMS are equipped to reflect the full range of emissions and mitigation options needed for effective policy analysis. These proposed enhancements represent a path forward in the continual evolution of NEMS and will help pave the way for more accurate complete net-zero modeling, as the U.S. works toward achieving net-zero emissions by 2050.
Why Non-CO2 GHGs Matter in Modeling
While CO₂ is the most significant contributor to GHG emissions, other gases such as methane (CH₄), nitrous oxide (N₂O), and fluorinated gases (HFCs, PFCs, SF₆, NF₃) also play a crucial role in global warming. These gases often have higher global warming potentials (GWP) than CO₂ and remain in the atmosphere for extended periods, making them critical targets for emission reduction strategies. As one example, methane that may escape the natural gas system and seep or be vented from wells and pipelines directly into the atmosphere has a GWP of 27 to 30 times that of CO₂ over 100 years.
Historically, NEMS has focused primarily on CO₂ emissions from energy combustion, roughly 80% of total GHG emissions, leaving a gap in the ability to model and analyze the contributions of non-CO₂ gases. This gap has made it difficult to fully simulate the potential impact of various policy and technological scenarios on the broader goal of net-zero GHG emissions. Recognizing this limitation, the U.S. Department of Energy Office of Fossil Energy and Carbon Management (FECM) tasked OnLocation with designing an expanded NEMS framework, now referred to as FECM-NEMS, to better represent these emissions and integrate mitigation options.
Figure 1: Expanding NEMS with GHG Emissions and Mitigation Across Sectors
Disjointed Approaches Are Inefficient at Best
Historically, the modeling of sources of non-CO₂ gases has often been performed in isolation rather than as part of an interconnected economy-wide strategy. For instance, the agriculture sector, the largest source of methane emissions after energy, has mainly focused on soil management and livestock practices, while the waste sector has tackled landfill gas capture separately, and energy-intensive industries have concentrated on improving efficiencies in their processes. This fragmented approach has led to “silos” in policy development and response, with each sector’s solutions not necessarily aligning with or complementing the broader goal of cross-sectoral emissions reductions. This disconnect hinders the creation of unified, cost-effective strategies that could leverage overlapping benefits between sectors, such as linking energy efficiency incentives with agricultural methane capture initiatives, such as Renewable Natural Gas (RNG), anerobic digesters, and the state and federal programs that support those projects.
Moreover, as emissions decrease, the marginal cost of each ton of reduction typically increases. The first 80% of reductions might be achievable through efficiency improvements and switching to renewables. Still, the last 20%, and in particular the final increments like the last 5%, can involve significant financial and technological challenges, such as carbon capture and storage (CCS) for industrial emissions, advanced methane abatement techniques, or large deployments of Direct Air Capture (DAC) technologies. Without comprehensive modeling of these costs and sector-specific responses, policymakers risk underestimating the resources and strategies needed to achieve full net-zero, and may fail to identify the most cost-effective integrated approaches.
This is where a robust, comprehensive modeling system like NEMS becomes essential. Energy-related CO2, and many of the options for addressing their mitigation, are already included within the model. Expanding NEMS to include non-CO₂ GHGs enables it to simulate how different policies—such as carbon pricing or emissions trading—affect all sectors and gases, not just CO₂. Such a model can capture interdependencies, showing how reductions in one sector impact another, and can test the cost-effectiveness of technologies across sectors.
Options for Modeling Non-CO2 GHGs in FECM-NEMS
The proposed plan described in the Component Design Report involves consideration of several approaches:
- Expanding Emissions Categories: FECM-NEMS already represents major CO2 emissions from fossil fuel combustion, but non-CO2 emissions—especially from sectors like agriculture, waste, and land use—were previously underrepresented. Our work focused on identifying and quantifying these emissions, drawing on EPA’s Inventory of U.S. Greenhouse Gas Emissions and Sinks as a benchmark.
- Incorporating Marginal Abatement Cost (MAC) Curves: For many sectors, MAC curves are an effective tool for estimating the cost of reducing GHG emissions. These curves provide a simplified, numerical approach to estimating the costs of mitigating emissions over time, enabling policymakers to weigh the trade-offs between cost and impact across sectors.
- Adding Explicit Mitigation Technologies: For larger emission sources, we propose adding endogenous technologies into FECM-NEMS, allowing for detailed, technology-specific mitigation strategies. This is particularly useful for sectors like energy and industry, where multiple technological pathways—such as carbon capture and storage (CCS) or renewable energy integration—can be modeled based on cost, performance, and scalability.
- Linking External Models: For emissions that fall outside the scope of NEMS, particularly in sectors like land use and agriculture, we propose linking FECM-NEMS to external models like POLYSYS. This provides a more detailed representation of emissions in sectors that NEMS alone cannot model comprehensively.
For example, MAC curves are a potential tool for estimating emissions reductions across different mitigation options within a sector or economy. Each point on the curve represents a specific reduction strategy, plotted by the cost per ton of emissions abated on the vertical axis and the cumulative potential emissions reduction on the horizontal axis. The curve is typically produced using detailed data on mitigation technologies, including their capital costs, operating expenses, and the effectiveness of emissions reduction, as well as broader economic inputs like energy prices, policy incentives, and regulatory constraints. As abatement progresses and lower-cost options are exhausted, the curve generally slopes upward, indicating the increasing costs associated with further emissions reductions.
By incorporating marginal abatement cost (MAC) curves and sector-specific technologies, the model could provide insight into how each sector might respond to emissions pricing, helping to balance efforts across the economy. However, their simplification of mitigation responses and effects would need to be weighed against their overall impact and a determination as to whether to incorporate the underlying technologies into FECM-NEMS directly.
The stakes are high. Without addressing these non-CO₂ emissions, net-zero goals remain out of reach. Only through comprehensive modeling, which includes emissions from agriculture, waste, and industrial sectors, can we develop actionable and cost-effective pathways that realistically support the U.S. in achieving net-zero emissions by 2050.