related cost reductions for some technologies but not others. On a third topic, the role of offsets in greenhouse gas modeling, the word Newell used to characterize the issue was “huge.” Newell used the example of EIA’s analysis of H.R. 2454 (the American Clean Energy and Security Act of 2009, or simply the Waxman-Markey bill), passed by the U.S. House of Representatives in the summer of 2009. In that analysis, offsets constitute up to 78 percent of cumulative abatement through 2030. If one limits offsets, the allowance price increases by more than 60 percent, all else constant. Offsets were one of two key sensitivities that EIA found in its analysis (the other was the cost and the availability of options for generating electricity with low or no greenhouse gas emissions).
Finally, with regard to the issue of story lines, Newell noted that model projections are not meant to be an exact prediction of the future, but rather a representation (a story line) of a plausible energy future given the current technological and demographic economic trends and what is assumed about current laws, regulations, and consumer behavior. These assumptions and projections, though, are highly uncertain, given that they are subject to many events that cannot be foreseen, such as energy supply disruption, policy changes, and technological breakthroughs. Generally, the differences between various story lines can often be useful to look at, or even more useful to look at than the results of any individual policy case. But there is often considerable debate around even the direction of an effect felt as a result of an individual factor, such as whether an individual policy initiative or behavioral trend will be a positive or a negative, a total cost or a benefit, or will lead to an increase or a decrease in emissions, or result in increased or decreased use of a particular technology.