Minnesota Climate Change Advisory Group Final Report Page: 9
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* Discounted and "levelized" costs Fairly standard approaches were taken here. The "net
present value" of costs was calculated by applying a real discount rate of 5%. Dollars-per-ton
estimates were derived as a "levelized" cost per ton, dividing the "present value cost" by the
cumulative GHG reduction measured in tons. As was the case with GHG reductions, the
period 2008 2025 was analyzed.
* Benefits vs. costs The principal benefit of the MCCAG policy recommendations is reduced
GHG emissions and these were quantified simply as metric tons. There was no attempt to
monetize the benefit of these reductions in atmospheric concentration (e.g., health benefits).
Many policies did create easily monetized non-GHG benefits (e.g., fuel savings and
electricity savings). In these cases, monetized benefits were subtracted from monetized costs,
resulting in net costs. These net costs could be positive or negative; negative costs indicated
that the policy saved money or produced "cost savings."
* Direct vs. indirect effects Cost estimates were based on "direct effects" (i.e., those borne by
the entities implementing the policy).15 Implementing entities could be individuals,
companies, and/or government agencies. In contrast, conventional cost-benefit analysis takes
the "societal perspective" and tallies every conceivable impact on every entity in society (and
quantifies these wherever possible).
Contributing Issues: The MCCAG recommendations were guided in part by the GHG
reductions and monetized costs and benefits of various options, but members also felt that other
considerations (e.g., social, economic, and environmental) should also have weight. The TWGs
were asked to examine these qualitative terms where deemed important and quantify them on a
case-by-case, as needed, depending on need and where data were readily available.
Minnesota GHG Emissions Inventory and Reference Case Projections
The CCS, with assistance from the Minnesota PCA, prepared a draft of Minnesota's GHG
emissions inventory and reference case projections for the MCCAG.16 The draft inventory and
reference case projections, completed in July 2007, provided the MCCAG with an initial,
comprehensive understanding of current and possible future GHG emissions. The draft report
was provided to the MCCAG and the TWGs to assist the MCCAG in understanding past,
current, and possible future GHG emissions in Minnesota and thereby inform the policy
recommendation development process. The MCCAG and TWGs have reviewed, discussed, and
evaluated the draft inventory and methodologies as well as alternative data and approaches for
improving the draft GHG inventory and forecast. The inventory and forecast was revised to
address the comments approved by the MCCAG and was subsequently approved by the
MCCAG at its seventh meeting.
The inventory and reference case projections included detailed coverage of all economic sectors
and GHGs in Minnesota, including future emissions trends and assessment issues related to
s15 "Additional benefits and costs" were defined as those borne by entities other than those implementing the policy
recommendation These indirect effects were quantified on a case-by-case basis depending on magnitude,
importance, need, and availability of data
16 Draft Minnesota Greenhouse Gas Inventory andReference Case Projections, 1990-2020, prepared by the Center
for Chimate Strategies for the Minnesota Pollution Control Agency, July 2007
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Minnesota Climate Change Advisory Group. Minnesota Climate Change Advisory Group Final Report, report, April 2008; Minnesota. (https://digital.library.unt.edu/ark:/67531/metadc226723/m1/36/: accessed April 23, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; .