Life Cycle Optimization of Residential Air Conditioner Replacement

Table 5.7: Impact of Carbon Price on Cost Optimal SolutionCity CarbonCost($/ton ofCO 2 eq.)ScheduleLifeCycleCost(2009$)Ann Arbor No Tax 1985, 1995, 2008 $21,600$50 1985, 1995, 2008 $23,000$100 1985, 1995, 2008 $24,300$200 1985, 1995, 2008 $27,000SanAntonioNo Tax 1985, 1995, 2008 $45,600$50 1985, 1995, 2008 $49,200$100 1985, 1995, 2008 $52,800$200 1985, 1995, 2008 $60,100Creating a cost of carbon up to $200 per ton of carbon dioxide had no impact on the actualreplacement dates. Since the final replacement date remains 2008, the carbon cost introducedin 2009 would only serve to raise the cost of operating the unit from 2009 until the end of thetime horizon.It is important to note that the model does not reflect changes to the forecast for averageefficiency of units sold as a result of carbon pricing. This model also does not reflect changes inthe emission factors of the electricity grid as a result of carbon pricing. It is likely that lesscarbon intensive generation methods would be adopted since a carbon price of $200 per toncould double or triple the price of electricity in most NERC grids. Finally, these dramaticincreases in the price of carbon would also change consumer patterns and reduce airconditioning demand in favor of ceiling fans and other methods of cooling. All of these factorsgreatly limit the accuracy of the optimization for forecasting actual lifecycle costs under acarbon pricing regime. Instead, these results should be viewed as an upper bound of lifecyclecosts over the time horizon.