World economy grew, but carbon emissions didn’t

In a sign that low-carbon policies may finally be gaining traction, global carbon dioxide (CO2) emissions leveled off last year even while the world economy grew.

Preliminary data from the International Energy Agency (IEA) indicate that energy-related CO2 emissions (from burning fossil fuels for electricity, transportation, industry, space heating and so on) remained unchanged from the previous year at 32.3 billion metric tons. Meanwhile, economic growth increased 3.3 percent.

One year’s data doesn’t necessarily translate into a trend. Even with much stronger efforts, it will be some time before we can truly announce that we have turned the corner on reducing carbon dioxide emissions. But 2014 is notable in that it’s the first time since the IEA was established in the early 1970s that a levelling off or a drop in global carbon emissions didn’t accompany an economic downtown.

Historically, energy-related CO2 emissions have moved in lockstep with economic growth. They’re being decoupled due to policy changes and market forces affecting two factors – energy intensity and fuel mix – both in China and in the developed economies.

Energy intensity is a measure of how much energy a country uses to create its goods and services, or GDP. While fuel mix looks at what sources, such as fossil fuels, nuclear and renewables, a country uses to derive its energy.

In China, efficiency policies, ambitious targets for renewable and nuclear energy, and anti-pollution measures appear to be having the desired effect. Emissions in China last year dropped for the first time, by 2 percent, even as its economy grew 7.3 percent.

China, the world’s largest energy consumer and largest emitter of CO2, has committed to reducing its energy intensity, setting goals in its last two five-year plans. China’s energy intensity will decline as it transitions from a predominantly manufacturing economy to a more service-based economy, since services such as finance, retail, and software development require less energy than steel and cement making.

Chinese coal consumption fell by 2.9 percent last year due to new, cleaner electric generating capacity, new restrictions on where new coal plants can be built, and shutdowns of older, less efficient plants in urban areas.

In developed countries, long-standing policies to promote energy efficiency and increase the adoption of renewable electricity generation seem to be paying off. CO2 emissions in developed countries peaked in 2007 and were nearly 7 percent lower in 2012, even as economic activity increased after 2010.

Developed countries have reduced energy intensity by improving vehicle fuel economy and increasing the efficiency of appliances and industrial and commercial equipment. U.S. fuel economy standards adopted in 2012 for model years 2017 to 2025 will double the efficiency of the U.S. fleet compared with vehicles manufactured in 2008, lowering emissions. Moreover, the United States, the European Union, Japan and many other countries are encouraging greater adoption of more efficient lighting, refrigerators, and industrial equipment, reducing electricity consumption.

In the US, 30 states and the District of Columbia have renewable electricity standards, which, along with other national policies, are encouraging greater quantities of renewable generation. Since 2002, non-hydro renewable electricity generation in the United States has more than tripled. Germany has installed more solar PV than anywhere in the world.

Market forces have also contributed to decarbonizing the fuel mix, particularly in the United States. An abundance of natural gas, brought about by technological innovation, has led to its greater use in the power sector. Since 2005, natural gas’ share of the U.S. electricity mix has increased from 19 to 27 percent, while coal’s share has gone from 50 to 39 percent. Since burning natural gas releases half as much carbon dioxide as burning coal (and far fewer pollutants per unit of energy), the shift to natural gas plus growing renewable generation lowered U.S. power sector emissions 15 percent.

While these developments are promising, the IEA’s own projections show we’re not likely to stay on this path, and that global CO2 will increase in the future. The World Energy Outlook 2014’s more optimistic scenario projected energy-related CO2 emissions will rise 8 percent by 2020 and 13 percent by 2030, led by emissions growth in developing countries. Non-CO2 greenhouse gases are also expected to increase, and land-use changes and deforestation could also worsen the problem.

Clearly, there is more work to do.

But there’s reason to be optimistic, especially as more countries announce their intended contributions to a new international climate agreement due this December in Paris. Greater adoption of policies that reduce energy intensity, promote energy efficiency, and decarbonize our fuel mix will help countries, states, cities and companies reduce emissions and mitigate the damage from climate change.