How Big A Deal Is Economy–Energy CO2 Decoupling?

March 15th, 2015 by Sandy Dechert

We’ve heard some cautious rejoicing comes from scientists and media this weekend about the world economy and energy carbon dioxide emissions finally decoupling last year. World emissions of CO2 remained at 32.3 billion tons in 2014, while world GDP figures grew by 2.9%. Many analysts have hailed the change as showing that emission reduction efforts to combat climate change may be bearing more fruit than previously calculated. In an exclusive communication with CleanTechnica, Michael Mann, climatologist, geophysicist, and director of the Earth System Science Center at Pennsylvania State University, stated, “This a hopeful demonstration of the fact that we can decarbonize and grow the economy at the same time.”

The International Energy Agency indicated in a preliminary statement that emissions of carbon dioxide from the world’s power sector accelerated less in 2014 than the global economy (see graph). While recession has caused this phenomenon several times in the past (the early 1980s, 1992, and 2009), for the first time in 40 years we are now experiencing a relative reduction in emissions during a time of economic gains.

The figures were first published by The Financial Times in an interview with Chief Economist Fatih Birol, who will succeed Maria van der Hoeven as executive director of the agency. He said:

“This is both a very welcome surprise and a significant one. [It] gives me even more hope that humankind will be able to work together to combat climate change, the most important threat facing us today…. For the first time, greenhouse gas emissions are decoupling from economic growth.”

“The latest data on emissions are indeed encouraging, but this is no time for complacency—and certainly not the time to use this positive news as an excuse to stall further action,” said van der Hoeven.

The IEA chalks the emissions slowing to energy consumption patterns changing. As we noted earlier this week, China has seen economic growth decoupling from greenhouse gas emissions. China’s CO2 emissions fell 2% in 2014. That country also saw growth from renewable sources (hydropower, solar, and wind) and government limitation of coal as fuel in major cities.

China is now the world’s greatest investor in renewables. Since the pollution in China’s cities reached intolerable levels, the country has worked hard to limit environmental damage from economic development. In a joint pledge with the United States last November, China committed to reversing growth in carbon emissions by 2030 (earlier if possible) and increasing nonfossil fuels to 20% of its total energy supply. Analyst Joe Romm comments that “China’s push to replace coal with cleaner energy is a key reason the country (and the world) decoupled CO2 growth from GDP growth last year.”

In Organization for Economic Co-operation and Development economies, IEA says that recent efforts to promote sustainability (both higher greater energy efficiency and more use of renewables) are also decoupling energy and economics as technology costs have sunk and transportation fuel efficiency has improved. Michael Mann elaborates: “Efforts by OECD countries like Germany to increase their share of renewable energy through mechanisms like feed-in tariffs are beginning to pay dividends.”

Steven Cohen, executive director of the Earth Institute at Columbia University, said the globe is starting to see the benefits of energy efficiency and use of renewables, but the slowly maturing improvements there may not last if stronger actions aren’t taken. Cohen told Climate Central:

“We still need to develop a transformative renewable energy technology that is less expensive than fossil fuels and can match the reliability and convenience of fossil fuel technology. I believe we will develop such a technology, but the sooner the better.”

How important is economy-energy emissions decoupling in overall terms? It’s been heralded as suggesting that efforts to mitigate climate change may actually have started to show a measurable effect on emissions, possibly sooner than anyone thought they would.

IEA bases its statement on preliminary data. A final look in closer detail will come out in an IEA special report on energy and climate that will be released on June 15. That analysis will give decisionmakers everywhere a chance to adjust their climate pledges in the context of recent fossil fuel events, to advance climate goals through more practical policy measures, and to assess adaptation needs more finely.

In actual fact, energy consumption has been decreasing in some developed economies since 1990. Western Europe, where renewables, energy efficiency, and sustainable growth were priorities in the world’s earliest climate adaptation process, is a good example. Last fall, the EU pledged to cut total emissions 40% below 1990 levels by 2030.

In the joint agreement with China, the US pledged “to cut net greenhouse gas emissions 26-28 percent below 2005 levels by 2025.” The US has seen energy-related CO2 emissions drop during seven of the past 23 years, according to Energy Information Administration data. The Obama administration notes that the carbon intensity of the U.S. economy (CO2 emissions per dollar of GDP) has trended downward over the past 25 years.

Scenarios worked out by FUEL magazine suggest that world coal production will peak before 2025. India, Canada, Australia, and Russia pose particular concern for the future.

Let’s step back now and look at the whole CO2 picture. As the graph above shows and other calculations also indicate, energy use accounts for only 35-45% of the world’s CO2 emissions. The other major sources are transportation, land use changes (southeast Asia accounts for half, South America 4%, Africa 2%, other 3%), and nonenergy emissions from agriculture and (less than 10%) industrial and waste sources.

About two-thirds of the world’s CO2 emissions at this time have nothing to do with energy generation. (If you count in transportation, the number is more like half.) Use of renewables makes up a comparatively small piece of the carbon emissions pie, considering the other inputs.

Among recent transportation gains: increased CAFE standards, better fuel mileage, and manufacturer compliance for autos, airplanes and long-haul trucks saving fuel, more public transportation, walking, and bicycle riding.

In the other sectors, many ongoing and planned measures also affect the world’s carbon dioxide emissions. Among them:

Reforestation, wetlands restoration;

Sustainable agriculture, no-till farming, use of natural pesticides rather than industrially intensive chemical methods;

Readjustments in ocean harvesting and dumping practices;

Conservation and pollution abatement;

Lower heating costs, better home energy management; and

Cement industry and utility plans to transition from coal

Also:

Use of new data and models developed by nongovernmental organizations to quantify and compare inputs like fuel carbon-intensity and model complex results;

Intended Nationally Determined Contributions, carbon tax schemes, and other countrywide and regional pledges being worked out by September of this year;

Increased awareness by business that sustainability and global change adaptation offer considerable profits;

Extensive city and state greening and mitigation efforts; and

Near-universal citizen effort.

The world has a big event coming up this December: construction and ratification of a new international climate change agreement among 195 countries at talks in Paris. The agreement will come into force in 2020, with interim measures being taken during the next five years. Michael Mann sees the IEA finding as “further reason for optimism as we head into the crucial Paris UN summit later this year.”

The summit’s ultimate aim: limit increase of the average global surface temperature to no more than 2C (3.6F) compared with pre-industrial levels, thus avoiding radical climate change. As Joe Romm points out, “Such a deal would not will ‘not get us onto the 2°C pathway,’ as Christiana Figueres, the top UN climate official, and others have explained. But it would get us off the catastrophic 6°C path and lead to a permanent decoupling of GDP and CO2…. That would give the next generation a realistic chance at coming close to a 2°C path in the 2020s and 2030s.”

Steven Cohen, executive director of the Earth Institute at Columbia University, told Climate Central that the world is just beginning to see the benefits of energy efficiency and the use of renewables:

“The decline in oil prices and the massive increase in fossil fuel use in China and India will push in the opposite direction in 2015. We still need to develop a transformative renewable energy technology that is less expensive than fossil fuels and can match the reliability and convenience of fossil fuel technology. I believe we will develop such a technology, but the sooner the better.”











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