It's the electricity stupid

Why US carbon emissions are falling even as the economy grows

October 22, 2013
Obsession
Energy Shocks
October 22, 2013

The US economy was both green and growing in 2012 as energy-related carbon dioxide emissions dropped 3.8% even as the gross domestic product (GDP) jumped 2.8%. That’s the largest decline in emissions since 1994 and the first time the nation’s carbon spew has fallen when per capita economic output increased by more than 2%. Most significantly, 2012 marked the biggest drop in the carbon intensity of the economy—6.5%—since record-keeping began in 1949, according to the US Energy Information Administration (EIA).

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Those numbers validate a credo long-held by environmentalists—and the Obama administration—that environmental protection and economic vitality are not mutually exclusive. The continued slow recovery from the Great Recession and the weather certainly played a role in the emissions drop. But more importantly, the data show that a fundamental shift in US energy production is under way and that policies like a mandate to increase vehicle fuel efficiency are beginning to pay off in reduced planet-warming gases. In other words, 2012 may not be a fluke but the beginning of a long-term trend.

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That will only prove true, however, if certain policies and changes in electricity production continue, such as greenhouse gas regulations that discourage coal production. The boom in cleaner-burning natural gas continues to displace coal-fired electricity as renewable energy production rises. For instance, electricity generated by coal plummeted by 215.2 billion kilowatt-hours (kWh) while power production from natural gas jumped by 211.8 billion kWh. Electricity generated from wind farms spiked by 19.9 billion kWh.

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The shift in electricity production has resulted in a drop in energy intensity—emissions per unit of energy produced—of nearly 10% since 2007. Driving that trend in part has been a 16% jump in vehicle fuel efficiency thanks to new federal regulations. Americans are also driving less, with a 3% drop in miles traveled between 2007 and 2012. Transportation accounted for 22% of the decline in energy-related carbon emissions in 2012.  Ironically, climate change is contributing to the drop in energy intensity as warmer winters mean less energy is expended to heat buildings. Of course, more electricity is generated to cool homes and offices during hotter summers but air conditioning is less energy intensive than heating, according to the EIA.

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The result of all these trends is that the carbon intensity of the economy—emissions per unit of economic output – continues to fall, meaning we can produce more stuff without polluting more. The carbon intensity of electricity production, for instance, fell 13% between 2007 and 2012. The EIA attributes 63% of that decline to a switch from coal natural with the reminder due to growing energy production from non-carbon sources such as renewables and nuclear.

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