U.S. Energy-related Greenhouse Gas Emissions

U.S. Energy-related Greenhouse Gas Emissions: Rapid growth during 2000

Although official inventories of U.S. greenhouse gas emissions are not yet available, emissions estimates derived from energy consumption data suggests a sharp upturn in carbon dioxide (CO2) emissions from U.S. energy use in 2000.

The increase over 1999 is likely to fall between 28 and 38 million metric tons (MMT) measured in carbon equivalent terms, depending on final numbers for total petroleum consumption and its composition. By way of comparison, energy-related emissions of CO2 were 1511 MMT in 1999, and growth over the previous 3-year period, when the U.S. economy grew more rapidly than in 2000, had averaged only 13 MMT per year.

Why did energy-related emissions grow so rapidly in 2000? From a fuel mix perspective, almost all of the emissions growth reflects increased use of natural gas (4.7 percent growth over 1999 level) and coal (3.4 percent growth over 1999 level). Oil use in 2000 was fairly flat, probably reflecting a demand response to the sharp rise in prices from the levels of early 1999. Use of coal and natural gas for power generation, boosted in part by a falloff in hydropower generation from 1999 levels, was a significant factor, as was increased demand for natural gas as a heating fuel during the record cold weather at the end of 2000.

Is rapid emissions growth likely to continue?
A number of short term factors point towards continued emissions growth in 2001. The mild weather experienced during the first three months of 2000 was not repeated in 2001, resulting in a year-over-year increase in heating energy use. With stream flows in the West projected at or near historic lows in 2001, hydropower production will fall significantly short of last year's level, requiring increased use of fossil-fired generation. Nationwide, high prices for natural gas in 2001 will encourage increased utilization of coal-fired power plants, which have the highest CO2 emissions per unit of electricity generated, whenever transmission is available to move power into areas that usually rely on gas-fired generation. Finally, through the first 4 months of 2001, the supply of petroleum products is up by more than 2 percent relative to year-earlier levels, although recent price increases for refined products could dampen demand for the remainder of the year. However, since weather patterns and trends in economic activity that can have a very significant impact on energy use and emissions are wild cards that can easily trump the factors cited above, it is far too early to make any definitive estimate of 2001 emissions.

What about mid-term emissions growth prospects?
Based on average annual growth rate in energy-related CO2 emissions under 1% over the 1996 to 1999 period despite rapid economic growth, some analysts had advanced the idea that the economy had been decoupled from energy use and resultant emissions. If, as recent data suggest, the rate of energy-intensity improvement is highly correlated with the rate of economic growth, these analysts are probably right in suggesting that energy intensity improvement factors from scenarios that under-predict growth cannot be mechanically applied in a high-growth setting. However, emissions optimism may be overstated since weather and other "one time" factors played a major role in determining 1996 to 1999 emissions. With projected population growth of nearly 1% per year over the next decade driving increased household formation and personal travel, the decline in the average fuel economy of the vehicle fleet as the most fuel-efficient vintages of the late 1980s reach scrapping age, and the near certainty that emission-free nuclear and hydro will account for a declining share of total electricity generation, the mid-term outlook for emissions growth appears to be quite challenging.

What are the policy implications of rapid emissions growth?
The resumption of rapid growth in energy-related CO2 emissions is certain to rekindle the domestic debate regarding strategies to limit emissions while meeting energy objectives. Some will point to more rapid emissions growth as evidence that energy policy must be developed in parallel with, rather than prior to, policies to limit emissions of greenhouse gases. The Bush Administration has chosen to proceed serially, with an energy policy announced in May to be followed by a climate policy announced at a future date.

The growth in U.S. CO2 emissions will also raise the temperature in international discussions, adding to fuel to the firestorm of criticism that followed the Administration's announcement in March that it was abandoning the Kyoto Protocol, which would have set binding emissions limits for the U.S. and other developed countries for the 2008 to 2012 period. Recent U.S. emissions trends will undoubtedly be raised when President Bush meets with his European counterparts in June and when the parties to the Framework Convention on Climate Change resume their negotiations in July.

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