In a surprise turn of events, the IEA reported that global greenhouse gas emissions may have stayed flat in 2015, the second year in a row.
Preliminary data gathered by the IEA and published on March 16 shows that global carbon dioxide emissions stood at 32.1 billion tonnes, about the same level as 2014. Emissions for those two years were up ever so slightly from the 32.0 billion tonnes in 2013.
“The new figures confirm last year’s surprising but welcome news: we now have seen two straight years of greenhouse gas emissions decoupling from economic growth,” IEA Executive Director Fatih Birol, said in a statement. “Coming just a few months after the landmark COP21 agreement in Paris, this is yet another boost to the global fight against climate change.”
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With the world grappling with the adverse effects of climate change, the unexpected stall in emissions could have huge implications.
Intriguingly, the data offers some glimmers of hope for the world’s attempts to prevent the worst effects of runaway climate change. The IEA data suggests the world could achieve something once thought unthinkable: decoupling economic growth from CO2 emissions. Energy consumption has long-been highly correlated with economic growth. If GDP goes up, so does the burning of oil, coal, and natural gas. There have only been four periods of time on record that the IEA found that CO2 emissions fell compared to the previous year. Three of those occurred because of a recession.
We are in the midst of a fourth period in which emissions have declined, except the drop off comes as the global economy continues to grow. World GDP expanded by 3.4 percent in 2014 and 3.1 percent in 2015.
Part of the reason that emissions failed to grow is because of the rapid proliferation of renewable energy, which captured 90 percent of all new sources of electricity generation in 2015. Related: Eni’s Arctic Field Comes Online, But Will it Ever Be Profitable?
The decline in carbon pollution largely comes down to what is going on in the U.S. and China, the world’s two largest emitters. Energy-related carbon pollution fell in both countries in 2015. In the U.S., rising renewable energy and energy efficiency is meeting flat energy demand. China’s coal consumption declined for the second year in a row as the government grapples with horrific air pollution. Coal’s share of China’s electricity market has declined from 80 to 70 percent in just over four years.
The clean energy industry expects to build on its recent successes. In the United States, solar installations are expected to surge by more than 100 percent this year, with an estimated 16 GW of new capacity in 2016, compared to 7.2 GW installed last year. Renewables will likely continue to make up the majority of new electric capacity additions, a trend that could accelerate as costs steadily decline.
Even the non-renewable capacity additions – namely, natural gas – are forcing dirty coal plants out of the market. Cheap natural gas combined with tightening environmental regulation forced a whopping 18 GW of coal-fired capacity offline in 2015.
In fact, natural gas could surpass coal in terms of market share in the U.S. electric power sector in 2016 for the first time ever on an annual basis. Coal made up 50 percent of the country’s electricity market less than a decade ago, a share that could fall to just 32 percent this year. Related: ‘’Iran’s Return To The Oil Markets Less Damaging Than Expected’’
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The decline for coal is structural rather than cyclical. Limits on greenhouse gases come on top of other restrictions on toxic emissions from coal plants, a regulatory burden that will be difficult if not impossible to overcome. At the same time, the short-term pressure from natural gas is causing acute pain for coal producers. With natural gas prices at their lowest levels since the turn of the century, coal plants – particularly old, inefficient coal plants – can simply no longer compete.
That offers the world some hope when it comes to addressing climate change. Of course, emissions need to decline on an absolute basis, and by substantial amounts, if the worst effects of climate change are to be avoided. We are far from that trajectory, but keeping emissions flat in 2015 is a start.
By Nick Cunningham of Oilprice.com
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