Recessions are not the way to permanently cut greenhouse gas emissions. Global emissions surged during 2010, cancelling out the reductions from the global financial crisis (GFC).
Emissions took off in 2010 as the global economy grew quickly in the rebound from the GFC. There was also an unusual increase in the amount of energy used for each dollar of GDP. More carbon intensive sources of energy were also used.
Emissions growth in 2011 and 2012 is likely to be more moderate, but still far above what is needed for effective climate change action.
We trace back the growth in carbon dioxide emissions – a massive 5.8% during 2010 compared to a long term average of 2.0% – to the growth rate in economic output, energy intensity (the ratio of energy used to GDP), and carbon intensity of energy (ratio of carbon dioxide to primary energy consumed).
In 2010, global energy demand grew faster than GDP, which is unusual. Over the last four decades this has only happened on four occasions. Apart from 1990, the effect was never as strong as it was in 2010. 1990 saw increasing global energy intensity because the Soviet Union’s economy collapsed faster than its use of energy.
Energy intensity rose in both OECD and non-OECD countries in 2010 (by 0.4% and 0.2% respectively). Likely explanations include relatively subdued fossil fuel prices – prices remained below 2008 levels during 2010 – and fiscal stimulus spending on energy-intensive activities such as construction.
The carbon intensity of energy fell in OECD countries over the decade as a result of a slow shift away from oil and coal and toward natural gas and renewables. In non-OECD countries it rose, as their use of coal increased. Globally, the carbon intensity of energy increased slightly over the decade.
If energy intensity and carbon intensity of energy in 2010 had fallen at their long-term average rates, then the 2010 GDP growth would have resulted in emissions growth of 3.7% instead of 5.8%.
Global carbon emissions growth is likely to slow in years to come. GDP growth already tailed off during 2011 and is expected to be lower still in 2012. Meanwhile, policy efforts to improve energy efficiency and shift to lower-carbon energy supply are likely to increasingly bear fruit.
Coupled with greater availability of natural gas and falling costs of renewable energy technologies, this should spell lower energy intensity and, in some countries, lower carbon intensity of energy.
For example, Australia’s emissions from energy and industry fell by 1% over the year to September 2011. This was mainly due to a reduction in Australia’s power use and less coal-fired electricity generation.
The ongoing recovery of hydroelectric generation after the drought (up by 10% on 2010), a significant increase in other renewable generation (up by 29%), and energy savings all contributed to the outcome.
While the 2010 emissions surge is likely to have been a one-off, cutting global emissions remains an enormous challenge. The underlying momentum is for strong emissions growth, particularly in developing countries. Energy efficiency will need to be improved at an unprecedented rate, and zero-carbon energy sources deployed faster.
China, in many respects, is leading the way. But much stronger policy action is needed in just about all countries.