21 September 2009

Much Ado About Very Little

The Financial Times has a front page article today touting the fall in industrial emissions in 2008:

The recession has resulted in an unparalleled fall in greenhouse gas emissions, providing a "unique opportunity" to move the world away from high carbon growth, an International Energy Agency study has found.

In the first big study of the impact of the recession on climate change, the IEA found that CO 2 emissions from burning fossil fuels had undergone "a significant decline" this year - further than in any year in the last 40. The fall will exceed the drop in the 1981 recession that followed the oil crisis.

The graph above shows annual rates of decarbonization of the global economy from 1981 to 2006 (blue bars, using data from Maddison and EIA) and then data for 2008 (red bar) from The World Bank and a German group for carbon dioxide emissions (data for 2007 is not shown). We should have a bit of caution in using two datasets, however, because I am looking at percentage changes rather than absolute values for decarbonization, if the data is accurate then the comparsion should be OK.

The graph shows that the world did indeed accelerate its decarbonization at a rapid rate in 1981, in fact at almost exactly the same amount as in 2008. But then after 1981 the world resumed decarbonization at a much lower rate. The magnitude of emissions decline was larger in 2008 than 1981 for the simple reason that the baseline (and the economy) is much larger.

Some suggest that the reduced emissions in 2008 signify something important:
Fatih Birol, chief IEA economist, said the [2008] fall was "surprising" and would make it "much less difficult" to achieve the emissions reductions scientists say are needed to avoid dangerous global warming. "We have a new situation, with the changes in energy demand and the postponement of many energy investments," he said. "But this only has meaning if we can make use of this unique window of opportunity. [That means] a deal in Copenhagen."
I am afraid that Mr. Birol is kidding himself if he thinks that the 2008 recession will make future emissions reductions efforts "much less difficult." In fact, because the recent recession likely led to the plucking of much "low-hanging fruit" in the global energy economy, it would not be surprising to see rates of decarbonization much lower than 2008 starting in 2009.

Why should we believe that 2008 different is any different than 1981?


  1. Because 2008 is more like 1980. Emissions peaked in 1979 and then fell dramatically in 1980 and 1981. The States is already half way through the 20% cut envisaged in W-M. Surely being half way through makes it easier to achieve a target? Although of course your point about low-hanging fruit is well made.

  2. -1-bsanchez

    You ask: "Surely being half way through makes it easier to achieve a target?"

    If the main policy tool is economic contraction, then the answer is "yes."

    If the main policy tool is decarbonization through sustained efficiency gains and shift to low carbon energy supply, then the answer is probably "no".

  3. All the spike means is that sectors of the economy that emit more are hurting more in this recession than those that don't. And we already knew that. Like manufacturing and construction (concrete production is supposed to be a big emitter).

    In other words BIG DEAL. It's not unexpected and it certainly doesn't make emitting less easier. Because now there is less capital to be invested in alternatives.

    But it's funny how Enviro-wackos cheer for economic bad news. And to think if we just got rich enough it would be so "easy" to handle all their issues. But No...

  4. Roger,

    Could you provide a more complete description ofr the data in that chart. I assume it is GDP/CO2, expressed as a percentage change.

    Also, are you using GDP at PPPs ;-)

    Either way, this is encouraging news. We probably only have to wipe another 50% of global income (and then stay there, sans growth) to hit the targets we are being told are absolutely vital.

  5. -4-Geckko

    You are correct, datasets are described in this paper, and are PPP adjusted GDP: