America delivers climate hope, again. US CO2 fell 3.8% last year
The world has yet to figure out how to stop the relentless increase in global climate pollution. But one of the biggest obstacles to international climate action appears to be shifting.
The US Energy Information Agency (EIA) just reported that America's CO2 emissions plunged 3.8% in 2012. This is especially remarkable because their GDP grew by 2.8%. Economy growing -- emissions falling. America's CO2 emissions have now fallen in five of the last seven years since 2005.
Last year the International Energy Agency (IEA) announced that between 2006 and 2011 the US had the largest reduction in climate pollution of all the world's countries or regions. They estimated the overall annual reduction at 430 million tonnes of CO2 (MtCO2). The main reasons were "lower oil use in the transport sector … and a substantial shift from coal to gas in the power sector." Now the US has followed that up by reducing CO2 pollution another 208 MtCO2 last year.
All told, US CO2 pollution was 709 MtCO2 lower than in 2005.
How big a deal is cutting 709 MtCO2 in annual emissions? It vastly exceeds all the CO2 emitted in Canada, the world's ninth largest climate polluting nation. From a US perspective it's equal to eliminating the combined CO2 emissions from seven western states: Washington, Oregon, California, Idaho, Montana, Utah and Nevada. That includes the economic giant of California that boasts one of the world's 12 largest economies, rivaling Canada's.
It seems America -- the planet's biggest all-time CO2 polluter -- is finally reducing its emissions.
Breaking the global log jam?
As my top chart shows, US CO2 emissions are falling faster than what President Obama pledged in the global Copenhagen Accord.
Until now, the failure by the USA to make significant emission cuts has been at the center of the global deadlock over what to do about climate pollution. Many of the biggest polluting nations -- such as China, India, Russia, Canada, Australia, and Brazil -- have been reluctant to create policies to reduce CO2 as long as the biggest bad-boy of them all, the USA, wasn't joining in.
But now Americans are both promising CO2 cuts and actually doing it. In doing so they are, for now, leading the world in total CO2 reductions.
Can they keep it up? Who knows. They have surprised most observers in the last few years, and there are many hopeful signs their success can continue.
Take a look at my chart below to which I've added coal, oil and natural gas CO2 changes.
Clearly major shifts are underway in America's energy landscape. Coal and oil burning are falling while natural gas burning is increasing. Here's a table of the changes since 2005:
Natural gas CO2
Let's take a closer look at why coal and oil are declining.
Coal is a "dead man walking"
Coal use in the US plunged 24% in the last seven years as cheap natural gas, a surge in renewable energy and an overall decline in energy demand formed the perfect storm.
The derided and abandoned US Kyoto target called for their CO2 emissions to fall 7% between 1990 and 2012. US coal CO2 actually fell 9% over those years.
Declines in US coal CO2 look set to continue over the years as a suite of new Clean Air requirements for coal-fired power plants start to kick in. At the same time, prices for low-carbon alternatives to coal -- like solar and wind -- are falling rapidly. Even the most expensive of these, solar without any subsidies, is now cheaper than building new coal plants in some of the sunniest parts of the US.
Deutsche Bank has called coal use in the US a "dead man walkin'" saying:
"Banks won’t finance them. Insurance companies won’t insure them. The EPA is coming after them…And the economics to make it clean don’t work."
Share prices of the major US coal companies are now in a freefall with some entering bankruptcy. The four largest coal extraction companies in the USA are Peabody, Arch Coal, Alpha Natural Resources and Cloud Peak. Combined they extracted over half the coal mined in American in 2011. Their share prices in the last two years have declined 56%, 77%, 73% and 26% respectively.
For other large US coal extractors it is far worse: James River Coal -78%; Walter Energy -81%; Oxford Resource -90%; both Cline and Patriot Coal -99%.
Investing in US coal is making junk bonds seem tame.
Climate scientists have been warning for years that most of the reserves of the dirtiest fossil fuels, like coal, must stay in the ground forever if humanity has a hope of preserving a safe climate system. The term of art is "unburnable carbon." As the climate reality continues to unfold, trillions of dollars in assets are at risk of being stranded and written off.
The world is crammed with dangerously over-inflated carbon bubbles caused by "irrational fossil fuel exuberance". The more climate-polluting the fossil fuel the more likely it is a carbon bubble waiting to pop. Alberta's tar sands is certainly one, as I'll discuss below. US coal is another.
In my view what we are witnessing now is the popping of US coal's carbon bubble. Pension funds beware.
Oil is pricing itself out of its largest market
Americans buy more oil than any other nation on earth. But, as I wrote about previously, rapidly rising oil prices are driving a big decline in America's oil use. The price of oil has more than doubled since 2005. Double the price of a commodity and people will use less.
Sure enough, the decline in US oil consumption since 2005 has been dramatic. Oil consumption has fallen 14% in seven years. Americans now buy 2.5 million fewer barrels of oil every day. That's like turning off the spigots on three Keystone-XL-sized pipelines.
But despite buying less oil, the Americans' bill for it rose by $250 billion a year. That is an extra $1,000 per adult every year -- for less oil. Ouch. When it comes to dollars, Americans pay attention. Maybe that is why even the auto makers stood side by side with Obama as he announced regulations forcing cars and light trucks in the USA to improve their miles-per-gallon by 40 percent this decade. As vehicles become more efficient oil use will fall further.
As the EIA just highlighted last week, total vehicle miles travelled in the US have declined more than 3% since 2007 while the average vehicle is now 16% more efficient. Since almost all oil in US is used for transportation, the table is set for continuing declines in oil emissions too.
Living in the 1960s
The CO2 declines per person are even more impressive. The average American's CO2 emissions are down to levels not seen since 1964 -- half a century ago.
Way back in 1964 Americans were listening to speeches by President Johnson and Malcolm X. Racial segregation was still legal and the KKK were kidnapping and killing black Americans. The Vietnam war was just getting started and Disney's Mary Poppins had its world premiere. IBM's screaming hot new System/360 computer took up a fair sized room when it debuted that year. It was also a thousand times less powerful than today's iPhone. Cell phones of course didn't exist. Neither did video games, personal computers, the internet or even the ability to rent a movie to watch at home.
It was another age, and a long time ago. But as my chart below show, Americans are returning to fossil fuel consumption levels from that distant era.
Per person, Americans are back to 1960 levels of oil consumption. Oil is the biggest source of CO2 in the USA. Now with rising oil prices, new vehicle regulations and the emergence of electric cars it looks like the USA's biggest source of CO2 will continue to fall. Considering that Americans could cut oil use in half and still use more per person than Europeans, there is clearly lots of room for big declines ahead.
Coal is the number two source of CO2 for Americans. Today the average American burns an amount similar to what they did in 1958, and even less than they did in the 1940s. Like oil, the forces aligned against coal in the USA seem to point to a continuing long term decline in coal CO2.
Here are the per capita changes since 2005:
Natural gas CO2
Historically, no nation has done more to cause the climate crisis than the USA. Today, Americans are still in the top tier of CO2 emitters per person, along with Canadians. But it is exactly America's historical role of biggest and dirtiest that makes their sharp decline in CO2 pollution so noteworthy and potentially game changing at the global level.
In Canada, the game most likely to be changed by this trend is Alberta's tar sands roulette.
Bubble trouble in the tar sands casino
"When elephants dance the grass gets trampled" -- African proverb
America's declining emissions are a serious threat to the expansion plans of the Alberta tar sands. Here's why...