Our paper, “The excellent news ,” quantifies the sector’s sizeable reductions in carbon emissions since 2005 and clarifies what accounts for it. It shows that while substitution of fracked gas for dirtier coal contributed significantly to reducing emissions, a greater role was played by what we call clean electricity: an upsurge in electricity production from renewables (wind turbines and solar photovoltaic cells), and electricity savings that caused electricity usage to flatten whilst economic output increased.
We estimate that by the top of 2016 the U.S. electricity sector will have reduced its CO2 emissions by 27 percent since 2005, thus achieving quite four-fifths of the 2030 carbon-reduction goal of a 32 percent cut set by the Obama Administration’s Clean Power Plan. As best we will estimate, 58 percent of the electricity sector’s carbon reduction since 2005 is thanks to clean electricity, and 42 percent thanks to substitution for coal by gas . This finding belies the prevailing narrative crediting fracked gas for many of the reduction in coal burning and therefore the resulting lowering of carbon emissions.
The electricity sector’s reduction in carbon emissions is sweet news not only due to its magnitude but because it effectively “banks” emission reductions against a slowing of progress looming under the incoming Trump administration. The leading role played by clean electricity is sweet news because it comes without the climate-damaging methane emissions related to gas extraction and transportation, and since it signifies the emergence of a replacement energy economy built on inherently clean energy production and usage technologies which will scale rapidly, economically and gracefully.
Quantifying the CO2 avoided because U.S. electricity usage has stayed flat since 2005 rather than growing almost in tandem with economic output, as within the past, is that the key new feature of our analysis. It led to the surprising and heartening finding that “clean electricity” (power savings + renewables) are replacing more coal and pushing out more CO2 than is fracked gas.
“The Good News” explores in some detail the explanations that economic output since 2005 has decoupled from electricity usage. One is that the emergence of a strong business that’s finding, financing and delivering money-saving efficiency improvements in commercial buildings and multifamily housing, thus obviating the necessity for property owners and managers to require on a posh new specialty. Another is that the widening penetration of digital technologies in everything from energy management, where they monitor and command key parameters, to product design, most notably in LED’s but also in thermostats and appliances, and in manufacturing generally.
This progress has been accomplished without a price on carbon pollution. Notwithstanding the 2016 elections, we believe that a strong and briskly rising carbon tax remains the foremost powerful policy tool for rapidly driving down emissions within the power sector and, especially, the remainder of the economy. Such a tax would accelerate the continued decarbonization of electricity supply by increasing the returns from substituting zero-carbon electricity sources for fuel generation. The tax would further reduce emissions by dampening electricity usage through the charge it adds to electric rates.
While this trend is heartening, much more is required for the us to satisfy its economy-wide carbon-reduction pledge under the Paris climate agreement, especially in light of the increase in emissions within the transportation sector spurred by cheap petroleum fuels. “The Good News” points to the necessity for and potential of strong carbon taxes to offset that rise and stimulate emission reductions.
We have estimated that the carbon tax levels mandated under the McDermott carbon bill depicted within the line graph above would have reduced economy-wide CO2 emissions from fuel combustion — not just from electricity but from automobiles , aviation , industry, etc. — by one-third within a decade. While the political hurdles are set higher by the 2016 election, the necessity for a strong carbon tax remains a minimum of as strong as ever.
Visitors to the present page are encouraged to download the great News. Readers with a specific interest in energy efficiency should also read our blog post for the Sallan Foundation, Almost Unnoticed, Flat Electricity Demand Is Crushing U.S. Carbon Emissions. Please report back your impressions and circulate our findings. Thanks.