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Carbon Dioxide Emissions Set Dubious Record

Yearly gain in carbon dioxide emissions for 2010 tops U.S. GDP growth for first time in more than two decades

by Jeffrey W. Johnson
September 5, 2011 | A version of this story appeared in Volume 89, Issue 36

Changing Trend
Until last year, the rate of U.S. economic growth outpaced CO2 emissions.GDP = U.S. gross domestic product.SOURCE: Energy Information Administration
Until last year, the rate of U.S. economic growth outpaced CO2 emissions.GDP = U.S. gross domestic product.SOURCE: Energy Information Administration

Last year, U.S. energy-related carbon dioxide emissions set a new record of sorts. CO2 emissions increased by 3.9%, or 213 million metric tons, the largest annual jump in percent and absolute tonnage in 22 years, reports the Energy Information Administration (EIA).

Also, for the first time in more than 20 years, in 2010 CO2 emissions grew at a faster annual rate than did the nation’s gross domestic product (GDP), a measure of national output in goods and services, according to data from EIA, an independent agency in the Department of Energy. In 2010, GDP increased by 3.0% and CO2 emissions jumped 3.9%.

Historically, GDP economic growth has far outstripped CO2 emissions growth, notes a report released last month by EIA, which accompanies the data. The report, “U.S. Energy-Related CO2 Emissions, 2010,” shows a change in a 20-year trend in which CO2 emissions have increased by about 12%, while GDP has grown by 63%. If this change in direction continues, it could signal a new rise in CO2 emissions.

The shift could also indicate a troubled future for the U.S. as it tries to fire up its declining industrial base to create new jobs and improve the economy.

Since 1990, only in two years—1996 and 2000—did CO2 emissions grow at levels approaching 2010’s, but in those years, GDP increases still topped carbon emissions growth.

These energy-related CO2 emissions make up nearly all U.S. CO2 emissions as well as 81.5% of all U.S. greenhouse gas emissions, according to EIA.

The agency attributes last year’s CO2 increase to a combination of factors, led by changes in U.S. production. In 2008 and 2009, the U.S. experienced an economic slump which led to an unusually large drop in industrial output and, as a result, a decrease of CO2, notes Perry Lindstrom, coauthor of the report and an EIA economist. He says the small but significant economic recovery in 2010 resulted in most of the increase in CO2 emissions.

For Lindstrom, however, 2010 is an outlier. He underscores the importance of the history of slower growth in CO2 as compared with GDP, which he says is due to the slow shift in basic U.S. industrial manufacturing away from energy-intensive products to a “microchip and service” economy.

Along with the small economic recovery and industrial output growth, the report attributes the rise of CO2 emissions to national population growth and more energy use, particularly energy generated by fossil-fuel-based sources.

For instance, in 2010 demand for energy was met by greater use of coal, both for electricity and for energy produced and used by industries, the report says. Energy demand in the industrial sector increased by 5.7%, and in the residential sector demand grew by 5.2%, mostly due to a string of exceptionally hot days that drove up electric demand for air-conditioning.

As a result, coal use jumped almost 6% over 2009 levels. The carbon-intense fuel satisfied 56% of the overall increase in demand for electrical generation.

On the other hand, while noncarbon-based electricity generation saw a small increase in 2010, its share of electricity generation for the year actually fell from 30% to 29% because of the growth in overall electricity demand. Within the noncarbon-based generation sector, EIA notes, there was a decline in hydropower that offset an increase in output from nuclear-, wind-, and solar-generated electricity.

Like Lindstrom, EIA Acting Administrator Howard K. Gruenspecht predicts that the spike in CO2 emissions is an anomaly resulting from the unique economic situation. He explains that he expects CO2 emissions will drop and continue to slow over the next decade.

Other economists, however, worry that difficulties may lie ahead for cutting greenhouse gas emissions, particularly if the nation successfully shakes off the high unemployment and economic malaise of the past few years.

John A. Laitner, director of economic and social analysis for the nonprofit American Council for an Energy-Efficient Economy, is one of those economists. He says last year’s shift in which CO2 outpaced production may be the “new normal.” Worse yet, he warns, the conditions that led to it may signal a much slower rate of growth for the U.S. economy in the long run.

The U.S., Laitner says, has three problems: waste, weak capital investment, and inefficient electrical generation. Specifically, the U.S. wastes a huge amount of resources, which in turn imposes a very large cost that constrains a robust economy. The level of U.S. capital investment fell by $400 billion in 2010 compared with 2007, the last year before the most recent recession hit, which curbed introduction of new technologies. The U.S. generally relies too heavily on old, inefficient electrical generation sources, he adds, and to meet peak demand increases for industrial output or residential needs, utilities turn to even less efficient generators.

These problems, Laitner says, drove the U.S. to consume more energy last year, which in turn led to higher CO2 emissions.

The way he sees it, the nation wastes 86% of its energy resources. The number seems remarkably high, but he teases out three big-ticket items as examples: old coal-fired power plants that supply most U.S. electricity are about 35% efficient, incandescent lightbulbs used in most homes waste about 90% of their energy in heat not light, and the nation’s old electrical transmission lines consume about 10% of the energy they move.

“What is really needed is serious rebuilding of our nation’s antiquated and inefficient infrastructure,” Laitner says, “particularly the aging fleet of 163,000 industrial and commercial boilers.” U.S. capital investments in infrastructure, he says, have fallen from 16.2% of GDP in 1998 to 12.8% last year with a peak of 17.0% of GDP in 2000.

Along with generally increasing investments, he says, dollars should be targeted to support greater energy productivity, such as elimination of wasteful industrial manufacturing processes and encouragement of energy efficiency. The U.S., he adds, tends to focus on industrial investments that control pollution rather than processes that eliminate it.

Laitner applauds programs like Dow Chemical’s long-running commitment to cut energy use by 1.5% per year and urges other companies to join in. But the easy efficiency improvements—the so-called low-hanging fruit—will become harder to find, he notes, and consequently the nation needs to encourage sharply directed energy investments with government support as well as tax and other financial incentives.

“Our existing inefficiencies impose very large costs which in turn constrain industrial growth and job creation,” Laitner says. “Without change, the economy is likely to limp along with a growth rate of about 1% above population growth at best.” ◾


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