Carbon Emissions on the Rise But Policies Growing Too

In 2007, carbon emissions from fossil fuel combustion worldwide reached an estimated 8.2 billion tons, which was 2.8 percent more than in 2006-and 22 percent above the total in 2000.¹ The United States and Europe accounted for roughly 4 and 3 percent, respectively, of the growth during this decade.² India contributed 8 percent, and China, a staggering 57 percent.³ Despite the rapid increase, China's 18.3 share of global fossil fuel emissions remained slightly behind the U.S. share (19.5 percent).⁴ Per capita emissions in the developing world remain well below those in industrial countries.⁵ (See Figure 1 and Table 1.)

Coal, oil, and natural gas are burned to produce electricity, to power engines, and to feed industrial processes. When burned, the carbon contained in these fuels is converted to carbon dioxide (CO2), which is a natural component of Earth's atmosphere. CO2 traps heat that would otherwise radiate into outer space, thereby keeping Earth's temperature within a habitable range.⁶ But emissions from human activities have greatly increased the stock of carbon dioxide in the atmosphere. The additional gas is trapping more heat, raising the average global temperature and changing the climate.⁷ Fossil fuels account for about 74 percent of all CO2 emissions and for roughly 57 percent of all greenhouse gas emissions.⁸ (See Figure 2.)

The combustion of coal typically releases 1.8 times as much carbon dioxide per unit of energy as natural gas does and 1.3 times as much as oil.⁹ But since more oil than coal is used, total emissions from these two fossil fuels are similar.¹⁰

Carbon-to-energy ratios vary dramatically, depending on the methods used to produce the fuels. Liquid fuels derived from coal have nearly twice the global warming impact as equivalent fuels derived from petroleum.¹¹ Similarly, producing oil from Canada's tar sands emits up to three times as much carbon as producing conventional oil, due to the energy-intensive extraction and refinement.¹² As conventional fossil fuels become scarcer, use of these carbon-intensive fuels is growing. Production of oil from Canada's tar sands reached 1 million barrels a day in 2004 and may reach 3-4 million barrels a day by 2015.¹³

Consumption of fossil fuels by the world's wealthiest countries is largely responsible for elevating atmospheric CO2 levels to the current 384 parts per million, an increase of 37 percent over the pre-industrial level.¹⁴ But today the rapid, coal-dependent development of China and India is the most important driver of growth in global carbon dioxide emissions. Coal pro­vides 70 percent of commercial energy in China and 56 percent in India.¹⁵ Recent trends suggest that most of the growth in emissions from human activities will come from the developing world. In fact, based on the average growth rates for the past five years (see Figure 3), China's emissions from fossil fuels will surpass those of the United States sometime in 2008.¹⁶ Thus the key to stabilizing the global climate will be moving industrial nations to a low-carbon energy economy while ensuring that developing countries can leapfrog to cleaner development paths.

The potential for de-carbonizing modern economies is huge. Energy efficiency, wind, solar, and hydro power are carbon-free energy alternatives that are available today.¹⁷ Germany, for example, already gets 14 percent of its electricity from renewable sources and hopes to increase this to 45 percent by 2030.¹⁸ A 2007 study by McKinsey & Company suggested that by 2030 the United States could affordably reduce greenhouse gas emissions to 28 percent below 2005 levels using a mix of measures, including energy efficiency, renewable energy, and carbon capture and storage.¹⁹

Action at the diplomatic and national policy levels to limit carbon emissions continues to advance. In December 2007, the 192 parties to the United Nations Framework Convention on Climate Change agreed to establish a new global climate change agreement by 2009.²⁰ This will build on the existing Kyoto Protocol, which commits industrial countries to reduce green­house gas emissions to 6-8 percent below their 1990 levels.²¹ Under the existing agreement, emission targets have not been adopted by dev­eloping countries or the United States, and the initial commitment period is set to expire in 2012.²² These issues need to be addressed before the conclusion of the negotiations in 2009.

To meet its commitments in the most cost-effective manner, the European Union (EU) established a carbon market known as the Emissions Trading Scheme (ETS). By establishing a carbon cap and associated carbon price, the ETS has succeeded in reducing emissions by some 5 percent.²³ The cap has been lowered to nearly 6 percent below 2005 levels for the 2008-12 period.²⁴ And last year the EU committed to reducing greenhouse gas emissions to 20 per­cent below 1990 levels by 2020.²⁵ If pursued by the most cost-effective policy approaches (including the ETS), these goals could be achieved at an estimated cost of about 0.6 percent of gross regional product in 2020.²⁶

The U.S. Congress has struggled to formulate a similar nationwide climate change policy, and the country will not see climate change legislation before 2009, under a new administration.²⁷ Despite the delay at the national level, 19 states now have greenhouse gas emission reduction targets.²⁸ California plans to cut its emissions to 1990 levels by 2020 through sharp increases in energy efficiency and by using renewable sources to supply 33 percent of the state's electricity by 2030.²⁹

In spite of relatively low emissions per per­son, the developing world has also begun to act to mitigate climate change. China's current Five-Year Plan includes a target of reducing the energy intensity of gross domestic product 20 percent below the 2005 level by 2010.³⁰ China has also adopted a plan to satisfy 10 percent of energy demand through renewables by 2010 and then 15 percent by 2020.³¹ Costa Rica has joined Iceland, Norway, and New Zealand in a pledge to achieve zero net carbon emissions.³² Although Costa Rica's emissions are only a tiny fraction of the global total, its commitment to carbon neutrality may serve as a wake-up call to wealthier countries.

According to a 2007 U.N. report, getting emissions back to today's levels by 2030 would require a global investment of about $200 billion annually, or 0.3-0.5 percent of the gross world product (GWP).³³ But achieving the reductions that scientists estimate are needed to limit global warming to 2 degrees Celsius will require bringing global emissions at least 50 percent below 2000 levels by 2050.³⁴ Economist Nicholas Stern has recently suggested that the dangers of climate change warrant an even greater investment-2 percent of GWP.³⁵ Though this is a massive sum, Stern's 2007 report, The Economics of Climate Change, concludes that the price of doing nothing to stop runaway carbon emis­sions could be as much as 5-20 percent of GWP.³⁶