U.S. Greenhouse Gas Emissions Reach 18 Year Low

by Nick Cunningham

A new report found that U.S. greenhouse gas (GHG) emissions fell to their lowest levels since 1994, indicating that significant progress is being made in transitioning away from dirty sources of energy. Published by Bloomberg New Energy Finance, the report shows that U.S. emissions fell 13% over the past five years. The progress puts the U.S. half-way towards President Obama's goal of 17% reductions below 2005 levels, which is within reach.

This is undoubtedly good news, which seems all too rare on the topic of climate change. The progress is the result of several factors: renewable energy capacity doubled from 2009 to 2012, buildings have become more energy efficient, fuel economy standards for vehicles have improved significantly, and also a sizable chunk of the nation's coal fleet has been put out of commission. The Sierra Club boasts that it forced the closure or the prevention of 137 coal plants since 2010, with 385 left to go.

From a political perspective, the news that the U.S. has made significant cuts in greenhouse gas emissions cuts two ways, I think, which likely depends on your pre-existing ideology.

1. The reduction in greenhouse gas emissions is proof that transitioning to clean energy need not hurt the economy. From 2007-2012, GHG emissions dropped 13% while real GDP expanded by 3%. This lends credibility to the notion that we can make much more significant cuts in emissions and still grow the economy. This narrative can embolden climate hawks and undercut the argument from those resisting climate change legislation. 
2. On the other hand, people who oppose climate legislation can merely point to this data to justify doing nothing. They can say, "See! we don't need legislation, emissions are already declining!" 

But, that second claim is ridiculous. It's ridiculous because the emissions reductions would not be possible without policy. U.S. emissions did not decline in a vacuum - there were a variety of policies over the last few years aimed at cleaning up U.S. power plants, cars, and buildings.

Here are a few examples.

First, the administration in 2009 announced that it would begin regulating greenhouse gases from vehicles for the first time. This led to an increase in corporate average fuel economy (CAFE) standards, raising the required fuel economy for the auto fleet from 25 miles per gallon (mpg) up to 35 by 2016. Then, in a deal the White House struck with the auto industry, last year the administration announced CAFE standards would rise to 54.5 mpg by 2025.

It is hard to underestimate how important these standards are. To effectively double fuel economy standards - after decades of little change - is huge. Although fuel economy standards are likely not the first choice on the part of economists on how to reduce greenhouse gases (carbon tax is better), the standards will take a significant bite out of the 18 million barrels of oil the U.S. consumes each day. Conventional cars are becoming more efficient, hybrids are ubiquitous, and electric vehicles are slowly making inroads.

Second, the administration made a big bet on clean energy in the stimulus act. The "Recovery Act" put $90 billion towards clean energy (see a breakdown here). This allowed the deployment of renewable energy, smart grid technology, weatherization of homes and building, electric vehicles and charging stations, and more. Providing this "demand pull" for a variety of clean energy technologies undoubtedly allowed them to scale up and bring down costs.

Third, a patchwork of state renewable portfolio standards (RPS) also established demand for clean energy. About thirty states plus D.C. have RPSs, requiring utilities to generate a certain percentage of their electricity from clean sources. This has forced utilities around the country to build large renewable energy projects - which, again, has allowed the industry to scale up and reduce costs.

As a result, renewable energy has doubled its share of the market from 3% to 6% in the last four years. The levelized cost of renewable energy has plummeted; for example, the cost of electricity from large solar plants has fallen from $0.31 per kilowatt hour in 2009 to $0.14 per kilowatt hour in 2012.

Furthermore, EPA regulations have forced electricity generators to clean up. Over the last several years, EPA has proposed and finalized a slew of regulations requiring power plants to reduce toxic mercury emissions, particulate matter, sulfur dioxide, and for the first time, greenhouse gases. This has resulted in power plants that have been forced to either clean up or shut down.

The list goes on.  

In fact, Climate Progress broke down how the emission reductions were achieved, as follows: fuel switching from coal to gas (6%), state RPSs (6%), renewable fuels program (6%), CAFE standards (11%), state energy efficiency portfolio standards (12%). Also worth noting that Climate Progress attributes 22% of the drop to the economic downturn.

What is surprising from these statistics is that the enormous focus in the media on the role that fracking has played. The natural gas industry takes a lot of credit for emissions reductions as it takes market share from the coal industry. However, the Climate Progress numbers show that although fuel switching has played a role, it is smaller than many believe. (Nevermind that fracking was an innovation with a history of government support).

So, while we can celebrate an achievement, it is far from enough. Even if we achieve the President's goal of 17% reductions by 2005, which we are on track for, it is likely still too weak.

More legislative action is needed, and the news that the U.S. has reached an 18-year low in GHG emissions is proof that policy works - not a reason to be complacent.