State Space Models

All state space models are written and estimated in the R programming language. The models are available here with instructions and R procedures for manipulating the models here here.

Monday, November 28, 2011

US CO2 Emission Reductions Unlikely as a Result of COP17

COP17 (17th Conference of the Parties to the UNFCCC) started today in Durban, South Africa and a salient topic of discussion was what will happen when the Kyoto Protocol 2012 Emission Targets expire next year. Of particular concern is what the US will do. The graphic above is an attractor forecast out to 2050 for US CO2 emissions. It's useful to discuss the forecast in terms of the Kyoto Protocol.

The Kyoto Protocol was initially adopted in December of 1997, went into force in February of 2005 and is scheduled to expire in 2012. The US Executive Branch ratified the protocol but it was never signed by the US Congress. Had the protocol been signed, it would have committed the US to a 7% GHG (Greenhouse Gas) reduction below 1990 emission levels.

In 1990, the US emitted 4992.3 million metric tons of CO2 according to the US EIA (here). In 2006, the US emitted 5981.6 million metric tons of CO2. Current emission levels are lower as a result of the 2007 Financial Crisis. According to the Earth Policy Institute (here):

Between 2007 and 2011, carbon emissions from coal use in the United States dropped 10 percent. During the same period, emissions from oil use dropped 11 percent. In contrast, carbon emissions from natural gas use increased by 6 percent. The net effect of these trends was that U.S. carbon emissions dropped 7 percent in four years. And this is only the beginning.

The initial fall in coal and oil use was triggered by the economic downturn, but now powerful new forces are reducing the use of both. For coal, the dominant force is the Beyond Coal campaign, an impressive national effort coordinated by the Sierra Club involving hundreds of local groups that oppose coal because of its effects on human health.

In other words, it is possible for the US to reduce emission levels by 7%. However, it's important to add that the reduction was the result of the worst financial crash since the Great Depression. My forecast, above, suggests that the probability of getting back to 1990 emission levels is effectively zero for the foreseeable future.

The best short-term forecast for US emissions can be made directly from a simple Impact Model, the type used by the IPCC to create global emission scenarios:

In the Impact model, CO2 emissions are simply a function of production levels, Q -> CO2. Just for round numbers, in 1990 about 1 million metric tons of CO2 were emitted for every 5 trillion dollars of US real GDP. US GDP went from a low of 12.8 trillion US$ in 2009 to about 13.2 trillion US$ in 2011. You can do the math (or look at my GDP forecast here).

The graph above constructs the attractor for US CO2 emissions from the state of the US economy, not just GDP. The results show emissions increasing until at least 2030 before reductions become probable (the dashed lines are the 98% bootstrap confidence intervals). Getting back to 1990 levels are really unlikely for the foreseeable future.

The relationship between CO2 emissions and US GDP should be plain to see from eye balling the historical data. GDP fell during the Financial Crisis and CO2 emissions fell (from the attractor model, you can see that emissions were above their attractor during the bubble). I think US policy makers are keenly aware of this relationship. And, for that reason alone, there is no chance that the US Congress will ever ratify an international protocol limiting GHG emissions. It would mean effectively limiting GDP growth.

In the IPCC scenarios (here) and in the underlying scientific literature, it is typically assumed that reductions will result from technological change (reductions in emission intensity). That issue will have to be dealt with in a later post. The current problems developing a US Solar energy policy (here) suggests to me, at least, that "We Cannot 'Techno-Fix' Our Way to a Sustainable Future."

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