US CO2 Forecasts: Will Trump II Make a Difference?

US President Donald Trump recently announced that he was pulling the US out of the Paris Climate Agreement. This is somewhat of a hollow gesture because he has done it before in the first Trump administration, only to be reversed by the next Democratic Administration. But, there are still strong indications that the Trump administration is no friend of environmental regulation and would like to undo regulations that restrain polluters (see Project 2025 below). We cannot know the future and we cannot know whether or not the Trump administration will be successful in their efforts to roll back environmental regulation, but we can make forecasts and then look back four years from now, after the Trump II administration, and see what effect their policies have had.

The time plot above is a forecast of US CO2 emissions out to 2040. The period from 1960 until the present shows how well the model works in tracking actual emissions (the solid back line). The dashed red line is the step-ahead forecast, the dashed blue and green lines are the 98% bootstrap prediction intervals. US CO2 emissions dropped in the 1980's but then continued climbing until a peak after 2000 (during the Bush II Administration). From there forward the model predicts a decline in CO2 emissions out to 2040 and to levels lower than in the 1960s. What causes the forecast decline?

The best model for US CO2 emissions is driven by dynamics in the World System. The best model was determined by comparing seven competitor models. The state of the World System is described by three state variables: (1) An overall state variable describing all the indicators, (2) A second independent state variable describing biodiversity and food production and (3) A third state variable dominated by world oil and agricultural markets. The effect of changes in the state of the World System on US CO2 emission can be seen from the shock decomposition diagram above. Growth of the World System and expansion of food production increase US CO2 production while increase in World oil prices decreases US CO2 production. 

The best way to limit US CO2 production is to allow world oil prices to increase and to stabilize the growth of the World System.

As growth of the World System stabilizes, there will be less demand for US industrial and energy production. Stabilizing world population will limit demand for agricultural products and destruction of biodiversity. Rising oil prices increase the attractiveness of renewable energy and will help build the infrastructure for electric transportation vehicles. The Paris Agreement may or may not have an impact on growth of the World System. However, US natural gas production through fracking has had an impact of keeping gasoline prices down, which is counterproductive.  

Unfortunately, US Oil Prices are controlled by the World Market. Any shocks to prices will increase inflation and create political problems for the administration in power. In a future post I will look at the World Oil Market and the expected future path for prices.

Project 2025

Project 2025 is a political initiative published in April 2022 by the American conservative think tank the Heritage Foundation (you can read the full report here). Somewhat surprisingly, in the 922 page report, CO2 emissions are only mentioned on page 378 under Conservative reforms for the Office of Energy Efficiency and Renewable Energy (EERE). Project 2025 calls for the EERE to focus on energy access and energy security rather than "entirely on the reduction of CO2 emissions." Project 2025 calls for the EERE to shift away from prioritizing "...decarbonization of the electricity sector, the industrial sector, transportation, buildings, and the agricultural sector". If the Trump Administration abolishes the EERE or changes it's mission without picking up the CO2 Emission priority in some other Federal Agency, any changes may or may not affect the trajectory of emissions which are on a strong anticipated downward path.

To put all this in context, the New York Times (here) also predicts that CO2 admissions for the EU, US, and China are reaching, at least around 2100, a steady state.

EU Gives Up on Climate-change Regulation! Really?

On January 22nd, the NY Times reported (here) that the European Union (EU) "…proposed an end to binding national targets for renewable energy production after 2020." The reasons given in the article were "high energy costs, declining industrial competitiveness and a recognition that the economy is unlikely to rebound strongly..." from the Financial Crisis of 2007-08. This would appear to be pretty bad news since the EU has been a world leader in addressing climate change. The NY Times concludes that "…now even Europe seems to be hitting its environmental limits."

What is confusing here is that the NY Times article goes on to say that:

Europe pressed ahead on other fronts, aiming for a cut of 40 percent in Europe’s carbon emissions by 2030, double the current target of 20 percent by 2020.

From the standpoint of climate change, the only really important point is that the EU reduce its CO2 emissions since CO2 -> + (Global Temperature). Does it really matter how they get there? More than that, from the graph above you can see that the EU has reduced CO2 emissions by 20% from the peak in 1981 to 2010. My forecast (dotted red line) predicts another 16% decrease by 2020 and a 30% decrease by 2046 (the end of the forecast). By 2050, the EU would be close to 1960 levels of CO2 emissions for almost a 45% reduction from the peak levels of the 1980s.

Environmental groups, such as Greenpeace, have been calling for more rapid and deeper decreases, asking for a 55% decrease by 2030. Partly, these demands are based on the idea that the existing reductions in CO2 emissions have been the result of policy measures. And, if that is true, then we don't want any policy reversals or backing away from hard emission targets. Targets themselves imply that policy goals are driving the reduction in CO2 emissions. But, what if policy pronouncements have nothing to do with reduction in CO2 emissions, at least in the EU?

The EU20 model that was used to produce the forecast in the graph above has no policy variables in it. This is not to say that policy variables are not important, just that policies directed at producing more green energy are not that important to the the overall economic system and it is the overall economic system that is responsible for generating CO2 emissions.

A comparison between the North American regional model (NAC20) and the EU20 model will help make the point. Without policy intervention, the NAC20 will keep producing higher and higher levels of CO2 emissions for ever. There are currently no limits to growth in the NAC20 model while there are  in the EU20 model. Growth will essentially be over in the EU20 model by 2040. The same thing will not happen in NAC20 model unless there are policy interventions or some other external forces limiting growth.

This is not to say that the environmental community should not be holding the EU to its environmental commitments. Even though the EU20 model predicts future reductions in CO2 emissions, no one knows the future and there are alternative futures for the EU, but that will have to be a subject for a future post, as will a discussion of the EU20 and NAC20 models.

NOTE: The CO2 data (CO2 emissions in kilo tons), EN.ATM.CO2E.KT in the plot above,is taken from the World Bank's World Data Bank (here) as is all the data in the EU20 and NAC20 models.

Canada Backs Out of Kyoto

On Monday, December 12, as an NPR Marketplace piece documents, Canada pulled out of the Kyoto Protocol blaming the lack of participation of the US and China in the accord. Under the Kyoto Protocol, Canada pledged to reduce its CO2 emissions by 6% compared to 1990 levels. In 2011, Canada decided to move the goal post and seek a 17% reduction from 2005 levels by 2020 (read the history here).

Unfortunately, Canada is nowhere close to meeting either of these goals and appears on a future path of increased emissions as long as I would feel comfortable forecasting into the future (attractor forecast above, dashed red line with 98% prediction intervals).

What's interesting is that Canadian CO2 emissions are being driven predominantly by the North American regional system, that is, by the combined productive power of the US and Canada. What is also interesting is that while US emissions have a chance of stabilizing by 2040 (see my forecast here), Canada's emissions do not.

The Canadian government is basically accurate in the reasons given for pulling out of Kyoto. If US energy demand (and thus CO2 emissions) is ever reduced, Canada will just continue exporting whatever hydrocarbons it can produce to China, India or whomever needs oil. The export orientation of Canada's economy is probably the reason that CO2 emissions are unlikely either to be reduced through international protocols or technological change.

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."