U.S. CO2 Emissions and Economic Growth

Within the last 5 days the U.S. Energy Information Administration (EIA) released two significant sets of data. One relates to climate change. The other relates to job creation, growth and economic recovery.

Together the graphs spell out a conundrum that President Obama faces between two incompatible goals.

One goal is the President’s emissions limiting energy policy found in the new Climate Action Plan. The other goal is economic recovery and prosperity.

One goal must be partly sacrificed for the other. The President’s choices will either hurt or help every American smack dab where it counts… the pocketbook.

CO2 Emissions increase 2% in 2013

In a bit of a surprise, the EIA reported yesterday that U.S. CO2 emissions will increase by about 2% in 2013. It will level off after that.

It’s surprising because emissions have generally been declining since 2007. The decline is a combination of three factors:

  • The Great Recession
  • Energy conservation
  • Conversion from coal-fired to gas-fired electric power plants

A decrease in economic activity caused by the Great Recession reduced U.S. energy use which, in turn, reduced CO2 emissions. Energy conservation also played a roll. Vehicles are more energy efficient and Americans have been driving less and generally using less energy.

The biggest contributor to the reduction in CO2 though, according to the EIA, is the switch from using coal to produce electricity to using natural gas. Coal-fired electric plants produce approximately 40% of all U.S. atmospheric CO2. A private-sector driven conversion from coal to natural gas that started in 2007 is doing the trick.

So it is not surprising that the EIA says that the 2% rise in CO2 is because of a slight upturn in the use of coal to produce electricity.

The EIA goes on to say that the U.S. is still on tract to meet the Administration’s goal for reducing carbon dioxide emissions to 17% below 2005 levels by 2020.

Global Energy Costs Leveling Off

The EIA’s “Today in Energy” report for 1/9/2014 shows that global oil prices have stabilized as a result of increases in U.S. oil production.

Oil prices dramatically increased last decade. After a hiccup caused by the Great Recession, price again rose steeply until 2011 when the effects of increased U.S. oil production began to kick in. Since then prices have stabilized.

Energy drives industry and economic development. Every dollar taken out of the economy to pay for energy is a spendable dollar drained from consumers and a dollar added to the cost of producing goods and services. It’s bad all the way around. It slows economic recovery.


Will the President stubbornly choose to save the planet from global warming by imposing very expensive carbon reduction schemes to all fossil fuels as part of the Climate Action Plan, or will he sensibly switch direction to leverage the CO2 reducing capabilities of natural gas to achieve both the 17% reduction goal AND to boost economic recovery through cheaper energy at the same time?

Since 2008 the Obama Administration has spent about $150 billion on green energy initiatives that, according to EIA data, have had minimal impact on U.S. energy production or consumption. According to EIA forecasts, the impact of wind and solar on total U.S. energy production is barely measurable over the next 26 years.

In 2008 fossil fuels supplied about 82% of all U.S. energy needs and the EIA forecasts fossils will still supply around 80% in the year 2040… 26 years from now! Throwing billions of taxpayer dollars at green energy isn’t working.

Today, a primary driver behind U.S. CO2 reductions is the switch from coal-fired to natural gas-fired electric power plants. There is enough natural gas to serve U.S. needs for decades. Continuing and accelerating the switch through economic incentives makes logical sense. It gets the job done, and, better yet, it does it at lower consumer and business costs than any other energy solutions. That is perfect for the economy.

Yet, crazy as it seems, the President appears stuck on imposing expensive restrictions on the use of the only viable energy source that stands between him and meeting his 2020 CO2 reduction goal.


About azleader

Learning to see life more clearly... one image at a time!

Posted on Jan 14, 2014, in Business, Climate, climate change, economics, Economy, environment, Government, news, Opinion, Politics, Thoughts. Bookmark the permalink. Leave a comment.

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