The major backward step in 2017 data is most stark in carbon emissions from energy consumption, which are estimated to have increased by 1.6% in 2017, said BP’s Chief Economist Spenser Dale in the company’s Statistical Review of World Energy. This follows three consecutive years of little or no growth in carbon emissions.
Probable causes
- Global GDP growth picked up to above trend rates. Much of that growth was driven by industrial activity, which is more energy hungry, causing gains in energy intensity to slow.
- And the turnaround in coal consumption, from the substantial falls seen in the previous three years to a small rise last year, meant the improvement in carbon intensity was more muted. How worried should we be?
Last year when we discussed the exceptional performance seen over the previous three years, I suggested that some of that improvement was likely to be structural and would persist, but that the degree of improvement was probably exaggerated by several cyclical factors, particularly in China. Given that, as those short-run factors unwind – like they have done this year – it’s not surprising that carbon emissions increased to some extent.
But the extent of that pick-up has probably also been exaggerated by some short-run factors working in the opposite direction, adds Mr. Dale. The unusually strong economic and industrial growth in the OECD and the extent of the bounce back in power demand in China, which sucked in coal as the balancing fuel.
My guess is that some of the deterioration in 2017 relative to the previous three years will persist, but not all of it. So I’m a bit worried, but not overly so. Personally, I am more worried by the lack of progress in the power sector over the past 20 years, than by the pickup in carbon emissions last year.
