US economic growth less reliant on carbon
By: Zack Colman
Published: February 4, 2015
The United States economy is growing while using less energy, and what is does use contains less carbon, according to a report released Wednesday.
Electricity use and economic growth has effectively "decoupled," meaning using more power isn't necessary to drive gross domestic product, said a report released by Bloomberg New Energy Finance and the Business Council for Sustainable Energy. Electricity demand growth has averaged zero annually from 2007 through 2014. Energy efficiency has improved 54 percent since 1990 and 11 percent since 2007 when measuring GDP per unit of energy consumed.
Natural gas production and consumption also hit record U.S. highs last year, and renewable energy provided 13 percent of electricity in the U.S., up from 8 percent in 2007, said the report, "The Sustainable Energy in America Factbook."
Renewable energy investment rebounded in 2014, increasing 13 percent to $318 billion — just shy of the $318 billion peak in 2011. U.S. investments totaled $51.8 billion, second only to China. The report pinned the resurgence on short-term extension of a federal wind energy tax credit, a booming rooftop solar industry and "yieldcos," which are publicly listed companies that own clean energy assets.
Those changes to the U.S. electricity mix have lowered greenhouse gas emissions that scientists say drive climate change. As natural gas and renewable energy have become more competitive, coal has dwindled from supplying 49 percent of the nation's power to a low of 37 percent in 2012.
Coal's decline reflects both market and policy.
Environmental regulations have pushed some coal-fired power plants into retirement. Cheap natural gas has also contributed — demand hit an all-time high last year of 66.9 billion cubic feet per day, an increase of 2.8 percent compared with 2013, the report said. Much of the easier to mine coal has already been tapped, raising costs for getting what's left.
But coal did experience a slight bounce the past two years, as it crept back up to supply 39 percent of U.S. electricity as natural gas prices climbed for a bit. Carbon emissions rose along with it after 2012, though the report said, "Nevertheless, ‘structural’ trends — especially the retirement of coal plants — are underway that will probably lead to long-term increased market share for natural gas."
Federal and state policy will play a role in accelerating declines in coal use and emissions as well.
State-based energy efficiency policies are "slowing," the report said. But it added states could take up such measures to comply with a proposed Environmental Protection Agency rule to slash power plant emissions 30 percent below 2005 levels by 2030. The regulation would take coal-fired power plants offline — to the dismay of industry and conservatives who worry the policy will raise power costs — while putting a premium on switching to natural gas, adding renewable energy and improving efficiency.
President Obama's pledge to reduce overall U.S. emissions between 26 and 28 percent by 2025 in a November non-binding agreement with China will also pressure emissions. More stringent vehicle standards that aim to double fuel efficiency by 2025 will also cut emissions.
"[A]s enacted and proposed policies (such as regulations on existing power plants and fuel economy standards for cars) begin to bite, emissions are projected to go on a downward trajectory according to official US estimates," the report said.