Steep U.S. GHG emissions drop in 2020 are not sustainable, says Rhodium Group

January 15, 2021

by Peter Maloney
APPA News
January 15, 2021

In 2020, the United States saw the single largest annual decline in greenhouse gas (GHG) emissions in 2020 anytime since World War II, putting the country’s GHG emissions below 1990 levels for the first time, according to preliminary data from the Rhodium Group.

The research group estimates that the slowdown in activity related to steps taken to reduce the spread of COVID-19 led to a 10.3 percent drop in GHG emissions. Those restrictions reduced travel, altered demand for goods and services, and resulted in record high unemployment, the Rhodium analysts said. In 2009, GHG emissions declined 6.3 percent as a result of the Great Recession.

With GHG emissions now 21 percent below 2005 levels, the U.S. is expected to “far exceed” its 2020 Copenhagen Accord target of a 17 percent reduction below 2005 levels, according to Rhodium’s Green Stimulus and Recovery Tracker.

Nonetheless, the Rhodium analysts warned that its preliminary 2020 data should not “in any way be considered a down payment” toward the U.S. meeting its 2025 Paris Climate Agreement target of GHG declines of 26 percent to 28 percent below 2005 levels.

The U.S. left the Paris Agreement on Nov. 4, 2020, but president-elect Joe Biden has said it will rejoin the pact early in his presidency.

“The emission reductions of 2020 have come with an enormous toll of significant economic damage and human suffering,” Rhodium said. “With coronavirus vaccines now in distribution, we expect economic activity to pick up again in 2021, but without meaningful structural changes in the carbon intensity of the US economy, emissions will likely rise again as well.”

With economic activity expected to bounce back in 2021 — most forecasts currently project GDP growth of 3 to 4 percent — Rhodium noted, “emissions will likely increase as well absent a concerted effort.”

In October, the International Monetary Fund forecasted that U.S. GDP would decline 4.3 percent in 2020, Rhodium noted, adding that year-end year estimates by Bloomberg and Goldman Sachs put that decline at around 3.5 percent. And while the COVID-10 related decline was “significantly less drastic than the IMF’s April forecast, it goes “well beyond the 2.5% contraction the U.S. experienced during the Great Recession of 2009,” Rhodium said.

Several of the hardest hit economic sectors — transportation, electric power, and industry — are also the leading sources of U.S. GHG emissions, the Rhodium analysts noted.

With the possible exception of the power sector — where coal’s decline has been driving a steady reduction in power sector emissions over the past decade — emission reductions in 2020 resulted largely from reductions in overall economic activity, Rhodium said.

Travel demand was hard hit in 2020, resulting in a 14.7 percent decline in transportation sector emissions between 2019 and 2020. Industrial emissions were down 7 percent and emissions from buildings were down 6.2 percent year-over-year, Rhodium said.

Power sector emissions dropped 10.3 percent, driven by a nearly 19 percent reduction in year-over-year emissions from coal generation, the largest year-on-year decline in recorded history. Year-over-year electricity demand declined only 2 percent.

Before the pandemic hit, Rhodium has projected that power sector emissions would drop by as much as 7 percent in 2020. But coal’s decline was “only accelerated by weakened electric power demand during the pandemic,” Rhodium said.

After decades as the predominant fuel for US electric power, in 2020 coal became only the third-largest fuel source after natural gas and nuclear, with renewables close behind.

In 2020, coal’s share of US power generation dropped from 24 percent to 20 percent, with natural gas and renewables picking up most of the slack, rising to 39 percent and 18 percent, respectively. The uptick in natural gas generation offsets more than 10 percent of the reduction in emissions from coal-fired power.

According to the recently released Energy Information Agency short-term outlook the share of U.S. electric power sector generation from natural gas will decline from 39 percent in 2020 to 36 percent in 2021 and 34 percent in 2022 in response to significantly higher natural gas fuel costs and increased generation from renewable energy sources. Coal’s forecast share of electricity generation will rise from 20 percent in 2020 to 22 percent in 2021 and 24 percent in 2022, which is close to its share in 2019.

Electricity generation from renewable energy sources will rise from 20 percent in 2020 to 21 percent in 2021 and 23 percent in 2022. The nuclear share of U.S. generation will decline from 21 percent in 2020 to 20 percent in 2021 and 19 percent in 2022.

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