Energy and Climate Trends Since President Trump’s Election
How have CO2 emissions and energy use changed over the last 3 years and 9 months?
It feels like there’s been breaking news every few hours recently. To counter that, I wanted to step back and take stock of some long-run energy and climate trends. With the election in sight, I thought it would be worth pondering how the last four years under President Trump might have altered those trends.
To do that, I’m presenting some basic statistics on US CO2 emissions and energy use in the graph below. All three data series are plotted relative to 2000. Given the Trump administration’s dedication to rolling back environmental policies, I was a bit surprised to see that, at a super high level, we don’t see a big trend break after 2016.
The Kaya Identity
The lines on this graph are part of the Kaya Identity, which is a helpful way to decompose what’s going on with CO2 emissions. Specifically, you can imagine four broad ways to reduce US CO2 emissions from energy:
- Shrink the population, so there are fewer people using energy,
- Reduce economic output (Gross Domestic Product – GDP) per capita, so we’re making less stuff using energy,
- Use less energy per dollar of GDP, or
- Emit less CO2 per unit of energy.
Leaving aside the attack ads that many Republicans are launching at Democrats, no one really is proposing the first two bullets as policy levers for addressing climate change. I haven’t plotted population trends in the graph above, but it’s marching up at a nice, steady growth rate of a little less than 1% per year and that’s not likely to change dramatically. (See Andy’s blog on population and energy trends.) The pink line (at the top on the right hand side of the graph) reflects GDP per capita. You can see the line dip with the Great Recession in 2008-09 and when we have the 2020 numbers, they will show a drop, but in general, this increases steadily at a little more than 1% per year, which generally means more jobs, prosperity, iPhones, etc.
The interesting lines are in orange and blue, which show, respectively, CO2 per unit of energy and energy per dollar of GDP. Both of these have been declining pretty steadily since 2000. To my mind, the blue line reflects what’s happening on the demand side of the energy sector – are we able to do the same economic activities more efficiently? The orange line reflects what’s happening on the supply side – are we able to produce the same amount of energy emitting less CO2?
Beginning in 2008, we started to see less CO2 emitted per unit of energy production, mainly as we added more renewable electricity to the grid and switched from coal to gas for electricity production. The Energy Information Administration calculates that the coal to gas switch accounted for over 60% of the decline. (See Figure 10 here.)
Energy efficiency has been improving pretty steadily for the last 30 years, for example as we deploy more LED light bulbs, improve overall productivity or shift energy-intensive industries abroad. There are a number of papers that analyze this trend – here’s one that I know of.
Why isn’t the Trump effect more obvious?
Given President Trump’s rhetoric about saving coal and the despair that many environmentally minded people experienced in November 2016, it may be a little surprising that the Trump effect can’t be seen in the trends so far. (Meredith blogged about the Trump effect on local air pollution – it’s less rosy.) In part, this likely reflects the fact that a lot of energy policy decisions are made at the state level. For example, California, like 34 other states, has a renewable portfolio/clean energy standard, which forces the CO2 emissions from electricity production down.
President Trump’s inability to control these trends also reflects the fact that there are market forces driving American’s decisions about energy consumption and production. For example, the rapid decline in the price of LED lighting has led to dramatic reductions in the electricity used by the residential and commercial sectors (see Lucas’ earlier blog) and the decline in natural gas prices spurred the coal to gas switch. And, many of these markets are global. Prices for solar photovoltaics and wind turbines have fallen a lot, so some of the renewable electricity is being installed because it’s the cheapest option, not because of a renewable portfolio standard or other policies (at least not directly).
One concern might be that today’s policy decisions drive tomorrow’s market trends. I would like to see an analysis of the extent to which LED price drops were inspired by energy efficiency policies. My read of the solar price decline is that market forces – capitalists trying to make a better mousetrap, so to speak – are an important part of the story.
But, it’s also true that we don’t know what the blue or orange lines would have looked like under a Hillary Clinton administration – maybe they would have declined faster. And, the trends over the next 10 years might have been different if she had become president in 2016.
Comparing the US to the rest of the world
Another concern is that the US has made progress by exporting its energy- and carbon-intensive activities to other parts of the world, like China. If the US economy is more service oriented, and its manufacturing is moving to other parts of the world, then we’ll see the orange and the blue lines falling locally, but going up elsewhere.
The figure below, from the Global Carbon Project, reflects the worldwide trends. (Thank you to Armond Cohen for pointing me to them. To make it easier to compare, I copied their color scheme and normalized to the same year).
Source: Center for International Climate Research, Global Carbon Project
The downward trends in the blue and orange lines are less pronounced worldwide than they are in the US, but there’s also no evidence that the US reductions have led to increases elsewhere. The US consumes only 17% of worldwide energy, so a 20% drop in energy use per unit of GDP worldwide, could not be driven by a 30% reduction in the US and growth elsewhere. This figure suggests that CO2/Energy is falling in the world’s largest emitting countries, though not as much as in the US. One optimistic view is that the US, and other countries that have seen recent declines, are leading the rest of the world in decarbonizing the energy sector, and that other countries will see similar declines in CO2 in the future.
Big systems with long-lived assets, like the worldwide energy sector, are hard to redirect. That’s a good thing for those of us worried about the damages President Trump has wrought, but it also emphasizes just how hard it will be to get massive reductions in CO2.
Keep up with Energy Institute blogs, research, and events on Twitter @energyathaas.
Suggested citation: Wolfram, Catherine. “Energy and Climate Trends Since President Trump’s Election” Energy Institute Blog, UC Berkeley, October 13, 2020, https://energyathaas.wordpress.com/2020/10/13/energy-and-climate-trends-since-president-trumps-election/
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Catherine Wolfram View All
Catherine Wolfram is the William F. Pounds Professor of Energy Economics at the MIT Sloan School of Management. She previously served as the Cora Jane Flood Professor of Business Administration at the Haas School of Business at UC Berkeley. From March 2021 to October 2022, she served as the Deputy Assistant Secretary for Climate and Energy Economics at the U.S. Treasury, while on leave from UC Berkeley. Before leaving for government service, she was the Program Director of the National Bureau of Economic Research’s Environment and Energy Economics Program, Faculty Affiliate of the Energy Institute at Haas from 2000 to 2023, as well as Faculty Director of the Energy Institute from 2009 to 2018. Before joining the faculty at UC Berkeley, she was an Assistant Professor of Economics at Harvard. Wolfram has published extensively on the economics of energy markets. Her work has analyzed rural electrification programs in the developing world, energy efficiency programs in the US, the effects of environmental regulation on energy markets and the impact of privatization and restructuring in the US and UK. She is currently working on several projects at the intersection of climate and trade. She received a PhD in Economics from MIT in 1996 and an AB from Harvard in 1989.
Energy Institute Blog 
Great and timely article.
My take on the chart shown here is two-fold. First, the devil is in the details – there is a lot hiding under broad indicators. One obvious example is while there is steady growth in GDP/capita from immediately after the great recession (ca 2009) to 2019 (which, notably, doesn’t seem to be higher post 2016), the benefits of that growth are not evenly distributed and even with the low unemployment rates pre-pandemic, there has been an increase in income inequality.
The decrease in CO2/unit of energy produced (which is what is claimed here) likely reflects both state and federal policies and the declining use of fossil fuels, especially coal, but it’s not clear to me that some of the end use CO2 production, e.g. transportation, is accounted for in this analysis. Arguably, as automobile fuel efficiency has improved (over many years) the CO2/mile emissions have gone down. tRump and company have tried to roll back fuel efficiency requirements, but that effect won’t been seen in these data (and hopefully won’t be seen in the future either with a new administration). There is another issue here, though, which is that CO2 is not the only measure of greenhouse gas emissions from the energy sector – methane is widely recognized as a more potent greenhouse gas – by roughly a factor of 30. Fugitive emissions of CH4 all along the methane fuel cycle – from production to storage to transportation and handling – are (slowly) being recognized as important. Thus the GHG benefits of fuel switching from coal (or oil) to natural gas are not as great as one might expect (newer gas-fired technologies, such as combined cycle, help).
the most intriguing line on the chart, for me (my second take), is the decline in energy use/unit of GDP. A few decades ago, the standard rubric for doing energy forecasting was a straight edge and semi-log graph paper and all one needed to know is what the forecasts were for GDP growth rates. the standard ‘thinking’ then was that energy use and GDP were inextricably linked – one to one or even more. By the end of the 1970s, California discovered that simply wasn’t true (illustrated by the Rosenfeld effect). The data shown here – spanning ~30 years – show a 40% reduction in energy use/unit of GDP over that time, which is both remarkable and interesting. The question, it seems to me, is how much of that is due to more efficient energy use (the advent of LED lighting is a huge example – another thing that ol’ whatshisname wants to dismantle) and how much is due to structural changes in the economy (e.g., manufacturing vs service sector).
There is a completely unexplored reason for politicians to be concerned about both ordinary pollutants and CO2 buildup, and that reason is that people value improvements in environmental quality more than it would appear from even “state-of-the-art” benefit-cost analysis. The argument for CO2 policy (under-published in Ecological Economics) is here:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2685447
and the (mutually-supporting) argument for ordinary pollutants (under-published at JEEP) is here:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2920340
The papers at the preceding links have received little “traction” in the economics profession…as far as I can ascertain, that is because they are “too easy to read” to be thought “important.” I think the importance should be quite obvious. 🙂
Catherine, the Kaya Identity, or
F = P • G/P • E/G • F/E
simplifies to
F = F.
Thus, it’s a tautology. For example, if we substitute
C = Global population of chickens
for
F = Global CO2 emissions from human sources
it’s not hard to show that the global population of chickens is, indeed, equal to the global population of chickens. Because any numbers we substitute for Kaya’s other variables will end in the same result, it’s of limited value other than entertainment.
In general I’d agree with your criticism of the careless and misdirected policy of the Trump administration. However:
“Prices for solar photovoltaics and wind turbines have fallen a lot, so some of the renewable electricity is being installed because it’s the cheapest option…”
assumes dispatchable and intermittent energy are equally useful (have equal value). However, wind and solar require support from dispatchable sources to integrate them on an electrical grid, and it’s not free. The Energy Information Administration (EIA) finds the operating expenses for nuclear energy to be 27% cheaper than photovoltaic and wind plants, combined with the gas turbine and combustion sources needed to support them:
https://www.eia.gov/electricity/annual/html/epa_08_04.html
Echoing Brian’s comment, the drop in natgas prices is completely due to the expansion of fracking from Texas to Pennsylvania to Montana over the past 15 years. That has created lower capex and a glut of low priced natgas (<$3/mmbtu), not only displacing coal but also compelling more LNG terminals that export our cleaner fuel to the world.
Although that fracking technology is probably not inspiring to the writer (or the politicians of California), it would be informative to identify the major contributor that led to the drop in CO2. In many ways it is like the dilemma renewables proponents have with natgas peakers that facilitate the market expansion of renewables until batteries (and however we dispose of them) can cost effectively displace them.
Great article. The decline in natural gas prices has forced inefficient and expensive coal generation on the margin and continues to be a major contributor to carbon reduction despite the administrations attempt to save coal jobs. This trend is expected to continue into the foreseeable future.