Global CO2 Emissions Projected to Reach 43 Billion Tons Per Year by 2040

The International Energy Outlook 2016 (IEO2016) recently released by the US Energy Information Agency (EIA) projects that world energy consumption will rise from 549 quadrillion BTU in 2012 to 815 quadrillion BTU in 2040, an increase of approximately 48%.

The document makes clear that economic growth and population growth are the key determinants of growth of energy demand.  In that regard, it is worth noting that the IEA assumes that the world’s GDP will more than double during the next 25 years, growing at an average annual rate of 3.2%.  The EIA’s economic growth assumptions are generally in line with recent IMF and World Bank projections.

Renewable energy is expected to be the fastest-growing energy source, increasing by 2.6% per year through 2040, followed by nuclear energy which increases at an average annual rate of 2.3%.  Unfortunately, fossil fuel use also increases during this time period.  Natural gas consumption is projected to increases at an annual rate of 1.9%.  Petroleum and other liquid fuels consumption increases from 90 million barrels per day in 2012 to 121 billion barrels per day in 2040, an average annual increase of approximately 1.1% per year.  Coal consumption also continues to increase, albeit at a slower rate of 0.6% per year.  The net effect is that fossil fuels will still account for 78% of energy use in 2040.

Because of the increase in fossil fuel use, world energy-related CO2 emissions are expected to rise from 32.2 billion metric tons in 2012 to 43.2 billion metric tons in 2040 – an increase of 34% over the reference period.

Most of the growth in energy- related CO2 emissions over the next 25 years is expected to come from the developing world, i.e., from non-OECD nations, many of which will continue to rely heavily on fossil fuels to meet the growing needs of their impoverished and rapidly growing populations.

The Reference case projection summarized above is described by the IEA as, “a business-as-usual trend estimate, given known technology and technological and demographic trends”.    It does do not include the potential effects of the Obama administration’s recently finalized Clean Power Plan (CPP).  If the CPP is fully implemented, US CO2 emissions in 2040 would be reduced by approximately 0.5 billion tons.   This would lower the projected global CO2 emissions in 2040 to 42.7 billion tons, a relatively modest reduction of approximately 1.2%.

For countries other than the United States, the EIA analysts have attempted to, “assess the prospects that countries or country groups will be able to achieve the goals or targets stated or implied in their policies”.  Virtually no information is provided as to how this “assessment” was carried out, particularly as it relates to the emissions reduction goals set out by most countries at the Paris Climate Conference (COP21) in November 2015.

Our Perspective

The International Energy Outlook 2016 clearly demonstrates that the world is not on a trajectory that would lead to the substantial reduction in greenhouse gas emissions that are necessary to keep global temperature increase to a maximum of 2oC.   Indeed, the growth in CO2 emissions envisioned in this document would all but guarantee that the 2oC threshold will be crossed well before 2040.

Although there is an inherent and unavoidable uncertainty in many of the underlying assumptions upon which the projections contained in this document are based, there is no reason to doubt the objectivity of those responsible for the document’s preparation.  It is worth noting in that regard that, by law, the EIA’s data, analysis and forecasts are independent of approval by any other officer or employee of the US Government.

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