The United States and China are the world’s two largest economies. They are also the two largest producers and consumers of coal, and the largest emitters of carbon dioxide. In recent years, however, their paths on coal have started to diverge.
Over the last few years, coal consumption has dropped dramatically in the United States, mainly due to low natural gas prices. In response to weak domestic demand, the U.S. coal industry has been rushing to find its way out to the international market. Last year, U.S. coal exports hit a historical high of 114 million metric tons.
However, it is worth noting that the shift away from coal in the U.S. may not be permanent. As my colleague, Kristin Meek, pointed out in an earlier blog post, coal use in the U.S. power sector was on the rise again towards the end of 2012, likely driven by the new uptick in natural gas prices.
On the other side of the globe, China’s appetite for coal continues to grow. In response, Chinese power companies are looking to tap the international coal market for sources that are more reliable and cost competitive. Among those markets is the United States. In 2012, China imported 290 million metric tons of coal. China was the third largest destination for U.S. coal exports, behind the Netherlands and the U.K.
This fact sheet updates a May 2012 working paper on the U.S. fast-start finance (FSF) contribution over the 2010-2012 period. It analyzes the financial instruments involved in the U.S. self-reported portfolio—about $7.5 billion, or 20 percent of the total FSF commitment globally. It also...
by Taryn Fransen, Abigail Jones, Michael Wolosin and Smita Nakhooda - April 2013
This post originally appeared on the National Journal's Energy Experts blog. It is a response to the question: "What's holding back energy and climate policy?"
We are in a race for sure, but it is not a race among various national issues. It’s a race to slow the pace of our rapidly changing climate. The planet is warming faster than previously thought, and we cannot afford to wait for national politics to align to make progress in slowing the dangerous rate of warming.
Recent events, like the tragedy at Sandy Hook elementary school, propelled gun control front and center. Last year’s elections shifted the national conversation on immigration. Climate change, too, should demand the attention of our national leaders.
The evidence of climate change is clear and growing. In 2012, there were 356 all-time temperature highs tied or broken in the United States. As of March, the world had experienced 337th consecutive months (28 years) with a global temperature above the 20th century average. Global sea levels are rising and artic sea ice continues to shrink faster than many scientists had predicted.
There are indications that Americans are deepening their understanding about climate change, especially when it comes to its impacts. People are beginning to connect the dots around extreme weather events, rising seas, droughts and wildfires, which have been coming in increasing frequency and intensity in recent years. The National Oceanic and Atmospheric Administration calculated that weather-related damages in the United States were $60 billion in 2011 alone.
The Gulf of Mexico has the largest dead zone in the United States and the second-largest in the world. Dead zones form when excessive amounts of nitrogen and phosphorous wash into waterways and spur algal blooms, depleting the water of oxygen and killing fish, shrimp, and other marine life. The Gulf of Mexico dead zone can range between an astounding 3,000 and 8,000 square miles. At its largest, it’s about the size of Massachusetts.
Reducing this growing dead zone problem is a huge scientific, technical, economic, and political challenge. It’s a conundrum that agricultural and environmental experts from across the United States will deliberate this week at the Gulf of Mexico Hypoxia Task Force meeting in Louisville, Kentucky.
The rapid expansion of unconventional natural gas development has reshaped the U.S. energy picture through increased production and reduced prices of natural gas. The shale gas production boom has also ignited divisive debates over its near- and long-term environmental impacts.
The rapid expansion of natural gas development in the United States has been a double-edged sword. While natural gas supporters are quick to point out its economic benefits and green attributes—natural gas produces roughly half the carbon dioxide emissions of coal during combustion—this isn’t the whole story. Natural gas comes with environmental consequences, including risks to air and water quality.
One risk is “fugitive methane emissions,” potent greenhouse gases that escape into the atmosphere throughout the natural gas development process. This methane—which is 25 times more potent than carbon dioxide over a 100-year timeframe—contributes to global warming and undercuts the climate advantage that cleaner-burning natural gas has over coal and diesel. (Learn more about fugitive methane emissions in our recent blog post.)
Despite the controversy surrounding natural gas development, energy forecasts suggest that natural gas is here to stay. Fortunately, several pathways are available to limit the climate impacts associated with its development. WRI just released a working paper, Clearing the Air: Reducing Upstream Greenhouse Gas Emissions from U.S. Natural Gas Systems, which outlines a number of state and federal policies and industry best practices to cost-effectively reduce fugitive methane emissions. We find that with the right amount of reductions, natural gas does offer advantages from a greenhouse gas (GHG) emissions perspective over coal and diesel.
Reducing Upstream Greenhouse Gas Emissions from U.S. Natural Gas Systems
This working paper focuses primarily on evaluating and reducing upstream methane emissions in the natural gas sector. We outline a number of state and federal policies and industry best practices to cost-effectively reduce fugitive methane emissions.
Natural gas is booming in the United States. Production has increased by 20 percent in the last five years, fueled largely by technological advances in shale gas extraction. Other countries--including China--are now studying our experience with this abundant new resource.
But the growing role of natural gas in the U.S. energy mix hasn’t come without controversy. Natural gas development poses a variety of environmental risks. In addition to habitat disruption and impacts on local water and air quality, one of the most significant concerns is the climate impact resulting from the “fugitive methane emissions” that escape into the atmosphere from various points along the natural gas supply chain.
So what are fugitive methane emissions, and how big of a problem are they? How do emissions from natural gas compare to those from coal? And are there ways to mitigate them? The answers to these questions will help us better understand how natural gas development will affect climate change.
New data from the U.S. Energy Information Administration (EIA) reveals a troubling trend: Coal-fired power generation—and its associated greenhouse gas emissions—were on the rise as 2012 came to an end.
According to the data, which was released yesterday, natural gas prices have risen significantly since April of 2012, prompting a rise in coal-fired electric generation (see figure below). This increase marks a dramatic change from the trends we’ve seen in the United States over the past several years. U.S. energy-related carbon dioxide (CO2) emissions from the power sector had been falling, mostly due to more electricity being generated by renewables, slowed economic growth, and a greater use of low-cost natural gas, which produces roughly half the CO2 emissions of coal during combustion.
The new uptick in gas prices and coal use suggests that we cannot simply rely on current market forces to meet America’s emissions-reduction goals. In fact, EIA projects that CO2 emissions from the power sector will slowly rise over the long term. To keep emissions on a downward trajectory, the Administration must use its authority to prompt greater, immediate reductions by putting in place emissions standards for both new and existing power plants.
This has been a big week for U.S.-China collaboration on climate change. Yesterday the U.S.-China Climate Change Working Group (CCWG), which was established in April by the Joint Statement on Climate Change, presented their report on bilateral cooperation between the two countries. Not only does it lay out actions to reduce greenhouse gas emissions, a close reading sheds light on important themes for the future of U.S.-China collaboration on climate change.
The report centers on five separate “action initiatives.” to address key drivers of greenhouse gas emissions in both countries. The U.S. and China make up more than 40 percent of global CO2 emissions, so significant collaboration between the countries is absolutely essential to addressing the problem. The five areas that the report singles out include: vehicle emissions; smart grids; carbon capture, utilization and storage; greenhouse gas data collection and management; and building and industry energy efficiency.
Although the report is built around these five initiatives, four big themes can also be seen:
Large electricity consumers such as Apple or DuPont have limited options for directly purchasing green power. End-user consumers can’t easily contract with renewable power generators; they have to work through electric utilities who act as intermediaries. This gives utilities excessive market power as the only potential buyers in the green power market.
Based on a model proposed by WRI, Google set a new precedent in the green power market by committing to a long-term Power Purchase Agreement (PPA) with an Iowa wind farm. This is the largest, longest-term wind deal ever closed in the country between a renewable generator and an electricity end-user, and was only possible because of its creative deal structure.
WRI has been actively engaging Green Power Market Development (GPMDG) companies, including Google, for several years to overcome barriers in the power markets and regulations that make it difficult for non-utilities to sign PPAs. Long-term PPAs are essential for renewable power generators, because they are needed to secure financing—yet the traditional model used by utilities is not suitable for electricity consumers.
WRI provided analysis and connections to technical experts that helped Google better understand the benefits of entering into long-term purchase agreements with wind developers. These long-term agreements help the wind developer secure more attractive financing than traditional short term purchase agreements do, while providing important price stability to the end user (the price of wind does not fluctuate). These contracts can be complex to structure and raise many technical and financial questions. WRI’s research helped Google find a workable approach to these contracts that can now be replicated in the market place. This model could increase the amount of wind power the commercial and industrial sector purchase.
The model created by the groundbreaking Google deal will open the door for private electricity consumers to sign long-term PPAs, creating a whole new stream of credit-backing and access to financing for renewable power generators.
Wading through the vast sea of global greenhouse gas (GHG) emissions data can be a real challenge. To help simplify the process and make such data more accessible, today the World Resources Institute is launching the Climate Analysis Indicators Tool, or CAIT 2.0.
The free, online portal provides data on GHG emissions from 186 countries and all 50 U.S. states, as well as other climate data. CAIT 2.0 allows users to view, sort, visualize, and download data sets for comparative analysis. By providing comprehensive emissions data in an easy-to-use tool, users from government, business, academia, the media, and civil society can more effectively explore, understand, and communicate climate change issues.
The global market for wood and other forest products is changing quickly. The industry has long struggled to address the problem of illegal logging, which damages diverse and valuable forests and creates economic losses of up to $10 billion a year. In some wood-producing countries, illegal logging accounts for 50-90 percent of total production.
But recent developments indicate that we may be turning a corner: Illegal logging rates worldwide have declined by about 20 percent since 2008.
This was the topic on everyone’s minds at the recent Forest Legality Alliance meeting in Washington, D.C. This meeting brought together nearly 100 members and experts representing a wide array of companies, trade associations, NGOs, and governments involved in the harvest, manufacturing, and trade of legally produced forest products.
The White House’s climate action plan aims to transform the U.S. electricity system in the coming decades. The President directed the Environmental Protection Agency (EPA) to develop and implement standards to reduce carbon dioxide pollution from power plants, double renewable energy in the United States by 2020, and open public lands to an additional 10 gigawatts of renewable energy development, enough to power more than 6 million homes.
The big question is: Are renewable energy sources up to the task of taking on a significant portion of the country’s electricity? Recent trends and data show that the answer to this question is a definitive “yes.”
Four big signs that renewable energy is ready for the limelight include:
While reactions to President Obama’s newly announced climate plan have focused on domestic action, the plan actually has potentially significant repercussions for the rest of the world. These repercussions will come in part through his commitment to limit U.S. investments in new coal-fired power plants overseas. If fully implemented, the plan will help ensure that the U.S. government channels its international investments away from fossil fuels and toward clean energy. The move sends a powerful signal—and hopefully, will inspire similar action by other global lenders.
President Obama’s newly announced National Climate Action Plan will make serious progress on reducing pollution and curbing climate change. But importantly, the United States can also save billions of dollars each year by fully implementing all aspects of the plan.
The world has been asking: How will the United States turn its climate change talk into real action? President Obama began to answer that question this week when he announced his National Climate Action Plan, laying out concrete steps to curb climate change at home and abroad, including a policy that would bar the U.S. from financing conventional coal plants internationally.
The concrete steps he described are vital--most importantly because they represent actions, not just words. But everyone should also take note of the starting point in his speech. It reveals the critical role the international climate change process can play in stimulating climate action.