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Was 2014 the year CO2 emissions peaked?

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Coal fired power station near Nottingham, UK

Somehow, somewhere, have climate politics worked? That was the question raised by a recent report by the International Energy Agency (IEA), which said that harmful CO2 emissions from the energy sector in 2014 had “stalled” (i.e. remained at the same level as 2013), largely because of the halt in emissions growth thanks to changing patterns of energy consumption in China and OECD countries.

This is the first time in the history of recorded energy data that CO2 pollution from energy consumption – which is about three quarters of all global greenhouse gas emissions – stopped growing in times of robust economic growth (about 3% annually). Has the world achieved the first massive task of combatting climate change by curbing emissions growth?

Three other questions arise: was 2014 the peak year for fossil fuels? Are clean energy policy changes – and which ones – really the cause of the “stalling” CO2 emissions? And finally, is the world seeing declining in CO2 emissions from 2015 onwards?

Globally reduced emissions from coal have contributed to “stalling”

We know for sure that reduced oil and gas demand from some energy efficiency policy measures (mainly in the transport sector) triggered an oversupply of shale oil growth in the US that caused or contributed to the oil price slump we have experienced since June 2014. Yet, demand for oil and gas still grew in 2014 (compared to 2013) as shown by preliminary figures from the IEA.

To offset the slight growth in oil and gas CO2 emissions, this “stalling” can only have happened with the reduction of coal use and the associated reduction in CO2 emissions. Now, whether China is responsible for the bulk of that, and how much OECD countries may have contributed, isn’t clear. We will only know the source of this “stalling” for sure once global CO2 emissions data is fully analysed. Still, the IEA is known to be thorough and cautious, so the fact that they have published this data means they must have some confidence in the evidence.

Whatever the contribution of China to the “stalling” – it burns around half of global coal – I am rather convinced that the EU also contributed to this “stalling” as there was a decline in coal consumption compared to 2013. Gas prices slipped between 5% and 30% as well last year, as it was more profitable to crank up the load factor for lower-carbon gas power than for coal. In years past, it was the opposite – oil-indexed gas prices (at least in the EU and parts of Asia) and slumped carbon prices in the EU emissions trading system led to higher coal and less gas use in the EU.

We should remember that in 2014, investments in renewables (mainly power) grew 16% compared to 2013. Solar financing alone grew to $US 150 billion (the highest investment ever) and 25% more than 2013. Wind power received $US 100 billion – an increase of 11% over 2013. Generally, according to Bloomberg New Energy Finance, declining manufacturing prices and increased energy output by various renewable sources over the last few years means that the contribution of renewables in 2014 to overall electricity supply might be even up to twice that in 2010 (when global renewable energy investments were on similar high levels).

Generally, (and besides China) countries with lots of coal consumption like Germany, the US, Japan and the UK contributed particularly with enhanced renewable energy investments that also curbed coal.

Was 2014 the peak year for global emissions?

Solar power plant, Mojave Desert, USA

In order to stay well below 2 degree Celsius compared to pre-industrial temperatures, it is well accepted science that that the world has to ‘peak and decline’ greenhouse gas emissions before 2020. So far, any peak or decline was far away.

Whether or not we are observing a trend change and a sign that the various climate and clean energy policy measures in EU, China, Japan, US, and India (for example) are starting to bite globally needs to be confirmed over the years to come. Let us also keep in mind that energy CO2 is ‘only’ about 70 per cent of all global greenhouse gas emissions. In recent years, we have also seen a significant decline in deforestation emissions, mainly in Brazil.

This all gives hope and confidence for a new global climate deal to be agreed in Paris in December. But no one can say whether (and for how long) this flattening or “stalling” of emissions can be maintained – and even more importantly, when this ‘peak’ will be transferred into a long term, continued and reliable decline of all global greenhouse gas emissions by mid-century to no more than 20% of those of 1990. This is the level that is considered to allow the Earth to warm not more than 1.5 degrees, which is a “survival threshold” for many island nations.

Is it a fossil fuel CO2 peak?

Is it a fossil fuel CO2 peak? It’s too early to tell. It seems some clean energy measures are truly effective now. But what are the consequences of a sustained low oil price?

Sure, low oil prices will take some of the really devastating fossil fuel projects (such as drilling in the Arctic and shale in the US) off the market and will probably also curtail tar sands significantly. Elsewhere, it will stall risky and expensive offshore oil (for instance the ‘Pre-Salt’ development in Brazil).

Yet in the US and other countries, people are rushing out to buy more SUVs compared to last year. It is also true that internationally, coal trade prices follow gas prices like a shadow to within one or two years. So while a low oil price triggers lower gas prices, lower gas prices also encourage lower coal prices. Lowered gas prices replace coal but also necessary efficiency measures in transport, industry and housing and, in some cases, renewables. Lowered coal prices hit back on all sectors and encourage more fossil fuel use.

Continued uptake of renewables and strong decarbonisation policies needed for long term, sustained decline in CO2 emissions

So to really ensure that 2014 is not only a peak year, but also a step towards a long-term decline for energy C02 emissions, governments can’t rely on market dynamics. It is well known by all economists as the ‘green paradox’. Strong decarbonisation politics will be accompanied by a strong fall in all fossil fuel energy prices – the market reaction on oversupply and under-demand.

To not be lured back into fossil fuel growth, good, clean energy policy must be characterised by undisturbed and continued uptake of renewables, in combination with strengthened energy efficiency and conservation in all economic sectors. This must be based on and fostered by clear legislation and standards – then the overall CO2 decrease will occur continuously and irrespective of the oil, gas or goal price.

Some countries have taken the first steps, but the world as a whole is very far from a reliable and continuous zero-emission pathway.

Dr Stephan Singer is Director of energy policy for WWF. He is based in Brussels, Belgium. ssinger@wwf.eu

Tweet this and help share the message:

Was 2014 the year CO2 emissions peaked? @climatewwf on the @IEA’s new report http://bit.ly/1BI7B5q

In 2014, the world’s economy grew while CO2 emissions “stalled.” Are #climate policies finally working? http://bit.ly/1BI7B5q

Somehow, somewhere, have #climate politics worked? CO2 emissions “stalled” in 2014, according to @IEA http://bit.ly/1BI7B5q

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