Emissions Story

Emissions Story, the September issue of TerraJoule.us, queries whether future growth of global CO2 emissions may be lower than forecast, due to demographic changes in population and fertility rates; the completion of fossil fuel adoption cycles in a majority of the world’s economies; and the ferocious learning rate of global wind and solar power:

Recent data from China indicates that, in 2015, 100% of the growth in that country’s electricity system was more than amply covered by two sources: wind, and solar power. According to Greenpeace—which contrary to historical perceptions now possesses actual data gathering capabilities on the ground globally, including Beijing—China’s power generation in 2015 grew by only 22 TWh. But combined new wind and solar generation grew by 48 TWh. This is precisely the regime-change that TerraJoule.us has been warning about over the past year. While we remain with our forecast that wind and solar will more reliably come to dominate growth in global power generation by the year 2020, it is telling that in several important domains—the UK, China, the US—the ability of combined wind and solar to crowd out other energy sources in the market for electricity growth is telling. TerraJoule.us is increasingly concerned that energy transition itself is starting to land more forcefully, move more quickly, than many understand. If so, the implications for global emissions growth— a huge scientific and political challenge—could be altered meaningfully, if not dramatically…

…To emphasize this point further, it’s now clear that CO2 emissions in the OECD have peaked. If that conclusion seems uncertain to you, then attempt the following experiment: try to model a case where the OECD enters a new adoption cycle for fossil fuels. Try to make the case that Japan, Australia, Europe, and the United States will see a new push into coal, oil, and natural gas. Not easy, right? The OECD is also host to aging populations, and low fertility rates. And it’s also the epicenter of persistently low interest rates which are telling you that future growth is likely to either be low—or much lower than most would hope. So again, given all those factors, try to make the case for a net gain in combined oil, coal, and natural gas. Even in domains where you can make the case for consumption upticks in one of those sources, you will generally find that either one or two of the other sources are in decline.

In the continuously updating TerraJoule.us Global Grid Decarb Monitor, the forecast for power generation growth from solar is maintained this month, but the forecast for global  growth from wind power is revised up sharply, due to capacity factor gains and rapid 2016 deployment: again, mainly in the US and China.

Finally, The TerraJoule.us Transition Index, composed of 70% ETFs and 30% individual equities, rose to 102.51 to finish the month of August, having started the new year at a notional value of 100.

–Gregor Macdonald, Editor of TerraJoule.us – A Journal of Energy Transition.