Following three years of decline, U.S. carbon dioxide emissions rose 3.4% in 2018 as the American economy expanded and natural gas-fired generation beat out renewables for replacing a wave of retiring coal plants, according to a preliminary estimate released Jan. 8 by the Rhodium Group. With previous reports showing that the U.S. already is off track to meet its CO2 emissions reduction goals under the Paris Agreement on climate change, the research firm's analysis suggests the gap the country needs to close to meet those targets has grown even larger.
Under the Paris Agreement, the U.S. committed to cut CO2 emissions 26% to 28% below 2005 levels by 2025. The climate accord aims to reduce greenhouse gas emissions enough to limit global warming ideally to 1.5 degrees C and to 2 degrees at the most from pre-industrial levels in an effort to avoid the catastrophic effects from climate change.
U.S. Environmental Protection Agency Acting Administrator Andrew Wheeler recently claimed that the U.S. is meeting its commitments to reduce CO2 emissions under the Paris Agreement despite President Donald Trump's plan to withdraw from the accord. But that assertion was only true for the U.S. electric utility sector in 2017 — not for the nation's economy as a whole. CO2 emissions from large power plants dropped 4.5% in 2017 compared to the previous year, according to an EPA analysis. Over the course of 2018, however, power sector emissions likely increased by 1.9% year over year, according to the Jan. 8 report.
That spike was fueled in part by a large increase in natural gas-fired power capacity. Between January and October of 2018, U.S. power companies added more new gas capacity than was needed to replace retiring coal capacity, according to the report. In addition, twice as much new gas-fired capacity was added to the nation's generation mix during that same period as new wind and solar capacity, including distributed solar, combined, the report found. A Jan. 8 analysis by S&P Global Market Intelligence found that a total of 16,900 MW of U.S. power generation capacity retired in 2018, far more than the 11,569 MW that retired in 2017.
The Rhodium Group based its estimates on data from the U.S. Energy Information Administration for the first three quarters of the year, weekly EIA petroleum supply data, plus daily power generation from Genscape and Bloomberg. The estimates in the report are for energy-related CO2 emissions only, which account for roughly three-quarters of total greenhouse gas emissions in the U.S. Official EPA 2018 inventory numbers for all greenhouse gases will not be available until 2020.
Overall transportation emissions grew by 1% in 2018, roughly the same as the 2017 growth rate, the report estimated. During the first nine months of the year, gasoline demand declined by 0.1%, but robust growth in demand for both trucking and air travel increased demand for diesel and jet fuel by 3.1% and 3.0%, respectively. And the largest emissions growth in 2018 came from buildings and industry, the report found. Direct CO2 emissions from residential and commercial buildings likely increased by 10% in 2018 to their highest level since 2004, due in part to a colder-than-average winter across much of the U.S., the report said. Meanwhile, the Rhodium Group's preliminary estimates suggest the industrial sector posted the largest CO2 emissions gains in 2018 with 55 million metric tons. That was mostly due to industrial growth, the group said, citing U.S. Federal Reserve data showing that the value of shipments across all manufacturing industries rose 7.3% in the first nine months of the year compared to 4.5% during the same period the year before.
Looking forward, the group predicted that the industrial sector will become responsible for an increasingly large share of U.S. greenhouse gas emissions "absent a significant change in policy or major technological breakthrough." Based on its preliminary estimate, the U.S. will need to reduce energy-related CO2 emissions by 2.6% on average over the next seven years to meet its the Paris Agreement targets, the report found. That rate is more than twice the pace the U.S. achieved between 2005 and 2017 and significantly faster than any seven-year average in the nation's history, the report noted.