The 2010s wrecked the planet

The 2010s wrecked the planet

The past decade hasn't done much to inspire optimism about the future of the planet.

Emissions from burning fossil fuels and land-use changes since the start of 2010 have been equivalent to about 407 billion tonnes of carbon dioxide. About one-sixth of all carbon emissions in human history happened in the past decade alone.

Depending on the estimates used, emissions can continue at such a pace for 10 or at best 20 more years before all hope of avoiding more than 2 degrees Celsius of global warming is gone. The path that keeps the world closer to 1.5C is already almost impossibly narrow -- and the trend is still going in the wrong direction.

"Energy-related emissions hit another historic high in 2018," the International Energy Agency (IEA) wrote in the latest edition of its annual energy outlook. There's a persistent gap between "expectations of fast, renewables-driven energy transitions and the reality of today's energy systems in which reliance on fossil fuels remains stubbornly high."

Yet, while that's true, there's a surprising amount of evidence that the needed transformation has started to play out -- especially in power generation, which accounts for the largest slice of emissions.

To see why, compare current activities with the scenarios of future emissions the IEA first put out just over a decade ago, in 2009. These modelled two different futures: A "reference scenario" that assumed no new policies to limit carbon; and a "450 scenario" that assumed efforts would be rapidly stepped up to restrict the Earth to 2 degrees of warming. ("450" refers to the 450-parts-per-million atmospheric concentrations of carbon dioxide thought to be consistent with two degrees of warming).

It's hard to argue we're in a 450 world. That model imagined all rich countries joining an international carbon market by 2013, with binding emission-reduction targets for 2020. All other major economies would join a similar market by 2021, while separate international agreements would limit emissions from the transport and industrial sectors. In the wake of the failure of last month's Madrid climate conference, such a degree of global cooperation looks fanciful. Only in Europe have we seen anything of the sort.

Yet despite all that, power generation appears to be tracking closer to 450 than the reference scenario. Electricity generators pumped about 13.6 billion metric tonnes of carbon dioxide into the atmosphere in 2017, according to the IEA's latest report on global emissions. Even if pollution continues to grow at 10-year average rates this year and next, that should leave the world about 842 million tonnes short of the reference scenario, and only 258 million tonnes above the 450 scenario.

That's impressive. Apart from the lack of policy action, unsubsidised renewables weren't able to compete on price with fossil-fired power until the middle of the 2010s. Nowadays, they're starting to undercut even existing thermal plants. On top of that, the past decade saw a nuclear shutdown after 2011's Fukushima accident that added about 2.4 billion tonnes of carbon emissions over six years. Had Fukushima not happened, grid emissions could now be tracking more or less in line with the IEA's rosiest 2009-vintage expectations.

The improving economics of renewables and the deteriorating outlook for coal-fired power suggest the dynamic could move in an even more positive direction during the 2020s.

So much for the good news. The bad news is that while the power sector is shifting in the right direction, it accounts for less than half of global fossil-fuel emissions -- and things look worse, not better, elsewhere. While the pace of growth in industrial and transport emissions has slowed, they've not only failed to bend toward the IEA's 450 scenario -- they're actually emitting more carbon than the dirtier reference projection. Total emissions of 33.1 billion tonnes in 2018 look likely to end up closer to the 34.5 billion tonne reference scenario for 2020 than the 30.7 billion tonne 450 version.

On top of that, the 2009 estimates have been invalidated by pollution pumped since then. We're already overdrawn on our carbon budget. We'll need to work even harder over the coming decade just to get back to balance.

Still, what's happened in the power sector offers encouragement. A decade or so ago, the idea of economically competitive low-carbon power looked like science fiction. "Most unit energy costs seem likely to remain higher than fossil fuels," Nicholas Stern wrote in his influential 2006 review of the economics of climate change, "and policies over the next 25 years should be based on this assumption".

That forecast ultimately proved too pessimistic. As with previous global action to tackle sulphur and ozone emissions, reducing carbon emissions from power generation appears to be a surprisingly tractable problem. If the world can start a similar transformation in transport and industry throughout the 2020s and advance on the progress with electricity over the past 10 years, it may still be possible to rein in humanity's carbon addiction before it's too late. ©2020 BLOOMBERG OPINION.

David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies.

David Fickling

Bloomberg Opinion columnist

David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.

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