Weather conditions around the world this summer have provided ample fodder for the debate over global warming. Droughts and heat waves are a harbinger of our future, carbon cuts are needed now more than ever, and yet meaningful policies have not been enacted. But beyond this well-trodden battlefield, something amazing has happened: Carbon-dioxide emissions in the United States have dropped to their lowest level in 20 years. If we estimate on the basis of data from the U.S. Energy Information Agency from the first five months of 2012, this year’s expected carbon-dioxide emissions have declined by more than 800 million tons, or 14 percent, from their peak in 2007.
The cause is an unprecedented switch to natural gas, which emits 45 percent less carbon per energy unit. The United States used to generate about half its electricity from coal, and roughly 20 percent from gas. Over the past five years, however, those numbers have changed, first slowly and now dramatically: in April of this year, coal’s share in power generation plummeted to just 32 percent, which is on par with gas.
America’s rapid switch to natural gas is the result of three decades of technological innovation, particularly the development of hydraulic fracturing, or what is known as “fracking,” which has opened up large new resources of previously inaccessible shale gas. Despite some legitimate concerns about safety, it is hard to overstate the overwhelming benefits.
For starters, fracking has caused gas prices to drop dramatically. Adjusted for inflation, gas has not been this cheap for the past 35 years, with the price this year three to five times lower than it was in the middle of the first decade of the century. And, while a flagging economy may explain a small portion of the drop in U.S. carbon emissions, the EIA emphasizes that the major explanation is natural gas.
The reduction is even more impressive when one considers that 57 million additional energy consumers were added to the population of the United States over the past two decades. Indeed, U.S. carbon emissions have dropped some 20 percent per capita, and are now at their lowest level since President Dwight D. Eisenhower left the White House in 1961.
David Victor, an energy expert at the University of California, San Diego, estimates that the shift from coal to natural gas has reduced U.S. emissions by 400-500 megatons of carbon-dioxide per year. To put that number in perspective, it is about twice the total effect of the Kyoto Protocol on carbon emissions in the rest of the world, including the European Union.
It is tempting to believe that renewable energy sources are responsible for emissions reductions, but the numbers clearly say otherwise. Accounting for a reduction of 50 megatons of carbon-dioxide per year, America’s 30,000 wind turbines reduce emissions by just one-tenth the amount that natural gas does. Biofuels reduce emissions by only 10 megatons, and solar panels by a paltry three megatons.
This flies in the face of conventional thinking, which continues to claim that mandating carbon reductions – through cap-and-trade or a carbon tax – is the only way to combat climate change.
But, based on Europe’s experience, such policies are precisely the wrong way to address global warming. Since 1990, the EU has heavily subsidized solar and wind energy at a cost of more than $20 billion annually. Yet the continent’s per capita carbon-dioxide emissions have fallen by less than half of the reduction achieved in the U.S. – even in percentage terms, America is now doing better.
Because of broad European skepticism about fracking, there is no gas miracle in the European Union, while the abundance of heavily subsidized renewables has caused over-achievement of the carbon-dioxide target. Along with the closure of German nuclear power stations, this has led, ironically, to a resurgence of coal.
Well-meaning politicians in the United States have likewise shown how not to tackle global warming with subsidies and tax breaks. The relatively small reduction in emissions achieved through wind power costs more than $3.3 billion annually, and far smaller reductions from the use of ethanol (biofuels) and solar panels cost at least $8.5 and $3 billion annually.
Estimates suggest that using carbon taxes to achieve a further 330 megatons carbon-dioxide reduction in the European Union would cost $250 billion per year. Meanwhile, the fracking bonanza in the United States not only manages to deliver a much greater reduction for free, but also creates long-term social benefits through lower energy costs.
The amazing truth is that fracking has succeeded where the Kyoto Protocol and carbon taxes have failed. As shown in a study by the Breakthrough Institute, fracking was built on substantial government investment in technological innovation for a period of three decades.
Climate economists repeatedly have pointed out that such energy innovation is the most effective climate solution, because it is the surest way to drive the price of future green energy sources below that of fossil fuels. By contrast, subsidizing current, ineffective solar power or ethanol mostly wastes money while only benefiting special interests.
Fracking may not be a panacea, but it really is by far this decade’s best green-energy option.
Bjorn Lomborg, the director of the Copenhagen Consensus Center, is the author of “The Skeptical Environmentalist” and “Cool It.” THE DAILY STAR publishes this commentary in collaboration with Project Syndicate © (www.project-syndicate.org).