EU CO2 emissions have fallen by 17% since 2008. Does this vindicate the energy policy mandating 20% of total energy from renewables by 2020? For member countries, a comparison of the per capita wind + solar installed capacity in 2014 with the CO2 reduction in each country 2008-2014 has no correlation (R2 = 0.01). At face value, installing wind and solar devices appears to make no difference to CO2 emissions reduction.
What does correlate with CO2 reduction in member countries is economic growth. A group of seven countries have had negative aggregate growth since 2008 (Denmark, Italy, Portugal, Finland, Ireland, Greece and Spain). These are the countries, stuck in depression, that have the highest degree of emissions reduction.
In contrast, the countries with strongest growth have barely reduced their emissions at all. A comparison of economic growth and CO2 reduction has R2=0.42. In terms of CO2 reduction (i.e. lack of it), Poland, Norway and Germany are the dirty men of Europe. And for example, the UK has lower per capita CO2 emissions than Norway and Germany and has reduced emissions appreciably more since 2008 (Figure 1).
Understanding what lies behind emissions reduction has proven to be a rather complex subject to tackle which threw up a number of surprises en route. One surprise that caught my eye early on was that Germany has barely cut emissions at all. Despite all the massive hype behind their Energiewende, the Germans are the dirty men of Europe. Another surprise was to learn that Denmark and Finland have economies as feeble as the PIIGS. We need a new acronym – Roger came up with DIPFIGS.
A good starting point for this discussion is to take a look at CO2 emissions trends for Europe (Figure 1).
Figure 1 CO2 emissions trends for European countries, including Norway and Switzerland. The heavy black line shows the mean (sigma emissions / sigma population). Note that 2000 to 2008, the mean emissions trend was essentially flat. Since 2008, mean emissions have begun to fall slowly. Data are from the BP statistical Review 2015. BP are reporting emissions from the combustion of coal, oil and natural gas and exclude other sources.
You are not supposed to be able to read all the trends from this chart, but a few key observations are possible. The first is that an East European country like Romania has about one quarter the per capita emissions of West European countries like Belgium and Holland. Clearly, if you start high you have a better chance of cutting emissions than if you start low. All East European countries are concentrated towards the bottom of the pile.
It is curious that Holland and Belgium lie so much higher than everyone else. I’m guessing that this has to do with the low countries’ import hubs for oil and gas and attendant refining industries. In this regard Holland and Belgium may accrue CO2 emissions for products consumed in other countries. By the same token, squeaky Green Norway has much higher emissions than one may have guessed and this may be linked to that country’s oil and gas industry. And this establishes an important principle which is that CO2 emissions embedded in traded goods are not accounted for. One of the easiest ways to reduce emissions is to shut down your heavy industry and to have cars and ships built in Japan and S Korea instead. Countries with positive trade balances, like Germany, will tend to have higher emissions since they are net exporters of goods with embedded CO2.
It is therefore also important to consider the type of economy, industrial mix and electricity generating mix in any interpretation. High nuclear high hydro countries like France and Sweden have lower emissions at the outset and therefore have less opportunity to cut.
The final observation to make from Figure 1 is that European emissions were essentially flat between 2000 and 2008 and then began to fall. 2008 was a watershed year. What has happened since 2008 to cause this? We know that the financial crash brought recession to much of Europe that has proven difficult to shake off. But we also know that the deployment of renewables has gone up a couple of gears since 2008. And the EU and member states have worthy energy efficiency drives. How do you untangle all of these variables?
Figure 2 simplifies the picture from Figure 1 by simply showing the fall in emissions from 2000 to 2014 as a percent of the 2000 value.
Figure 2 Countries ranked by the % fall in emissions from 2000 to 2014. The PIIGS are coloured yellow.
East European Bulgaria and Poland have actually seen their emissions rise. Squeaky Green, Norway, Austria and Germany are doing terribly. In contrast, squeaky Green Denmark leads the pack. Why is it that renewables obsessed Denmark and Germany are performing so differently? The PIIGS are coloured in yellow. And armed with prior knowledge that they have had extreme weak economies since the crash gives a clear hint that recession may be good for emissions reduction.
Recession Is Good For Your Health
2008 marks a watershed for European economies, thus the analysis from this point focusses on the period 2008 to 2014. Figure 3 shows countries ranked by their mean economic growth for this period.
Figure 3 Mean GDP growth 2008-2014.
It was a major surprise for me to learn that both Denmark and Finland have had mean negative growth since 2008 and join the PIIGS. And so we get a further clue as to why Denmark has done so well in cutting its emissions. This also raises the question if Europe’s highest electricity prices and obsession with renewables is not harming the Danish economy? Finland is a special case where its economy, heavily dependent on mobile phone giant Nokia, has suffered badly with the rise of Apple and Samsung. From Wikipedia:
In 2007, Nokia had a market capitalisation of €110 billion; by July 17, 2012 this had fallen to €6.28 billion
CO2 reduction % (2008 to 2014) is plotted against mean GDP growth in Figure 4. The correlation is not great but good enough to show that recession makes it easier to reduce emissions while economic growth makes that task harder. Greece leads the way in emissions reduction since 2008 (Figure 4) and we all know what has happened to Greece. Powerhouse Poland is the emissions laggard of Europe. This is not rocket science. Vibrant economies need energy to grow and most of that energy still comes from fossil fuels. A key driver that determines success or failure in reducing emissions is economic performance. Policy makers across Europe really do need to take note and to seriously consider the consequences of their actions. Do they really want us all to end up like Greece?
Figure 4 CO2 reduction 2008-2014 shows a modest negative correlation with economic performance in that period.
Renewables Not Good for Your Wealth
Figure 5 shows CO2 reduction 2008 to 2014 compared with per capita wind + solar installed capacity in 2014. The correlation coefficient of 0.01 shows there is zero correlation between the level of renewables penetration and a country’s success at reducing its CO2 emissions. This is a rather astonishing observation since common sense and conventional logic should dictate that replacing coal fired electricity with solar PV or wind must reduce emissions.
Figure 5 CO2 reduction 2008-2014 shows no correlation with the level of wind+solar deployed per capita.
Claims made about CO2 abatement by renewables companies and organisations like Renewables UK shown in Figure 6 are 10 a penny.
Figure 6 Screen capture from Renewables UK web site where it is claimed that UK wind power currently abates 14 M tonnes CO2 per annum.
So why does a fall in CO2 emissions of 14 M tonnes per annum not show up clearly in the statistics of Figure 5? There are two reasons for this. The first is that, for example, in 2014 the UK produced 471 M tonnes of CO2. Without wind power UK emissions would have been 485 M tonnes CO2. Hence wind abated 2.9% of the total. Given the environmental and economic penalties involved this is wholly inconsequential. Secondly, renewables enthusiasts tend to calculate CO2 abated by calculating directly how much gas or coal would have been burned to produce the renewable electricity, in this case 33 MWh. This is over simplified and ignores system costs associated with integrating intermittent renewables such as degraded efficiency of fossil plants that are required to ramp more frequently and more steeply, the additional grid and transmission costs, energy storage and providing energy to keep turbines moving when it is calm (this is done to protect bearings from stress should the turbine stand still).
The poles of the shot gun scatter plot (Figure 5) are quite instructive. Poland, Norway plus Germany are in the high economic growth group and have cut their emissions the least. One could say that Germany has done reasonably well despite investing so much in wind and solar. But notably, the German power house is the weakest economy in the high growth group. Germany has also substantially reduced its nuclear consumption in this period and much of its investment in wind and solar has simply gone to replace nuclear power.
Denmark, Spain, Ireland Italy and Greece all belong to the group stuck in recession that have cut their emissions the most as a result, regardless of the level of wind+solar deployed. Hungary is a bit of an enigma. Hungary has managed to cut its emissions enormously whilst investing nothing in wind+solar. It belongs to the feeble economies, just out of the recessionary group. Hungary has slashed its coal and gas consumption without obviously substituting this with anything else. The question remains, why is Hungary doing so badly while East European peers Poland, Bulgaria and Romania are doing so well? (Figure 3; Poland, Bulgaria and Romania belong to the high growth countries while Hungary is just outside of the negative growth group). Have they sacrificed their economy on the bonfire of CO2 reduction?
Energy Efficiency and Jevons’ Paradox
I wish to make clear that I am 100% behind improving energy efficiency. Well-insulated homes provide comfort and save money. A fuel efficient car saves you money. But here’s the rub. What do you do with the money saved? My preference right now would be a vacation on the Canary Islands. So all that money I saved gets poured into jet fuel, paella and Rioja. The paella and Rioja used energy to be created – boat fuel to catch those prawns and tractor fuel to harvest those grapes. And so I don’t actually save the planet from meltdown at all. I simply emit CO2 in a different way. The fact that the jet fuel is tax free means I can probably get more CO2 bangs for my buck.
The only way my efforts to become more efficient may work is if I flush the pounds saved down the toilet. This of course would be recessionary, and we have seen how recession does reduce emissions significantly.
At the basic level money and energy are interchangeable. A certain amount of energy is used to produce goods and services worth a certain amount of money. The more money in circulation the more energy has been used to create it or to consume it. Credit expansion in the OECD resulted in a vast amount of energy being expended in China where the goods we wanted to buy with the magic money were created with consequential increase in the CO2 emissions of that country.
Efficiency and energy efficiency are good for economic growth and true economic growth will cause emissions to rise. I use the term “true” to distinguish manufacturing and useful services from derivatives trading that is largely emissions free. If wind and solar were to make a significant contribution to saving emissions it is because they are inefficient and their deployment may ultimately cause recession that will lead to reduced CO2 emissions. At the moment their backs are being covered by fossil fuel energy stores. But wait until the blackouts begin and productivity plunges. CO2 will follow the economy down.
Detailed understanding about what causes CO2 emissions to rise or fall in individual countries is complex. This post does not provide a unique and quantitative answer, but it does provide many pointers.
Claims made about CO2 abatement by renewables advocates are likely overstated because they ignore system effects such as provision of load balancing services. The amount of CO2 abated by wind power in a country like the UK is also inconsequential in the bigger picture.
The countries that have cut their emissions the most since 2008 are those stuck in recession. The strong economies have barely cut their emissions at all. Economic growth is likely the main driver in Europe that determines whether or not emissions will rise or fall.
Improved energy efficiency is not expected to reduce emissions. On the contrary, efficiency is good for economic growth. Therefore, improved energy efficiency may actually cause emissions to rise and not to fall. Wind and solar are intrinsically inefficient. The negative impact this may have on economic growth may actually result in a greater fall in emissions than can be attributed to substitution of fossil fuels.