Don't expect recession to mean lower carbon emissions

The economic downturn may not mean a decline in greenhouse gas emissions, writes Adam Vaughan

guardian.co.uk, Tuesday 16 December 2008 12.42 GMT

Fiddlers Ferry coal fired power station near Liverpool, England Photograph: Phil Noble/Reuters
Environmentalists who hope a slowing global economy will mean big falls in greenhouse gas emissions are likely to be disappointed.
Because despite a gloomy economic forecast for 2009, the annual growth in emissions of 3% is only likely to slow modestly, and may even rise over the long term because of the downturn's impact on global climate talks and the funding of renewable energy projects.
Figures from the UK's Committee for Climate Change suggest even a 1.6% fall in UK GDP - a serious dip - would result in a saving of just 200,000 tonnes of CO2 emissions in 2009. That is a tiny fraction of the UK's projected total of 533m tonnes.
Andrew Simms, policy director of the New Economics Foundation, explains: "There's a strong lockstep between GDP and emissions ... You wouldn't get more than a 1% change in emissions unless you had something really dramatic happening, like closing a whole industry down."
Developed countries anticipate the largest falls in emmissions, according to analysts. Deutsche Bank this month predicted 2009 emissions covered by the European carbon trading scheme would drop 10% compared with 2007 levels. US emissions arealso expected to slow next year.
But falls in the developed world are expected to be short-lived. Deutsche Bank's report notes European emissions are likely to rise again in 2010. And Bert Metz, a fellow at the European Climate Foundation and former IPCC co-chair has said: "The recession is not of much significance to the climate problem or how we need to deal with it: it's a small blip." .
Healthy developing world economies are also likely to offset any shrinking from developed economies, according to Abyd Karmali, Merrill Lynch's global head of carbon emissions: "I don't think we'll see a reduction in emissions ... We talk about global recession but the truth is economies in places like China and India are still growing."
Most economists and scientists do agree however that fast-changing economic data makes short-term emissions hard to predict. "The economists don't know what's going on, so why would people looking at emissions know?" says Metz.
Predictions are complicated by unexpected increases in emissions. "Because of the recession, perversely, fuel prices have gone down a lot and that might cancel out some of the savings expected in that sector," says Simms.
Alessandro Vitelli, director of IDEAcarbon, has also suggested similar unplanned rises may occur in the developing world. Newly jobless workers in Brazil, for example, may turn to subsistence farming, increasing the slashing and burning of rainforest.
The economic impact on renewable energy projects could also cancel some anticipated CO2 savings in the next five years. The low price of carbon on trading markets and the low price of coal may combine with a lack of credit and debt-averse developers to halt new wind farms and other green-energy developments.
"What you'll find now is that projects already near completion will probably still come onstream as planned, but those in the planning process are not going to get off the ground for the next two years," says Deutsche Bank's Mark Lewis.
Some hope however may still lie in government policy, which may insulate some cleantech projects from the worst ravages of a global downturn according to Samuel Fankhauser, an author for the Climate Change Committee report.
And poor economic growth may mean less adherence to carbon-cutting rules. One of the downturn's biggest long-term effects on emissions may be its influence on internationally-agreed carbon cuts. The poor economic outlook won some European countries concessions on emissions cuts at the EU summit last week, and others may seek the same at ongoing UN talks working to deliver an international deal.
And while those who support a UN-backed green new deal suggest economic and emissions problems could be solved by a silver bullet - a green energy revolution - such a deal is considered politically unlikely by Simms, Vitelli and others.
In short, as the UN's head of the climate secretariat Yvo de Boer said recently: "It would be a pretty depressing way to make progress - to find that recession was helping the world kick an addiction to burning fossil fuels."