Stormy weather for economic climate has no silver lining for climate change

Greenhouse gases tend to track GDP, so a 3% drop in emissions won't help the government meet its own target of 34%

Adam Vaughan
guardian.co.uk, Friday 24 April 2009 11.23 BST

In his budget this week, Alastair Darling laid bare the rocky ride ahead for the British economy. He forecast that GDP would drop by 3.5% in 2009. There has been worse economic news from the rest of the world. In the last three months of 2008, the US economy contracted at an annualised rate of 6.2% - the fastest since 1982.
But does this vast economic cloud have a silver (or perhaps green-tinged) lining? As economist Alex Bowen and the New Economic Foundation's Andrew Simms have pointed out, greenhouse gas emissions tend to track GDP. So a 3.5% fall in the UK's GDP leads roughly to a 3.15% fall in CO2 emissions. That would help the UK government reach its commitment to cut carbon emissions by 34% by 2020.
The notion of GDP matching emissions was supported by new research this week from analysts Cambridge Econometrics, which said the recession will cause CO2 emissions to fall by 3% in both 2009 and 2010.
But such dips in GDP may not seriously affect emissions in the long term. On Tuesday, the US National Oceanic and Atmospheric Administration (NOAA) reminded us that atmospheric concentrations of greenhouse gases CO2 and methane were both up in 2008, despite the economic slump.
The NOAA data is hardly surprising. CO2 emissions have grown over 2% a year since the beginning of the industrial age, and around 2.5% for each of the past five years.
Judging from Cambridge Econometrics' numbers, it appears history will view the recession as a blip in rising CO2 levels. Its figures say that even if the UK economy suffers a very deep recession - based on a 4% decline in GDP this year, and 0.9% next year - the UK will still emit 131 million tonnes of carbon in 2015. That's still a considerable global warming contribution, even compared with the 148 million tonnes of carbon the UK emitted in 2007.
And, as the Cambridge Econometrics team notes, any drop in CO2 from the UK isn't just because factories are using less energy. Recent emissions falls are mainly due to the switch from coal to gas-powered power plants, which are less carbon intensive. So if gas falls out of favour - Russia switches off the pipes or gas prices rise again, for example - it'll be imperative the government sticks to its promise to only approve future coal power plants with carbon capture and storage technology. If it reneges on the promise, that 2015 figure of 131 million tonnes of carbon is likely to go up.
Some experts, however, argue that the recession could have a serious effect on CO2 - if the slump goes on long enough.
Terry Barker, the director at the Cambridge Centre for Climate Change Mitigation Research , says emissions in the Great Depression fell by 35% between 1929 and 1932, and he predicts greater falls for what he calls the 21st Century Greater Depression. He believes this downturn is more severe than economists realise and late last year told me we'll "see 40-50% CO2 emission falls globally between now and 2012".
Barker's is a fringe position, but NOAA reminds us that, historically, the "carbon dioxide record isn't immune to temporary dips lasting several years or more. A slowdown occurred in 1930–36 after the Great Depression and again during the 1940s, possibly because of World War II."
But saving ourselves from runaway climate change by decreasing economic activity that results in people losing their jobs and homes is neither desirable, or likely.
Even the finanical analysts predicting dramatic 4% falls in UK GDP this year reckon the UK economy will see only a 0.3% contraction in 2010. Cambridge Econometrics forecasts that UK GDP will then grow by 1.8% in 2011, and 2.5% in 2012. Which means, based on our GDP and emissions rule of thumb, we'll be back up to emissions growth of around 2.25%. In other words, business as usual.