A New Era Of Bogus Emissions Data

The global economy has entered a new phase which may go on for many years. The post-crash growth boom in the "developing" economies came to an end in 2014. A weaker global economy will slow the growth rate in carbon emissions going forward. As is often the case, the story starts in China (Financial Times, June 10, 2015).

[Spencer Dale, BP’s chief economist] said the slowdown in demand for coal in China last year, much of it consumed in iron, steel and cement industries, had contributed to a welcome slowdown in world carbon emissions.

Global carbon emissions rose by only 0.5 per cent last year, compared with an average rate of 2 per cent over the last decade, [Dale] calculated. “The one trillion tonne question is whether these developments in China are likely to persist, so possibly signalling the beginning of a lower trend in emissions growth, or whether they are likely to reverse in the near future,” said Mr Dale.

Non-fossil fuels including hydro, nuclear and other renewable sources had also provided a bigger overall contribution to global energy supply growth in 2014 than fossil fuels, for the first time in 20 years.

But despite increases in renewable energy supply outstripping fossil fuels last year, renewables still accounted for only 3 per cent of primary energy consumption in 2014.

As the global economy weakens, we see a dramatic slowdown in energy consumption growth (left panel above). Much is being made of the fact that new energy from renewables exceeded new fossil energy in 2014. (Bloomberg, June 10, 2015, graph source). Bloomberg and others also note China's energy intensity (toe per thousand 2010 dollars) is getting closer to that of Europe and the United States.

In 2015 China's coal consumption appears to have declined sharply. I say "appears" because there is little reason to trust China's official data, as Brad Plumer explains (Vox, May 22, 2015). Here's the context.

Arguably the most important climate story in the world right now is the question of what's happening in China. A recent analysis by Greenpeace International found that China's carbon dioxide emissions have plunged nearly 5 percent, year over year, in the first four months of 2015 [graph omitted].

That's ... unexpected. Ever since 2000, China's CO2 emissions have been rising at a relentless pace, as the country rocketed itself out of poverty by burning billions of tons of coal for electricity, heat, and industry. China is now the world's biggest CO2 emitter, getting two-thirds of its energy from coal, and officials have long assumed emissions would keep rising until 2030 or so. It's a big reason global warming forecasts look so dire.

But suddenly, China's emissions are falling, spurred by a sharp decline in coal use. As Greenpeace's Lauri Myllyvirta explains, China's coal consumption dropped in 2014 for the first time this century. Then, in the first four months of 2015, coal use fell another 8 percent, year on year — which translates to a roughly 5 percent decline in CO2 emissions...

To put that drop in perspective, that's the equivalent of a whole year's worth of CO2 emissions from the United Kingdom, gone. Because China is so incomprehensibly massive, even its hiccups have outsized effects on international coal markets and global-warming outlooks...

But are China's coal emissions really declining? If so, how much? Here's Plumer again.

1) Be very, very wary of China's energy statistics

This caveat deserves to go up high. Glen Peters, a researcher at the University of Oslo, pointed out that China's coal consumption numbers are notoriously unreliable, and often get revised significantly years later.

Case in point: back in the late 1990s, China announced it was shuttering a bunch of smaller, illegal coal mines, and early estimates suggested that nationwide coal use dropped 20 percent in 1998. But it turned out that those coal mines didn't actually close, they just stopped reporting their numbers to the government. When BP reviewed the data years later, it turned out that China's coal use hadn't dropped at all in 1998 [graph omitted]... 

Similarly, in its most recent five-year census, China revised upward its estimate for coal use in 2013 by about 8 percent. That's a massive edit.

So we should be cautious about these latest stats. As in the late '90s, China is currently attempting to close many of its smaller coal mines, but there's evidence that illegal mining is still ongoing. It's not impossible to think the latest coal numbers could be revised upward in the future.

Plumer goes on to question China's target 7% growth rate—is their economy really growing that fast? (And read here.) And he notes that there was a surge in hydro-electric power in 2014, which easily replaced whatever additional coal China might have consumed. Read the vox.com article for the details.

The main question raised by Plumer is whether China's slowdown is temporary. If it is, energy consumption will rebound sometime sooner rather than later, and humanity will once again be on the suicide fast track. However, as Plumer notes, economists generally expect China to gravitate away from heavy industry toward a more services-oriented economy. In short, China will eventually look more and more like other "advanced" economies.

Declining coal consumption? A services-oriented economy?

The issues are complex, but there is a missing "human factor" in these stories about China. You will recall that China has pledged an emissions peak by (or before) 2030 and a cap on coal consumption by 2020. Can we trust the Chinese to be straight with us?

For example, when "China revised upward its estimate for coal use in 2013 by about 8 percent" in its most recent 5-year census, were global carbon emissions similarly updated for 2013?

I don't know the answer, but as China embraces "green" energy policies, moves toward a "services" economy, and tries to fix its enormous smog problem, there will be considerable psychological pressure to make the numbers look good, regardless of physical reality. There are lots of ways to fudge the numbers, and making after-the-fact revisions is only one of them.

As Brad Plumer noted, what happens in China has an "outsized" impact on the global environment. Supposedly, China's emissions decline in the first four months of 2015 equals the total annual emissions of the U.K!  China is definitely the elephant in the room.

China does not want to be seen as pushing humankind over the climate cliff. It's that simple. China needs to maintain a positive self-image and be seen as advancing, not hindering, humankind's progress toward some future utopia.

So I believe we have entered a new era of bogus emissions data. I believe the 2015 China data we've seen so far is an example of such ... bogosity 

I also believe that China's economic slowdown is not temporary. As Herb Stein might have said about China's post-crash growth boom, "if something cannot go on forever, it will stop." Slower real growth will skew the official data to the downside. The impetus there is psychological because lower emissions are now more valued than higher emissions. Combined with China's new-found love of renewable energy, I see under-reported emissions going on for many years. 

And if China does indeed throttle back on heavy industry (e.g., cement and steel), those industries will eventually migrate to other countries (e.g., India) as demand dictates. In 2015, global demand is weak and so the global economy is weak.

In 2016, the headlines will read GLOBAL ECONOMY GROWS AS EMISSIONS SHRINK.

With the lies will come Delusion and Hope.

And here's a parting thought: growth in renewable energy will augment, not replace fossil energy, as so many hope. Therefore, from a thermodynamics perspective, "green" energy will eventually make it easier for the global economy to grow. A growing global economy will naturally require that we continue to rely on fossil energy to run it.

So renewable energy, in this sense, simply makes the overarching environmental problems worse in the long run.

Comments

[Brian]

Yes, any positive change will be quickly assumed to be the leading edge of a new permanent condition that will, inevitably, allow us all to continue to do exactly what we are currently doing, except more so.

Until we can't.

This was worth the read, as always, but even more enjoyable as a result of the excellent use of the word "bogosity"! :-)