In the OECD, since 2000, electricity sector emissions have fallen by 8% while transport emissions have actually increased by 5%. The best performers like the UK recorded drops in both: 40% and 6% respectively. In the U.S. it’s 25% and 0%. Catherine Wolfram at the Haas School of Business asks why transport is still going in the wrong direction, given the power sector’s progress. She posits three theories. Rich nations are outsourcing emissions-intensive work to non-OECD nations, whereas you can’t outsource your transport. Progress with EVs is being dragged down by other parts of the transport sector. It’s easier for governments to impose emissions laws on utilities than on drivers. There are other possible reasons too, explains Wolfram, who’s intention is to start a discussion that will focus minds on the transport sector, responsible for around a quarter of global emissions.
The transport and electricity sectors are the two behemoths in climate circles, together accounting for about half of worldwide greenhouse gas (GHG) emissions. Any serious attempt to mitigate climate change will require significant reductions in both sectors.
At a high level, mitigating GHGs in the electricity sector will involve things like retiring coal plants and switching to renewables, while mitigating GHGs in the transport sector will involve things like switching to low- or zero-carbon vehicles (e.g., electric) and improving fuel efficiency.
All of these things – renewables, electric vehicles – are part of the current discussion, so you might think that we’re making some progress in both sectors. But the data tell a different story. The graphs below reveal that we’re making much, much more progress in electricity.
GHG trends by sector in the UK and California
The first graph plots GHG emissions by sector relative to 2000 in the UK. Emissions from the transport sector are in red while emissions from the electricity sector are in teal. Note that transport includes all vehicles, not just passenger, plus domestic aviation, railways and domestic shipping.
The figure shows that emissions in the transport sector in the UK were about 6 percent lower in 2018 compared to 2000 (if 2000 is a 1, 2018 is a .94) while emissions in the electricity sector plummeted by more than 50 percent.
UK: total vehicle miles travelled has risen
The lines reflect trends in total emissions, not normalised by population or income, two important drivers of economic activity. For example, total vehicle miles travelled has increased in the UK by about 10 percent since 2000, likely driven by more drivers (higher population) and more shipments (higher incomes) as well as other factors. This means that a reduction in GHG emissions, even if modest, is a partial victory. But, nowhere near as big a victory as the Brits have had in the electricity sector.
Why am I looking at the UK? Of all the OECD countries (roughly, the developed world), the UK has had the most success reducing overall GHG emissions since 2000, driving them down by more than 30 percent. It’s useful to look at the leader as some indication of where other countries might be headed in the near future.
The next graph plots the same lines for California, which is near and dear to my heart, plus I know where to look for the data. Like the UK, transport sector emissions fell slightly while emissions in the electricity sector dropped by about 40 percent.
The explanations behind the drops in the electricity sector are similar in the UK and California. The UK, which generated 70 percent of its electricity from coal as recently as 1990 (mined by the archetypical British coal miners), have stopped burning coal at nearly all of its plants, switching to gas and renewables.
California hasn’t had coal plants within its borders for a while, but the electricity emissions in the graph reflect imports, which include some coal-fired power. Coal imports have fallen since 2000 (though perhaps more so on paper than in reality), and the state has added massive amounts of wind and solar.
California and the UK are not unique
The same story emerges in other jurisdictions. In Texas, emissions from transport have increased by almost 25 percent since 2000 – reflecting a booming economy and growing population – but electricity sector emissions have come down a bit. (I chose Texas as a counterpoint to California, plus since it has its own electricity grid, it’s easy to interpret the electricity sector emissions.)
In the US as a whole, emissions from transport were almost exactly the same in 2017 as they were in 2000, while emissions from the electricity sector dropped by almost 25 percent.
What’s going on?..
1] Rich nations are outsourcing emissions-intensive work! But you can’t outsource your transport
I have a couple of conjectures about possible explanations for these trends, but this is not something I’ve studied in detail, so I am very curious to hear some reactions.
- It’s harder to export transport emissions – COULD BE TRUE.
It’s possible that one of the reasons GHG emissions from the electricity sectors in OECD countries are going down is because developed countries have exported electricity-intensive production to non-OECD countries. Transport, by contrast, is inherently local and so harder to export.
The graph below suggests that electricity emissions have grown by more than transport emissions in non-OECD countries – the opposite of what we’ve seen in the OECD countries.
If anything the “excess” GHG emissions from the electricity sector in the non-OECD countries – the amount by which electricity sector emissions would be lower if they grew at the same rate as transport – are higher than the “reduced” GHG emissions from the electricity sector in the OECD. (There’s a +19% difference between electricity and transport emissions in non-OECD countries, meaning that if electricity sector emissions in these countries slowed to the pace of transport emissions, they’d be over 900 million metric tons lower, and there’s only a -13% difference between transport and electricity in OECD countries, meaning that if electricity sector emissions kept pace with transportation emissions, they’d be almost 750 million metric tons higher.)
This is a very rough calculation, and there are other reasons why emissions in the electricity sector and the transport sector might grow at different relative rates in low- and middle-income countries compared to rich countries. But these data are at least consistent with the possibility that de-industrialisation in the OECD countries is part of the explanation for falling electricity sector emissions.
2] Commercial vehicles are a drag on transport’s transition
- Progress in passenger vehicles leads slower progress in commercial vehicles – SEEMS FALSE.
I also wondered whether the modest reductions in transport masked more progress in passenger vehicles. After all, I see a lot of Teslas around the Bay Area, but electric trucks are still pretty futuristic. As it turns out, that’s not the case in California, where the data are broken out by vehicle type. As of 2018, reductions in passenger vehicle emissions are actually a tiny bit smaller than reductions in other parts of the transport sector.
3] It’s easier to impose laws on utilities than on drivers
- It’s easier to drive change in a regulated sector – COULD BE TRUE.
Worldwide, most electricity is generated by either state-owned companies or regulated utilities. I suspect that it’s easier for policymakers to influence outcomes in an industry that they’re already involved with.
This certainly isn’t the whole story – falling gas prices in the US certainly helped reduce electricity sector emissions here and it’s hard to trace that to regulatory interventions. But I suspect that it’s a lot easier to tell scores of regulated electric utilities that a certain share of their electricity needs to be generated by renewables – as a lot of US states have done with renewable portfolio standards – than to tell millions of drivers that they need to use different vehicles.
Other possible causes
I mainly wanted to put up some provocative graphs and start a discussion. My economist friends have proposed some other explanations, including differences in the degree of difficulty plugging new technologies into the existing network infrastructure, overstated electricity reductions due to reshuffling, and the difficulties replacing gasoline given its energy density.
The die-hard economists point out that both the UK and California have cap-and-trade programs, and wonder if we’re just seeing that the market has found that it’s a lot easier to get reductions from the electricity sector. But this doesn’t account for the fact that a lot of the electricity sector reductions have come from outside the market, through complementary measures like the renewable portfolio standard.
Whatever the explanation, it’s hard not to conclude with the hope that the next decade brings dramatic changes in the transport sector.
Thank you to Sophie Andrews for awesome research assistance.
Catherine Wolfram is the Cora Jane Flood Professor of Business Administration at the Haas School of Business, University of California, Berkeley
This article is published with permission
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