Emissions Rebounded Faster Than Economy

Rhodium Group report details bump in coal, freight

After a pandemic-induced economic downturn in 2020, greenhouse gas emissions increased faster than the economy in 2021, research from the Rhodium Group indicates.  

“Emissions grew even faster than the economic recovery and that was largely the rebound in coal generation,” report co-author Kate Larsen told CNN, noting that “there weren’t any significant policies to make economic growth less carbon-intensive.” 

While emissions remained 5% below pre-pandemic levels in the U.S., they grew 6.2% from 2020, while Goldman Sachs estimates GDP grew a cumulative 5.7% for 2021.  

“This indicates that GHG emissions rebounded slightly faster than the overall economy in 2021, largely due to a jump in coal-fired power generation, which increased 17% from 2020, and a rapid rebound in road transportation (primarily freight),” the Rhodium Group report states. “As a result, progress in reducing US GHG emissions was reversed in 2021, moving from 22.2% below 2005 levels in 2020 to only 17.4% in 2021, putting the US even further off track from achieving its 2025 and 2030 climate targets.” 

Thanks to increased consumer demand for goods, road freight was the only form of transportation that outstripped its 2019 levels. Gasoline demand primarily caused by increased passenger traffic went up by 13% compared to 2020 but remained 10% below 2019 figures, probably because many former commuters are still working from home at least part of the time rather than going into the office five days a week. Air travel shot up 26% but remained 24% below pre-pandemic levels. 

While electric power demand rose just 3% in 2021, coal generation was up 17%. 

“Coal’s rebound was driven largely by a run-up in natural gas prices, with Henry Hub spot prices averaging $4.93 per million Btu in 2021, or more than double their 2020 rate. Prices rose as oil and gas producers ramped down new production in 2021 in response to the COVID oil price collapse and ensuing slow growth in demand,” the Rhodium Group said. 

Renewables, meanwhile, accounted for 20% of electricity generation in the U.S. for the first time.