Reduction in U.S. carbon emissions attributed to cheaper natural gas

Harvard University
Feb 27, 2012

Changes in carbon dioxide emissions from the power sector in the nine census regions of the contiguous United States, 2008-2009. Image courtesy of Xi Lu.

In 2009, when the United States fell into economic recession, greenhouse gas emissions also fell, by 6.59 percent relative to 2008.

In the power sector, however, the recession was not the main cause.

Researchers at the Harvard School of Engineering and Applied Sciences (SEAS) have shown that the primary explanation for the reduction in CO2 emissions from power generation that year was that a decrease in the price of natural gas reduced the industry's reliance on coal.

According to their econometric model, emissions could be cut further by the introduction of a carbon tax, with negligible impact on the price of electricity for consumers.

A regional analysis, assessing the long-term implications for energy investment and policy, appears in the journal Environmental Science and Technology.

In the United States, the power sector is responsible for 40 percent of all carbon emissions. In 2009, CO2 emissions from power generation dropped by 8.76 percent. The researchers attribute that change to the new abundance of cheap natural gas.

"Generating 1 kilowatt-hour of electricity from coal releases twice as much CO2 to the atmosphere as generating the same amount from natural gas, so a slight shift in the relative prices of coal and natural gas can result in a sharp drop in carbon emissions," explains Michael B. McElroy, Gilbert Butler Professor of Environmental Studies at SEAS, who led the study.

"That's what we saw in 2009," he says, "and we may well see it again."

Patterns of electricity generation, use, and pricing vary widely across the United States. In parts of the Midwest, for instance, almost half of the available power plants (by capacity) were built to process coal. Electricity production can only switch over to natural gas to the extent that gas-fired plants are available to meet the demand. By contrast, the Pacific states and New England barely rely on coal, so price differences there might make less of an impact.

To account for the many variables, McElroy and his colleagues at SEAS developed a model that considers nine regions separately.
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