Weather conditions around the world this summer have provided ample fodder for the global warming debate. Droughts and heat waves are a harbinger of our future, carbon cuts are needed now more than ever, and yet meaningful policies have not been enacted.
But, beyond this well-trodden battlefield, something amazing has happened: Carbon-dioxide emissions in the United States have dropped to their lowest level in 20 years. Estimating on the basis of data from the US Energy Information Agency from the first five months of 2012, this year’s expected CO2 emissions have declined by more than 800 million tons, or 14 percent from their peak in 2007.
The cause is an unprecedented switch to natural gas, which emits 45 percent less carbon per energy unit. The U.S. used to generate about half its electricity from coal, and roughly 20 percent from gas. Over the past five years, those numbers have changed, first slowly and now dramatically: In April of this year, coal’s share in power generation plummeted to just 32 percent, on par with gas.
America’s rapid switch to natural gas is the result of three decades of technological innovation, particularly the development of hydraulic fracturing, or “fracking,” which has opened up large new resources of previously inaccessible shale gas. Despite some legitimate concerns about safety, it is hard to overstate the overwhelming benefits.
For starters, fracking has caused gas prices to drop dramatically. Adjusted for inflation, natural gas has not been this cheap for the past 35 years, with the price this year three to five times lower than it was in the mid-2000s. And, while a flagging economy may explain a small portion of the drop in U.S. carbon emissions, the EIA emphasizes that the major explanation is natural gas.
The reduction is even more impressive when one considers that 57 million additional energy consumers were added to the U.S. population over the past two decades. Indeed, U.S. carbon emissions have dropped about 20 percent per capita, and are now at their lowest level since Dwight D. Eisenhower left the White House in 1961.
David Victor, an energy expert at UC-San Diego, estimates that the shift from coal to natural gas has reduced U.S. emissions by 400 to 500 megatons CO2 per year. To put that number in perspective, it is about twice the total effect of the Kyoto Protocol on carbon emissions in the rest of the world, including the European Union.
It is tempting to believe that renewable energy sources are responsible for emissions reductions, but the numbers clearly say otherwise. Accounting for a reduction of 50 Mt of CO2 per year, America’s 30,000 wind turbines reduce emissions by just one-10th the amount that natural gas does. Biofuels reduce emissions by only 10 megatons, and solar panels by a paltry three megatons.
This flies in the face of conventional thinking, which continues to claim that mandating carbon reductions—through cap-and-trade or a carbon tax—is the only way to combat climate change.
But, based on Europe’s experience, such policies are precisely the wrong way to address global warming. Since 1990, the EU has heavily subsidized solar and wind energy at a cost of more than $20 billion annually. Yet its per capita CO2 emissions have fallen by less than half of the reduction achieved in the U.S.—even in percentage terms, the U.S. is now doing better.
Because of broad European skepticism about fracking, there is no gas miracle in the EU, while the abundance of heavily subsidized renewables has caused overachievement of the CO2 target. Along with the closure of German nuclear power stations, this has led, ironically, to a resurgence of coal.
Well-meaning U.S. politicians have likewise shown how not to tackle global warming with subsidies and tax breaks. The relatively small reduction in emissions achieved through wind power costs more than $3.3 billion annually, and far smaller reductions from ethanol (biofuels) and solar panels cost at least $8.5 and $3 billion annually.
Estimates suggest that using carbon taxes to achieve a further 330-megaton CO2 reduction in the EU would cost $250 billion per year. Meanwhile, the fracking bonanza in the U.S. not only delivers a much greater reduction for free, but also creates long-term social benefits through lower energy costs.
The amazing truth is that fracking has succeeded where Kyoto and carbon taxes have failed. As shown in a study by the Breakthrough Institute, fracking was built on substantial government investment in technological innovation for three decades.
Climate economists repeatedly have pointed out that such energy innovation is the most effective climate solution, because it is the surest way to drive the price of future green energy sources below that of fossil fuels. By contrast, subsidizing current, ineffective solar power or ethanol mostly wastes money while benefiting special interests.
Fracking is not a panacea, but it really is by far this decade’s best green-energy option.
This article was originally published by Project Syndicate. For more from Project Syndicate, visit their new Web site, and follow them on Twitter or Facebook.