Thursday, 23 July 2015

Has fracking contributed to the decline in US carbon emissions?

Yesterday I came across an interesting but slightly perplexing paper in Nature Communications entitled 'Drivers of the US CO2 emissions 1997-2013'. The central claim of the paper seems to be that, contrary to some headlines, exploitation of shale gas from fracking has not been an important contributor to the recent decline in US carbon emissions:
Before 2007, rising emissions were primarily driven by economic growth. After 2007, decreasing emissions were largely a result of economic recession with changes in fuel mix (for example, substitution of natural gas for coal) playing a comparatively minor role.
(I say "seems", because on p. 4 they claim that "about half of the 2.1% decrease in emissions during 2011–2013 is related to changes in the fuel mix of the energy sector"). Incidentally, the reason why exploitation of shale could plausibly have contributed to a decline in US carbon emissions is that natural gas has much lower emissions per unit of energy than other fossil fuels, particularly coal.

The authors of the Nature Comm. paper carry out a rather complex decomposition analysis in which they partition recent changes in carbon emissions into contributions from six factors: population, energy intensity, consumption patterns, fuel mix, production structure, and consumption volume. (I'm not quite sure why they felt that such a complex analysis was necessary to make their point; but I'm of course well outside my area of expertise.)

In any case, I decided to conduct my own, simpler analysis using data from the Energy Information Administration. The chart below plots absolute change in energy consumption from different sources, along with absolute change in total energy consumption, for the period 2007-2014. Since 2007, there has been: a fall in total energy consumption, followed by a partial recovery since 2012; a protracted fall in consumption of coal and petroleum; a rise in consumption of natural gas since 2009; a smaller rise in consumption of wind and biomass; and little change in consumption of hydro, geothermal and solar. In fact, coal consumption has fallen by 4.8 quadrillion Btu, while natural gas consumption has risen by 3.9 quadrillion Btu. 

In order to examine how much the exploitation of shale gas (i.e., the rise in natural gas consumption) has contributed to the decline in US carbon emissions, I reconstructed changes in carbon emissions since 2007 under the assumption that there had been zero substitution of coal for natural gas. In other words, I assumed that natural gas consumption had remained constant, and that all the increase in energy consumption from natural gas (3.9 quadrillion Btu) had actually come from coal. To calculate carbon emissions in each year, I multiplied the quantity of energy consumed from each source by that source's life-cycle carbon emissions (taken from the IPCC), and then summed over all the sources. 

The chart below plots three series for total carbon emissions: actual emissions (taken from the EPA); reconstructed emissions; and reconstructed emissions, without shale gas (i.e., under the assumption of zero substitution). All three lines have a very similar profile to the thick black line for total energy consumption in the chart above, consistent with the Nature Comm. paper's finding: most of the decline in carbon emissions has been due to a fall in energy consumption caused by the recession. Comparison of the non-dashed blue and red lines reveals a remarkably good fit between actual emissions and reconstructed emissions (r = .99). Comparison of the non-dashed and dashed blue lines indicates that emissions are appreciably lower than they would have been if there hadn't been any rise in natural gas consumption. In fact, exploitation of shale gas accounts for just under a third (29%) of the difference in total carbon emissions between 2007 and 2014.

My reading of the evidence here is that most of the decline in US carbon emissions since 2007 is indeed attributable to a decline in total energy consumption caused by the recession, but that just under a third of it is due to exploitation of shale gas from fracking. As noted, I am well outside my area of expertise, so I would be interested to know if anyone with a better understanding of the area has any comments or criticisms.

Tuesday, 14 July 2015

A selection of the most revealing Eurofederalist quotes

"All of us working with Jean Monnet well understood how irrational it was to carve a limited economic sector out of the jurisdiction of national governments and subject that sector to the sovereign control of supranational institutions. Yet, with his usual perspicacity, Monnet recognized that the very irrationality of this scheme might provide the pressure to achieve exactly what he wanted - the triggering of a chain reaction. The awkwardness and complexity resulting from the singling out of coal and steel would drive member governments to accept the idea of pooling other production as well"

"The internal market and the common currency demand joint co-ordinating action. This will require us to finally bury some erroneous ideas of national sovereignty... National sovereignty in foreign and security policy will soon prove itself to be a product of the imagination."
––Former German Chancellor Gerhard Schröder,

"We decide on something, leave it lying around, and wait and see what happens. If no one kicks up a fuss, because most people don't understand what has been decided, we continue step by step until there is no turning back."
––President of the European Commission Jean-Claude Juncker,

"Monetary union is there, the common currency is there. So our main concern nowadays is foreign policy and defence. The next step, in terms of integration of the European Union, will be our constitution. We are today where you were in Philadelphia in 1787."
––French diplomat Jean-David Levitte,

"The Constitution is the capstone of a European Federal State."
––Former Belgian Prime Minister Guy Verhofstadt, 

"We know that nine out of ten people will not have read the Constitution and will vote on the basis of what politicians and journalists say. More than that, if the answer is No, the vote will probably have to be done again, because it absolutely has to be Yes."
––Former Belgian Prime Minister Jean-Luc Dehaene,

"The EU Constitution is the birth certificate of the United States of Europe. The Constitution is not the end point of integration, but the framework for––as it says in the preamble––an ever closer union."
––Former German Minister for Europe Hans Martin Bury,

"If it's a Yes, we will say "on we go", and if it's a No we will say "we continue"."
––President of the European Commission Jean-Claude Juncker,

"Of course there will be transfers of sovereignty. But would I be intelligent to draw the attention of public opinion to this fact?"
––President of the European Commission Jean-Claude Juncker,

"I like to compare the EU as a creation to the organisation of empire. We have the dimension of empire."
––Former President of the European Commission José Manuel Barroso,

"If governments were always right we would not have the situation that we have today. Decisions taken by the most democratic institutions in the world are very often wrong."
––Former President of the European Commission José Manuel Barroso,

"Monetary policy is a serious issue. We should discuss this in secret, in the Eurogroup… I'm ready to be insulted as being insufficiently democratic, but I want to be serious… I am for secret, dark debates... When it becomes serious, you have to lie."
––President of the European Commission Jean-Claude Juncker,

"We decided to arrive at a political union via an economic and currency union. We had the hope––and we still have it today––that the Euro will gradually bring about political union... Most member states are not yet fully prepared to accept the necessary constraints on national sovereignty. But trust me, the problem can be solved."
––German Finance Minister Wolfgang Schäuble,

"We need a political union, which means we must gradually cede powers to Europe and give Europe control... We cannot just stop because one or other doesn’t want to join in yet."
––German Chancellor Angela Merkel,

"There can be no democratic choice against the European treaties."
––President of the European Commission Jean-Claude Juncker,
January, 2015, quote to French newspaper Le Figaro

"It's a horrible path, but it's a logical path. Leave Europe, leave Schengen and leave democracy. Do you really want to participate in a common state? That's the question."
––French President Francois Hollande,
August, 2015, speech in the European Parliament

"The coming weeks will show that the development of the markets, government bonds and the economy of Italy will be so far-reaching that this will be a possible signal to voters not to vote for populists on the right or left"
––EU commissioner Günther Oettinger,
May, 2018, interview with Deutsche Welle

“Italians have to take care of the poor regions of Italy. That means more work; less corruption; seriousness”
––President of the European Commission Jean-Claude Juncker
May, 2018, question and answer session in Brussels

"The worst case scenario would be Italy goes bankrupt. Then the Troika would have to march into Rome and take over the finance ministry"
––German MEP Markus Ferber
May, 2018, interview with German TV

Thursday, 9 July 2015

Harvard professors make more than CEOs

According to the Chronicle of Higher Education, the average full professor at Harvard makes $205,506 a year. According to the Bureau of Labor Statistics (Table 1), the average chief executive makes $180,700 a year. So Harvard professors apparently make $25,000 a year more than CEOs. In fact, according to the Chronicle data, full professors at the top twelve highest-paying colleges all make more than $180,700 a year. Of course, the distribution of CEO pay is likely far more skewed than the distribution of college professor pay, meaning that the highest-paid CEOs earn disproportionately more than the rest. 

According to the Congressional Research Service (Tables 1-2, pp. 9-10), senators and members of the House make $174,000 a year, majority and minority leaders make $193,400 a year, and the Speaker makes $223,000 a year. So CEOs make more than senators and members of the House, but less than majority and minority leaders. And the Speaker makes more than Harvard professors. One caveat is that I do not know whether any or all of the preceding figures include fringe benefits, which could be sizeable––particularly for CEOs. (The description given by the BLS in the Technical Note suggests they may not.)