In 2009, a decrease in the price of natural gas reduced the electricity industry’s reliance on coal, leading to a reduction in carbon emissions from power generation. Image: Bruno D. Rodrigues via Flickr.
In 2009, when the United States
fell into economic recession, greenhouse gas emissions also fell, by 6.59%
relative to 2008.
In the power sector, however, the
recession was not the main cause.
Researchers at the Harvard University School
of Engineering and Applied Sciences (SEAS) have shown that the primary explanation
for the reduction in carbon dioxide emissions from power generation that year
was that a decrease in the price of natural gas reduced the industry’s reliance
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 Environmental Science and Technology.
In the United States, the power sector is
responsible for 40% of all carbon emissions. In 2009, carbon dioxide emissions
from power generation dropped by 8.76%. 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 carbon dioxide 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
Their model identifies the relationship
between the cost of electricity generation from coal and gas and the fraction
of electricity generated from coal.
“When the natural gas prices are
high, as they were four years ago, if the gas prices come down a little bit, it
doesn’t make any difference,” explains lead author Xi Lu, a postdoctoral
associate at SEAS. “But there’s a critical price level where the gas
systems become more cost effective than the oldest coal-fired systems.
“If the gas price continues to drop,
you’ll continue to go down this curve so that you’ll knock out not just the
really ancient coal-fired power plants, but maybe some of the more recent
The model also predicts that a
government-imposed carbon tax on emissions from power generation would drive a
move away from coal.
“With a relatively modest carbon tax—about
$5 per ton of carbon dioxide—you could save 31 million tons of carbon dioxide
in the United States,
and that would change the price of electricity by a barely noticeable amount,”
The initial model was developed by Jackson
Salovaara ’11, an applied mathematics concentrator at SEAS. His work was
recognized as the “best senior thesis” in the Harvard Environmental
Economics Program, earning him the Stone Prize in May 2011.
Since then, the model has been
“souped up,” incorporating more sophisticated regional data analysis,
and producing not just the findings on 2009 but also predictions for more
“While the data from 2011 are not yet
available, based on the gas prices, we’re making a confident prediction that
there should be a continued shift from coal to natural gas in 2011 as compared
to 2008,” says McElroy.
“That’s good news for the atmosphere.”