As a flatlining of carbon emissions is trumpeted again, Trise member Mathew Little looks into the seldom noticed connection between world trade and CO2 levels.
According to the Financial Times, the head of the International Energy Agency (IEA), Fatih Birol, is “hopeful” that global CO2 emissions have finally peaked after news that they were flat in 2019.
Emissions have been downgraded after preliminary predictions in December last year that they rose by 0.6% in 2019. Now, however, it’s been revealed that emissions from energy use were unchanged from 2018, at 33 gigatonnes.
Birol was optimistic what the “clean energy transition” was rapidly accelerating and that emissions will now start to decline. “2019 is a year that gives me hope that the 2020s will be a decade of relief,” he said.
The trouble is that we’ve been here before. For three years in the middle of the last decade – 2014-2016 – emissions were flat. Many, including the IEA, celebrated the fact that carbon emissions were finally decoupling from economic growth, as global GDP showed a steady, if unspectacular, rise.
According to the IEA, 2014-16 saw “strong energy improvements” and “low-carbon technology deployment”. Strangely, however, this was a false dawn as the “dynamics changed” and demand for clean technology was not sustained. Emissions resumed their upward path in 2017 and 2018.
As previously argued on my blog, this mystery – why there were “strong energy improvements” in 2014-16 and again in 2019, but not in 2017-18 – becomes a lot less impenetrable if world trade is taken into account. According to the United Nations Conference on Trade and Development (UNCTAD) Status of World Trade 2017 report, world trade grew at less than 2 per cent a year from 2011-14, declined by 10 per cent in 2015 – during which time the profitability of global shipping companies sank like a stone – and dropped by a further 3 per cent in 2016. But trade rebounded strongly in 2017 and 2018.
Likewise in 2019 world trade hit the buffers. “World commerce is deteriorating rapidly”, noted the New York Times in October last year, reporting on the slashing of the World Trade Organization’s forecast of world merchandise trade levels – from a 2.6% increase in April to 1.2% in the autumn. Just last week, it was revealed that US imports and exports both fell in 2019. In the context of the trade war with China, US exports to, and imports from, that country, both dropped.
This is the background to the flatlining of carbon emissions in 2019.
To put things another way, the only occasions when global carbon emissions have not risen this century have been when world trade has also been depressed. The same is not true of economic growth per se which has seen significant, although below average, rises when emissions have been static.
What we have never seen is the combination of robust world trade and stagnant, or falling, CO2 emissions. Given the unerring commitment of the world’s liberal-capitalist establishment to both ‘open trade’ and the ‘clean energy transition’, this is what needs to happen if the IPCC’s scenario of droughts, inundation of coastal areas, crop failures and massive refugees flow is not to come to pass. In fact, what is necessary is a huge and sustained drop in CO2 emissions – of about 15% a year from now until 2040 (15th para).
The reason why burgeoning world trade (which now largely takes place within corporations) has never coincided with static or declining CO2 emissions is that the two things are mutually contradictory.