Global Warming Is Here, Getting Worse – What Should We Do?

by Elliott Morss, Morss Global Finance

Even some skeptics agree: global warming, caused primarily by CO2 emissions, is here and will get worse. Are the energy options we have significant enough to make any meaningful difference in the destruction and death we will have to endure? In what follows, I look at the facts.

CO2 Emissions and Global Warming

Recently, Richard Muller, a leading scientist and skeptic of claims that CO2 emissions caused global warming, changed his position. Why? Because research he led at Berkeley Earth. His team started by assembled historical temperature data on 36,000 global locations and compared it with global emission data. As the following graph suggests, they found the correlation between temperature and emission data was too high to have been caused by chance. So CO2 emissions are definitely contributing significantly to global warming.

CO2 Emissions

So what is happening to CO2 emissions? Table 1 indicates that since 1971, global emissions have more than doubled. Why? Because of the rapid growth in China and the rest of Asia. In the 2002 – 2009 period, emissions from China grew by 120%, causing China to pass the US as the leading emitter nation. And perhaps most worrisome, the global rate of growth has increased in the last eight years.

Source: IEA

Robert Corell chairs the Climate Action Initiative. He recently reviewed the UN’s scientific findings on global warming. He concluded the UN projections were too low. Back in 2007, the UN estimated a global increase of 4.5°F by the end of the century if countries enacted all climate legislation they have promised to enact. Today, Corell estimates that growth at <6.3°F or 0.7°F per decade). But what if countries don’t enact promised legislation? Corell estimates the increase will be 8.13°F (0.9°F per decade). The IPCC has estimated economic losses associated with a 4.5°F global warming (the mid-range estimate of equilibrium global temperature increase associated with a doubling of equivalent CO2 concentrations) as 1.5-2% percent of global GDP annually.

So What?

So temperatures will increase a degree or two every ten years, and sea levels will rise a bit. Why all the concern? Can’t we adapt? Here is the problem (I quote from the IPCC):
“Natural climate variability and human-generated climate change influence the frequency, intensity, spatial extent, and duration of some extreme weather and climate events…. For some systems, thresholds of change in temperature, precipitation, or other factors may exist, which, once exceeded, may lead to discontinuous changes in viability, structure, or function.”

This is ominous – it is the non-linear effects – like rapid glacier ice melt – that we have to worry about. The IPCC estimates that “rapid dynamical changes in ice flow” could quadruple sea level rise. The other extreme (non-linear) events expected by the IPCC include:

  • Increase in average maximum wind speed and associated heavy rainfall – Very likely;
  • Increase in warm days and nights – Very likely;
  • Increase heat wave frequency – Very likely;
  • Contribution of sea level rise to extreme coastal high water levels (such as during storm surges) – Very Likely.

So the gradual warming is not what is most worrying. It is the growing number of extreme events that are of greatest concern.

The Culprits

So the effects of global warming will be severe. To determine what can be done about, let’s look at the “Culprits”. In what follows, I look at countries, fuels, fuel efficiency by country, and electricity.

1. Regions/Countries

Table 2 provides data on the regions and countries with the highest CO2 emissions. Several facts stand out:

  • Non-OECD countries (less-developed) have the most rapid emission growth;
  • European countries have done the most to contain their emissions, with both Germany and the UK (both former high coal users) actually reducing their emissions; and
  • The emission growth rates of both Iran and South Korea have exceeded even those of China.

Source: IEA

2. Fuels

So what fuels are the largest offenders? In Table 3, I list fuels by the tonnes of CO2 emitted per unit of heat/energy (terajoules) generated. In other words, for a given amount of energy produced, what are the emission levels? The table breaks down into four basic groups:

  • Nuclear and most renewables with no emissions;
  • Natural gas and LPG;
  • Fuels used mostly for transport:
  • Coals, and
  • Biomass (emissions over wide range depending on biomass).

Source: IEA

Given these emission rates, what are the global emissions from each? These data are presented in Table 4. Coal is the leader, closely followed by the primary transport fuels with natural gas a distant third.

Source: IEA

3. Efficiency

Regions and countries can also be examined for how efficient they are in using fuel. In Table 5, the tonnes of CO2 generated per energy unit produced are given for both 1971 and 2009. A higher number is indicative of lower efficiency.

It is good to see that globally, energy use is becoming more efficient. But in China and India, things are getting worse. And China, with a tC/TJ coefficient of 72, is in a class by itself.

Source: IEA

In looking across all countries, energy inefficiencies are highly correlated with coal as a share of total energy produced. Globally, the coal share of total energy consumed is 27%. For China and India, the shares are 67% and 42%, respectively.

4. Energy Use

CO2 emissions can be also be examined by energy use. Globally, electricity production generates 41% of all CO2 emissions, far more than any other source. When that electricity is allocated by end use, you get the sector shares presented in Table 6. Manufacturing is the largest CO2 emitter, followed by transport and residential. Note how much higher China’s manufacturing share is than any other.

The Table also shows that in developing countries (Non-OECD, China and India), emissions from the transport sector are low. These will increase significantly via demand for autos from the growing middle classes in these countries.

Source: IEA

5. Electricity

As indicated above, 41% of CO2 emissions result from making electricity. Why is this number so high? Because, as I have written previously, it takes 1.62 units of energy to generate 1 unit of electrical energy. Putting it differently, there is a 62% loss of energy in making electricity. When fossil fuels are burned to make electricity, you on average lose 62% of the energy content. CO2 emissions would be much lower if those fossil fuels could be used directly.


If we are concerned about the effects of global warming, we should do all we can to reduce CO2 emissions. In Table 7, I list the share of fuels used globally along with their emission coefficients.

Source: IEA

What does the table tell us? All fossil fuels, including natural gas, contribute significantly to global warming. The real tragedy of the Fukushima nuclear disaster was that it discouraged nuclear use. Even with all the well publicized nuclear problems, it remains a far safer proposition than mining fossil fuels.

Investment Implications

Whatever we would like to do to curb global warming, keep in mind that the oil companies control most oil and natural gas supplies. They have a good business going, and they don’t want to lose it. One thing I have learned from earlier energy transitions –

“Money-making energy choices are not always the right ones. Deep pockets, government subsidies and aggressive marketing can turn a bad choice into a winner.”

The IEA World Economic Outlook (2011) reports that subsidies for renewable fuels reached $66 billion in 2010. Fossil fuel subsidies? $409 billion.

Investments? Stick with oil company ETFs – IEO, PXE, XOP.

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Analysis and Opinion articles about global warming

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