Scrutinising the sources of CO2 emissions

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Trends in CO2 emissions from fuel combustion illustrate the need for the global economy to shape a more sustainable energy future, with special emphasis first on the industrialised nations, with the highest per capita incomes and that are responsible for the bulk of cumulative emissions. However, with the rapidly growing energy demand of developing countries, it is important that they also strive to use energy in a rational way. Energy Technology Perspectives 2008 shows that enhancing energy efficiency and reducing the carbon intensity of a supply largely reliant on fossil fuels are fundamental steps towards a global low-carbon energy system.

Annual snapshot: 2006-2007

Global CO2 emissions increased by 0.9 Gt CO2 between 2006 and 2007, primarily due to an increase in the coal demand of developing countries (Figure 4, non-Annex I Parties to the UNFCCC). This represented a growth rate of 3% in CO2 emissions, identical to that of the previous year. However, as with TPES, early indicators suggest that growth in emissions slowed in 2008 and may have declined in 2009 as a result of the global economic crisis.

Figure 4. Global change in CO2 emissions (2006-2007)

Mt CO2

Figure 4. Global change in CO2 emissions (2006-2007)

Mt CO2

Coal Oil Gas Other


Coal Oil Gas Other


Key point: Combustion of coal in developing countries drove the growth in global emissions between 2006 and 2007.

In the future, coal is expected to satisfy much of the growing energy demand of those developing countries, such as China and India, where energy-intensive industrial production is growing rapidly and large coal

reserves exist with limited reserves of other energy sources. Energy Technology Perspectives 2008 shows that intensified use of coal would substantially increase the emissions of CO2 unless there was very widespread deployment of carbon capture and storage.

Fuel contribution to CO2 emissions

Though coal represented only a quarter of the world TPES in 2007, as shown in Figure 5, it accounted for 42% of the global CO2 emissions due to its heavy carbon content per unit of energy released. As compared to gas, coal is on average nearly twice as emission intensive.9 Without additional measures, the World Energy Outlook projects that coal supply will grow from 3 184 million tonnes of oil equivalent (Mtoe) in 2007 to 4 887 Mtoe in 2030.

Figure 5. World primary energy supply and CO2 emissions: shares by fuel in 2007

Percent share











* Other includes nuclear, hydro, geothermal, solar, tide, wind, combustible renewables and waste.

Key point: Coal generates about twice the CO2 emissions of gas, despite having a comparable share in the world energy supply.

Oil still dominates TPES, with a share of 34% in 2007. However, the share of oil in TPES decreased by about ten percentage points since 1971, largely counterbalanced by the penetration of gas. The supply of gas in 2007 was almost three times higher than in 1971 and its share in emissions increased by five percentage points over that period.

Observed and projected trends in TPES and CO2 emissions vary greatly by country, depending on stages of economic development and related energy choices, as illustrated in the next section.

Emissions by region

The dramatic increase of non-Annex I emissions between 2006 and 2007, seen in Figure 4 above, corroborated the growth already observed over the last decade. Figure 6 shows trends over the period 1971-2007, highlighting changes in the relative contributions from major world regions.

Figure 6. Trends in regional CO2 emissions

Figure 6. Trends in regional CO2 emissions

1971 1990 2007

□ Annex II GAnnex I EIT lAsla* OOther"

1971 1990 2007

□ Annex II GAnnex I EIT lAsla* OOther"

* Asia includes Korea and excludes Japan (which is included in Annex II).

** Other includes Africa, Latin America, Middle East, non-Annex I EIT, Turkey, international bunkers, and, for 1971, Annex I EIT.

Key point: Asian emissions will soon rival those of Annex II.

Between 1971 and 2007, global emissions doubled, with industrialised countries (Annex II Parties to the UNFCCC10) dominating historical totals. However, the share of Annex II progressively shrank (61% in 1971, 47% in 1990 and 39% in 2007), as developing countries, led by Asia, increased at a much faster rate. Between 1990 and 2007, CO2 emissions rose by 108% for non-Annex I countries as a whole and more than doubled for Asia. This is in contrast to the 15% growth which occurred in the Annex II countries. The growth in Asian emissions reflects a striking rate of economic development, particularly within China and India.

9. IPCC default carbon emission factors from the 1996IPCC Guide lines: 15.3 t C/TJ for gas, 16.8 to 27.5 t C/TJ for oil products, 25.8 to 29.1 t C/TJ for primary coal products.

10. The original Annex II Parties to the UNFCCC are Australia, Austria, Belgium, Canada, Denmark, European Economic Community, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Japan, Liechtenstein, Luxembourg, Monaco, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, United Kingdom and United States. Turkey was removed from Annex II on 28 June 2002.

Emissions from the group of countries with economies in transition (Annex I EIT11) followed a peculiar path due to a rapid decline in industrial productivity subsequent to the 1989 collapse of their centrally planned economies. Between 1990 and 2000, the EIT emissions declined by 36%. Emissions in the Former Soviet Union alone fell by over 1.4 Gt CO2, or 39%, between 1990 and 2000. However, this trend was reversed in recent years.

Regional differences in contributions to global emissions conceal even larger differences among individual countries (Figure 7). Two-thirds of world emissions for 2007 originated from just ten countries, with the shares of China and the United States far surpassing those of all others. Combined, these two countries alone produced 11.8 Gt CO2, about 41% of world CO2 emissions. In 2007, China overtook the United States to become the world's largest emitter of CO2 emissions from fuel combustion.

Figure 7. Top 10 emitting countries in 2007

Gt CO2

China United States Russian Federation India Japan Germany Canada United Kingdom Korea Iran

Gt CO2 Gt CO2

Key point: The Top 10 emitting countries account for about two-thirds of the world CO2 emissions.

This Top 10 group, which includes countries of very diverse economic structures, also produced 61% of the

global GDP. As detailed in the following section, economic output and CO2 emissions are generally strongly linked.

Coupling emissions with socio-economic indicators13

In 2007, China, the United States, the Russian Federation, India and Japan, the largest five emitters, produced together 55% of the global CO2 emissions, 50% of the world GDP and comprised 46% of the total population. However, for all three variables, the relative shares of these five countries within the subtotal of the group were very diverse (Figure 8).

Figure 8. Top 5 emitting countries: relative shares in 2007

Percent share 100%

CO2 GDP* Population

■ China IHUnited States ORussian Federation ülndia ÜJapan

* GDP using purchasing power parities.

Note: this is not "world shares", but "relative shares" within the Top 5.

Key point: Within the Top 5 emitting countries, the relative share of CO2 emissions does not necessarily follow those of GDP and population.

In 2007, the United States alone generated 20% of world CO2 emissions, despite a population of less than 5% of the global total. Conversely, China, contributing to a comparable share of world emissions (21%), accounted for 20% of the world population. India, with 17% of world population contributed less than 5% of the CO2 emissions. Thus, the levels of per capita emissions were very diverse, ranging from one tonne of CO2 per capita for India and five tonnes for China to 19 tonnes for the United States.

In the United States, the large share of global emissions is associated with a commensurate share of economic output (GDP), the largest in the world. While the high per capita emissions of the United States in 2007 were comparable to those of 1971, its

11. Annex I EIT Parties include: Belarus, Bulgaria, Croatia, Czech Republic, Slovak Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Slovenia and Ukraine.

12. In this discussion, GDP refers to GDP using purchasing power parities.

13. No single indicator can provide a complete picture of a country's CO2 emissions performance or its relative capacity to reduce emissions. The indicators discussed here provide some guidance but are certainly incomplete.

emissions intensity in terms of economic output (CO2/GDP) was about half, due to energy efficiency improvements and to economic growth in less-CO2-intensive sectors over the 36-year period.

With a GDP more than double that of the Russian Federation, Japan emits 22% less. As illustrated by major world regions, economies can achieve quite diverse emission efficiencies (Figure 9).

Figure 9. CO2 emissions per GDP* by major world regions in 2007

Kg CO2 per US$


Middle East Annex I EIT China** Other Non-Annex I Annex II North America Annex II Pacific Africa

Asia excluding China Annex II Europe Latin America

* GDP in 2000 US$ using purchasing power parities. ** China includes Hong Kong.

Key point: Emissions intensity in economic terms varies greatly around the world.

Worldwide, the highest levels of emissions per GDP are observed for the oil and gas exporting region of the Middle East, for the relatively energy-intensive EITs and for China. The rapid decoupling of emissions from economic growth that characterised the Chinese economy during the 1980s and 1990s has recently slowed and reversed, as noted in subsequent sections.

Relatively high values of emissions per GDP indicate a potential for decoupling CO2 emissions from economic growth. Possible improvements can derive from fuel switching away from carbon-intensive sources or from energy efficiency at all stages of the energy supply chain (from fuel extraction to energy end-use).

The ratio of CO2 emissions per GDP responds to changes in energy intensity (energy per unit of GDP) and in the CO2 intensity of the fuel mix (CO2 per unit of energy).15 For example, industrialised countries witnessed a rapid reduction in emissions per unit of GDP between 1973 and 1990, following the oil price shocks of the 1970s, through a decline in their energy intensity. On the contrary, even on a global scale, the CO2 intensity of the fuel mix (as measured for example by the ratio of CO2/TPES) has remained rather constant between 1971 and 2007 as fossil fuels continued to dominate the global energy supply.

As compared to emissions per unit of GDP, the range of per capita emissions levels across the world is even larger (Figure 10), highlighting wide divergences in the way different regions use energy.

Figure 10. CO2 emissions per population by major world regions in 2007

T CO2 per capita


Annex II North America Annex II Pacific Annex I EIT Annex II Europe Middle East Other Non-Annex I China* Latin America Asia excluding China Africa

* China includes Hong Kong.

Key point: Emissions per capita vary even more widely across world regions than GDP per capita.

Industrialised countries emit far larger amounts of CO2 per capita than the world average. However, some rapidly expanding economies are significantly increasing their emissions per capita. For example, between 1990 and 2007, China more than doubled its per capita emissions and India increased them by

14. The IEA has developed a database on policies and measures taken or planned in IEA Member countries, Russia, and five of the world's most powerful developing economies. Comprising records collected over six years, the database provides a comprehensive annual update of the policy making process in place since 2000. The online database is available at: Another data base on Global Renewable Energy Policies and Measures provides information on policies and measures taken or planned to encourage the uptake of renewable energy and can be consulted at http://renewables. iea. org.

15. See discussion in Energy Technology Perspectives 2008, IEA, 2008, p. 71.

more than two-thirds. Clearly, these two countries contributed much to the 10% increase of global per capita emissions over the period.

Indicators such as those briefly discussed in this section strongly reflect energy constraints and choices made to supply the economic activities of each country. They also reflect the sectors that predominate in different countries' economies. The major sectors driving the observed growth in global emissions are discussed in the next section.

Emissions by sector

In 2007, two sectors, electricity and heat generation and transport, produced nearly two-thirds of the global CO2 emissions (Figure 11). The emissions of these same sectors also increased at faster rates than global emissions (60% and 45%, respectively, versus the average 38%, between 1990 and 2007).

Figure 11. World CO2 emissions by sector

Figure 11. World CO2 emissions by sector

2007 Total emissions: 29.0 Gt CO2

Residential 6%

2007 Total emissions: 29.0 Gt CO2

Other* 10%

Electricity and heat 41%

Industry 20%

Residential 6%

Other* 10%

Electricity and heat 41%

Industry 20%

Transport 23%

* Other includes commercial/public services, agriculture/forestry, fishing, energy industries other than electricity and heat generation, and other emissions not specified elsewhere.

Key point: Between 1971 and 2007, the combined share of electricity and heat generation and transport jumped from one-half to two-thirds of global emissions.

Generation of electricity and heat was responsible in 2007 for 41% of the world total CO2 emissions, as compared to 27% in 1971. By 2030, the World Energy Outlook projects that demand for electricity will be almost twice as high as in 2007, driven by rapid growth in population and income in developing countries, by the continuing increase in the number of electrical devices used in homes and commercial buildings, and by the growth in electrically-driven industrial processes.

Worldwide, the generation of electricity and heat relies heavily on coal, the most carbon-intensive of fossil fuels, amplifying the sector's share in global emissions. Countries such as Australia, China, India, Poland and South Africa produce between 68% and 95% of their electricity and heat through the combustion of coal.

Fossil fuels provide over 70% of the world electricity and heat generation (Figure 12). Coal, the dominant source, supplied 41% of the generation in 2007. In non-Annex I countries, the share of coal in electricity and heat generation increased from 43% in 1992 to 53% in 2007. On the contrary, the share of oil generally decreased across the world (from 12% in 1992 to 6% in 2007 globally). Gas grew significantly in industrialised countries as a result of their fuel switching efforts: Annex II countries increased the share of gas in electricity and heat generation from 12% in 1992 to 23% in 2007. The future development of the emissions intensity of this sector depends strongly on the fuels that are used to generate the electricity and on the share of non-emitting sources, such as renewables and nuclear. As an indication, Box 1 presents product-specific implied emission factors per unit of electricity produced.

Figure 12. Coal, oil and gas: shares in world electricity and heat generation*

Figure 12. Coal, oil and gas: shares in world electricity and heat generation*



I Coal nOil OGas



I Coal nOil OGas

* Refers to main activity producers and autoproducers of electricity and heat.

"Complete data on heat production for 1990 is not available.

Key point: World electricity and heat generation increasingly rely on coal.

Box 1: Implied emission factors from electricity and heat generation

Summary tables presenting CO2 emissions per kWh from electricity and heat generation by country are presented in Part ii. However, these values will vary enormously depending on the fuel mix of individual countries. Average implied emission factors by individual product for this sector are presented below. These values represent the average grammes of CO2 per kWh of electricity and heat produced in the OECD member countries between 2005 and 2007. These figures will reflect any problems that may occur in net calorific values or in input/output efficiencies. Consequently, these values are given as an approximation and actual values may vary considerably.


g CO2 / kWh

Anthracite *


Coking coal *


Other bituminous coal


Sub-bituminous coal


Lignite/brown coal


Patent fuel


Coke oven coke *


BKB/peat briquettes *


Gas works gas *


Coke oven gas *


Blast furnace gas *


Oxygen steel furnace gas *


Natural gas


Crude oil *


Natural gas liquids *


Liquefied petroleum gases *


Kerosene *


Gas/diesel oil *


Residual fuel oil


Petroleum coke *


Peat *


Industrial waste *


Municipal waste (non-renewable)

* 450-1900

* These fuels represent less than 1 % of electricity and heat output in the OECD. Values will be less reliable and should be used with caution.

Figure 13. CO2 emissions from oil

While electricity and heat generation draws from various energy sources, the transport sector relies almost entirely on oil (94% of the energy used for transport came from oil in 2007). The share of transport in global oil emissions was close to 60% in 2007, as shown in Figure 13. While CO2 emissions from oil consumption in most sectors remained nearly steady in absolute terms since 1971, those of transport more than doubled. Dominated by road traffic, this end-use sector is the strongest driver of world dependence on oil.

Gt CO2










■ Transport □Electricity and heat nindustry (^Residential DOther*

1971 2007

■ Transport □Electricity and heat nindustry (^Residential DOther*

* Other includes commercial/public services, agriculture/forestry, fishing, energy industries other than electricity and heat generation, and other emissions not specified elsewhere.

Key point: With a share that increased by about 50% since 1971, transport dominates emissions from oil.

Economic growth contributes to the increasing demand for transport, both for personal mobility and for shipping goods. For example, the United States has the highest level of travel per capita in the world (more than 25 000 kilometres per person per year). In addition, larger incomes favour the switch to faster modes: air travel is the most rapidly growing mode of transport in industrialised countries, while growth in car travel is first in developing countries. Car ownership generally grows with increasing income per capita.

As for energy intensity and consequent emissions, relatively high fuel prices provide an incentive for more efficient vehicles. In the United States (until recently), lower fuel prices have contributed to a trend towards the use of larger vehicles, while in Europe higher fuel prices have helped encourage improved fuel economy (along with the EU voluntary agreement with manufacturers). As a result, there is more than a 50% variation in the average fuel consumption of new light-duty vehicles across OECD member countries.

Global demand for transport appears unlikely to decrease in the foreseeable future; the World Energy Outlook projects that transport will grow by 45% by 2030. To limit the emissions from this sector, policy makers first and foremost should consider measures to encourage or require improved vehicle efficiency, as the United States has recently done and the European

16. Energy Technology Perspectives 2008, IEA, 2008, p. 435.

Box 2: Biofuels

Compatible with many conventional engines and blendable with current transport fuels, biofuels have the potential to contribute to energy security by diversifying supply sources for transport and to reduce greenhouse-gas emissions. However, the economic, environmental and social benefits of the current generation of biofuels vary enormously.

Though there are important uncertainties about their efficacy in reducing GHG emissions, biofuels can be classified on the basis of their well-to-wheel performance with respect to conventional fossil fuels. When ethanol is derived from corn, the well-to-wheel greenhouse-gas reduction with respect to conventional gasoline is typically in the range of 10 to 30%. The reduction is much higher for sugarcane-based ethanol from Brazil, reaching an estimated 90%. Similarly, oilseed-derived biodiesel leads to greenhouse-gas reductions, on a well-to-wheel basis, of 40% to 60% when compared to conventional petroleum diesel. "Second generation" biofuels, derived from non-food crops such as trees and perennial grasses, have the potential to dramatically expand the scope for very low-carbon biofuels production. However these biofuels are still under development. None of these estimates takes into account the possibility that changes in land use from starting biofuels production can result in one-time releases of CO2 that could be quite large; more research is needed into the impacts of both direct and indirect land-use change and how to minimise adverse impacts.

For both current and second generation biofuels, production cost is the main barrier to a larger penetration of biofuels in the transport fuel mix. Without subsidies, only ethanol from sugarcane produced in Brazil has been competitive with petroleum fuels, although this may change with the higher oil prices occurring recently. The cost barrier is such that market introduction of biofuels has typically required substantial regulatory intervention and governmental support.

Currently, several countries have mandated or promoted biofuel blending standards to displace oil in domestic transport supply. In Brazil, gasoline contains 20-25% ethanol. Furthermore, 95% of the cars purchased in Brazil in 2008 can run on either 100% ethanol or on the gasoline/ethanol blend. With recent high oil prices, most drivers are choosing to operate these vehicles mainly on ethanol. In 2006, the United States introduced mandatory standards and these were extended in 2007 under the EISA law. Blending requirements will reach 12.9 billion gallons in 2010 and 36 billion gallons by 2022 (of which more than half will be required to be advanced biofuels and about one-third cellulosic).

Several years ago the European Union introduced a target for biofuel use equivalent to 2% of the market share of motor fuel by 2005 (although it was not reached) and 5.75% by the end of 2010, while the target for renewable energy sources in transport for 2020 is now set at 10%. The current legislation also requires "sustainability criteria" favouring biofuels derived from waste, residues, non-food cellulosic material, and lignocellulosic material in order to prevent mass investment in potentially environmentally harmful biofuels. Australia (New South Wales and Queensland) and Canada are also mandating the use of biofuels, as are a number of OECD non-member countries.

For the future, it is crucial that policies foster innovation and support the most sustainable biofuels only, through a continuous monitoring and assessment of their effectiveness in reducing GHG emissions and in providing benefits for rural workers. Suitable land availability and potential influence of biofuel production on global food prices also need to be carefully monitored, taking into account all global food, fibre and energy needs for the growing world population out to 2100. However, barriers to the commercial viability of biofuels shrink as technologies evolve and as prices of conventional fossil fuels remain high. Moreover, if well managed and coordinated with investments in infrastructures and agriculture, biofuels can provide an opportunity for increasing land productivity and creating economic development, in particular in rural areas.

Union is currently doing as a follow-up to the voluntary agreements. Policies that encourage a shift from cars to public transportation and to lower-emission modes of transportation can also help. Finally, policies can encourage a shift to new, preferably low-carbon fuels. These include electricity (e.g. electric and plug-in hybrid vehicles), hydrogen (e.g. through the introduction of fuel cell vehicles) and greater use of biofuels (e.g. as a blend in gasoline and diesel fuel, Box 2).

These policies would both reduce the environmental impact of transport and help to secure domestic fuel supplies sometimes unsettled by the geopolitics of oil trade. As they will ease demand growth, these policies are also likely to help reduce oil prices below what they otherwise might be.

The importance of electricity generation and transport in shaping global CO2 emissions is apparent in Figures 14 and 15, which detail the contributions from individual sectors to trends of the socio-economic indicators discussed in previous sections such as CO2 emissions per GDP and CO2 emissions per capita.

The world average per capita carbon intensity remained fairly constant between 1971 and 2001. Since then it has been steadily increasing, with 2007 levels 14% above those of 2001. However, this trend concealed a significant rise in the emissions per capita of electricity generation and transport. Between 1971 and 2007, the emissions per capita for these two sectors grew by 82% and 32%, respectively. The growth in the number of people accessing electricity and the growth in electricity infrastructure contributed significantly to this rise.

Figure 14. Per capita emissions by sector


Figure 14. Per capita emissions by sector


-Elec.+ heat--Transport -Industry

—"Residential Total

-Elec.+ heat--Transport -Industry

—"Residential Total

Key point: Relative to the almost-stable average emissions per capita, those of power generation and transport have grown markedly since 1971.

Overall, the emissions intensity of the world economy, in terms of CO2 per GDP, declined by 41% between 1971 and 2007. However, the electricity and heat sector slowed the global decoupling between emissions and economic growth with a decrease in emissions per global unit of GDP of only 9% over that period.

Power generation and transport challenge the sustainability of both the global economy and the environment. This is particularly pronounced for developing countries that increased their emissions from these two sectors, respectively, by three times and by one and a half times faster than the global average between 1990 and 2007. Access to modern energy services is crucial to eradicating poverty and for economic development of these countries and the challenge will be to help developing countries use energy in a rational way.

Strong energy efficiency gains, the increased use of new technologies for road transport and the decarbonisation of electricity supply (both through a shift toward less carbon-intensive fuels such as natural gas and renewables and through the introduction of CO2 capture and storage) are some of the potential means to achieve a more sustainable energy path.17

Investment decisions taken over the next few years will have a huge long-term impact, since energy systems could be locked into a fuel mix for about 50 years, and consequently into a CO2 emissions trajectory, that may be difficult to change.

17. Energy Technology Perspectives 2008, IEA, 2008. INTERNATIONAL ENERGY AGENCY

Figure 15. Per GDP* emissions by sector


Figure 15. Per GDP* emissions by sector


Elec.+ heat _ _ Transport -Industry

-----Residential Total

Elec.+ heat _ _ Transport -Industry

-----Residential Total

* GDP using purchasing power parities.

Key point: Generation of electricity and heat and to a lesser extent transport have slowed down the global decoupling of emissions from economic growth.

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