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Recession causes 11% drop in U.S. energy-related emissions

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Though lockdowns are gradually lifted in several U.S. states, the government expects an 11% drop in energy-related emissions as demand…

The chairman of the Federal Reserve, Jerome Powell, has warned the coronavirus crisis could lead to a prolonged recession if not more fiscal stimulus measures are put in place swiftly.

Unprecedented downturn

“The scope and speed of this downturn are without modern precedent, [and] the job gains of the past decade have been erased,” Powell said, indicating that more than 20 million American people have lost their jobs since the start of the pandemic two month ago.

The FED chair underlined the current downturn is solely attributable to the virus and the steps taken to limit its fallout. To date, Congress has provided roughly $2.9 trillion in fiscal support for households, businesses, health-care providers, and state and local governments—about 14% of GDP.

Travel restrictions and business lockdowns not only brought the U.S. economy to a near-halt in April but also caused a substantial drop in emissions. However, even before the effects of coronavirus crisis became apparent in mid-March, the U.S. government had expected a decline in energy-related emissions which kept falling from their 2007 peak.  

Clean air thanks to lockdowns

Stay-at-home orders, travel restrictions, and work-from-home arrangements reduced demand for motor gasoline, diesel and jet fuel. Petroleum is the largest source of emission in the United States, accounting for 46% of the 2019 total, according to the U.S. Energy Administration (EIA).

Natural gas-related emissions, accounted for a third of last years’ total. Compared with petroleum and coal, EIA expects a relatively smaller decline in natural gas consumption and its related CO2 emissions (both 4% lower) in 2020.

Power generation consumes the largest volumes of gas, and although electricity output is forecast to fall 5% this year due to the recession, the EIA expects only a 1% decline in gas-burn due to relatively low natural gas prices compared to thermal coal. The closing or reduced operation of many nonessential businesses, combined with generally warmer weather this year, will likely lead to a falling gas use by the commercial sector.

Come 2021, the EIA sees energy-related CO2 will increase 5% – a proportionally smaller rise than the forecast 6% GDP growth as businesses, industries, and institutions resume normal operation.


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