EBF 200
Introduction to Energy and Earth Sciences Economics


Reducing Carbon Emissions


Regardless of what economic or political mechanisms are put into place, if any policy is enacted, then, at the end of the day, actions will have to be taken to reduce carbon emissions. I wish to briefly look at some of the things we can do to reduce carbon emissions from fossil fuel combustion.

We burn fossil fuels for three basic reasons: to heat spaces, such as homes and offices; to transport things, such as people and cargo; and to generate electricity, which is then used to heat things or move things.

Main Fossil Fuels


About 90% of the coal we burn in the US is used to generate electricity. The rest is burned in industrial applications like steel making. We consume approximately 0.5 billion tons of coal per year in the United States. Note that lower emission and significant recent drop in the natural gas price have created incentive for the power generation sector to switch to natural gas.

Crude Oil and its Products

About 70% of crude oil is refined into products that are used for transportation, in the forms of gasoline, diesel fuel, and jet fuel. Oil products are, by far, our largest source of transportation energy. The rest is used for home heating, generating electricity, and as feed stocks for plastics and other materials, like asphalt. We consume about 20 million barrels per day of crude oil.

Natural Gas

Natural gas is used in three sectors, in approximately equal shares. It is used in residences and businesses for space heat, it is used in industries for process heat (i.e., as part of a production process), and it is burned in power plants to generate electricity. We consume about 32 trillion cubic feet of gas per year.

Carbon intensity

The amount of carbon dioxide put out by burning a certain amount of fossil fuel is called the carbon intensity:

  • Coal: about 2.9 tons CO2 emitted per ton of coal burned
  • Oil: about 2 tons CO2 emitted per ton of oil burned
  • Natural gas: about 1.6 tons of CO2 emitted per ton of natural gas burned

Carbon Targets

The Kyoto Protocol had a goal of reducing carbon output to 95% of 1990 levels by 2012. That is, for every ton put out in 1990, the goal was to put out 0.95 tons in 2012. For comparison, the United States saw emissions rise by 7% from 1990 to 2009, so reducing to 95% of 1990 levels would be the same as reducing "business as usual" 2012 numbers by perhaps 15-20%.

Strategies for Reducing Output

Other fossil fuel substitution

As can be seen from the above intensity data, natural gas puts out less CO2 per ton than other fossil fuels. Thus, switching to gas from oil and coal is one way to reduce carbon emissions. Note that due to the extraction from abundant unconventional shale gas reservoirs during the past decade, natural gas price has been decreased significantly, which made the transition from coal to natural gas more convenient for the industry and the economy.

Non-fossil fuel substitution

We can replace carbon-creating energy sources with carbon-free ones. Alternatives include hydroelectric power (dams), nuclear power, wind, solar, geothermal, and tidal energy. Recently, methane emissions captured from agriculture, landfills, and coal mines are also being utilized. Most of these are for electricity-generating purposes and do not address transport fuel needs.

Carbon-neutral fuels

This is another way of talking about what are called bio-fuels: fuels made from plants. As the carbon that forms part of the plant came from the environment, burning plants is what is called "carbon-neutral" - we are simply cycling the carbon from the air to the plants to the combustion process, which puts the carbon back in the air, and so on.

Energy efficiency

We can choose to use less energy in our daily lives. This can be thought of as a type of factor substitution - when looking at factors of production, we can sometimes substitute one for another. For example, if I add insulation to my house, I am substituting capital for energy. If I purchase a smaller car that gets better mileage, I am investing in more capital in order to reduce my consumption of energy. This is likely to be one of the largest sources of carbon reduction.


This is a bit like energy efficiency, but it means that instead of employing more energy-efficient capital, I simply perform less of the actions that consume energy. This could mean driving less - maybe I will go on driving vacations less frequently, or maybe walk to work. Maybe it means that I go without air conditioning in the summer by raising my thermostat, or using less heat in the winter by wearing a sweater inside.

Carbon capture and sequestration

This involves capturing the carbon before it gets into the environment and storing it in the underground formations.

Recommended Reading

A brief description is given in the following link by the National Energy Technology Laboratory (NETL), part of the U.S. Department of Energy (DOE), "Carbon Storage Faqs".

We will examine the costs of some of these strategies in next week's lesson.