‹ Analysis & Projections

Annual Energy Outlook 2016

Release Date: July 7, 2016   |  Next Release Date: July 2017 

Energy-related carbon dioxide emissions

In the AEO2015 Reference case projection, U.S. energy-related CO2 emissions are 5,549 million metric tons (mt) in 2040. Among the alternative cases, emissions totals show the greatest sensitivity to levels of economic growth (Figure 36), with 2040 totals varying from 5,979 million mt in the High Economic Growth case to 5,160 million mt in the Low Economic Growth case. In all the AEO2015 cases, emissions remain below the 2005 level of 5,993 million mt. As noted above, the AEO2015 cases do not assume implementation of EPA’s proposed Clean Power Plan or other actions beyond current policies to limit or reduce CO2 emissions.


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Emissions per dollar of GDP fall from the 2013 level in all the AEO2015 cases. In the Reference case, most of the decline is attributable to a 2.0%/year decrease in energy intensity. In addition, the carbon intensity of the energy supply declines by 0.2%/ year over the projection period.

The main factors influencing CO2 emissions include substitution of natural gas for coal in electricity generation, increases in the use of renewable energy, improvements in vehicle fuel economy, and increases in the efficiencies of appliances and industrial processes. In the Reference case, CO2 emissions growth varies across the end-use sectors (Figure 37). The highest annual growth rate (0.5%) is projected for the industrial sector, reflecting a resurgence of industrial production fueled mainly by natural gas. CO2 emissions in the commercial sector grow by 0.3%/year in the Reference case, while emissions in both the residential and transportation sectors decline on average by 0.2%/year.


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In the alternative cases, various factors play roles in the emissions picture. In the High Economic Growth case, GDP increases annually by 2.9% and overshadows the decrease in energy intensity of 2.2%, leading to the largest annual rate of increase in CO2 emissions (0.4%/year). In the Low Economic Growth case, GDP grows by only 1.8%/year, and that growth is offset by a similar annual average decline in energy intensity. With the additional decline in the carbon intensity of the energy supply, CO2 emissions decline by 0.2%/year in the Low Economic Growth case.

Emissions levels also vary across the other alternative cases. The High Oil and Gas Resource case has the second-highest rate of emissions in 2040 (after the High Economic Growth case) at 5,800 million mt. In the Low Oil Price case, CO2 emissions total 5,671 million mt in 2040. In the High Oil Price case, emissions levels remain lower than projected in the Reference case throughout most of the period from 2013 to 2040, but energy-related CO2 emissions exceed the Reference case level by 35 million mt in 2040, at 5,584 million mt.