U.S. Economic Assumptions and Energy-Related Carbon Dioxide Emissions

Recent Economic Indicators. EIA used the May 2020 IHS Markit macroeconomic forecast in this STEO. Using this forecast, EIA assumes U.S. gross domestic product (GDP) will decline by 7.4% in 2020, compared with a decline of 5.4% in the May STEO. In addition, the IHS forecast used in the June STEO includes average non-farm employment of 130.6 million for 2020 and 136.0 for 2021, down by 13.0 million jobs and 6.3 million jobs, respectively, from the May STEO.

Energy-Related Carbon Dioxide Emissions. After decreasing by 2.8% in 2019, EIA forecasts that U.S. energy-related carbon dioxide (CO2) emissions will decrease by 14% (714 million metric tons) in 2020. This record decline is the result of less energy consumption related to restrictions on business and travel activity and slowing economic growth related to COVID-19 mitigation efforts. CO2 emissions decline with reduced consumption of all fossil fuels, particularly coal (33%) and petroleum (13%). In 2021, EIA forecasts that energy-related CO2 emissions will increase by 5%, as the economy recovers and stay-at-home orders are lifted, for a net decrease in energy-related CO2 emissions of 9% for 2020 and 2021 combined. Energy-related CO2 emissions are sensitive to changes in weather, economic growth, energy prices, and fuel mix.