The 2008-2009 economic recession has had a major impact on energy prices and price estimates for 2009. The Energy Information Administration (EIA) estimates petroleum products consumption in 2008 will fall 5.8% from the 2007 average and another 1% in 2009. Electricity consumption in 2008 is expected to be flat with 2007 and to decline in 2009. With spot fuel prices down from summer 2008 highs, residential electricity rates are predicted to rise 6% in 2008 and 5% in 2009.
The good news is that carbon based energy will be lower as petroleum consumption and electricity demand decrease. And with an increase in wind, nuclear, natural gas and petroleum fueled electricity generation, electricity produced by burning coal should fall 0.2% in 2009. Unfortunately, these changes do little to alter the GreenHouse Gas (GHG) emissions forecast from the “Business as Usual” scenario (See Increasing Carbon Productivity Tenfold).
According to the The Carbon Productivity Challenge published by McKinsey & Company, the world has 50 years to increase carbon productivity from $7,300 GDP per ton of CO2e to $740 GDP per ton of CO2e. Some big steps are needed with a cost for GHG emissions via a cap and trade system at the top of the list.