Energy, Carbon, and Market

Carbon Flows and Energy Market

Environmental conservation and sustainability are common debates around the world. Scientists and researchers have raised concerns about global warming and climate change brought about by human activities. Jackson described the severe effects of climate change as intense heat waves, accelerated rising sea levels, and loss of sea ice. Such impacts, in turn, lead to drought as crops would not endure high temperatures, lack of water, hurricanes, and floods, disrupted energy distribution systems, and insect outbreaks. As a result, understanding what causes global warming could help in preventing the identified devastating effects.

Multiple factors cause climate change, but the energy sector is considered the leading contributor. According to “Energy Transitions Indicators,” nearly 90% of the carbon dioxide (CO2) emissions globally are caused by the energy system. The high demand and energy consumption have increased CO2, particularly because people turn to fossil fuels to meet their power needs. The “Where Greenhouse Gases Come from” report indicated that 75% of greenhouse gas emissions primarily come from human-related activities such as burning coal, petroleum, natural gas, and hydrocarbon gas liquids as sources of energy. Other notable greenhouse gases include methane (CH4), which comes from agriculture, natural gas and oils, coal mines, and landfills. Other gases include nitrous oxide from the nitrogen fertilizers applied in farms and industrial waste, human-made industrial gases such as hydrofluorocarbons (HCFs), and sulfur hexafluoride. People release greenhouse gases into the atmosphere, which when heated, makes the earth warmer.

The energy sources, particularly electricity generation, significantly lead to carbon emission. The authors of “Where Greenhouse Gases Come from noted that 37% of the US population relied on electricity as the primary source of energy. The same report indicated that 60% of electricity was generated using coal and 38% from natural gas (“Where Greenhouse Gases Come from”). The two resources are the major contributors to CO2 emissions in the country. Moreover, in 2018, the share of electric power consumption worldwide grew to 20%, increasing carbon emissions from electric generation to 40% (Valavanidis 2). In addition to burning fossil fuels releasing greenhouse gases, the mining process also damages ecosystems through water and air pollution and land degradation.

Efforts to Manage Emissions

The detrimental impacts of fossil fuels have led people to think of ways to transition into a more sustainable energy system. Regional and international environmental agencies and governments have created various policies intended to reverse the severe effects of greenhouse gas emissions and climate change. The European Union (EU) has adopted several regulations such as Renewable Energy Directive 2009/28/EC, which set targets for renewable energy use (Löffler et al. 2). This plan enabled EU member countries to propose action plans aimed at limiting the use of fossil energy. For instance, Spain, Portugal, and France developed strategic interconnections to accelerate cross-border production and renewable energy consumption. Countries such as Germany embarked on constructing low carbon-emission plants, and by 2017, 36% of electricity came from renewable sources (Löffler et al. 3). The EU members created a renewable energy roadmap to guide citizens on alternative power sources such as rooftop solar connections for heating.

As a leading contributor to global emissions, the United States has also adopted various deregulation policies. The 1992 Energy Policy Act set the foundation for renewable energy sources such as wind and solar energy installations by offering tax credits (“Congress Climate History”). The Environmental Protection Agency (EPA) was also mandated to publish greenhouse gas emissions from the country’s largest sources. Many other proposals were introduced to the House but failed to meet the required threshold for implementation. However, in 2018, Congress enacted tax credits and carbon pricing to help in the reduction of carbon emissions. The revenue accrued from carbon tax enables the government to focus on renewable technologies and energy conservation (Clémençon 4). The implementation of such policies is an issue to be looked into to improve efficiency.

The United States was also abiding by the Paris Agreement, a legally binding treaty on climate change. The Paris Agreement states that the member countries should communicate their greenhouse gas emissions and strategies toward clean energy. The members also support one another through finance, technology, and capacity-building toward carbon neutrality (“The Paris Agreement”). The USA withdrew from Paris Agreement during President’s Trump administration, but the new government rejoined the treaty. Biden’s administration also promised to spend $2 trillion on clean energy and infrastructure within his four years-term, towards achieving 100% clean energy by 2035 (CohnReznik Capital 3). Thus, many efforts are made to lower the level of gas emissions and focus on energy conservation strategies in the USA.


In conclusion, the growing energy demand has caused an increase in greenhouse gas emissions; such gases in the atmosphere lead to a warmer climate and many other global changes. Scientists have identified the major contributors to greenhouse gases as fossil fuels and advised people to switch to renewable energy sources such as wind, solar, and geothermal ones. International agencies and governments have also created policies and directives intended to reverse the impacts of emissions and climate change.


Clémençon, Raymond. “The Two Sides of the Paris Climate Agreement: Dismal Failure or Historic Breakthrough?” Journal of Environment & Development, vol. 26, no. 1, 2016, pp. 3-24.

CohnReznik Capital. Renewable Energy Financing Trends: The Year Ahead. Mini Brief, 2021.

“Congress Climate History.” Center for Climate and Energy Solutions, 2020, Web.

“Energy Transitions Indicators.” International Energy Agency, 2019. Web.

Jackson, Randal. “The Effects of Climate Change.” Global Climate Change, 2020, Web.

Löffler, Konstantin, et al. “Modeling the Low-Carbon Transition of the European Energy System – A Quantitative Assessment of the Stranded Assets Problem.” Energy Strategy Reviews, vol. 26, 2019, pp. 1-15.

“The Paris Agreement.” UNFCCC, 2020. Web.

“Where Greenhouse Gases Come from.” U.S. Energy Information Administration (EIA), 2020. Web.

Valavanidis, Athanasios. “Can Renewable Energy Sources Produce All the Global Electricity by 2050?” Scientific Reviews, 2020, pp. 1-46.

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