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Texas’ Prominence in Energy Production Puts State at Center of Climate Change Debate, says Dallas Fed’s Southwest Economy

For Immediate Release: September 30, 2019

Special edition goes “On the Record” with leading climate scientist Katharine Hayhoe and examines wind and solar pairing; other topics include education funding and the auto loan market in Texas and digital payment adoption in Mexico

DALLAS—Texas emits more carbon dioxide gas than any other state but is also a leader in renewables. Those two trends place the state in the center of the climate change debate, according to the Federal Reserve Bank of Dallas’ Southwest Economy.

The third-quarter issue of Southwest Economy takes a closer look at how issues related to climate change are playing out in the Lone Star State.

In “Texas’ Energy Base Drives Climate Concerns as Renewables Expand,” Emma Marshall and Jesse Thompson examine the role of Texas’ energy industry in emissions of carbon dioxide (CO2) gas—a leading contributor to climate change. While the state has the highest overall CO2 emissions, it ranks 18 in emissions per dollar of economic output.

“CO2 emissions in terms of population and output—the carbon intensity of the state—put the state closer to the middle of the pack,” the authors write.

Texas’ energy industry is a key contributor to carbon emissions, according to the authors. The state accounted for about 8.4 percent of the nation’s economy in 2016, but it produced 13 percent of the nation’s carbon emissions. Nearly all of the state’s CO2 came from transportation, electric power and industrial usage.

While natural gas and coal are still the largest sources of electricity generation in Texas, the state has taken a leading role in wind power. And the move toward diversification of energy sources is likely to increase, according to the authors.

“Policymakers, acting on climate change concerns, will likely implement policies that will slowly lead to decreased reliance on carbon-based energy over time,” they write. “Texas can be better prepared for the future by continuing to diversify its sources of energy and overall economic activity.”

In “Texas Offers Perfect Setting to Study Impacts, Costs of Climate Change,” Southwest Economy goes “On the Record” with Katharine Hayhoe, an atmospheric scientist and professor at Texas Tech University in Lubbock. Hayhoe directs the Climate Center at Texas Tech and was a lead author of the Fourth National Climate Assessment.

Texas’ prominent role in the energy industry as well as its vulnerability to extreme weather and climate events makes it an ideal place to study the impacts of climate change, Hayhoe said.

“It’s the perfect place to be to talk about climate change to help people understand it, to encourage our investment and solutions, and to help people understand how we are vulnerable to the impacts of a changing climate and what we need to do to prepare,” she said.

Rounding out this edition’s focus on climate change, Aquil Jones, Soojin Jo and Christopher Slijk look at the state of renewables in “Wind and Solar Power: Perfect When Paired in Texas.”

Both wind and solar power generation pose problems with reliability; however, diversity across renewable sources can help alleviate this problem, according to the authors.

“Regional studies suggest that lulls in wind energy production in Texas are correlated with peaks in solar energy production, and vice versa, on an annual and daily basis,” they write.

Also in this edition of Southwest Economy, Jason Saving looks at Texas education funding in “Texas K–12 Education Spending Set to Rise, but Who Will Pay?” Wenhua Di examines Texas auto loan delinquency rates in “Texans Help Drive National Increase in Auto Loan Debt.” And the latest “Go Figure” infographic explores Mexico’s slow adoption of digital payments.

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Media contact:
Jennifer Chamberlain
Federal Reserve Bank of Dallas
Phone: (214) 922-6748
Email: jennifer.chamberlain@dal.frb.org