Studies Show Economies Can Grow as Carbon Emissions Fall

Wednesday, April 06, 2016
(graphic: Getty Images)


By Coral Davenport, New York Times


Throughout the 20th century, the global economy was fueled by burning coal to run factories and power plants, and burning oil to move planes, trains and automobiles. The more coal and oil countries burned — and the more planet-warming carbon dioxide they emitted — the higher the economic growth.


And so it seemed logical that any policy to reduce emissions would also push countries into economic decline.


Now there are signs that GDP growth and carbon emissions need not rise in tandem, and that the era of decoupling could be starting.


In 2014, for the first time in the 40 years since both metrics have been recorded, global GDP grew but global carbon emissions leveled off. Economists got excited, but they also acknowledged that it could have been an anomalous blip. But a study released by the International Energy Agency last month found that the trend continued in 2015.


In another study published on Tuesday, Nathaniel Aden, a research fellow at the World Resources Institute, a Washington think tank, found that since the start of the 21st century, 21 countries, including the United States, have already fully decoupled their economic growth from carbon emissions. In those countries, while GDP went up over the past 15 years, carbon pollution went down.


“It’s really exciting, and it suggests that countries can sever the historic link between economic growth and greenhouse gas emissions,” Aden said.


Of course, even if 21 countries have achieved decoupling, more than 170 countries have not. They continue to follow the traditional economic path of growth directly tied to carbon pollution. Among those are some of the world’s biggest polluters: China, India, Brazil and Indonesia.


And decoupling by just 21 countries is not enough to save the planet as we know it. Over the 15 years that Aden studied, the decoupled countries lowered emissions about 1 billion tons — but overall global emissions grew about 10 billion tons.


The question is whether what happened in the 21 countries (including the United States) can be a model for the rest of the world. Almost all of them are European, but not all are advanced Group of 20 economies. Bulgaria, Romania and Uzbekistan are among them.


The Paris Agreement, the landmark climate change accord reached in December, commits nearly every country on Earth to taking actions to tackle climate change — and to continuously increase the intensity of those actions in the coming decades. But absent major breakthroughs in decoupling, governments are likely to be hesitant to take aggressive steps to curb emissions if they mean economic loss.


In the United States, the decoupling of emissions and economic growth was driven chiefly by the boom in domestic natural gas, which when burned produces about half the carbon pollution of coal. The glut of cheap natural gas drove electric utilities away from coal, while still lighting and powering ever more homes and factories. The decoupling was also driven by improvements in energy-efficiency technology.


The decoupling trend held even in the U.S. industrial sector. Between 2000 and 2014, Aden found that energy-related carbon dioxide emissions dropped 16 percent in the U.S. industrial sector, while economic activity increased 9 percent.


But decoupling can hurt. Even as the industrial sector grew overall in those years, a push by U.S. factories to use more energy-efficient technology contributed to a 21 percent loss of industrial jobs, Aden says.


In smaller economies, decoupling hurts less. Sweden experienced economic growth of 31 percent as its emissions fell 8 percent, continuing a long-standing trend driven by its tax on carbon emissions, instituted in 1991. Today Sweden gets nearly half of its electricity from nuclear power, which produces no emissions, and 35 percent from renewable sources, particularly hydroelectric.


But in large, industrial economies that are trying to decouple, the change raises thorny questions. For example, will the pollution just move elsewhere? In Britain, emissions fell 20 percent between 2000 and 2014, while GDP grew 27 percent. That was largely the result of a push to de-industrialize in the country that gave birth to the Industrial Revolution. As Britain’s financial and service sectors grew and its coal mines, mills and steel factories closed, some of those industries went to China, which became the world’s largest polluter.


According to Aden’s study, China’s GDP has increased 270 percent since 2000 and its carbon emissions rose 178 percent. But there are very tentative signs that even China may be decoupling.


In a paper published last month by the journal Climate Policy, two British researchers made the case that China’s emissions may have peaked in 2014 and have now begun a modest decline. It is hard to know for sure because China’s self-reported emissions data can be faulty. But if it is true, and China’s economy continues on even a modest growth path, it could have profound implications for the future of climate change.


“The question with China is if they really have turned the corner and if it can stick,” Aden said.


Decoupling presents another problem. “The countries that have achieved decoupling have de-industrialized — and that has increased income inequality,” U.S. Sen. Bill Cassidy, R-La., said in an interview. “One of the things that has not been analyzed is the job prospects for those families. There’s going to be unintended consequences of their livelihoods being curtailed.”


Meanwhile, some left-wing economists still say that the dream of decoupling is just that — and that the only way to truly lower emissions will be to bite the bullet and accept a hit to the economy.


“I’m not saying it’s impossible to decouple, but we have to be skeptical,” said Giorgos Kallis, an editor of the book “Degrowth” and an economist at the University of Barcelona. “I don’t believe that an economy powered by solar and renewables can sustain the same level of economic growth. If we are serious about reducing emissions, we cannot do the wishful thinking that the economy will double every 35 years. We have to ask, can we manage without growth?”


But Aden remains optimistic, saying, “We may be on the verge of a transition where this relationship is finally unhinging.”


To Learn More:

Decoupling of Global Emissions and Economic Growth Confirmed (International Energy Agency)

The Roads to Decoupling: 21 Countries Are Reducing Carbon Emissions While Growing GDP (by Nate Aden, World Resources Institute)

Climate Change Policies Implemented by Cities in U.S. and Around the World Could Save $17 Trillion over 35 Years (by Noel Brinkerhoff and Steve Straehley, AllGov)

Citibank Study Finds Huge Financial Benefits to Acting on Climate Change (by Noel Brinkerhoff, AllGov)

U.S. Leads the World in Cutting CO2 Emissions…With Help from Fracking and Poor Economy (by Noel Brinkerhoff, AllGov)


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