Economic slump not rule for carbon emission reduction

This means that an increase in a country’s economic growth would likely be reflected in an increase in its GHG emissions. So, is it possible to reduce emissions and see growth in a country’s economy?

Recent years have seen China becoming the world’s leading economy but earning the infamous title of the world’s number one polluter. Emerging economies such as Brazil, India and Mexico have also reported fast-growing economies but not without raising their greenhouse gas emissions.

At the global level, emissions have increased as the global economy has developed and in many cases, development has also been associated with an increase in carbon-intensive industrial activity.

Poor countries who have often found it difficult to address climate change at the expense of industrial activity and the economy have amplified industrial activity regardless of carbon emissions increase.

According to Carbon Brief, there exists an uncalled for trade-off that there is no need of mediation between economic growth and carbon emission reduction.

A recent report by the International Energy Agency (IEA) seems to support this view. It says global emissions stalled in the past two years even as the economy grew.

Climate Nexus reported last month that global investment in renewable energy was more than twice that of coal and gas last year while FS-UNEP reported last year that global investments in renewable energy rebounded strongly in 2014, registering a solid 17 per cent increase after two years of decline and brushing aside the challenge from sharply lower crude oil prices.

These developments had a hand in reducing global emissions. The upward trend in renewables must continue to grow for many countries to meet their Paris climate targets, analysts caution. In a recent article, Eco Watch also says that linking investors to renewable energy opportunities in energy markets is key to the success of the Paris Agreement.

However, if countries are to reach the target of keeping global temperature rise to 1.5°C or less in this century then they must do more than just stall global carbon emissions. Emissions must fall to zero.

Bhutan, a country with a population of about 750,000 has already set the pace as all its emissions are absorbed by the country’s carbon sinks. The country is not only carbon-neutral, but also carbon negative, making it one of the few countries to have negative carbon emissions.

This means the country’s carbon sinks, such as its forests, absorb more carbon dioxide each year than its sources of pollution, such as factories, do emit.

The country emits around 1.5 million tonnes of carbon annually, while its forests absorb over 6 million tonnes. It is thus aiming for zero net GHG, zero-waste by 2030 and to grow 100 per cent organic food by 2020.

Some countries that have cut their emissions have also grown their economies. This means that several countries are well on track in the process of decoupling emissions from the economy.

According to the World Resources Institute (WRI) 21 countries including Australia, Belgium, Bulgaria, Czech Republic, Denmark, Finland and France have managed to reduce GHG emissions and registered significant growth in their GDP since 2000.

Others are Germany, Hungary, Ireland, Netherlands, Portugal, Romania and Slovakia. The list also involves Spain, Sweden, Switzerland, Ukraine, UK, USA and Uzbekistan.

“US is the largest country to experience multiple consecutive years in which economic growth has been “decoupled” from growth in carbon dioxide emissions.

From 2010 to 2012, energy-related carbon dioxide emissions declined by 6 percent (from 5.58 to 5.23 billion metric tons), while GDP grew by 4 percent (from $14.8 to $15.4 trillion),” says WRI.

In its analysis of the Clean Power Plan (CPP), the US Energy Information Administration forecasts on a cleaner electricity system after 2020 that will bring about a sustained period of GDP-GHG decoupling.

CPP implementation is expected to reduce total US energy-related carbon dioxide emissions by a further 6 per cent between 2020 and 2025, while GDP increases by 13 per cent in real terms over the same period.

UK is an example of a country where economic growth and carbon dioxide emissions have increasingly diverged. Between 2000 and 2014, UK achieved six years of absolute decoupling where real GDP grew at the same time that carbon dioxide emissions declined. Over the 14-year period, emissions dropped from 591 to 470 million metric tonnes of energy-related carbon dioxide, while GDP grew from $2.1 to $2.7 trillion.

Countries must be wondering if there is a formula, policy or demographic trend that can be used to drive GDP-GHG decoupling.

But apparently there is none. Sweden, for example, implemented ambitious policies including carbon taxes that supported its decoupling. Denmark’s rapid increase in renewable energy reduced emissions while stimulating local production. Another key factor in many countries is a structural shift of the economy away from emissions-intensive industry.

More than 90 per cent of the countries that decoupled GDP and GHG emissions between 2000 and 2014 reduced the industrial sector share of their economies.

Across the 21-country group, the average change in the industry share of GDP was a 3 per cent reduction over the period, with an average carbon dioxide reduction of 15 per cent.

Decoupling of GDP and GHG emissions in numerous countries demonstrates the feasibility and increasing prevalence of the transition to cleaner modes of economic activity. Increasing renewables in the energy mix could lead to a low- carbon path.

Over the 14-year period covered here, the aggregate annual carbon dioxide reduction for these 21 countries amounted to slightly more than 1 billion metric tonnes. Given that total annual global carbon dioxide emissions grew by more than 10 billion metric tonnes over this period, it’s clear that decoupling needs to be scaled up rapidly to have any chance of limiting average warming this century to 2°C (3.6°F) above pre-industrial levels, the current international target for preventing the worst impacts of climate change.

Carbon Brief has extended the WRI analysis to consider all the countries in the world. Like WRI, this extended analysis looks at changes in real GDP using data from the World Bank. Carbon Brief used real GDP data in each country’s local currency.

The analysis used carbon dioxide emissions data from the Carbon Dioxide Information Analysis Center (CDIAC)for 216 countries including the likes of the tiny island of Réunion.
Forty five nations cut their carbon dioxide emissions between 2000 and 2014, while 35 of them increased their real GDP, four had their GDP shrank, while no GDP data was available for the remaining six countries.

“Singapore achieved 46 per cent emissions reduction, the largest followed by Denmark’s 33 percent and Ukraine’s 32 per cent,” says Carbon Brief.

Looking at carbon intensity, the carbon dioxide emissions per unit of GDP, Macao, Singapore and Uzbekistan made the largest improvements. UK cut its emissions by 128million tonnes of carbon dioxide between 2000 and 2014, a 24 per cent reduction, while its real GDP grew by 27 per cent, consequently for carbon intensity to have dropped 40 per cent.

“This was the biggest improvement among major economies that decoupled their emissions from growth, between 2000 and 2014,” reveals the analysis.

Yet countries have a lot to do in order to meet the UN target of reducing global temperature rise to less than 2°C within this century. “Even the climate pledges that countries have made for the next decade will only succeed in limiting global temperature rise to around 2.7°C,” says Climate Action Tracker.

As countries focus on implementing the Paris Agreement, decoupling presents one option to address global climate challenges while preserving economic security.