Can GDP Growth and Carbon Emissions be Delinked?

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Nate Aden of the World Resource Institute identifies 21 countries that succeeded in maintaining economic growth while also decreasing carbon emissions – can this feat be replicated elsewhere?

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GREGORY WILPERT, TRNN: Welcome to the Real News Network. My name is Gregory Wilpert and I’m coming to you from Quito, Ecuador.

Some rare good news on climate change. Twenty-one countries have managed to reduce carbon emissions while growing their gross domestic product, or GDP, which is one of the primary indicators used to gauge the health of a country’s economy. This is according to a new report from the World Research Institute, a nongovernmental, global research organization focused on sustainable natural resource management.

Ecologists and economists have long debated as to whether it was possible to maintain economic growth while at the same time reducing greenhouse gases. A large part of the debate stems from the fact that, historically speaking, ever since the beginning of the Industrial Revolution, economic growth took place together with growth in emissions of greenhouse gases, particularly carbon dioxide. If that trend were to continue it would mean that we cannot prevent global warming, or that we would have to dramatically reduce the size and scope of our economies.

So the big question is, is de-linking of economic growth and carbon emissions possible? Can we avoid a dilemma between ecological versus economic crisis? Also, can we meet the goals set up in the Paris climate agreement that was signed last December in order to avoid catastrophic climate change.

With us to discuss this new report, “The roads to decoupling: 21 countries are reducing carbon emissions while growing GDP,” is its author, Nate Aden. He is a research fellow with WRI’s climate program, and also with the energy and resources group at the University of California Berkley, and has been working on researching energy issues for over 10 years. He is joining us from Washington, DC. Welcome to the Real News Network, Nate.

NATE ADEN: Thanks, Greg.

WILPERT: So, this is exactly what the aim of the United Nations Framework Convention on Climate Change has been all about, de-linking GDP from greenhouse gas emissions. I should also add that there was another report recently that came out from the Global Carbon Project, that says 2015 was the first where global economic growth increased but global carbon emissions decreased. So, would you say that, are we seeing a shift from the last 150 years, where economic growth and global economy have been linked to gas emissions? Is this de-linking really occurring? What do you say?

ADEN: Yes. We’ve had brief periods, maybe a couple years, one or two years previously where countries diverged in terms of their GDP growth and their greenhouse emissions, but this is the first sustained, large scale decoupling that we’ve seen among multiple countries. And so, what I’ve found in my research is that more than 20 countries globally have increased their real GDP, so that’s accounting for inflation, at the same time that they’ve reduced greenhouse gas emissions over the 14-year period from 2000 to 2014. And those are the years 2014 is the year with the most recent data.

What’s notable about this is that it’s a new unhinging of this previously strong relationship that really developed during the industrial revolution, in terms of our motive, economic growth has been very resource and carbon intensive, and now these countries, this growing group of countries is indicating that there’s a new mode of growth that’s emerging that’s an alternative to the emissions-intensive growth that we had during the 20th century.

WILPERT: Uh huh. Let’s take a look at the list of countries. I mean, one of the notable things is that most of these countries seem to be basically based in Europe and the United States. What some critics would say, looking at this list, is that richer nations such as in Europe and the US are merely exporting climate change by moving their corporations and their manufacturing to other countries such as China, for example, or other countries where emissions continue to increase.

So is there an export, perhaps, going on of the greenhouse emissions? So, in other words, how did they actually decouple? What did your research find? In other words, also, can the decoupling be re-applicated in poor countries?

ADEN: Great, yeah. So the list is actually more diverse than I expected. When I started this research I had initially observed it in the richer countries, including the US and the UK, but as I started to look at the data, there’s a large range of countries, including many post-Soviet republics and former communist countries, such as Uzbekistan, Bulgaria, the Ukraine. And, one of the–So, there are several mechanisms that countries are using to achieve the decoupling of greenhouse gases and GDP. One of the large mechanisms they’re using is reducing the industrial share of GDP and importing those goods that would otherwise be produced in domestic manufacturing.

However, there are two countries within this group that successfully decarbonized that actually increased their industry share of GDP, and that would be Uzbekistan and Bulgaria. So those are sort of exceptional, post-Soviet, post-communist countries where there’s a unique story of really terribly inefficient capacity around 2000, much of which was replaced in the subsequent 15 years.

However, there’s no single route that all of these countries are using for decoupling, so many countries did reduce the industry share of GDP, but other countries really achieve these changes through increases in renewable energy use and cleaner energy consumption overall or, in the case of the US, switching from predominantly coal use to natural gas use, and that’s a big improvement, in terms of carbon emissions.

There are a few different points here. I mean, one is that there is no single route for decoupling in all countries. The other is that this de-industrialization that’s been observed in many countries is itself a complex phenomenon, where it’s driven primarily by higher productivity growth in industry and services, so that means that the industrial sector requires inputs in terms of energy and labor, so that’s been part of the large impact in some countries it would seem, but it also means that there’s fewer carbon emissions associated with that industrial production.

Efficiency improvements and process shifts within industries, so, for example, with steel production in many of these countries there’s an accumulated amount, accumulated stock of steel so that we can do more recycled steel in our economies, which is much less energy intensive that virgin steel production.

So that’s one example, and then the third big trend here, which is one that a lot of people focus on, is globalization, and particularly the fragmentation of supply chains and the rise of trade. And that is a significant issue here. However, analysis that’s looked at the embodiment of trade, that is, the emissions associated with imports, has found that you still have more than 20 countries that are decoupling, even if you account for the emissions that are embodied in their increasing trade, so that’s not the only factor here. It’s a complex picture with several causal variables.

WILPERT: Let me just get back to a couple of them. We don’t have very much time left, but one of the issues that you mentioned is the increase of natural gas use in the United States. Would that, perhaps, mean that there’s an increase, also, of methane emissions? Wouldn’t you also [crosstalk] have to factor in–

ADEN: [interceding]–Great question–

WILPERT: –the ways in which that natural gas use is achieved, for example through fracking, which is instead, perhaps, contaminating the water supply instead of the air? Wouldn’t that be a factor, let’s say in the United States?

ADEN: That’s a great question. The short answer is that methane emissions have dropped in the United States at the same time that we have increased fracking. total methane emissions have declined. That’s not to say that the methane emissions and other contaminants and pollutants from fracking are not a problem, but this assessment is really sort of the tip of the iceberg. It’s looking at two very simple variables: carbon emissions and GDP. There is much more to economics and to human development and prosperity than GDP. There’s jobs. There’s other variables. Those are equally important and I’m not saying that GDP is the only thing. It’s just that’s where the data are available right now for looking across countries for this period.

On the greenhouse gas side, carbon is the largest greenhouse gas that we’re responsible for, but of course methane, nitrous oxide, [inaud.], SF6, there’s a slew of other greenhouse gases that are equally important. The issue, again, is just one of data availability. What I focused on in this analysis is energy related CO2, because that’s where the data are available internationally through 2014, and generally there is a covariance between energy related CO2 and total greenhouse gas emissions. Certainly that’s what we found in the US, but this is an area that needs further research in terms of both the economic and greenhouse gas side of the ledger, here.

WILPERT: Well, we’re basically out of time, but let me just add another reflection quickly. I mean, one of the things that one could say is that, you know, you mentioned, for example, the countries of eastern Europe, they started from a very high point of emissions because they had very inefficient industries and were able to become more efficient, but then the question is, wouldn’t that level off at some point? You know, is there, like, a point at which they efficiency gains level off and where we really need to be aiming for is a complete transition away from carbon-based fuels.

ADEN: It’s a great question and I would say that the inclusion of Switzerland in this group indicates that we haven’t gotten there yet, in terms of exhausting all of the gain, because Switzerland is a very efficient, clean economy, and they’re still improving. They’re still going in the right direction. So we still have a ways to go before we exhaust all of our options, but certainly in the long run we do have to move to a carbon-neutral, non-fossil fuel economy. that’s clear if we want to limit warming this century to two degrees, and that will be part of the discussion with the Paris Agreement signing later this month by many countries, but this is an encouraging development in terms of existing, observed, empirical decoupling that’s already happening. So it’s showing that there are new modes of growth that are emerging for these countries to focus on as they implement the Paris agreements.

WILPERT: Okay, well, this is really interesting topic, and we’re definitely going to continue to track it. But thanks so much for agreeing to talk to us about this today, Nate.

ADEN: Thank you so much, Greg. I look forward to following up.

WILPERT: Great. And thank you for watching the Real News Network.

End

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