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The Roads to Decoupling: 21 Countries Are Reducing Carbon Emissions While Growing GDP

As countries embark on the transition to a new climate economy, there’s a debate about whether growth can drive, or even coexist with, climate stabilization. On the other side of the coin, it’s also a discussion of whether climate stabilization can drive growth. The debates on growth and resources are complex, fractious and centuries old, and while they won’t be resolved in the immediate future, recent developments show that global greenhouse gas (GHG) emissions stayed flat in 2014 and 2015 while GDP continued to grow. This emerging trend is supported by 21 countries that have managed to reduce GHG emissions while growing GDP.

The United States 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). In its analysis of the Clean Power Plan, the U.S. Energy Information Administration forecasts that moving to a cleaner electricity system after 2020 would bring about a sustained period of GDP-GHG decoupling. As illustrated in the figure below, CPP implementation is expected to reduce total U.S. energy-related carbon dioxide emissions by a further 6 percent between 2020 and 2025, while GDP increases by 13 percent in real terms over the same period.

Sources: U.S. Energy Information Administration; U.S. Bureau of Economic Analysis

If the United States implements the Clean Power Plan and achieves sustained decoupling, it will be in good company. Twenty other countries achieved decoupling of GDP and energy-related carbon dioxide emissions over the period from 2000 to 2014.

The UK is an example of a country where economic growth and CO2 emissions have increasingly diverged. Between 2000 and 2014, the 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 tons of energy-related CO2, while GDP grew from $2.1 to $2.7 trillion (constant 2005 U.S. dollars).

Sources: BP Statistical Review of World Energy 2015; World Bank World Development Indicators

How Have Countries Decoupled?

There is not a single formula, policy or demographic trend that’s driven GDP-GHG decoupling across all countries. 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.  As illustrated in the table below, another key factor in many countries is a structural shift of the economy away from emissions-intensive industry.

Metrics of Absolute Decoupling

  Change in CO2 (2000-2014) % Change in CO2 (2000-2014) Mt Change in Real GDP (2000-2014) Change in Industry Share of GDP (2000-2013)
Austria -3% -2 21% -3%
Belgium -12% -20 21% -6%
Bulgaria -5% -2 62% 2%
Czech Republic -14% -18 40% -0.3%
Denmark -30% -17 8% -5%
Finland -18% -11 18% -9%
France -19% -83 16% -4%
Germany -12% -106 16% -1%
Hungary -24% -14 29% -2%
Ireland -16% -7 47% -9%
Netherlands -8% -19 15% -3%
Portugal -23% -16 1% -6%
Romania -22% -21 65% -1%
Slovakia -22% -9 75% -3%
Spain -14% -48 20% -8%
Sweden -8% -5 31% -4%
Switzerland -10% -4 28% -0.3%
Ukraine -29% -99 49% -10%
United Kingdom -20% -120 27% -6%
United States -6% -382 28% -3%
Uzbekistan -2% -2 28% 10%

Sources: BP Statistical Review of World Energy 2015; World Bank World Development Indicators

More than 90 percent of the countries that decoupled GDP and GHG emissions between 2000 and 2014 reduced the industrial sector share of their economies. However, the exceptional cases of Bulgaria and Uzbekistan demonstrate that GDP-GHG decoupling is also feasible in countries with expanding industrial activity (not to mention Switzerland and the Czech Republic, where the industrial portion of GDP remained essentially steady). Across the 21-country group, the average change in the industry share of GDP was a 3 percent reduction over the period, with an average CO2 reduction of 15 percent.

Shifting to a Low-Carbon Path

Decoupling of GDP and GHG emissions in numerous countries demonstrates the feasibility, and increasing prevalence, of the transition to cleaner modes of economic activity. These country-level decouplings are driving the global trend toward decoupling in 2014 and 2015. Beyond the aggregate trends described here, more information is needed on the potential leakage of carbon emissions to other countries as nations move their industries overseas, factors that enable sustained and absolute decoupling, and what’s needed to support larger-scale emissions mitigation.

Over the 14-year period covered here, the aggregate annual CO2 reduction for these 21 countries amounted to slightly more than 1 billion metric tons. Given that total annual global carbon dioxide emissions grew by more than 10 billion metric tons 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 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels, the current international target for preventing the worst impacts of climate change. As countries focus on implementing the Paris Agreement, decoupling presents one option to address global climate challenges while preserving economic security.

Comments

I would like to know if carbon or GHG emissions due to transportation are included in these figures.

Wonderful information, highly inspiring. It set example to other countries who are slow on COP 21 recommendations.

I'm not sure what "decoupled" means. If it means anything, it means that the "national average energy intensity" is improving at a faster rate than hitherto. The long term average decline in NAEI has been about 1% for OECD countries. That rate has now increased with a more overt interest in energy conservation, increased use of renewables and transfer of energy intensive industry to China while maintaining currency value while selling services. The article makes it seem that we are all going to obtain goods and services without energy input when the curve intersects the time axis. This will occur with 100% sustainable energy.

Do these figures include the carbon that developed nations have 'outsourced' to developing nations? Carbon accounting should be done on a consumption-based methodology (the carbon required for our consumption, including imported goods) otherwise decoupling can appear to be achieved when really whats been happening is 'recoupling' the emissions overseas.

On consumption-based accounting, see this article: http://www.pnas.org/content/112/20/6271.abstract

Displaced emissions? I assume from the caveat in the final paragraph on shifting industries overseas that these statistics come from PRODUCTION-based accounts (i.e. they stop at national borders, not accounting for the emissions of imports). By not accounting for leakage, this creates a false sense of achievement and misinforms the public and policymakers. In fact countries dont just shift their industries, they shift the climate costs of these industries to poorer countries to pick up the slack.

A CONSUMPTION-based approach is likely to show much less optimistic numbers: i.e. adding all emissions related to the production of goods and services that are imported into a country, and substracting the emissions that are exported. Finally, I assume the growing airline industry is not included (as this is exempt from major climate agreements).

Please respond with clarity on how these aspects were addressed.

Thanks for this interesting analysis! It would be interesting to know if one could exclude that these CO2 emission reductions were due to a shift of emission intensive industries to other countries.

These decouplings are local (or from a production perspective), you can use different perspectives by example one of production and one of consumption, both can be used and are relevant but if you use a production perspective and clam decoupling while you just import more products (export the emissions) your not thinking correctly in my humble opinion. It's not the solution to any problem. Still of course its god to love emissions from production. My perspective is the Swedish one, emissions have increased if you look at the consumption perspective.

Good piece. The decoupling by developed economies is clear. You have, though, shorted Sweden's case. Since 2000 carbon emissions have been reduced about 24% – and this is "on top" of the 40% reductions between 1970 (their peak emission year) and 1990. Sweden's robust welfare economy has been decoupling for 45 years, adding a carbon tax in 1991.

Would it be possible to see a European gdp and emissions chart?

Many countries import carbon-intensive goods, and thus benefit for carbon emissions that do not count against them in such territorial-based estimates.

This analysis "The Roads to Decoupling: 21 Countries Are Reducing Carbon Emissions While Growing GDP" seems like good news. However, when you look at some of the most seemingly aggressive reductions (example Denmark at 30% over 15 years), this is an annual reduction of only 1.76%. This is far from what is needed to achieve the collective goal of less than 2 degree warming.

I'm impressed, I have to admit. Seldom do I encounter a blog that's equally educative and engaging, and without a doubt, you have hit the nail on the head. The issue is something which not enough folks are speaking intelligently about. I'm very happy I stumbled across this during my search for something regarding this.

Why isn't Italy on this list? It should be, it has definitely grown in real terms since year 2000 and its emissions have gone down.

That some countries have stopped dirty production and import goods from countries that have taken on that dirty production is nothing to be pleased about. We live on one planet.

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