Green growth now

Summary: Concerned about economic growth, China and India weakened the COP26 Glasgow Climate Pact. Our research suggests decarbonization and growth are independent processes. Delaying one to achieve the other is unnecessary and a wasteful detour.

Nobody in the rich world can blame developing countries for wishing to improve their economic status. We began to industrialize and grow wealthy when we learned to use first coal and then oil to provide us with motive power.  India has been widely blamed for weakening the Glasgow climate agreement. However, its coal use per capita is less than Germany’s, and its oil and gas use are much lower. Sympathetic commentators detect a Northern bias in the negotiation’s exclusive focus on coal, the dirtiest fuel.

Yet, the tremendous environmental costs of fossil fuel combustion are nowhere more apparent than in poor countries, which suffer disproportionately from both air pollution and climate change. When these damages are not reflected in the cost of polluting activities and fuels are subsidized, polluting activities become profitable even if they destroy value and worsen countries. Develop first, clean up later, aptly describes the historical development of rich countries. It is a result of ignorance and the persistent power of special interests. Yet even among experts, there is a widespread belief that emissions first need to rise as countries grow richer before they can go down.

In a recent study, we have analyzed a comprehensive datasets of emissions and economic development covering 73 countries’ carbon emissions and underlying energy and economic variables over 47 years. Our statistical analysis ascertained that economic growth and decarbonization acted independently. If economies relied on fossil fuels, every percent growth raised CO2emissions by a percent. Shifting to cleaner energy, increasing productivity, moving from industry to services, and switching from fuels to electricity contributed to reducing the economy’s carbon intensity.

A dozen countries have reduced carbon emissions over extended periods while maintaining economic growth, including Denmark, New Zealand, and Uruguay. They managed this feat through a combination of energy system transition and structural economic change. It is a recipe that can be applied in any country. It has never been easier. Unsubsidized solar and wind power have become cheaper than fossil power but are still hindered by structural barriers, fossil fuel subsidies, and the power of vested interests.

These developments mean that China and India can directly follow in the footsteps of countries that have reduced carbon emissions while maintaining economic growth. Basing economic development on coal and oil and changing the industrial structure afterward is harmful to the environment, economically wasteful, and politically challenging. It is wiser to change the sequence: Clean up first, and then invest in development. We hope the leaders of China and India recognize as much. Their decisions will shape our planet’s future.

Ranran Wang, Valentina Assenova, Edgar Hertwich (2021) “Energy system decarbonization, and productivity gains reduced the coupling of CO2emissions and economic growth in 73 countries between 1970-2016.” One Earth (Cell Press).