There is a common intuition that says we can have a healthy climate, or a growing economy, but not both.
Economic activity, as long as it is fueled by fossil fuels – which still provides about 80 percent world energy – creating greenhouse gas emissions. So it seems to follow that if we want to emit fewer greenhouse gases, we have to make some sacrifices economic growth, though raising average income levels is a key part of reducing poverty.
This creates a terrible dilemma, because fighting climate change and fighting poverty are very important goals. As developing countries explained at the COP27 climate summit that took place in Egypt, We really don’t want to change any of it.
Fortunately, we may not have to.
The proof comes from more than 30 countries who have achieved what is known as “absolute decoupling.” That means they already know how to reduce carbon emissions while continuing to grow economically, so those goals are not compatible. Note that this is not just a per capita measure; We are talking about total emissions and total economy here.
More in Our world is in DataResearcher Max Roser created a great chart showing 25 countries that have pulled off this feat in the past few decades.
When you see that, you might think: What about the fact that many countries are moving their carbon-intensive industries to other countries, which are often poorer, and then importing their goods? Of course, this chart does not capture everything that is outsourced production on account!
In fact, it is. Shown in the chart are consumption-based emissions, meaning emissions caused by goods produced outside the country but consumed within it.
The obvious question here is: How can these countries decarbonize as much as they do without lowering economic growth?
Many factors have made this possible, including technological advances on cheaper fuels and new regulations on air pollution, which have allowed countries to reduce the greenhouse gas intensity of their economies – The amount of carbon embedded in every economic buck. Another key part of the picture is putting a price on carbon, so those who cause emissions have to pay. Carbon pricing is based on a simple idea – if the price of a product goes up, consumption goes down – and it turns out to be very effective in countries like Sweden, Germany, and England.
The countries in the chart show that there should be no tradeoff between reducing emissions and improving the economy, because many economists and laymen once considered. And it’s not just that emissions reduction policies aren’t fundamentally hostile to the economy. In fact, this policy can actually increase economic growth in the coming decades. Investing in climate change mitigation now means we have to spend less in the future – to rebuild after fires and floods, to deal with premature deaths and lost productivity caused by them, and more.
That means, as Roser puts it in Our World in Data, “Fighting climate change is not only compatible with fighting poverty, the two goals – to reduce emissions and increase economic growth – are actually the same. strengthen each other.”
Or at least, they can, with the right policies.
How far can decoupling go? What is the limit given to the energy needs of poor countries?
Even if we know that decoupling is possible, the big question remains: Will it be enough to reduce emissions fast enough — meaning, fast enough to prevent a climate emergency? After all, while some relatively wealthy countries decoupling, other countries increasing their emissions.
In particular, most of the carbon emissions in the coming decade will come from emerging economies – such as India or China – which will have increasing energy needs as they become middle-income countries. You don’t see those countries in the chart above, and you may ask whether it is possible for them to achieve decoupling anytime soon if they want to improve the standard of living for their population. (Despite the large size of the economy, China’s GDP per capita is about $21,000 – less than one-third that of the US – while India’s is only about $8,000..)
But there is some room for optimism here as well.
Let’s look at India. According to research from the World Resources Institute, India does not have to choose between climate action and its economy. By putting the right policies in place – for example, phasing in the carbon tax – it could reduce projected emissions by a third. and achieve a GDP that is 1.5 percent higher than business-as-usual by 2050. Along the way it will also create 40 million new jobs and prevent 9.4 million premature deaths, as reducing the use of fossil fuels will lead to a drop in harmful air. pollutant.
This will not happen overnight. There are some short-term costs associated with moving away from fossil fuels and building clean energy technologies. But it is an investment worth making, as it will soon result in net savings for the country. In fact, the researchers’ analysis found that the savings from avoiding the use of fossil fuels will outweigh the costs of clean technologies in this decade. By 2050, India could see net savings of $965 billion!
India’s clean energy transformation is underway. Some experts say that the low-carbon development path it has created for itself can serve as a blueprint for other developing economies.
Meanwhile, in China, emissions are expected to peak before 2030, thanks to gigantic build-out of clean energy There. The country is rapidly adopting wind and solar power and embracing electric vehicles.
“China is probably going to be a big middle-income country that’s really decoupled — in the next five or six years, hopefully,” Zeke Hausfather, leader of climate research at Stripe and a research scientist at Berkeley Earth, told me.
Some developing countries – say, in sub-Saharan Africa – will probably have to continue to rely on fossil fuels for certain sectors of their economy in the next few decades. But there is promise too. As a climate and energy expert from the Breakthrough Institute notes on Foreign Policy:
Africa, where the majority of the world’s population growth will occur in the rest of this century, has abundant natural gas and hydropower resources. It could allow Africa to ditch coal, the most carbon-intensive fossil fuel, despite using oil and gas in key sectors of the economy.
All this explains why, for the first time, the International Energy Agency recently announced that it expects total fossil fuel use to peak and then decline around 2027. That’s only five years away. In the annual World Energy Review, it emphasizes how important this is: “Global fossil fuel consumption has increased with GDP since the beginning of the industrial revolution in the 18th century: putting this increase in reverse while continuing to expand the global economy. pivotal moment in the history of energy.
Likewise, Hausfather says that although we currently have some examples of decoupling among low- or middle-income countries (which tend to focus more on energy-intensive manufacturing), it will only be a matter of time before decoupling becomes the norm in the world.
But how much time? Will that moment be too soon to prevent dangerously high levels of warming?
There is no preordained answer.
“It depends on how quickly we make it [clean energy] cheap technology, “Hausfather told me. “And political will is certainly very important, both in terms of making the technology cheap – it’s government investment that scales these things – and in speeding up the transition and pushing back against the interests that can slow it down.”
Do we really need to grow the economy? Can we fix global poverty by tackling inequality?
It goes without saying that billions of people living in the world’s poorest countries deserve a shot out of poverty. They deserve to see their income increase to a decent level, so they can access things like medicine, childcare, and education.
yip rose explained, there are two ways to increase people’s income:
average income can increase over time, which is called economic growth
and inequality can decrease so that the poor approach the average income in the country
When considering which country’s path to isolation, it makes sense to look at both of these.
In rich countries like the US, where the size of the economic pie is large, much can be achieved by simply slicing more of the same. Whether these countries should also continue to treat economic growth as a policy priority – or whether they should slow down, stop, or even shrink their economies – is the question at the heart of the fire. “degrowth” debate.
Whatever you think about that question, it’s important to be aware of it that’s a completely separate question of what the poor countries of the world should do. The important thing to understand here is that for low-income countries, tackling inequality alone will not be enough to tackle poverty. In countries like Madagascar, say, or Zambia, the economic pie is so small that it is not enough to meet everyone’s needs, no matter how equally you slice it.
One way to solve this would be to redistribute income from richer countries to poorer countries. Directly transferring money to poor countries is a good thing, and there is enabling organization for us, as individuals, to do that effectively.
But large-scale global redistribution seems, unfortunately, very unlikely to happen anytime soon. After all, data shows that most wealthy countries are not even willing to spend 0.7 percent of GDP on aid. So we don’t have to hold our breath for them to agree to give up a bigger share of their wealth. And while climate reparations to developing countries are a major topic at the COP27 climate summit, the topic is carefully avoided by some richer countries like the US, which have even failed to fulfill previous climate finance promises.
There is no other way, then: The poorest countries must grow economically. And it’s really unfair for the richest countries – which got the world into the climate crisis to begin with – to expect the poorest countries to abandon that growth.
So, the hope is not that the poorest countries will not grow. Hope they will grow and keep emissions down, and that before long they will feature in a new chart showing all the countries that have achieved decoupling.