By Ersin Merdan
Decoupling economic activity from CO2 emissions

- The Writer holds an MSc in Eurasian Political Economy & Energy from King’s College London and also an MA in European Studies from Sabanc─▒ University.

Debate has intensified about whether economic growth can drive or even coexist with climate stabilization as countries usher in transitions to a new climate economy. Equally, the issue of whether climate stabilization itself can drive growth has been the focus of discussion circles. Despite the general pessimism about the growth in conventional resources and harmful emissions, recent developments give some cause for optimism:  global greenhouse gas (GHG) emissions stayed flat in 2014, 2015 and 2016 while GDP continued to grow. Many countries around the globe have concerns of losing their competitive edge in industry if they adopt wide-ranging climate action without the same measures being mirrored in other countries’ policies.

In a report written in 2011, the United Nations termed the concept of “decoupling” economic growth from energy consumption as a way of connecting the phenomenon to innovation and in the necessity for forward-thinking economic development policies.  

Years of studies and meetings at various levels with all interested parties have resulted in an almost undisputed consensus by the Intergovernmental Panel on Climate Change that global warming is caused by human activities and its impact can only be reduced with bold measures taken by countries all around the world. The agreement signed back in December 2015 in Paris is the most recent proof of this consensus. This agreement saw 195 countries around the world come to the conclusion that measures need to be taken for climate change to combat the worsening global environmental and climatic conditions.

Because 2015 was recorded as the hottest year since records began back in 1880, countries such as the U.S. and China, the top carbon emitters, back then began to curb their carbon emissions. In comparison with 2014, overall carbon dioxide emissions stemming from fossil fuel combustion, cement production and other processes decreased by 0.1 percent in 2015. China, with a 29 percent share in global total CO2 emissions, and the U.S. with 14 percent of global share, both set an example of effectively diminishing their carbon emissions as high as 2.6 percent and 0.7 percent, respectively in 2015. In the same year, Japan with a 3.5 percent share in global total emissions, saw a 2.2 percent reduction, and Russia decreased its overall CO2 emissions by 3.4 percent.

Even as the global economy grew in 2016, energy-related carbon dioxide emissions were flat globally since 2013, according to the latest statistics by the International Energy Agency, indicating a continuity of decoupling of economic growth from greenhouse gas emissions.

Structural changes in the global economy, the increasing share of renewable energy power generation, major developments in energy efficiency as well as increased volumes of natural gas consumption instead of coal were major reasons that contributed overall to the lowering of CO2 emissions.

The slowdown in global emissions since 2012, which endured for the last four consecutive years, has been due to increasing energy efficiency measures and developments in lowering renewable energy costs as well as global economic structural changes. Meeting the goal of keeping global warming well below the 2C agreed at the COP21 in 2015, however, requires further measures in the implementation of mitigation and adaptation policies. The further expedient deployment of such policies on a large scale is still achievable as long as nationally intended contributions, promised at the Paris Agreement, are met in the years to come.   

Recent developments that have stifled economic growth undermine the fundamental premise for national governments to cut carbon emissions. Some of the studies published in recent years challenge the idea that an increase in energy consumption is a prerequisite for economic growth. A clear example of this has been the Stern Review published in 2006 that set out to examine the economic impacts of climate change on the economy and concluded that ignoring climate change would eventually damage economic growth in the long-term. This study intended to demonstrate that the opposite was already happening. The U.K. is a loud and clear example of this. The British economy grew by 27 percent while cutting emissions by 20 percent between 2000 and 2014, while overall energy consumption dropped within the same period of time.

The fear of losing economic competitiveness has been apparent in many countries. Of particular concern is that if a country takes ambitious climate action, without similar efforts being made by other countries, then any measures taken without global consensus would appear almost negligible. While many countries around the globe have either exempted their energy-intensive industries from emissions reduction or allowed free emission permits, such action is destined to only increase the overall costs of tackling climate change measures in the long-term.

The dichotomy of sustaining economic growth while reducing greenhouse gas emissions is a major concern around the world. As the preservation of global economic growth has been at the top of many countries political agenda, decoupling allows for hope in addressing challenges faced with climate mitigation policies. Therefore, to prevent the worst impact of global warming by limiting average warming by 2 degrees Celsius above the pre-industrial level, decoupling should be scaled up to the extent that economic growth can coexist with climate stabilization.

It is critical for the international community to pursue an effective, efficient and equitable response to climate change because its consequences will be felt on a large scale. Measures already taken at the COP 21 engenders hope in tackling this issue, but unless further measures are taken for mitigation and adaptation, any action could possibly disrupt and risk large-scale economic growth. Tackling climate change should become the pro-growth strategy for the longer term through effective implementation of decoupling policies. And this can be done in a way that does not cap the aspirations for growth.

- Opinions expressed in this piece are the author’s own and do not necessarily reflect Anadolu Agency's editorial policy. 

17 Apr,2017
ANALYST