{"id":3500125,"date":"2024-03-06T12:50:53","date_gmt":"2024-03-06T12:50:53","guid":{"rendered":"https:\/\/www.resilience.org\/?p=3500125"},"modified":"2024-03-06T12:50:53","modified_gmt":"2024-03-06T12:50:53","slug":"how-to-decouple-emissions-from-economic-growth-these-economists-say-you-cant","status":"publish","type":"post","link":"https:\/\/www.resilience.org\/stories\/2024-03-06\/how-to-decouple-emissions-from-economic-growth-these-economists-say-you-cant\/","title":{"rendered":"How to \u2018decouple\u2019 emissions from economic growth? These economists say you can\u2019t."},"content":{"rendered":"

“This story was originally published by Grist<\/a>. Sign up for Grist’s weekly newsletter here<\/a>.”<\/em><\/p>\n

For nearly 200 years, two transformative global forces have grown in tandem: economic activity and carbon emissions. The two have long been paired together, or, in economist-speak, \u201ccoupled.\u201d When the economy has gotten bigger, so has our climate footprint.<\/p>\n

This pairing has been disastrous for the planet. Economic growth has helped bring atmospheric CO2 concentrations all the way up to 420 parts per million. The last time they were this high was during the Pliocene epoch 3 million years ago, when global temperatures were 5 degrees Fahrenheit hotter<\/a> and sea levels were 65 feet higher<\/a>.<\/p>\n

Most mainstream economists would say there\u2019s an obvious antidote: decoupling. This refers to a situation where the economy keeps growing, but without the concomitant rise in greenhouse gas emissions. Many economists and international organizations like the World Bank, the United Nations, and the Organization for Economic Cooperation and Development celebrate evidence that decoupling is already occurring in many countries.<\/p>\n

\u201cLet me be clear, economic growth coupled with decarbonization<\/span> is not only realistic, it has already been happening,\u201d said Fatih Birol, executive director of the International Energy Agency, or IEA, in a commentary<\/a> published in 2020.<\/p>\n

It\u2019s an alluring prospect\u00a0\u2014\u00a0that we can reach our climate goals without fundamentally changing the structure of the global economy, just by swapping clean energy in for fossil fuels. But a band of rogue economists has begun poking holes in the prevailing narrative around decoupling. They\u2019re publishing papers showing that the decoupling that\u2019s been observed so far in most cases has been short term, or it\u2019s happened at a pace that\u2019s nowhere near quick enough to reach international climate targets. These heterodox economists call decoupling a \u201cneoliberal fantasy<\/a>.\u201d<\/p>\n

The stakes of this academic debate are high: If decoupling is a mirage, then addressing the climate crisis may require letting go of the pursuit of economic growth altogether and instead embracing a radically different vision of a thriving society. That would involve figuring out \u201chow to design future livelihoods that provide people with a good quality of life,\u201d said Helmut Haberl, a social ecologist at the University of Natural Resources and Life Sciences in Vienna, Austria. Rather than fixating on growth, he argued, \u201cWe should engage more in the question of, \u2018What future do we want to build?\u2019\u201d<\/p>\n

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The basic idea behind decoupling has been ingrained in mainstream environmental thought for decades. The 1987 Brundtland Report<\/a> \u2014 a landmark publication of the United Nations designed to simultaneously address social and environmental problems \u2014 helped establish it through the framework of sustainable development. It argued for \u201cproducing more with less,\u201d using technological advances to continue economic growth while decreasing the release of pollutants and the use of raw materials.<\/p>\n

Decoupling continues to underlie most global climate policies today. The Organization for Economic Cooperation and Development, for example, has spent nearly two decades promoting it under its \u201cgreen growth<\/a>\u201d agenda, urging world leaders to \u201cachieve economic growth and development while at the same time combating climate change and preventing costly environmental degradation.\u201d Decoupling is also baked into the IEA\u2019s influential Net Zero Emissions by 2050 policy roadmap,<\/a> which assumes that full decarbonization can take place alongside a doubling of the global economy by 2050.<\/p>\n

That economic growth should continue is simply assumed by virtually every international institution and government. Policymakers connect growth with more jobs and better living standards, and use it as the primary measure of societal well-being. They also point to growth as a way to keep pace with the rising energy demands and economic needs of a growing global population.<\/p>\n

\u201cThe prospects for reversing inequality in all countries will be far greater when the overall economy is growing,\u201d writes<\/a> Robert Pollin, an economics professor at the University of Massachusetts Amherst.<\/p>\n

The good news is that at least some decoupling has been happening on a global scale for decades. Greenhouse gas emissions have continued to rise<\/a>, but not quite as fast as gross domestic product, or GDP \u2014\u00a0the value of all goods and services produced in a given area. This type of decoupling is described as \u201crelative\u201d or \u201cweak.\u201d As the IEA has noted, the tight link between climate pollution and economic activity \u201chas loosened\u201d in every region of the world<\/a> except for parts of Southeast Asia and the Middle East.<\/p>\n

But the kind of decoupling needed to achieve international climate targets is called \u201cabsolute\u201d decoupling, when economic growth and greenhouse gas emissions veer in opposite directions: GDP up, emissions down. More recent research has documented this in a number of high-income countries. The U.S., for example, saw a 32 percent increase<\/a> in GDP between 2005 and 2021, while its overall CO2 emissions fell by about 17 percent.<\/p>\n

Something similar appears to have happened in other developed economies like France, Sweden, and Germany \u2014 even when you account for so-called \u201cconsumption-based\u201d emissions, which include emissions from the production of goods that are imported or exported. In other words, these countries seem to really be reducing climate pollution and not just offshoring it to the developing world. Since 2016, reports from the World Resources Institute<\/a>, the Breakthrough Institute<\/a>, and independent researchers<\/a> have shown more and more countries achieving periods of absolute decoupling, including their consumption-based emissions. Perhaps the splashiest analysis came in 2022, when a Financial Times data columnist reported<\/a> that 70 countries \u2014 one in three worldwide \u2014 had experienced at least five consecutive years of absolute decoupling between 1990 and 2020.<\/p>\n

\u201cGreen growth is already here,\u201d the columnist wrote.<\/p>\n

Some experts have raised questions<\/a> about the data used to make these claims \u2014 GDP, for instance, can be measured in different ways<\/a> that affect decoupling calculations, and country-level emissions data typically excludes major pollution sources like aviation and methane<\/span> leaks from uncapped oil wells. Research led by Haberl \u2014\u00a0the largest literature review to date<\/a> on the empirical evidence for absolute decoupling \u2014\u00a0suggests that only countries experiencing an economic crisis have successfully reduced their emissions, and that evidence for an inverse relationship between GDP and CO2 emissions is \u201cseldom found.\u201d But there\u2019s a general consensus among economists that at least some amount of absolute decoupling has occurred in a handful of countries. In a study published last year in The Lancet Planetary Health<\/a>, even green growth skeptics found evidence of absolute decoupling in 11 of the world\u2019s highest-income countries.<\/p>\n

\u201cEveryone should be cheering about this,\u201d Kate Raworth, a heterodox economist and professor at Amsterdam University of Applied Sciences, told Grist.<\/p>\n

This leads to more nuanced questions, not about whether decoupling is possible \u2014 at least for individual countries<\/a> \u2014 but whether currently observed trends can be extrapolated out to create a climate-safe future for the entire planet. In other words, can decoupling happen fast enough to limit global warming to \u201cwell below\u201d 2 degrees Celsius (3.6 degrees Fahrenheit), the target laid out in the 2015 Paris Agreement?<\/p>\n

One simple way to look at it is to take the rate of emissions reductions achieved in countries that have successfully decoupled, and see how long it would take for them to fully decarbonize. That\u2019s essentially what Jefim Vogel and Jason Hickel \u2014 researchers at the University of Leeds and the Autonomous University of Barcelona, respectively \u2014 did in the Lancet Planetary Health study. They found that, if 11 high-income countries continued their achieved rates of emissions reduction, it would take them more than 220 years to cut emissions by 95 percent \u2014\u00a0far longer than the net-zero-by-2050 timeline called for by climate experts.<\/p>\n

\u201cThe decoupling rates achieved in high-income countries are inadequate for meeting the climate and equity commitments of the Paris Agreement and cannot legitimately be considered green,\u201d the authors wrote. In an interview with Grist, Vogel likened optimism around gradual decoupling to saying, \u201cDon\u2019t worry, we\u2019re slowing down,\u201d while the Titanic races toward an iceberg.<\/p>\n

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Some economists argue that just because decoupling at the scale and speed necessary hasn\u2019t happened yet doesn\u2019t mean it can\u2019t. With enough investment in renewable energy and efficient clean technologies, they argue, economic growth can continue without the rise in emissions that has historically accompanied it. As noted by researchers at the University of Oxford and the Mercator Research Institute on Global Commons and Climate Change, carbon-intensive sectors like electricity generation actually contribute relatively little to the world economy<\/a>, compared to high-value but lower-emitting sectors like IT, real estate, and social work.<\/p>\n

According to Pollin, the University of Massachusetts economics professor, faster decoupling is simply a matter of money and political will. If policymakers invest 2.5 percent of global GDP each year, he said \u2014\u00a0about $4.5 trillion \u2014 then the world economy can completely decarbonize within 40 to 50 years, all while boosting GDP through the creation of tens of millions of new jobs in the clean energy industry.<\/p>\n

This plan would likely involve new policies to address renewable energy permitting challenges, boost energy efficiency for appliances and housing, and rein in global methane emissions \u2014\u00a0not to mention the urgent need to curtail the lobbying power of the fossil fuel industry. Economic growth will be a natural byproduct of huge new investments in clean energy infrastructure, according to Pollin, and it will also be essential for creating new jobs for displaced fossil fuel workers and improving living conditions in developing countries. \u201cThere is simply no alternative,\u201d he said.<\/p>\n

Economists like Vogel and Hickel, however, draw a different conclusion. As long as countries pursue economic growth, they don\u2019t believe world leaders will be able to zero out emissions fast enough to comply with international climate goals and principles of climate justice. According to their research, doing so would require, on average, a 10-fold increase in currently observed decoupling rates, which they consider to be \u201cempirically out of reach.\u201d They note that their conclusions are conservative because their data does not take into account emissions from agriculture, forestry, other land use, aviation, and shipping, and their projections assume that countries began adequate climate mitigation in 2023, which does not appear to have happened.<\/p>\n

Other researchers have found that, even under aggressive climate mitigation policies, emissions relative to constant GDP growth can only decrease at a maximum rate of 3 percent per year<\/a>. That\u2019s only about a third of the decoupling rates that some experts say<\/a> would be needed to limit global warming to 1.5 or 2 degrees C (2.7 or 3.6 degrees F).<\/p>\n

\u201cAbsolute decoupling is not sufficient to avoid consuming the remaining CO2 emission budget under the global warming limit of 1.5 degrees C or 2 degrees C and to avoid climate breakdown,\u201d concluded the Intergovernmental Panel on Climate Change in its most recent assessment<\/a>.<\/p>\n

Instead of making growth greener, some economists call for a whole new economic paradigm to address converging social and ecological crises. They call it \u201cpost-growth,\u201d referring to a reorientation away from GDP growth and toward other metrics, like human well-being and ecological sustainability. Essentially, they want to prioritize people and the planet and not care so much what the stock market is doing. This would more or less free countries from the decoupling dilemma, since it eliminates the growth imperative altogether.<\/p>\n

Raworth, the professor at Amsterdam University of Applied Sciences, calls her version of the post-growth agenda \u201cdoughnut economics.\u201d In this visual model, the inner ring of the doughnut represents the minimum amount of economic activity needed to satisfy\u00a0 basic needs like access to food, water, and shelter. The outer ring signifies the upper limits of natural resource use that the Earth can sustain. The goal, she argues, is for economies to exist between the inner and outer rings of the doughnut,\u00a0maintaining adequate living standards without surpassing planetary limits.<\/p>\n

\u201cOur economies need to bring us into the doughnut,\u201d Raworth told Grist. \u201cWhether GDP grows needs to be a secondary concern.\u201d<\/p>\n

Vogel and Hickel go a little further. They call for a planned, deliberate reduction of carbon- or energy-intensive production and consumption in high-income countries, a concept known as \u201cdegrowth.\u201d The rationale is that much of the energy and resources used in high-income countries goes toward carbon-intensive products that don\u2019t contribute to human welfare, like industrial meat and dairy, fast fashion, weapons, and private jets. Tamping down this \u201cless necessary\u201d consumption could slash greenhouse gas emissions, while lower energy demand could make it more feasible to build and maintain enough energy infrastructure. Some research suggests that reducing energy demand could limit global warming to 1.5 degrees C without relying on unproven technologies<\/a> to draw carbon out of the atmosphere.<\/p>\n

Degrowth advocates say that deprioritizing growth could allow countries to redirect their attention to policies that actually boost people\u2019s quality of life<\/a>: shorter working hours, for example, as well as minimum income requirements, guaranteed affordable housing and health care, free internet and electricity, and more widespread public transit.<\/p>\n

\u201cDegrowth is as much oriented toward human well-being and social justice as it is toward preventing ecological crises,\u201d Vogel said.<\/p>\n

Crucially, degrowth advocates mainly promote the concept in high-income countries, which are historically responsible for the vast majority of greenhouse gas emissions. They acknowledge that many developing countries still need to grow their economies in order to raise populations out of poverty. Those existing inequities, they argue, put even more onus on developed countries to shrink polluting industries and cut their consumption, in order to balance out other countries\u2019 necessary growth.<\/p>\n

Several experts told Grist it was a \u201cdistraction\u201d to ask whether decoupling greenhouse gas emissions from economic growth is possible, as this question elides many areas of agreement between green growth and degrowth advocates. Both sides agree that moving off fossil fuels will require a massive buildout of renewable energy infrastructure, and that countries need to urgently improve living standards and reduce inequality.<\/p>\n

\u201cThe goal is to get to zero emissions and climate stabilization\u201d while improving people\u2019s well-being, said Pollin, the University of Massachusetts Amherst professor. \u201cThose are the metrics I care about.\u201d<\/p>\n

They also broadly agree that it\u2019s time to move past GDP as a primary indicator of societal progress. But that\u2019s easier said than done. We are \u201cstructurally dependent\u201d on GDP growth, as Raworth put it. Publicly traded companies, for example, prioritize growth because they\u2019re legally obligated to act in the best interest of shareholders. Commercial banks fuel growth by issuing interest-bearing loans, and national governments face pressure to grow the economy in order to reduce the burden of public and private debt.<\/p>\n

Making any meaningful shift away from focusing on GDP would require dismantling these structural dependencies. \u201cIt\u2019s massively challenging, there\u2019s no doubt about that,\u201d Vogel told Grist. \u201cBut I think they\u2019re necessary changes \u2026 if we want to avert a real risk of catastrophic environmental changes and tackle long-standing social issues.\u201d<\/p>\n

This article has been updated to better reflect Vogel and Hickel\u2019s definition of degrowth, and to clarify their position that countries can\u2019t pursue economic growth and decarbonize fast enough to comply with international climate targets and principles of climate justice.<\/em><\/p>\n