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The big climate question: Can we sever the link between CO2 and economic growth?

Metalworkers work at a steel factory of Shenyang Heavy Machinery Group Ltd. Co. on May 18, 2009 in Shenyang of Liaoning Province, China.
Metalworkers work at a steel factory of Shenyang Heavy Machinery Group Ltd. Co. on May 18, 2009 in Shenyang of Liaoning Province, China.
(ChinaFotoPress/Getty Images)

Historically, there's been a tight relationship between economic growth and the carbon dioxide emissions driving climate change. As the world's economy expands, we've built more power plants and factories and driven more cars and trucks. That's long meant burning more coal, gas, and oil.

If we ever hope to stop global warming, we'll have to sever that relationship — and figure out how to have economic growth while reducing emissions. (Alternatively, we could halt economic growth, but no one wants that.)

That's why a preliminary announcement last week by the International Energy Agency raised so many eyebrows. The agency reported that in 2014, the world's economy grew 3 percent. Yet CO2 emissions from energy sources actually stayed flat, compared with the previous year. It's the first time that has happened in over 40 years of record-keeping:

Why is this a big deal? As the chart above shows, global CO2 emissions from energy have gone up inexorably every year since 1984, with just three exceptions.

Two of these downturns were due to severe economic crises: the collapse of the Soviet Union in 1991, and the worldwide financial meltdown in 2008. But last year's stagnation was different. According to the IEA, the global economy expanded while energy emissions appeared to stay flat. Most surprisingly, China, the world's largest emitter, saw its economy grow by 7 percent while energy-related emissions apparently declined by 1 percent.

We'll have to see whether the IEA's numbers hold up: China's emissions data, after all, is notoriously unreliable. And even if true, China's drop in emissions last year may have just been a temporary one-year blip driven by an unusually good year for the country's hydropower dams, which generate carbon-free electricity but can fluctuate from year to year. For this to be significant, we'd want to see a prolonged trend. (Many analysts still expect China's CO2 emissions to grow through 2030.)

What's more, it's not enough for annual global emissions to stay flat each year. To avoid drastic climate change, emissions need to start falling, and fast. To do that while still maintaining economic growth, countries will have to decarbonize at a much, much faster rate than they've ever done historically. We're still very far from that point — and we don't yet know if it's feasible. Here's a rundown of the challenge:

The US is already cutting the link between CO2 and growth

Let's start with the good news: Wealthier countries, such as the US and Europe, have indeed begun severing the link between economic growth and carbon dioxide emissions. That shows it's at least possible.

The United States is a great example. Between 2008 and 2013, the US economy grew 9 percent (in real terms). But carbon-dioxide emissions from energy fell by 7.7 percent over that span:

(Energy Information Administration)

Part of the story was that the United States has been shifting toward cleaner energy sources. The fracking boom has produced a glut of cheap natural gas that has displaced coal in the power sector. Natural gas produces about half the CO2 that coal does for the same amount of electricity generated. Cleaner sources like wind and solar have also been making steady inroads.

On top of that, the US economy has been getting steadily more energy-efficient over time. Cars and trucks, for instance, can increasingly travel more miles on a single gallon of gasoline.

This all helps reduce the "carbon intensity" of the economy — the US is emitting less and less CO2 to generate a given amount of economic activity. Carbon intensity in the United States fell roughly 2.4 percent each year between 2008 and 2013. That helped drive the fall in overall emissions.

But China faces a much steeper uphill climb

Still, if we're worried about global warming, it's not enough to simply look at carbon emissions from the United States or Europe. We need to focus on everyone's emissions. And China's have been increasing rapidly over time:

Annex B vs Non Annex B

(Global Carbon Project)

To be fair, China is also making efforts to clean up. The country has been replacing aging power plants with newer ones, imposing efficiency standards on industry, and promoting cleaner sources like wind, hydro, and solar.

Add it all up, and China's carbon intensity fell by about 1.6 percent each year between 2008 and 2013. That's pretty comparable to the US rate. It's just that China was growing so much more rapidly — about 8.9 percent per year, versus just 1 percent per year for the US — and coal still makes up such a vast portion of its power sector. So, unlike in the US, China's overall emissions have been soaring for years.

That rise appears to have come to a temporary halt in 2014, according to the IEA. One reason? China's hydropower dams had an unusually productive year, as Armond Cohen of the Clean Air Task Force notes. But few people expect that halt to last. China's national government currently expects that the nation's emissions to keep rising until 2030 or so, as the country continues to grow rapidly.

For China's emissions to peak and start declining, carbon intensity would have to fall much, much, much faster than it currently is. The same goes for every country around the world. The question is: How much faster?

Carbon intensity has to fall 6% each year if we want to stop global warming. We're only at 1%.

So let's go back to this year's news from the International Energy Agency. Energy-related emissions stayed flat between 2013 and 2014, even though the global economy grew. That's certainly a big deal.

But looked at another way, it's not nearly enough. If global emissions simply stopped growing and stayed at their current levels indefinitely, CO2 would still continue to accumulate in the atmosphere and the world would warm rapidly. In order to avoid drastic warming — say, 2°C or more — global emissions need to decline sharply and fall to zero sometime this century:

failing at two-degree goal

(Global Carbon Project)

For that to happen, carbon intensity will have to fall much, much faster around the world than it currently is.

recent analysis by PriceWaterhouseCoopers provided some numbers on this: Since 2000, global carbon intensity has dropped by about 1 percent per year. But if we want to avoid more than 2°C of global warming, global carbon intensity has to drop by about 6 percent per year:

PWC 2 degrees (PriceWaterhouseCoopers)


In other words, the entire world would have to decarbonize about three times as rapidly as the United States is currently doing if we wanted to cut emissions and maintain our current pace of economic growth. And we'd have to do that pretty much indefinitely.

The closest any country has come in the past decade to achieving that pace has been Australia, which saw carbon intensity decline 4.6 percent between 2008 and 2013, thanks in part to a big drop in electricity use and a boost in hydropower. (During part of this period, Australia had a carbon tax — which the country has since repealed.)

country list decarbonization


Going further back in time, France saw carbon intensity fall roughly 5.7 percent per year back when it was massively ramping up nuclear energy between 1980 and 1985. By and large, these rates of decarbonization tend to be fairly rare. For the entire world to maintain this pace, the fraction of carbon-free energy the world uses would have to increase by staggering amounts this century.

Long story short: It's welcome news that emissions stayed flat in 2014, even as the economy grew. If that trend could be sustained for a few years — and doesn't just turn out to be a one-year blip driven by China's hydropower surge — it'd be even better news. But we're still a long, long way off from reducing carbon intensity quickly enough to let us sever the link between CO2 emissions and economic growth.

Further reading

-- Here's a previous post on the global drop in carbon intensity between 2008 and 2013. And here's a piece by Jesse Jenkins that looks even further back, to the 1970s. Sweden saw carbon intensity drop 6 percent per year between 1979 and 1989, but hasn't maintained that pace since.

-- Here's what the world would look like if we took global warming seriously

-- A closer look at the unreliability of China's emissions numbers

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