Decoupling of Economic Growth and Rising Emissions

Not so long ago, economic growth was synonymous¬† with rising emissions, but recent statistics show a “decoupling” of the two. And the fast growing economies of Asia are chugging along. Carbon dioxide emissions per unit of gross domestic product, calculated in purchasing power parity, have dropped by 26% in China from the year 2000, 23% in South Korea and 18% in India.

Looking across Asia (excluding China), average CO2 emission per unit of GDP was 0.23 kg in 2015, down 18% from 2000. The trajectory was similar to the global average, which dropped 18% during the same period to 0.31 kg.

According to the International Energy Agency, global CO2 emissions have stayed flat for the three years leading to 2016 while the economy grew by roughly 3% in each of those years. In 2015, the amount of CO2 emitted to produce $10,000 of global GDP was 3.1 tons. In 2000 it took 3.8 tons. The amount of CO2 emissions from burnt fuel totaled 32.1 billion tons in 2016, down 0.6% from a year earlier.

Behind the decoupling are three trends. Companies actively switching to more renewable energy, those renewable energies spreading to developing nations and the world’s largest emitters, namely China and the U.S., turning away from greenhouse gas emitting sources of power.

Apple, Microsoft and General Motors have joined RE100, an initiative of over 110 companies around the world, that aims for an eventual transition to 100% renewable energy.

In Asia, China’s Broad Group and Elion, India’s Dalmia Cement and Tata Motors, as well as Japan’s Ricoh and Sekisui House have joined the RE100.

China, the world’s biggest CO2 emitter, is turning from coal power to solar, and considering closing hundreds of coal thermal generators.

The proportion of coal in China’s energy mix will decrease from 73% in 2014 to 51% in 2030 and to 43% in 2040.

In the U.S., the world’s second-largest CO2 emitter, the shale revolution is prompting a shift away from coal power plants.

In India, on track to be the world’s most populous country and tasked to provide electricity to those who remain without it, solar power is considered to be the energy source of the future. Installed capacity of solar power generation is projected to rise to 29 gigawatts in 2020 and 188 gigawatts in 2040, making it the second largest solar power country in the world after China.

The cost of renewable energy is declining. According to research by Bloomberg New Energy Finance, in the U.S., Germany, Italy, Spain and Australia, the cost of generating solar power is now on a par with that of coal-fired power plants.

Growing investments in energy-saving technology are also helping. According to the IEA, global investments in such technology grew 9% to $231 billion in 2016 from a year earlier. The number of heat pumps and electric vehicles increased 28% and 38%, respectively.

Furthermore, energy conserving equipment developed in advanced economies are now spreading to emerging countries so the Decoupling.