Economic Growth and Emissions Cuts Can Go Together
- March 12, 2018
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There is often said to be a trade-off between growth and decarbonisation, but the evidence shows that advanced economies can combine large emissions cuts with continuing economic growth.
Policy on greenhouse gas emissions reductions is often framed as a trade-off between greater emissions reductions and greater economic growth. However, while emissions clearly can’t be reduced to zero immediately, faster emissions reductions can be accompanied by robust economic performance. The clearest example of this is the UK. Since 1990 the UK has cut its total greenhouse gas emissions much more rapidly than other G7 countries, while growing its economic output per capita more than the average. This is illustrated in Chart 1.
Chart 1: UK per capita GDP growth and greenhouse gas emissions compared with the G7 average[i]
The extent by which the UK has cut its per capita emissions relative to other countries is emphasised in the following charts, which show that the UK has achieved by far the largest reductions in per capita CO2 emissions.
Chart 2: CO2 emissions per capita in 2016 and 1990 for G7 countries[ii]
Note: Japanese emissions rose by 0.4 tonnes per capita over the period (not shown)
Chart 3: Change in per capita and total CO2 emissions 1990 to 2016 for G7 countries
Note: Data in these charts is for CO2 only, excluding other greenhouse gases.
Of course, some of the relative changes reflect circumstances. The UK started with relatively high emissions, including extensive use of coal in power generation. In contrast, France already had a low carbon power sector in 1990, and in 2016 France’s per capita emissions remained about 8% below those of the UK, even though UK emissions had fallen much more from their 1990 levels.
Germany has also achieved significant reductions, having benefitted from reductions in emissions in the former East Germany and installing large amounts of renewables. However it has been hampered by continuing extensive use of coal and lignite for power generation. The USA has accommodated significant population growth with only a small rise in emissions, but this is clearly nowhere near enough if it is to make an appropriate contribution to global reductions. Emissions remain at almost three times UK levels. Canadian emissions are also high and have increased in absolute terms. Japan’s emissions have grown slightly over the period.
Some falls in emissions in G7 economies may reflect a shift in the global pattern of emissions, with reduced emissions from industry in the G7 economies balanced by increases in China and elsewhere. However this can’t account for all of the reductions that have been achieved, or the vast differences in reductions between countries.
Policy has certainly also played its part. UK policy has successfully targeted relatively low cost emissions reduction, notably reducing coal use in the power sector. Above all the Climate Change Act (2008) has provided a consistent and rigorous policy framework.
And whatever the reason, one thing is clear. Cutting emissions more can accompany growing the economy more.