Increased use of low-carbon energy sources instead of fossil energy sources is making it easier for countries to decouple economic growth from greenhouse gas emissions, according to a new report. (photo: Mick Tsikas/Reuters)
26 September 15
New report from green think tank Heinrich Boll shows OECD countries grew their economies 16% in last decade – and cut greenhouse gas emissions 6.4%
s the world works out how to avoid catastrophic climate change, one of the biggest questions remaining is whether we can continue to grow economically without also increasing greenhouse gas emissions.
New research released this week at Climate Week NYC offers more hope that the answer might be yes. Prepared for green thinktank Heinrich Böll by DIW Econ, a German institute for economic research, the study found that, as a whole, countries that belong to the Organization for Economic Cooperation and Development (OECD) have already decoupled their economic growth from emissions.
From 2004 to 2014, OECD countries grew their economies by 16% all together, while cutting fossil fuel consumption by 6% and reducing greenhouse gas emissions by 6.4%, according to the report. The findings echo the results of an International Energy Association study earlier this year, which found that global emissions remained flat in 2014 while global GDP rose, marking a historical milestone.
Four major factors have contributed to this decoupling, according to the Heinrich Böll study: increased use of low-carbon energy sources instead of fossil energy sources; increased efficiency in energy generation; increased energy efficiency on the consumer side; and a move away from energy-intensive manufacturing towards less energy-intensive service sector work.
The biggest driver has been the reduced cost of renewable energy, particularly solar power, says Bastian Hermisson, executive director of the Heinrich Böll Foundation’s North America office.
“Renewables are the only source of energy that is continually getting cheaper,” Hermisson says. “In many parts of the world, solar and wind power have become cost competitive with coal. Renewables are, increasingly, offering the best return for your money, in terms of new investments.”
In Germany, for example, which has been a world leader in renewable energy policy, renewable energy costs have dropped 74% since 2006. Since 2004, Germany’s GDP has grown by 13% and its emissions have dropped by 11%. Conventional energy usage, including nuclear power, has dropped by 15% over the same period, while renewable energy usage has grown by 185%, and now represents 12% of the country’s total energy consumption.
In the US, GDP grew 17% between 2004 and 2007, while energy consumption dropped 2%; conventional energy usage dropped 4% and emissions related to fossil fuel combustion dropped 7.4%.
But the question of whether the world can continue to decouple economic growth and emissions depends largely on developing countries, which have taken on an increasing share of manufacturing. For the most part, developing countries’ economies are more dependent on fossil fuels, and they are growing to make up an increasing proportion of the total world economy.
Here, again, the Heinrich Böll study offers a glimmer of hope: it found that China, a major manufacturing economy, has also used renewables to begin decoupling its economy and emissions. The report stated that a stronger decoupling “seems possible in the near future”.
In 2004, China accounted for 9% of world GDP and 13% of energy consumption. Ten years later, those numbers had risen to 16% of GDP and 23% of energy consumption. This growth was, to a great extent, fueled by coal: in the same 10 years, China’s coal consumption grew by 74%.
But in the last two years, a major shift has occurred, according to the report: China has increased its use of renewables by 27%, and its use of natural gas by 22%, while its coal usage has remained flat. In other words, China’s rapid industrial growth, which previously depended mainly on fossil fuels, now appears to be taking a more renewable path.
This contrasts starkly with the energy picture in India, which is developing rapidly with a focus on coal. Since 2004, India’s coal consumption has more than doubled to account for over 57% of the country’s energy generation, according to the study. This has steeply raised emissions and has more than canceled out the benefits of its renewable energy growth.
Hermisson emphasizes the importance of helping developing countries to move toward more sustainable models. “If we do not find a way to combine sustainability with the developmental ambitions of billions of people in the world, the future looks bleak,” he says.
The secret may lie in exporting energy efficiency, along with manufacturing.
“The goal is to make sure that, when heavy manufacturing moves to developing countries, the old way of doing things doesn’t follow it,” Hermisson says. “We don’t want to repeat the developmental model of the OECD countries.”