Global Emissions Fall Despite Economic Growth

Air Pollution

By Jonny Wakefield

March 19, 2015

A new study from the International Energy Agency is challenging the conventional wisdom that decarbonizing the economy kills growth.

The agency’s latest report documents the first time in 40 years that a growing economy has not been accompanied by growing emissions of carbon dioxide. 

The report’s findings suggest that carbon reduction schemes are “having a more pronounced effect on emissions than had previously been thought”. In 2014, total carbon dioxide emissions sat at 32.3 billion tonnes—the same as the year before. In spite of that, the global economy grew around 3 per cent.

Declines in total carbon emissions have typically been accompanied by economic contractions. That was the case in the early 1980s, 1992 and 2009, after global economic shocks. Not so in 2014.

This time, it appears steps to curb greenhouse gas emissions by OECD countries and China might be working. In the US and some European Union countries, efforts to improve energy efficiency are also bearing fruit.

China has moved aggressively to curb its use of coal, mostly due to concerns around air pollution, and recently became the world’s largest installer of wind and solar power. The country has also slowed production of cement and steel—processes that are both coal intensive. China’s economy grew 7.4 per cent, while its carbon emissions fell 1 per cent.

Slowdowns in Chinese steel manufacturing have had ripple effects in British Columbia, where a number of mines that produce steel-making coal have closed.

The province is another example of an economy that reduced carbon emissions without sacrificing growth. The carbon tax, which took effect in 2008, wasn’t the job killer many expected. Fuel consumption in the province fell by more than 17 per cent between 2008 and 2013—while the GDP continued to grow along with the rest of Canada.

The IEA report bodes well for the next round of UN climate talks.

“There could not be better news for Paris,” IEA economist Fatih Birol told an Australian business journal. “It provides much-needed momentum to negotiators preparing to forge a global climate deal in Paris this December: for the first time, greenhouse gas emissions are decoupling from economic growth.”