Economic Growth and Carbon Emissions

Economic Growth and Carbon Emissions: The Road to “Hothouse Earth” is Paved with Good Intentions

Schröder, E. (TU Delft Economics of Technology and Innovation)
Storm, S.T.H. (TU Delft Economics of Technology and Innovation)

2020

De-carbonization to restrict future global warming to 1.5 °C is technically feasible but may impose a “limit” or “planetary boundary” to economic growth, depending on whether or not human society can decouple growth from emissions. In this paper, we assess the viability of decoupling. First, we develop a prognosis of climate-constrained global growth for 2014–2050 using the transparent Kaya identity. Second, we use the Carbon-Kuznets-Curve framework to assess the effect of economic growth on emissions using measures of territorial and consumption-based emissions. We run fixed-effects regressions using OECD data for 58 countries during 2007–2015 and source alternative emissions data starting in 1992 from two other databases. While there is weak evidence suggesting a decoupling of emissions and growth at high-income levels, the main estimation sample indicates that emissions are monotonically increasing with per-capita GDP. We draw out the implications for climate policy and binding emission reduction obligations.

Carbon-Kuznets-Curve
climate change
consumption-based CO emissions
decoupling
economic growth
F64
Paris agreement
Q54
Q55
Q56

http://resolver.tudelft.nl/uuid:d823c67e-e6b8-45b4-9ecc-7608c1d54457

https://doi.org/10.1080/08911916.2020.1778866

International Journal of Political Economy, 49 (2), 153-173

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journal article

© 2020 E. Schröder, S.T.H. Storm