Turns Out Economic Growth Doesn’t Mean Destroying the Planet

The world seems to have found a way to keep growing every year without further destroying the environment, potentially sundering the link between growth and pollution that has been a grim reality since the Industrial Revolution.

For the second straight year, global economic growth rose while carbon dioxide emissions from the energy sector remained flat, according to a new study by the International Energy Agency in Paris. In 2015, global GDP growth was about 3 percent, yet energy-related emissions stayed virtually flat and haven’t really budged since 2013.

It is especially noteworthy because in the past, the only time energy-sector greenhouse gas emissions went down was during big economic recessions, such as in the early 1980s and 1990s and the global financial meltdown in 2009. Continued growth and flat emissions suggest “further evidence that the link between economic growth and emissions growth is weakening,” the IEA said.

The apparent progress in reducing energy-related emissions while maintaining healthy growth rates could have significant political repercussions in the U.S., where leading Republican lawmakers and presidential candidates routinely argue that taking action on climate change will poleax the economy.

Donald Trump, the front-runner for the GOP presidential nomination, thinks climate change is a Chinese hoax to steal jobs and has vowed to gut the Environmental Protection Agency if elected. Sen. Ted Cruz of Texas is a die-hard opponent of the Obama administration’s plan to phase down coal power in the country’s electricity system and has vowed to “end the war on affordable energy.”

The IEA’s study also raises hopes that China can manage to combine steady economic growth without the accompanying tsunami of pollutants that has turned it into the world’s biggest contributor to climate change. Some researchers believe that China’s greenhouse-gas emissions are close to flattening out and could actually fall, thanks to tough environmental rules and the economic rebalancing.

The IEA says there are are several reasons for the unusual burst of good environmental news. Cleaner-burning natural gas is pushing dirty coal out of the power system in a lot of countries, especially the United States. This year will probably be the first time that natural gas fuels more electricity generation than coal in the United States.

Renewable energy sources like wind farms and solar panels, meanwhile, are getting cheaper and growing by leaps and bounds around the world. The IEA noted that 90 percent of new electricity-generation capacity installed last year came from renewable sources, not from coal- and gas-fired plants as in the past.

And China is both clamping down on dirty fuels like coal and rejigging its economic model away from heavy industry and more toward services. China posted an official growth rate of 6.9 percent last year, yet saw energy-sector emissions fall by 1.5 percent. That is a dramatic change for China, whose nearly four-decade economic explosion featured double-digit growth rates and double-digit increases in emissions.

“The fact that emissions have actually stalled and may even decline, even as the economy continues to grow, is a very exciting trend,” said Jason Bordoff, a former energy and climate advisor to the Obama administration and the founding director of Columbia University’s Center on Global Energy Policy.

He linked the progress to a steady, decades-long improvement in energy intensity in the world’s economies, meaning it takes less energy every year to produce a dollar’s worth of economic output. Indeed, energy intensity in recent years is declining much faster than in the two previous decades, according to the World Bank, fruit of efficiency gains in manufacturing, transportation, and power generation.

To be sure, the energy sector is the biggest single source of man-made emissions that are driving climate change, but it isn’t the only one. Emissions from other sectors, such as deforestation, continue regardless of how many wind farms are built. And carbon dioxide isn’t the only greenhouse gas. Emissions of methane are still a growing problem, especially with the boom in natural gas production. Other industrial gases known as hydrofluorocarbons are potent contributors to global warming, and HFC emissions are still growing by about 7 percent a year, though most countries plan to start phasing them out in 2016. Atmospheric concentrations of CO2 recorded last year the biggest jump in history.

Whether the past two years were a short-term blip or the start of a new normal will be determined by a spate of factors. China’s painful transformation from an investment-driven, export-focused economy toward one that relies more on domestic consumption for growth is already causing social unrest, and will require a delicate balancing act from Chinese leadership to continue.

Cheap and abundant natural gas has been a big contributor to the improvement, but natural gas prices may not stay this cheap for long. If the price of crude oil rebounds sharply in coming years, as plenty of observers including the IEA expect, that will drag up natural gas prices with it, making it less competitive versus coal.

There are also an array of emerging — and in some cases, established — economies that haven’t yet fully divorced growth from emissions. The IEA noted that while the United States and China saw their emissions decline, that progress was offset by rising emissions in Asian emerging economies, the Middle East, and in Europe. India, for example, could nearly double its greenhouse gas emissions in a generation thanks to its ambitious plans for economic development, which are heavy on manufacturing and coal-fired electricity. India is also poised to become the next big consumer of crude oil, and doubts remain as to how much clean-burning natural gas will meet India’s energy needs.

Finally, despite the successful Paris climate summit late last year, the kinds of policies needed to lock in a cleaner-energy future are still under fire in many quarters. The U.S. Supreme Court has dealt a body blow to the Obama administration’s plans to clean up the energy sector by phasing out coal-fired plants, for instance, and many U.S. states are pushing back against those policies and refusing to take steps to clean up their generators. Some European countries are ditching ambitious climate goals and focusing on securing more energy. Even developed economies like Japan are backtracking from their climate pledges and turning more to dirty sources of power, like coal.

The progress made recently “is not inevitable or a reflection of a permanent new reality,” Bordoff said. “It will require continued strong climate policies to ensure that this trend continues.”

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