World carbon emissions fall while economy expands

This decline in emissions in the face of a world economy that expanded 2.5 percent in 1998 suggests an accelerated “de-linking” of economic expansion from carbon emissions, undercutting arguments that reducing emissions will damage the economy, says Christopher Flavin, Senior Vice President and Energy Analyst at the Worldwatch Institute.

During the past two years, the global economy has grown by 6.8 percent, while carbon emissions held steady, leading to a 6.4 percent decrease in the amount of carbon emissions required to produce $1,000 of income.

This turn marks the first pause in the carbon emissions escalator since economic collapse cut emissions in central Europe dramatically in the early 1990s. But unlike that reduction, or the previous decline connected with the oil crises of the 1970s, the latest downturn did not result from a major economic disruption. Still, it is not yet clear how long-lasting the new trend will be.

The recent decline in emissions stems in part from improved energy efficiency and from falling coal use, spurred by new efficiency standards and the removal of energy subsidies, says Flavin. Also, much of the economic growth of the last two years has come in information technologies and services, sectors that are not major energy users. Contrary to the implication of a recent Forbes article, operating the entire global Internet requires less electricity than New York City uses. Meanwhile, industries such as steel making and other resource-intensive sectors are growing more slowly.

According to new projections by the U.S. Department of Energy, emissions from former Eastern bloc nations will still be 28 percent below the 1990 level in 2010. Under the Kyoto Protocol, this 374 million tons of so-called “hot air” may be sold to other countries-at a projected annual bill of between $4 and $8 billion.

The de-linking of carbon emissions from economic growth is most clearly seen in China, the world’s second largest emitter. Its economy grew 7.2 percent in 1998, while emissions dropped 3.7 percent, following a smaller decline the previous year. This compares with a steady 4 percent annual increase in China’s emissions in the previous two decades. The reasons for the sharp cut in China’s emissions are not fully known, but one factor is a recent $14 billion cut in its coal subsidies.

Also notable is the fact that emissions in former Eastern bloc countries are still declining a full decade after their economic transformation began. Poland’s emissions fell 9.7 percent in 1998, while the economy grew 6 percent. Russia’s emissions also declined, and are now 24 percent below the 1991 level.

Indications of a de-linking of carbon emissions and economic growth were also evident in the United States in 1998, which saw emissions increase 0.4 percent while the economy grew 3.9 percent. Still, U.S. emissions in 1998 were 11.7 percent above its 1990 levels. Under the Kyoto Protocol, the United States is supposed to reduce its total greenhouse gas emissions to 7 percent below the 1990 level by 2010.