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A carbon-less world by 2050?

A global emissions-GDP graph shows the need to cut this ratio tenfold from the current level to meet the climate change targets

Aaditya Mattoo & Arvind Subramanian 

Aaditya Mattoo & Arvind Subramanian

Is the world making progress on climate change? Recently, the Organisation for Economic Cooperation and Development struck a hopeful note by suggesting that emissions were being decoupled from gross domestic product (GDP), by noting that they were growing more slowly than GDP in both the high- and low-income countries, including China. Alas, that decoupling is misleading: the trend of emissions growing slower than GDP was true for nearly 40 years between 1960 and 2000. Since then, or for nearly a decade now, that pace of decoupling has stalled (and even reversed), and now emissions are growing as rapidly as GDP. The graph shows the recent stall.

The graph plots the ratio of global CO2 (carbon dioxide) emissions to world GDP. (Data for 1960-2009 are from the World Bank, and for 2010, are extrapolated using the International Energy Agency's most recent data for emissions). This emissions-GDP curve, which was declining until the late 1990s, has since flattened out (even rising slightly). This is despite the emissions-GDP ratio declining in both high- and low-income countries. So, in every country, emissions growth can get decoupled from GDP growth, and yet, global emissions need not get decoupled from global GDP growth.

How is this possible? Essentially, world GDP is shifting toward the fast-growing countries such as China and India. It is this shift combined with the fact that the fast-growing countries have higher emissions-to-GDP than slow-growing ones that has arrested the decoupling of emissions from GDP. This is regress, and not progress, from a global perspective. And if this recent pattern of developing countries growing faster than rich ones continues, the curve will not bend down. (GLOBAL EMISSIONS AS SHARE OF GLOBAL GDP)

Focusing on global emissions and global GDP is important for other reasons. All the national data relate to emissions in production. As professor Dieter Helm in his recent book The Carbon Crunch argues, one should be looking at consumption rather than production. For example, if a steel plant closes down in the UK, the country's emissions will come down. But if the UK's energy needs remain unquenched, that steel production could shift to China. This will show up, somewhat unfairly, as a rise in China's emissions. But emissions-wise, the world will be worse off. One way to avoid this problem is then simply to look at global emissions, which is both production and consumption.

Similarly, focusing on global GDP is important to recognise the role played by energy demand in driving global emissions. As global GDP rises, the demand for energy will rise in high-income countries less than proportionately. But there will be much greater increases in energy use from developing countries. These increases from very low current levels are not only unavoidable, but arguably a moral imperative, since increased energy use will be crucial to lifting vast numbers of people out of extreme poverty.

How should this play out? One can ask what needs to happen by 2050 for the world to have a fighting chance of limiting temperature increases to below two degrees centigrade. Or, how much does the emissions-GDP curve need to be bent to save the planet? We can make some reasonable assumptions about global GDP-per-capita growth: three percent, less than seen in recent years and assuming some under-performance by low-income countries; and about population growth (0.8 per cent). These assumptions combined with the goal of limiting target emissions in 2050 to about 15 gigatonnes of CO2 emissions, which could be on the high side, imply that the emissions-to-GDP ratio needs to decline from the current level of 0.8 to about 0.08, or a tenfold decline.

In the graph, the barely visible bar at 2050 is where the world needs to head to. For all practical purposes, we need to be in a carbon-less world by 2050 for climate change targets to be met. Note that the curve between now and 2050 will have to be dramatically steeper than anything we have witnessed in history (bending the health cost curve in the US seems, in comparison, a piece of cake). The basic assumptions can be altered but they will not change the basic fact of how much the emissions-GDP curve needs to be bent*.

If, on the other hand, the emissions-GDP curve heads anywhere close to the current trajectory, we are looking at emission levels of about 90-100 gigatonnes (2050 GDP is about $185 trillion, at 2000 prices), and orders of magnitude larger than the target for 2050 of about 15 gigatonnes.

That is why in Greenprint, our new book, we argue that nothing short of a radical technological change can help reconcile growth and energy-use aspirations with climate change goals.

The writers are authors of the recently published book, Greenprint: A New Approach to Cooperation on Climate Change, published by the Centre for Global Development
*Expressing the emissions-GDP relationship in terms of GDP measured at purchasing power parity does not alter the conclusions. There will be some natural decline in the demand for energy and in the carbon-intensity of world GDP as the composition of world output shifts from manufacturing to services

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First Published: Tue, March 12 2013. 21:42 IST