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

Enno Schröder and Servaas Storm

International Journal of Political Economy, 2020, vol. 49, issue 2, 153-173

Abstract: 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.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:mes:ijpoec:v:49:y:2020:i:2:p:153-173

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DOI: 10.1080/08911916.2020.1778866

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