3.17 Carbon: Decoupling-the relationship between economic development and CO2 emissions

Author: Michael Witkowicz.

ABSTRACT: To achieve carbon dioxide emission reduction we need to analyze the relationship between economic development and CO2 emissions. Generally, the goal for both developed and developing countries is to maintain their economic growth at sustainable rates. However, economic growth can appear to conflict with emission reductions when CO2 emissions are intricately linked with the country’s gross domestic product. So, the negative environmental impacts generated using natural resources would need to be reduced while ensuring economic growth to achieve a more sustainable use of natural resources. Thus, reconciling economic development with a low-carbon strategy is not only imperative, but also possible by decoupling both resource use and its impacts from economic growth.

An illustration of resource decoupling and impact decoupling. Retrieved from International Resource Panel website, Infographics, UNEP 2011


Generally, economic development is strongly associated with the rapid rise in use of natural resources such as energy, materials, water, and land, which is essential for human well-being (Fischer-Kowalski, Swilling and von Weizsäcker). Economic growth is currently seen as the answer to tackling almost every problem a nation faces, from poverty to national debt to higher quality of life for its people. Yet, the problem with continuing down this path is that we will continue to use resources exponentially although we live on a finite planet. This will eventually lead to a collapse as we will have no more resources to deal with the issues we are attempting to fight with economic growth. Accordingly, when the overall economy is doing better, we see rising carbon dioxide (CO2) emissions, so we need to spend more time decoupling economic growth from CO2 emissions (UN DESA Voice). Decoupling occurs when the growth rate of CO2 emissions is less than that of its economic driving force such as a country’s gross domestic product (GDP) over a given period (International Resource Panel).

When the use of resources increases at a lesser rate than economic growth, we have Resource Decoupling. Resource decoupling mitigates the impact economic growth has on the environment but does not necessarily help the environment, and even though it will generate growth more efficiently, it is not sustainable. On the other hand, when resource use shrinks as economic use increases, we have impact decoupling. Impact decoupling is where we will experience both sustainable growth and a greater environmental wellbeing (Fischer-Kowalski, Swilling and von Weizsäcker). Impact decoupling has different variations on what a society looks like after it is implemented, with some theories maintaining the idea that we can continue to grow in economic wealth with improved technologies that foster a greener planet (NV atCEPImperial). However, some experts are saying that this form of impact decoupling is impossible to achieve in time, and perhaps even counterproductive. To achieve impact decoupling, we must make systemic changes (UN DESA Voice). This involves changing the ways we chose to live, and what we chose to consume (Meadows). In this definition, growth is not defined the same as it has been in the past but shifts its focus to what we as humans will value most, such as community, health, and happiness. Here the standard of living shifts from wealth to happiness (Fischer-Kowalski, Swilling and von Weizsäcker).

Some countries, for instance Germany, have done a respectable job at implementing policies to build a greener economy. Germany has become a front runner in sustainable development by implementing policies as early as the 1970s and establishing the National Strategy for Sustainable Development in 1996. There is “empirical evidence that shows that from 1994 to 2007, impact decoupling was achieved in the raw material sector, as resource productivity grew by 35.4% and GDP by 22.3% while raw material input decreased by 9.7%” (Fischer-Kowalski, Swilling and von Weizsäcker 51). Nevertheless, Germany is not as green as it is known to be as these calculations do not factor in biotic raw materials. As well, it continues to use coal power plants that produce one-third of Germany’s electricity and does not intend to eliminate these power plants till 2038 (DW Business Made in Germany). In addition, as society continues to love its automotive industry, consumers will continue to contribute to the demand for fossil fuels (Stewart). So, although many developed countries strive for greener policies and economies, they have fallen short within certain curtail sectors, as seen with Germany with coal and auto, that prevents them from effective impact decoupling. Consequently, to date, there is no known concrete example of a developed nation that has achieved overall impact decoupling.

This gives developing countries an opportunity to develop their economy with sustainability at the forefront and to “leapfrog dirty technologies by going straight to green solutions” (Fischer-Kowalski, Swilling and von Weizsäcker). In 2010 Ethiopia set a goal to become a middle-income country by 2025 and to have a net zero carbon footprint by 2030, despite its rapidly growing population. One study showed that by 2015, its greenhouse gas emissions decreased by 15% (Baines). By using its population growth in the calculation, this meant it had a carbon efficiency of 5.7 times that of 2010. Ethiopia is focusing on its electricity sector with aims to raise electric generation and to build more electric trains for public transport (Baines), as 98% of its electricity is renewable energy from hydropower (Ritchie and Roser). Like so many other developing countries, Ethiopia needs significant funding if it is to meet the goal of impact decoupling. Its annual CO2 emissions are still on the rise with it jumping from 12.69 trillion to 14.35 trillion from 2015 to 2016 (Ritchie and Roser). As well, its goal to build many power plants be it for fossil fuel or electricity will still have a large upfront carbon footprint. However, although it is still too early to tell if Ethiopia will achieve impact decoupling by 2030, the data shows that impact decoupling may be possible.

Many developed and developing countries are in favor of investing in sustainable development. Yet only the coming years will tell whether developing countries can leapfrog dirty technologies and jump straight into sustainability with the support from countries like China and America funding their electricity sector. However, there must be a value shift (NV atCEPImperial) to effectively achieve impact decoupling, for in any scenario we will inevitably need to forgo many things we value in the short run-in order to see long term benefits, for example, whether its gas-powered cars, or cars in general. Yet on a political level, democracy has been bad at solving climate change issues as many politicians choose to focus mainly on dealing with issues where the benefit is seen immediately. Still, as noted by the changes made in some developed and developing countries that have invested in sustainable development, the reduction of CO2 emissions is not inevitably based on a decline in economic growth as it can be achieved by improving energy efficiency and reducing carbon intensity.


Baines, Steve. Can economic growth really be decoupled from increased carbon emissions in Least Developed Countries? Ethiopia’s Story. 14 March 2017. https://oxfamapps.org/fp2p/can-economic-growth-really-be-decoupled-from-increased-carbon-emissions-in-least-developed-countries-ethiopias-story/

DW Business Made in Germany. Why Germany is not as green as you think. 23 March 2021. https://www.dw.com/en/why-germany-is-not-as-green-as-you-think/av- 56963536

Fischer-Kowalski, Marina, et al. “Decoupling natural resource use and environmental impacts from economic growth, A Report of the Working Group on Decoupling to the International Resource Panel.” 2011. https://www.resourcepanel.org/reports/decoupling-natural-resource-use-and-environmental-impacts-economic-growth

International Resource Panel. “Introduction to Decoupling.” United Nations Environment Programme, 11 July 2018. https://www.youtube.com/watch?v=9zYEpPjYmJw

Meadows, Dennis. 40 Years Limits to Growth. Christiane Grefe. 27 November 2012. https://www.youtube.com/watch?v=uYNlhjOZ7DU

NV atCEPImperial. “Decoupling economy growth from environmental resources.” London: NV atCEPImperial, 1 December 2017. https://www.youtube.com/watch?v=n7w9j7eciwo

Stewart, Rachel. How green is Germany. 23 June 2021. https://www.dw.com/en/how-green-is-germany/av-58019550

Ritchie, Hannah and Max Roser. “CO2 and Greenhouse Gas Emissions – Ethiopia.” 2020. Our World in Data. Online resource. https://ourworldindata.org/co2/country/ethiopia

UN DESA Voice. No trade-off between economic growth and environmental protection. A conversation with Elliott Harris, UN Assistant Secretary-General, Chief Economist. June 2018. https://www.un.org/development/desa/undesavoice/feature/2018/06#40825


Michael Witkowicz has a Bachelor of Arts degree in Economics from the University of Calgary. Currently, in his first year of the Bachelor of Journalism program at Ryerson University.

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