Good News: World GDP Growth Is Getting Greener

A worker inspects solar panels at a solar farm in Dunhuang, 950km northwest of Lanzhou, Gansu Province
A worker inspects solar panels at a solar Dunhuang, 950km (590 miles) northwest of Lanzhou, Gansu Province September 16, 2013. China is pumping investment into wind power, which is more cost-competitive than solar energy and partly able to compete with coal and gas. China is the world's biggest producer of CO2 emissions, but is also the world's leading generator of renewable electricity. Environmental issues will be under the spotlight during a working group of the Intergovernmental Panel on Climate Change, which will meet in Stockholm from September 23-26. REUTERS/Carlos Barria (CHINA - Tags: ENERGY BUSINESS ENVIRONMENT) - RTX13UEF
Photograph by Carlos Barria — Reuters

Global emissions of carbon dioxide from the energy sector were essentially flat for the second year in a row last year, adding to evidence that the world is starting to meet the challenges of Climate Change.

The Paris-based International Energy Agency said in a release Wednesday that emissions of CO2 from the energy sector fell in both the U.S. and China, the world’s two largest sources of it. China’s CO2 emissions from energy sources fell 1.5%, while the U.S.’s fell 2%.

The figures are notable because the world economy has generally moved in tandem with energy-related emissions in the past. The only times that emissions have fallen in the last 40 years have been severe periods of economic weakness (in the early 1980s, 1992 and 2009). By contrast, the world economy grew by 3.4% in 2014 and 3.1% in 2015.

“The new figures confirm last year’s surprising but welcome news: we now have seen two straight years of greenhouse gas emissions decoupling from economic growth,” said IEA Executive Director Fatih Birol.

Source: IEA

In part, the results are due to China: not only is overall growth slowing, but more of its growth is coming from the consumer and services sectors, which need less energy than the heavy industries that have driven its economy for the last 25 years. (By the same token, cynics would argue that the IEA’s numbers only reinforce their suspicions that China is now overstating its growth rate for domestic political reasons.)

The decline in U.S. emissions was due more to cheaper natural gas replacing coal in the fuel mix of the electricity sector–a phenomenon also reflected in the growing signs of distress among U.S. coal miners.

However, the IEA stressed that the biggest factor in the decoupling appeared to be a much greater reliance on renewables. Worldwide, renewable sources accounted for some 90% of all the new generation capacity installed last year, with wind alone accounting for over half it.



Subscribe to Well Adjusted, our newsletter full of simple strategies to work smarter and live better, from the Fortune Well team. Sign up today.