Economic growth and development with low‐carbon energy

Abstract

Energy is needed for economic growth, and access to cheap, reliable energy is an essential development objective. Historically most incremental energy demand has been met through fossil fuels; however, in future that energy will have to be low carbon and ultimately zero-carbon. Decarbonization can and needs to happen at varying speeds in all countries, depending on national circumstances. This article reviews the implications of a transition to low-carbon energy on economic growth and development in current low-income countries. It sets out empirical findings about trajectories for energy intensity and emissions intensity of economic growth; explores pathways to accelerate decarbonization; reviews the theoretical and empirical literature on economic costs and co-benefits of energy decarbonization; and assesses analytical approaches. It discusses the opportunities that might arise in terms of a cleaner, more dynamic and more sustainable growth model, and the options for developing countries to implement a lesscarbon intensive model of economic development.

Coal and climate change

“…At COP21, the member states of the United Nations Framework Convention on Climate Change (UNFCCC) overwhelmingly endorsed the key recommendations contained in the Paris Climate Agreement, the headline target of which was to limit global warming well below 2°C above preindustrial levels . Because coal is such a significant energy source and the most carbon intensive and dirtiest of the fossil fuels (Gohlke et al, ), movement toward this <2°C target will require significant reductions in coal production and consumption in absolute terms (Fankhauser & Jotzo, ; Spencer et al, ). McGlade and Ekins (, p. 187) calculate that even with widespread deployment of Carbon Capture and Storage (CCS) technology, “over 80 per cent of current coal reserves should remain unused from 2010 to 2050 in order to meet the target” (compared with just a third of oil reserves and half of gas reserves remaining unused) and Johnson et al (, p. 100) argue that it would require “the complete phase‐out of coal‐based electricity generation without CCS by 2050.” This means that shifts in the coal trade or in public opinion over coal have amplified significance, since the future of the global climate is inextricably linked with the future of coal.…”

The Conundrums of Sustainability: Carbon Emissions and Electricity Consumption in the Electronics and Petrochemical Industries in Taiwan

“…Decoupling economic growth and carbon emissions is the goal of many industrialized countries. Many studies have compared transnational data, as well as the domestic economic and carbon emission structures and models across countries, to identify whether decoupling has occurred [7][8][9]. However, the literature review shows that the different stages of economic development in different countries require completely different decoupling policies for energy production and consumption, and because of the limitations of these excellent studies, they do not provide specific policy recommendations for the industrial and energy transitions for these countries [10][11][12].…”

“…For the iPhone model that Apple introduced in the third quarter is how they would be able to maintain economic growth whilst under a carbon reduction pathway. Fankhauser and Jotzo [7] pointed out that economic development over the last 200 years was built on fossil fuel energy and the energy generated by fossil fuels was the main driver of economic growth; however, due to climate change, fossil fuel use therefore has to be limited, and countries have to consider how the energy demands for development can be met while enforcing carbon reduction regulations. They believe that investing in a power generation infrastructure, on the backdrop of green energy and innovation, and enhancing market practices, would be beneficial for developing countries that are pursuing universal access to energy.…”

Breaking Out of Carbon Lock-In: Malaysia’s Path to Decarbonization

“…Thus, energy must be a key component to any decarbonization plan. In high and middle income countries, decarbonization focuses on shifting the means of power generation, redesigning electricity grids, improving energy efficiency, and reducing industry and transport emissions (Fankhauser and Jotzo, 2018). According to an assessment by the International Energy Agency, meeting the Paris Agreement's goal of limiting global temperature rise to 2 • by 2050 will require an ambitious set of policy measures, including the rapid phase out of fossil fuel subsidies, a rise in CO 2 prices to unprecedented levels, extensive energy market reforms, and stringent low-carbon and energy efficiency mandates (OECD/IEA and IRENA, 2017).…”