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Decoupling Economic Growth and Carbon Emissions

September, 2017
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Decoupling Economic
Growth and Carbon
John Deutch1,*

John Deutch is an emeritus Institute
Professor at the Massachusetts Institute
of Technology where he has been a
member of the faculty since 1970. He
has served as Chairman of the Department of Chemistry, Dean of Science,
and Provost. In the Carter Administration, he served as Director of Energy
Research (1977–1979), Acting Assistant
Secretary for Energy Technology
(1979), and Undersecretary (1979–
1980) in the US Department of Energy.
He has been a member of the President’s Nuclear Safety Oversight Committee (1980–1981); the White House
Science Council (1985–1989); the President’s Committee of Advisors on Science and Technology (1997–2001),
and the Secretary of Energy Advisory
Board (2008–2016). John Deutch has
published widely on technical and policy aspects of energy and the environment and has been a member of the
board of directors or of the technical
advisory committees of several energy
All economic activity requires energy;
to the extent this energy comes from
fossil fuels, the energy use results in
emissions of carbon dioxide, CO2.

The nature of this link between the
growth in economic activity and carbon emissions is a critical question for
climate change.1 Linkage implies that
deep emission reductions will constrain
economic growth; decoupling implies
that deep emission reductions are
possible with little or no effect on
growth. An answer to this question
is important for the United States,
but more crucial for rapidly growing
emerging economies such as China
and India that seek to improve their citizens’ access to low-cost energy while
respecting the need to protect the
global environment.
Shortly before leaving office, President
Obama wrote an article, The Irreversible Momentum of Clean Energy, that
stressed the importance of ‘‘decoupling’’ energy sector emissions from
economic growth.2 He reported that
during the period of his presidency
(2008–2015), CO2 emissions from the
energy sector fell by 9.5% while th; e
economy grew by over 10%, based on
statistics in the 2017 Economic Report
of the President (ERP-2107).3 Other senior members of his administration
have made similar observations about
the irreversible trend of maintaining
economic growth with lower carbon
The most instructive tool for analyzing
this ‘‘irreversible trend’’ and ‘‘decoupling’’ is the Kaya identity, which establishes an ironclad connection between
emissions and economic growth.6
In differential form, the Kaya identity
states that for a region, over any given
time period, the following relation
must hold between gross domestic
product (GDP), Y, energy use, E, and
carbon emissions, C.7
dC dðE=Y Þ dðC=EÞ dY
ðE=Y Þ
The Kaya identity decomposes the linkage between economic growth and

carbon emission in two links: energy intensity (E/Y) and carbon intensity (C/E).
Energy intensity declines, for example,
when higher energy prices cause firms
to make energy efficiency investments
that reduce the amount of energy
needed to produce product. Carbon intensity declines, for example, when utilities shift from coal to natural-gas-fired
generation since coal emits almost
twice as much CO2 per kWe-hr as natural gas.
Table 1 and Figure 1 present data for
the time period 2008–2015 and projections for the period 2015–2040, which
satisfy the Kaya sum rules.7 As shown
in the 2008–2015 panel, during this
period, the United States improved energy and carbon intensity sufficiently
to enjoy modest economic growth
(1.4% annually) and reduced emissions
(1.4% annually). In contrast, during
this period, China and the world experienced increased carbon emission with
economic growth. While both carbon
and energy intensity improved in China
and globally, the improvement was
insufficient to reduce carbon emissions
over the period.
Short-term trends are not an adequate
guide to the future. Indeed, recently
the International Energy Agency (IEA)
announced that during the period
2014–2017, global CO2 emissions
were stable while economic grow was
Projections about future economic
growth, energy and carbon intensities,
and accompanying carbon emissions
are highly sensitive to assumptions
about markets, policy measures, and
technology change. Both the Energy
Information Administration (EIA) and
the IEA offer several scenarios in order
to span the range of outcomes from
different assumptions. The 2015–2040
panel in Table 1 presents projections
for one common scenario, the EIA

Joule 1, 3–9, September 6, 2017 ª 2017 Elsevier Inc.


80% mid-century Obama administration target.11

Table 1. Kaya Identity Relationships in Two Time Periods
Fractional Changesa

Recent Past: 2008–2015

GDP (%)

Energy use


Carbon emissions
Energy use


Carbon emissions (%)

Future: 2015–2040
























































Data sourced from Ref. All quantities in parentheses represent the annual average % change over that
time period.
DX/X where X is the quantity in the left-hand column of the table.

‘‘reference case.’’ For the United
States, the EIA ‘‘reference case scenario’’ is reasonable, not disruptive,
and assumes current policies stay in
place throughout the time period; it
projects essentially flat CO2 emissions.
However, Figure 2 demonstrates that
the EIA ‘‘reference case scenario’’ has
over the years overestimated the
amount of CO2 emitted in the United
States and provides a valuable
reminder of the uncertainty of such

For the United States, the Kaya identity
allows only an annual 1% decline in
CO2 emissions from more ambitious
de-carbonization assumptions of a
1% decrease in carbon intensity, a
2% decrease in energy intensity,
and 2% annual economic growth. If a
trend as favorable as the annual 1.4%
decline in CO2 emissions experienced
during 2008–2015 (a period of tepid
economic growth) continued until
2050, CO2 emissions in 2050 would
be 56% below 2005, far below the

For rapidly growing, emerging economies such as China, now the globe’s
largest greenhouse gas emitter, the
Kaya identity presents a different stark
reality. China in its submission to the
Paris Accord pledged to reduce CO2
emissions per unit GDP by 60%–65%
from 2005 levels by 2030 (an annual
rate of 4.1%–4.7%). At the pace indicated in Table 1, China may well meet
this target but at the expense of a lower
average annual economic growth rate
of 6%, which does not align with
the economic goals of the Chinese
The Kaya decomposition shows that
the extent of ‘‘decoupling’’ economic
growth and emissions depends
entirely on reductions in energy and
carbon intensity. The downward trend
in both these quantities is welcome
and likely it is ‘‘irreversible.’’ But the
decline is insufficient to avoid significant average global temperature increase in the second half of this century. It is misleading to suggest that,
while this trend may create jobs and
benefit the United States, it will successfully avoid the risks of climate
Given the size and complexity of the
US and global energy infrastructure, a
stable policy is required to guide public and private investments for the
innovation necessary to develop,
demonstrate, and deploy low carbon
technologies in priority areas such as
energy efficiency; smart electricity distribution systems; CO2 capture utilization and disposal; energy storage,
especially batteries; and increase in
the uptake of CO2 by the terrestrial

Figure 1. Kaya Identity Relationships in Two Time Periods


Joule 1, 3–9, September 6, 2017

It seems unlikely that the
administration will pursue this
The much celebrated Paris
ment is based on the highly



of Chemistry, Massachusetts
Institute of Technology, Cambridge, MA 02139,
*Correspondence: jmd@mit.edu


Figure 2. EIA Estimates of US CO2 Emissions by Year

expectation that a ground-up international process will lead to reductions
in carbon emissions at the necessary
scale and pace, gigatonnes per year.
This nation and the world seek
insurance against the catastrophic risks
of climate change. It is difficult to
be optimistic that mitigation on its
own will protect the globe from the
consequences of climate change. The
United States and the world must
urgently turn to learning how to
adapt to climate change and to
explore the more radical pathway of
1. Carbon emissions refer to CO2
emissions plus the emissions of
other greenhouse gases, (GHGs) expressed
as CO2 (equivalent) emissions. The CO2
(equivalent) is the amount of the GHG
multiplied by the ratio of the radiation force,
(global warming potential) of the GHG to
the global warming potential of CO2,
each over a given time horizon, usually
100 years.
2. Obama, B. (2017). The irreversible
momentum of clean energy. Science 355,
3. Obama refers to data presented in the
2017 Economic Report of the President, ERP,
Chapter 7, Addressing Climate Change, p.
424; available at: https://obamawhitehouse.
4. John Podesta, former Counselor to Barack
Obama, Battling Climate Change in the
Time of Trump, Center for American
Progress, March 21, 2017.
5. Deese, B. (2017). Paris isn’t burning. Foreign
Affairs 96, 83.
6. Kaya, Y., and Yokoburi, K. (1997).
Environment, Energy, and Economy:
Strategies for Sustainability (United Nations
University Press), ISBN 9280809113.

7. For discrete changes, the integrated form
has ðdX=XÞ replaced by log½1 + ðDX=XÞ. The
differential relation between GDP and GDP
per capita is dðY=PÞ=ðY=PÞ = ðdY=YÞ ðdP=PÞ.
The US population growth rate is 0.7% per
annum so the per capita rate is lower. By
contrast, China’s population growth rate is
0.1% per annum.

Water Splitting
Provides a Blueprint
for Artificial
Leaf Technology
James Barber1,*

8. Sources for Table 1. All data are drawn
from the EIA International Energy Outlook for
2011 and 2016, with the exception that data for
the United States in the time period 2008–
2015. Kaya factor projections are found in
Annex H and J of the 2011 and 2016 IEO.
Data for the United States in the time period
2008–2015 comes from the IEA Annual Energy
Outlook of 2011 and 2016; the IEA Annual
Energy Outlook was the source indicated
for the data presented in Ref.10
9. International Energy Agency. IEA finds CO2
emissions flat for third straight year even as
global economy grew in 2016. https://www.
March 17, 2017.
10. The Council of Economic Advisors report:
The Economic Record of the Obama
Administration: Addressing Climate
Change, September 2014, makes a similar
point in its analysis. See, especially Figure 27,
p. 49. The report includes a clever use of
Kaya decomposition, comparing projected
and actual outcome in order to identify
11. United States Mid-Century Strategy for
Deep De-carbonization, The White
House, November 2016. https://search.
12a. Fergus Green & Nicholas Stern, China’s
Changing Economy: Implications for its
Carbon Dioxide Emissions, Climate Policy,
1156515 forecasts Kaya parameters for
China’s energy future See Table 1, page 13.
b. Grubb, M., Sha, F., Spencer, T., Hughes, N.,
Zhang, Z., and Agnolucci, P. (2015). A review
of Chinese CO2 emission projections to
2030: the role of economic structure and
policy Climate Policy 15 (suppl 1), S7–S39.

James Barber is Emeritus Ernst Chain
Professor of Biochemistry, Senior
Research Fellow at Imperial College
London, and the Cannon Visiting Professor to Nanyang Technological University (NTU) in Singapore.
He is a Fellow of the Royal Society
(FRS), Fellow of the Royal Society of
Chemistry (FRSC), Member of European Academy, and Foreign Member
of the Swedish Royal Academy of Sciences. He has Honorary Doctorates of
Stockholm University, University of
East Anglia, and NTU. He has been
awarded several medals and prizes
including Flintoff Medal of RSC, Novartis Medal (UK Biochemical Society),
Wheland Medal (University of Chicago), Eni-Ital gas/ENI Prize, Interdisciplinary Prize Medal of the RSC, Porter
Medal of the International Photochemical Societies (Europe, USA, and Asia),

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