New research by experts at the Wharton School and elsewhere refutes conventional wisdom among policymakers that economic growth is the inevitable casualty of reducing greenhouse gas emissions. Economic growth can be achieved along with emissions reductions if policymakers integrate “mediating mechanisms,” they argue.
The paper, titled “Energy System Decarbonization and Productivity Gains Reduced the Coupling Between CO2 Emissions and Economic Growth in 73 Countries Between 1970 and 2016,” identifies five mediating mechanisms as influential: increases in economic productivity; energy system decarbonization; electrification; winter warming; and deindustrialization.
The paper is coauthored by Valentina A. Assenova, a management professor at Wharton, and others. The researchers argue that emissions can be reduced consistently over time, and establishes that there’s a tradeoff between economic growth and greenhouse gas emissions—the faster the economy is growing, the more aggressive the need to move on decarbonizing the energy system.
The article establishes that the higher the carbon intensity and the lower the productivity of an economy, the higher the emissions increase. The policy implications of this finding is that it is “crucial that decarbonization and productivity improvements happen first,” the authors note.
Read more at Knowledge@Wharton.