A new report from the Energy Information Administration (EIA) shows that U.S. emissions of carbon dioxide (CO2) declined by 78 million metric tons or 1.3 percent in 2006 (HT: Volokh Conspiracy). Meanwhile, according to the Bureau of Economic Analysis (BEA), the U.S. economy grew by around 3.1-3.2 percent in 2006. The confusion is already setting in, and everyone is pointing fingers at the weather. Indeed, I can think of few instances (if any?) where an economy grew rather robustly and experienced a fall in CO2 emissions.
One of my favorite topics in our recent Sustainable Economic Development course was the role of development and the environment. A lot of people think that there is a tradeoff between the two—a country can have either a developed, growing economy or a clean environment. However, most scholarship suggests that economic growth and environmental protection are linked. This is initially because as economic growth starts to satiate more peoples’ most pressing needs (food, water, shelter, work, etc.), folks can then concentrate on the things that are important but less so than basic needs—like the environment. Hence, a certain level of development is needed to have an environmental movement at all (ever wonder why environmental movements seem to be dominated by people from rich countries?). Secondly, as societies grow richer, they acquire the resources necessary to solve more environmental problems. They can then afford the new water treatment plant or finally manage to replace their old, dirty power plants with new ones. True, there is usually an uptick in pollution as economies get going, but environmental damage per unit of GDP actually starts falling at around $6,000 per capita GDP. For example, in the U.S. the economy has roughly tripled over the last 30 years, while the amount of pollution has halved. However, this is not a new trend. Pollution in the U.S. peaked in the 1920s—meaning that emissions of major pollutants actually started declining fifty years before the creation of the EPA. Nor is this trend due to some mistakenly perceived decline in manufacturing; U.S. manufactures are actually churning out more “stuff” than ever before.
The reason for this trend is simple progress. As people discover better ways to do things, they inevitably cause less environmental damage. New machines, cars, and appliances are almost always cleaner and use less energy than those they replace even in the absence of new regulations. The result in the U.S. has been a steady decline in major pollutants, such as nitrogen dioxide (NOX), sulfur dioxide (SOX), carbon monoxide (CO), etc. That being said, the emission of one particular gas (sorry there are differing legal and economic opinions as to whether it is technically a pollutant) has bucked this trend. This gas is carbon dioxide (CO2), and economies tend to produce more of it as they grow and demand more energy.
Despite the rise in CO2 emissions common to economic growth, some have postulated that these emissions will eventually follow the major pollutants and decline. The thought has been that CO2 simply will just begin to decline at a much higher level of GDP than other gases. Well, the EIA’s numbers could very well indicate the beginning of this trend. Of course, it could be the weather, or a strange combination of circumstances, rather than the beginning of a long-term trend. However, CO2 emissions don’t fall outside of recession very often (if at all?). Let us hope that this is the beginning of a long-term trend and not unusually pleasant weather; but rather the fact that as Americans grow ever wealthier they are replacing their older, less efficient homes, cars, appliances, and machines with newer, more environmentally friendly ones.
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