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The Puzzling Flattening of Carbon Emissions and the Problem of Global Growth

by Kurt Cobb

Editor’s Note: the below was originally published by Resource Insights.

Kurt CobbLast week we learned that maybe, just maybe, global carbon emissions were flat in 2014 even though the global economy supposedly grew by 3 percent. As Brad Plumer of Vox (whose work I greatly respect) points out, carbon emissions have moved up almost in lockstep with economic growth for the entire industrial age except during recessions and one year of growth 40 years ago.

This is why I use “supposedly” when referring to the global economic growth number. It’s because there is another obvious and plausible explanation for the flat carbon emissions, namely, that the global economy did not grow by the stated percentage, that it may have grown only a fraction of that amount or not at all.

Economic measures are constantly being revised, and I think it is very likely that the global economic growth number for 2014 will be revised downward. Probably not to zero, but downward nonetheless. It’s also possible that estimates of carbon emissions are too low. Plumer cites “notoriously unreliable” Chinese emission numbers as one reason to be skeptical.

But, even if 2014 turns out to be a year of growth without rising emissions, we shouldn’t get particularly exercised. Nor should we be particularly excited if it continues for a time. This is because the only trend that will actually address climate change is a RAPID DECLINE in worldwide emissions (as Plumer rightly points out).

Plumer makes one very telling statement in this regard:

If we ever hope to stop global warming, we’ll have to sever that relationship [of economic growth to emissions] — and figure out how to have economic growth while reducing emissions. (Alternatively, we could halt economic growth, but no one wants that.)

“Alternatively, we could halt economic growth, but no one wants that.” Two questions arise from this observation: Is it true that “no one wants that”? Who specifically wants economic growth to continue and why?

The answer to the first question is no; there is, in fact, a small minority of people advocating an end to growth. Herman Daly, former World Bank senior economist, is the acknowledged dean of the steady state economy movement. In a September 2005 Scientific American piece, “Economics in A Full World,” he outlined his case for why there is little room for economic growth and why growth in recent decades has been uneconomic, that is, the cost of such growth has outweighed the benefits.

There are also the deep ecologists who value other species on the planet as much as our own, a view which implies not only an end to economic growth but a serious rollback of industrial civilization. Perhaps Derrick Jensen is the best known of the deep ecologists whose views about how to achieve the proper role for humans on planet Earth varies greatly.

Given that there are people who want to halt or even reverse economic growth, we must now ask the second question: Who wants growth and why?

If we follow Herman Daly’s logic, we have long since passed the point of economic growth and now have “uneconomic growth,” growth that imposes costs greater than the growth is worth: social costs in terms of inequality and environmental costs that undermine the long-term sustainability of human society.

So, who benefits from such growth? We now have a name for this group, the one percent. Those with the highest incomes and greatest financial wealth continue to benefit from such growth since they can both reap disproportionate rewards from it and insulate themselves from the costs associated with it–leaving others to bear them.

When Plumer says that no one wants economic growth to end, what he is unwittingly saying is that the power elite in the world does not want to face the grand implication of a steady state economy–namely, that lower-income groups cannot be assured of a better material existence through economic growth and so such betterment would, of necessity, have to come from the redistribution of wealth.

As long as the chimera of perpetual growth can be sold to the masses, no one will have to deal with the thorny issue of redistribution as the primary method for the economic betterment of the middle and lower classes.

And yet, growth ended for many people around the globe in 2008. According to the International Labour Organization (ILO), if you earn the median wage in Kenya, your real income has declined 26 percent from 2008 through 2013. For Greece, the decline has been 24 percent. For prosperous Singapore and Japan the number is minus 1 percent. Egyptian real median income declined 10 percent; the United Kingdom declined 7 percent; Iceland and Italy, 6 percent; Taiwan, 5 percent; Spain and the Netherlands, 3 percent; Ireland, 2 percent; Austria, Luxembourg and the Philippines, all hovered around zero percent growth.

Of course, some prospered. Median wages in Romania, Panama, Paraguay, Norway, Jordan, Poland, Vietnam and Morocco all rose more than 10 percent from 2008 onward. There were standouts: The Brazilian median wage grew by 21 percent; Thailand by 26 percent; China by 74 percent; Mongolia by 75 percent. Ukrainian workers enjoyed a media wage increase of 43 percent through 2013 though it is likely that much of that has since been wiped out by the war and currency crisis there. In the United States, the median wage registered a one percent increase according to the ILO, though homegrown analysis suggests a decline.

The metaphorical tide of economic growth that is supposed to lift all boats is lifting far fewer people much more selectively than before.

On the other hand, if you possess substantial financial assets, you have prospered quite nicely as financial markets post daily records in the face of ever more precarious economic growth numbers around the world. But, only a small portion of the world’s people have any financial assets at all. The fate of a large number of the others has been stagnant or falling incomes or unemployment in an increasingly uncertain world.

Whether economic growth for all the world’s people will return is an open question. The system by which we’ve governed the world economy, a system dependent on central banking, central government spending, the build-up of huge and unsustainable debt, and the ever more rapid depletion of fossil fuels and other resources is showing its decrepitude.

Six years of pedal-to-the-metal monetary policy and government deficit spending have barely nudged world growth forward while levitating financial markets to unsustainable levels (and thereby exacerbating inequality). Such policies in the past would have had the world economy quickly overheating with central bankers responding by hoisting interest rates sky high to rein in inflation and financial excesses.

Instead, the economy remains so weak that the U.S. Federal Reserve had to reassure the world that despite language in its recent public statement that would indicate an imminent increase in interest rates for the first time in 10 years (that’s not a typo), the central bank really wouldn’t be raising them anytime soon after all.

So, maybe flat carbon emissions are actually telling us something “no one” wants to hear: that economic growth has faltered or even halted for a large portion of the world’s people and that we are going to have to deal with the consequences of that until we design a new system that can either grow for the benefit of everyone–a difficult proposition–or that can sustainably, equitably and successfully manage a steady state economy–an even more difficult proposition.

Kurt Cobb is an authorspeaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at [email protected].

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5 Responses to “The Puzzling Flattening of Carbon Emissions and the Problem of Global Growth”

  1. Sandwichman says:

    There are more caveats here than you can shake a stick at.

    First, the IEA announcement only referred to “energy-sector” emissions. It doesn’t include emissions that didn’t come from, say, transportation, construction or agriculture.

    Second, the announcement only referred to carbon dioxide emission, not to all emissions of greenhouse gases. So switching to natural gas from coal-fired electricity generation would reduce CO2 emissions, even if it increased a more than equivalent amount of methane emissions.

    Third, this is only about the flattening of a flow. Tthe stock continues to increase, just not at a faster rate than previously.

    See my blog post (linked to name) “Of Bathtubs, Bombshells and Boilerplate” for more on this supposed GHG emissions “bombshell”

  2. bsrkr11 says:

    No mention of the 59 fold increase in credit expansion since 1968 and the effects this is about to have. .. emissions will go down as gravity over powers the efforts of the central banks to keep inflated the ponzi scheme that is the global economy. The unfortunate part will be the war death and destruction that will accompany the massive deflationary depression. The scale of the collapse will be breath taking. …

  3. Aquifer says:

    This is the statement that jumped out at me;

    “…we are going to have to deal with the consequences of that until we design a new system that can either grow for the benefit of everyone–a difficult proposition–or that can sustainably, equitably and successfully manage a steady state economy–an even more difficult proposition.”

    He suggests two alternatives 1) a system that can grow for the “benefit of everyone” or 2) a system that can “sustainably, equitably and successfully manage a steady state economy”

    He describes the first as a “difficult proposition” and the second as “an even more difficult proposition”

    So why, pray tell, wouldn’t we want to pursue the less difficult proposition, if it winds up benefiting “everyone”?

    He suggests, nay, more than suggests, that the first, though difficult, is actually possible …

    So why would we not want to pursue the first, instead of the second?

    This sounds like a “I come to bury Caesar, not to praise him …” sort of speech – He starts out presenting the “uneconomic growth” case, though even here he sprinkles it with the “exceptions”, but ….. suggests that it would be possible to make a system where “growth” benefits “everyone”, which system would be less difficult that a steady state one … and that is precisely what our politicians, of all stripes have been telling us …

    Frankly this is not a piece i would have expected to see here – more suitable, and rather cleverly so, methinks, for the MSM ….

  4. Uh, not puzzling at all really. Renewable energy is displacing dirty technologies at an unprecedented rate. That’s a pretty astonishing absence in the foundation of your analysis. It’s not like that data is hard to find…

    This isn’t one that’s tied to growth, it’s tied to a fundamental energy system transition that’s in progress and gaining momentum.

  5. John Doyle says:

    The SCALE OF THE ISSUE is really unrecognised by nearly everybody. The best way is to compare energy sources/supplies/consumption by referring to CMO,= Cubic Miles of Oil.
    We use over 1 CMO every year, petroleum. On top of that we use nearly 2CMO of other energy supplies, such as coal and gas, hydro etc.
    What is 1 CMO equivalent to? In hydro we would need 200 three gorges dams! In coal fired power stations, 5200. In nuclear power plants, 2600. Wind power 1.6 million generators, 4.6 billion solar panels.
    Anyone think we can get anywhere near that? Anyone thinking we can achieve a reduction in such capacity without major destruction to the economy? ‘
    It’s not on.

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