trending Market Intelligence /marketintelligence/en/news-insights/trending/0E6t-o28LfOAZPrpYzB3VA2 content esgSubNav
In This List

US has broken link between CO2 emissions, economic growth

Blog

Q&A: Datacenters: Energy Hogs or Sustainability Helpers?

Blog

Insight Weekly: US stock performance; banks' M&A risk; COVID-19 vaccine makers' earnings

Video

S&P Capital IQ Pro | Powered by Expert Insights

451 Research Podcast

Next in Tech | Episode 41: IoT's Role in Energy and Utilities


US has broken link between CO2 emissions, economic growth

More than 30 states managed to decouple growth from carbon emissions between 2000 and 2014, according to analysts at the Brookings Institution, confirming that economic growth does not necessarily require a hike in emissions. But the think tank doubts that this trend will be helped along by the incoming presidential administration.

In a new report released Dec. 8 that examines the relationship between GDP and decarbonization, Brookings researchers compared data on real GDP growth between 2000 and 2014 for all 50 states and the District of Columbia with data on energy-related carbon dioxide emissions for the same years and locations. The report confirmed that decoupling is occurring, although the pace of this change varies greatly from state to state.

SNL Image

The U.S. economy expanded without increased emissions for the first time in 2001. That occurred again in 2006, between 2010 and 2012, and in 2015. In all, 33 states plus the District of Columbia collectively managed to expand their economies by 22%, while carbon emissions declined 12%, from 2000-2014. Maine, Massachusetts, New York and Georgia rank among the "strongest decouplers," according to Brookings, while Kansas, Kentucky and Wisconsin were the weakest.

Decoupling has been helped along by the states as the power industry transitions away from coal for electricity generation and toward cleaner or non-emitting fuels such as natural gas or renewables. Regional resources and fuel mix for each state has a strong impact on decoupling. Gas-rich states in the Northeast and the South, which have benefited from the shale-gas boom and the resulting decline in fuel prices, led the way on decoupling.

The research group argues that under the new administration, states and cities will have an even more important role to play in decoupling carbon emissions from economic growth. "With the stunning election of Donald Trump to the presidency, every aspect of the low-carbon paradigm for national and world progress has been thrown into doubt," the report said. "All of which raises the question of how resilient the decarbonization paradigm is at the state and local level."

As a result, the report found, states and cities will need to do much more to keep the trend going. States typically wield the power to set policy and laws related to emissions, largely through state public utility commissions that regulate investor-owned electric utilities. The vast majority of the country's success in cutting carbon emissions in recent decades has been the result of state and local efforts, rather than federal policy, the report concludes.

"With responsibility for U.S. decarbonization now devolving to the states and cities, state and regional actors will need to fill the vacuum created by Washington's abdication of leadership with new energy and resolve," the report said. Brookings predicts that federal climate policy will "all but disappear" under Trump. The president-elect has pledged to withdraw the U.S. from the Paris climate agreement and to roll back regulations such as the Clean Power Plan. "The Trump-style climate view frequently depicts efforts to curb emissions as a drag on economic growth," the report said.

Dozens of states have pushed back against the U.S. EPA's Clean Power Plan with a legal challenge that succeeded in putting the rule on hold, pending an appeal in federal court. Trump's pick for director of the EPA, Oklahoma Attorney General Scott Pruitt, is an outspoken opponent of the plan. In order to meet the global goal of limiting human-caused climate change to 2 degrees Celsius, Brookings noted that greenhouse gases would need to be cut globally by 40% to 70% from their 2010 levels by 2050 and to zero by the century's end.