Do we need degrowth? Can we save the climate while growing the economy?

There’s a common intuition that says we can either have a healthy climate, or a growing economy, but not both.

Economic activity, so long as it’s powered by fossil fuels — which still provides about 80 percent of the world’s energy — creates greenhouse gas emissions. So it seems to follow that if we want to emit fewer greenhouse gasses, we’re going to have to sacrifice some economic growth, even though raising average income levels is a key part of reducing poverty.

This creates a horrible dilemma, because fighting climate change and fighting poverty are both hugely important goals. As developing countries are making clear at the ongoing COP27 climate summit in Egypt, we really don’t want to shortchange either one.

Fortunately, we may not have to.

The evidence comes from more than 30 countries that have already achieved what’s known as “absolute decoupling.” That means they’ve figured out how to reduce carbon emissions while continuing to grow economically, so those goals are not incompatible. Note that these are not just per capita measures; we’re talking about total emissions and total economies here.

Over at Our World in Data, the researcher Max Roser created a great chart that shows 25 of the countries that have pulled off this feat over the past couple decades.

As you look at it, you might be thinking: What about the fact that lots of countries outsource carbon-intensive industries to other, often poorer countries, then import the goods? Surely this chart isn’t taking all that outsourced production into account!

In fact, it is. What the chart shows are consumption-based emissions, meaning they account for the emissions caused by stuff that was produced outside a country but consumed inside it.

Our World in Data

The obvious question here is: How were these countries able to decarbonize as much as they did without lowering economic growth?

Many factors have made this possible, including technological progress on cheaper renewables and new regulations on air pollution, which enable countries to reduce the greenhouse gas intensity of their economy — the amount of carbon embedded in each economic buck. Another key part of the picture has been putting a price on carbon, so that those who cause emissions have to pay for them. Carbon pricing is based on a simple idea — if the price of a product goes up, consumption goes down — and it’s turned out to be very effective in countries like Sweden, Germany, and the UK.

The countries in the chart show that there doesn’t have to be a tradeoff between reducing emissions and growing the economy, as many economists and laypeople once assumed. And it’s not just that emissions-reducing policies are not fundamentally hostile to the economy. In fact, these policies can actually boost economic growth in the coming decades. Investing in climate change mitigation now means we’ll have to spend less in the future — on rebuilding after fires and floods, on coping with premature deaths and the lost productivity that results from them, and more.

That…