A discussion on decoupling economic growth from the emissions of carbon dioxide

TR 2007/02

Report: TR 2007/02
Author: A Giorgetti

Abstract

The purpose of this paper is to highlight the key sustainability issues associated with decoupling to encourage further discussion on the topic. It explores the link between economic growth and energy consumption and consequently the production of greenhouse gases (GHGs), specifically carbon dioxide (CO₂) emissions.

Like the rest of the world, New Zealand relies on fossil fuels for energy production, which release CO₂ emissions. These emissions have increased by 33 per cent since 1990. If New Zealand does not change its energy policies, then fossil fuels will prevail in electricity production and energy prices will rise.

The costs of not taking action to curb climate change are estimated to be five times the costs of action. Only the degree of urgency of action is being contested. In the absence of policy interventions, the long-run positive relationship between income growth and emissions per head is likely to persist.

A discussion on decoupling economic growth from the emissions of carbon dioxide [PDF, 259 KB]

Contents
	Executive summary	iii
1	Introduction	1
1.1	Purpose	1
1.2	Background	1
1.3	A definition of coupling	2
1.4	Evidence of coupling overseas	2
1.5	Causes of coupling	4
1.6	Evidence of coupling in New Zealand	5
1.7	Relative or absolute decoupling	6
1.8	Evidence of decoupling overseas	7
1.9	Causes of decoupling	7
1.10	Carbon intensity	8
1.11	Evidence of decoupling in New Zealand	9
1.12	Autonomous or policy driven decoupling	9
2	Opportunities and challenges	10
2.1	Pricing CO₂ emissions	10
2.2	Supporting innovation	11
2.3	Resource productivity	12
2.4	Efficiency improvements	12
2.5	Other strategies	12
3	Conclusions	13
3.1	Lessons learnt from overseas	13
3.2	Implications for New Zealand	14
3.3	A potential decoupling strategy	14
	Glossary	17
	References	20