Great news on emissions. Really.

For as long as anyone thought about it, economies and their greenhouse-gas (GHG) emissions grew in tandem.  This link made sense—as people got richer, they naturally used more energy to drive, to travel, to shop, to buy heating and cooling.  A 2007 review of studies by the UN’s climate change body, for example, asserted that each 1 percent increase in GDP translated into higher emissions.

The reason that matters is that in a world in which more than 700 million people live on $2 a day or less, and where tens of millions more in rich and middle-class countries are also struggling, strangling economic growth in order to curb emissions is not an option, for both moral and political reasons. “Let’s stop growing!” is not a winning election strategy.

So it’s very important that in both 2014 and 2015 the global economy grew—and energy-related emissions didn’t.  In the 40 years that the International Energy Agency has been tracking emissions, this is the first two times that year-on-year energy-related emissions have been flat or less, without an economic downturn.  And in 2013, emissions grew less than the global economy.  For perspective, energy accounts for more than two-thirds (68 percent) of global GHG emissions, and energy use increased more than 150 percent from 1971 to 2013.

So all that sounds pretty wonky.  Why does it matter?  Because it means that it is not only possible, but a reality that the link between emissions and growth can, in fact, be cut.  Indeed, in a number of developed countries, that is already happening.  In 2014, for example, the EU grew modestly—and cut emissions by more than 5 percent.  The United States saw power-related carbon emissions decline 10 percent from 2005 to 2014, due to greater efficiency—in effect, like Europe, it is creating more wealth using less energy—and  the displacement of coal with cleaner natural gas.  

While the United States and Europe are important, accounting for about a quarter of global GHG emissions, they are already rich and their populations are stable.  Moreover, developed countries like these are likelier to have service-oriented economies, which are less energy-intensive.  Finally, there are technological trends that suggest that they can keep on making  progress.  In the next 10 to 15 years, McKinsey research estimates that the use of connected sensors, automation, and analytics could reduce demand for energy by
10 percent.

The big question marks are in places like China and India, which are growing fast economically and are also likely to see increases in population.  From 1990 to 2013, China’s per capita emissions tripled, and India’s doubled.  China alone accounts for 30 percent of total global emissions, twice as much as the United States.

But here, too, there are encouraging trends.  The rate of growth of emissions in China is slowing, as its economy becomes less energy intensive—services now account for more than half of GDP, the highest ever.  China has also begun to get serious about growing less filthily. In part because of pressure from a public literally sick of living in smog-choked cities, the country is investing in more efficient and cleaner energy use.  In 2014, Chinese emissions increased less than 1 percent compared to the previous year, even as it grew 7.3 percent.  In the previous decade, China’s emissions had grown an average of 6.7 percent a year.  So that’s a big change.  The big reason: China is depending less on coal, which accounts for more than 80 percent of its energy-related emissions.

But the larger point is this: As with so many other things, the answer to dealing with the environment and the prospect of global warming is technology and innovation.  Just as many poor countries have skipped landlines to go straight to mobile phones, they may be able to take advantage of technological advances in other markets to “leapfrog” to less polluting power options.  For one thing, there are shale reserves in both India and China that could displace coal, which remains their single largest source of power.  In addition, both have ambitious plans for renewables and can learn from the successes (and mistakes) in other markets.  China is also placing big bets and working with international partners on things like clean coal and advanced nuclear reactors.

The possibility, then, is that sooner rather than later, developing countries too can break the link between economic growth and emissions growth.  That is essential if the world is to meet global commitments on climate change while also meeting human needs. In short, in the slightly wince-inducing formulation beloved by consultants like myself, that’s a win-win.