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How can countries be prosperous and clean
Countries around the world face a dual challenge: increasing living standards and economic growth while reducing greenhouse gas emissions. This challenge has been characterized as a trade-off. After all, rich countries have high levels of per capita GHG emissions than poor countries. Rich countries consume far higher levels of energy and, despite all the advances in renewable energy, two-thirds of energy comes from burning fossil fuels. A business-as-usual strategy is to grow rich first and clean up late
Fortunately, this story is a myth. It is not supported by empirical evidence. To show this, consider Figure 1, a simple plot of the per capita GHG emissions and the per capita gross national income of countries. The vertical dashed lines in red show the divisions used by the World Bank to separate low-income countries (to the left), middle-income countries (center), and rich countries (to the right). The horizontal dashed lines are an equivalent classification, based on work by World Data Lab along with the World Ban
separating countries into low-emitters (top of the Figure), middle-emitters (center) and high emitters (bottom panels).
Source: World Emissions Clock, World Development Indicators.
Note: Graph excludes outliers with exceptionally high/low emissions such as QAT, BRN, MNG, MLI, TON, TTO and others for legibility reasons.
The Figure shows the common perception that, on average, rich countries do emit more GHGs than poor countries. However, what the figure also shows that the range of emissions at every income level is very wide. The average relationship hides enormous variation among countries. For example, Switzerland (country code CHE), with a per capita income of almost $100k has the same emissions per capita as the Central African Republic, (CAF), a country with a per capita income of $490, that is one-two hundredth of the Swiss level, or Vietnam with an income per capita of $4,200. Viewed from another perspective, compare Canada (CAN), a Northern Hemisphere country with an income level of $53,000 and Sweden (SWE), a similarly situated Northern economy with a slightly higher income level of $63,000. Canadians emit 22.7 tons per person per year, Swedes less than one-quarter of this, 4.8 tons per person.
These extreme examples show that being prosperous and being clean are not necessarily in contradiction with each other. Each outcome reflects poli choices that governments have made over the years.
Learning from the best
The blue line in Figure 1 shows the existing frontier of the minimum GHG emissions per capita associated with countries at each income level.1If every country in the world was on this frontier, with their same level of per capita income, global emissions would fall from 58 Gigatons to 5.8 Gigatons, so a tenth of current levels. Is it realistic for countries to move towards the frontier, to achieve positive economic growth and reduce emissions at the same time?
To see the actual experience, Figure 2 plots average growth rates in per capita GHG emissions and per capita GVA from 2010 to 2022. As before, we estimate a frontier of emissions per capita growth for different levels of GVA growt The Figure shows that most countries were in the top quadrant; that is, they had positive GNI growth and negative emissions per capita growth. The frontier line shows that the fastest emissions-reducing countries—those that have brought down emissions by 4% per year since 2010—have also been able to grow at rates up to 5% per year. Romania (ROU) is a good example. For most countries with “normal” growth—in the range 0% to 6%—there is a statistically significant relationship between income growth and emissions growth. So very fast growing countries, including Ireland (IRL), Malta (MLT), Djibouti (DJI) and Lithuania (LTU) have grown while reducing emissions. Ethiopia (ETH) and Cote d’Ivoire (CIV) grew fast with minimal emissions increases.
Admittedly, some fast growers, like China (CHN), Bangladesh (BGD) and Vietnam (VNM) have also had positive emissions per capita growth. This is
1 Technically, the blue line is the upper part of the estimated convex hull of the data points, with a few outliers removed.
because their growth is based on industry, a sector with high emissions intensity. However, the countries with the highest increases in emissions, including North Macedonia (MKD), Bulgaria (BLG) and Albania (ALB) still only had average growth rates.
Figure 2: Relationship between growth of GVA and total GHG emissions per capita (2010-2022) 
To understand better what differentiates the low-emitters from oth countries, we disaggregated emissions into five broad sectoral categorie energy, industry, buildings, transport, and agriculture and land use. All economic activity is classified into one or other of these categories, so t emissions sum to each country’s aggregate emissions. As before, we compared the growth of economic activity in each sector with the growth of emissions from that sector.
In agriculture and land use, there is no relationship between value added growth in the sector and emissions associated with the sector; emissions intensity from the sector hardly changed in a large majority of countries. Some European countries, including Slovakia, Bulgaria, Lithuania, Romania, and Slovenia had rapid reduction in emissions from this sector, at close to 10% per year, mainly from better land use practices.
Figure 3: Relationship between growth of GVA and GHG emissions per capita in agriculture sector (2010-2022)
Most countries have reduced energy emissions per capita since 2010, some by reducing emissions intensity, others by introducing energy-saving practices to cut down on total energy consumption. Countries with the fastest reduction in energy emissions per capita are those that have been able to take advantage of natural resources to enhance renewables. For example, Guinea, Malawi and Kazakhstan have brought major hydropower on-line since 2010.
Figure 4: Relationship between growth of GVA and GHG emissions per capita in energy sector (2010-2022)
Industry has been harder to decarbonize. It is the sector with the strongest trade-off relationship between growth in economic activity and growth in G emissions, both on aggregate and per capita. Few countries have managed to grow the sector rapidly and reduce emissions at the same time. Uzbekistan, Denmark and Switzerland stand out as exceptions, with reasonably rapid sectoral growth coupled with negative emissions growth. Ireland had the fastest activity growth, but it came at a modest cost of 5% per year higher emissions per capita.
Figure 5: Relationship between growth of GVA and GHG emissions per capita in industry sector (2010-2022)
There has been considerable reduction in emissions from the operation of buildings. Almost all countries have had success in cutting emissions, at least on a per capita level, in this sector. Israel has been a leader, but Vietnam and Uzbekistan have also had sizeable emissions reduction coupled with rapid growth in buildings and construction thereof. The Gambia has enjoyed the fastest growth in buildings value added and has still managed to cut per capita emissions.
Figure 6: Relationship between growth of GVA and total GHG emissions per capita in buildings sector (2010-2022)
Finally, experience in transport is very mixed. Over half of all countries had positive growth in per capita emissions from transport. Almost all countries where the transport sector grew rapidly also had a growth in emissions. Among frontier countries, Ireland stands out as having the fastest growth of value added, while limiting emissions to the same per capita level in 2022 as in 2010. Among major economies, the USA saw rapid growth alongside substantial reductions in per capita emissions from its transport sector.
Figure 7: Relationship between growth of GVA and total GHG emissions per capita in transport sector (2010-2022)
Source: World Emissions Clock, UNdata
Take-aways
There is no evidence of a strong trade-off between prosperity and emissio across countries. Over the last decade or so, a majority of countries have achieved overall economic growth while cutting emissions per capita at the same time. The best performers show little evidence of a trade-off except very high rates of activity growth. Some sectors have been easier to decarbonize than others. Agriculture and buildings stand out as sectors where activity can be accompanied by strong emissions reduction under the right policies. Energy also has potential but country geography can play a major role in dictating feasible options. The experience in transport is mixed. Industry has proven hard to decarbonize while maintaining rapid growth.
