Rankings for Carbon Emissions and Economic Growth Decoupling
65
More precisely, they argue that increases in GDP can have low or even negative costs
for nature. With “negative costs” they mean that environmental protection can induce
the development of green technologies and businesses that can foster the economy
even further. Jacobs (2013) differentiates between “strong” and “standard” green
growth. The former is the one for which growth considering nature can encourage
the development of growth itself. Hence, followers of green growth are optimistic
regarding the feasibility of decoupling between carbon emissions and GDP.
The empirical base for “green growth” is the environmental Kuznets curve,
according to which more growth sooner or later implies pollution decreases
(Grossman and Krueger 1995). The cause of that inverted U shape between economic
activity and emissions is that as countries grow, higher income implies technological
development and changes in consumers’ tastes, and further both go in the direction of a greener economy. Several articles provide a theoretical framework for the
environmental Kuznets curve. For example, Stokey (1998), using a representative
consumer model, show that “if increased productive capacity allows both consumption growth and improved environmental quality, then growth may continue without
bound.” However, there are doubts in the literature on the feasibility of occurrence
of a classical Kuznets shape for carbon emissions (Dasgupta et al. 2002).
Finally, other economists support a third way, based on the traditional concept
of sustainable development. The idea is that economic growth and environmental
sustainability are not goals in themselves, but rather social progress is the ultimate
target. Under this line, the economy can grow and do so decreasing emissions, but it
can also be that social satisfaction is not increasing. That perspective has been named
by the term “a-growth”, referring to “agnostic growth.” Van den Bergh (2011) introduces that word in the Ecological Economics journal (i.e., one of the most important
in the field). “A-growth” does not mean to be against growth, but rather against
economic growth that does not consider social and environmental sustainability. An
example that is often used to illustrate the point is the case of India that has been able
to increase GDP but has maintained a low standard of human development, measured
by life expectation, health and education levels (Drèze and Sen 2013).
There are several ways to measure social progress. One alternative is to use social
welfare functions (Adler 2012), but it is not easy to operationalize this type of functions since they require comparability among individuals. Another option is to use
the index of Genuine Savings (GS), which introduces corrections to take into account
environmental resources depletion and environmental damages, as well as the investment in human capital (Hamilton 2000). A criticism for the GS indicator is that
losses of natural capital are considered irrelevant if they are substituted by gains
in human capital (van den Bergh and Antal 2014). Another index often used to
measure progress is the Human Development Index (HDI). The IDH is an indicator
that combines life expectation, the number of years in formal education, and GDP
per capita. The problem with the HDI is that it does not have any environmental
dimension. Arrow et al. (2012) propose another way to measure sustainability in
terms of the capacity to provide well being to future generations. They provide a
model and empirical estimations of wealth in several countries. They incorporate
population growth, technological change, human capital and environmental quality
65
More precisely, they argue that increases in GDP can have low or even negative costs
for nature. With “negative costs” they mean that environmental protection can induce
the development of green technologies and businesses that can foster the economy
even further. Jacobs (2013) differentiates between “strong” and “standard” green
growth. The former is the one for which growth considering nature can encourage
the development of growth itself. Hence, followers of green growth are optimistic
regarding the feasibility of decoupling between carbon emissions and GDP.
The empirical base for “green growth” is the environmental Kuznets curve,
according to which more growth sooner or later implies pollution decreases
(Grossman and Krueger 1995). The cause of that inverted U shape between economic
activity and emissions is that as countries grow, higher income implies technological
development and changes in consumers’ tastes, and further both go in the direction of a greener economy. Several articles provide a theoretical framework for the
environmental Kuznets curve. For example, Stokey (1998), using a representative
consumer model, show that “if increased productive capacity allows both consumption growth and improved environmental quality, then growth may continue without
bound.” However, there are doubts in the literature on the feasibility of occurrence
of a classical Kuznets shape for carbon emissions (Dasgupta et al. 2002).
Finally, other economists support a third way, based on the traditional concept
of sustainable development. The idea is that economic growth and environmental
sustainability are not goals in themselves, but rather social progress is the ultimate
target. Under this line, the economy can grow and do so decreasing emissions, but it
can also be that social satisfaction is not increasing. That perspective has been named
by the term “a-growth”, referring to “agnostic growth.” Van den Bergh (2011) introduces that word in the Ecological Economics journal (i.e., one of the most important
in the field). “A-growth” does not mean to be against growth, but rather against
economic growth that does not consider social and environmental sustainability. An
example that is often used to illustrate the point is the case of India that has been able
to increase GDP but has maintained a low standard of human development, measured
by life expectation, health and education levels (Drèze and Sen 2013).
There are several ways to measure social progress. One alternative is to use social
welfare functions (Adler 2012), but it is not easy to operationalize this type of functions since they require comparability among individuals. Another option is to use
the index of Genuine Savings (GS), which introduces corrections to take into account
environmental resources depletion and environmental damages, as well as the investment in human capital (Hamilton 2000). A criticism for the GS indicator is that
losses of natural capital are considered irrelevant if they are substituted by gains
in human capital (van den Bergh and Antal 2014). Another index often used to
measure progress is the Human Development Index (HDI). The IDH is an indicator
that combines life expectation, the number of years in formal education, and GDP
per capita. The problem with the HDI is that it does not have any environmental
dimension. Arrow et al. (2012) propose another way to measure sustainability in
terms of the capacity to provide well being to future generations. They provide a
model and empirical estimations of wealth in several countries. They incorporate
population growth, technological change, human capital and environmental quality