Evaluation of decoupling of GDP and CO2 emissions in EU-15

Abstract

Abstract Generally, economic growth is accompanied by an increase in energy consumption, which consequently leads to higher levels of greenhouse gas emissions. These, in turn, are the causes of global warming, which is one of the most acute environmental problems nowadays. Decoupling occurs when environmental pressure can be decreased without the negative effect of the economic growth of a country. This study is focused on the investigation of the decoupling of the economy and environmental pressure. The analysis was carried out for EU-15 countries for the period between 1990 and 2014. For the evaluation of decoupling the Tapio decoupling elasticity method was used. This method provides the extent of decoupling of the economy and environmental pressure for each country. The economy was measured in terms of gross domestic product (GDP), while the environmental pressure was represented by CO2 emissions from the public electricity and heat generation sector. The EU-15 countries were classified into three groups depending on the individual reduction targets following Kyoto Protocol. Group I had high values of reduction targets ranging from -28% to -12.5%, Group II had moderate values of reduction targets situated between -7.5% and 0%, and Group III had mild values of reduction targets from +4% to +27%. The results of this analysis show that there is strong fluctuation of the extent of decoupling between GDP and CO2 emissions for each country in the specified period. Therefore, there are no clear patterns of decoupling intensity that can be observed. However, it is important to notice that in almost every country the decoupling between GDP and CO2 emissions was either strong or weak. This study has shown that generally most of the countries achieved some extent of decoupling between the growth of the economy and the pressure on the environment. The countries that showed the decoupling of more than 80% of the specified period are Luxemburg, Ireland, and Italy. For most of the countries, the decoupling was deteriorated by the financial crisis of 2008. Another possible reason for the decrease in decoupling is the extensive use of renewable energy resources. While their application lowers the CO2 emissions, the high production and operation costs constrict the growth of the economy. Sweden, Finland, and Denmark had such situation.