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A bigger economy is good for the environment

    One of the most interesting data sets in the Environmental Accounts published today by the ONS is one showing the intensity of carbon dioxide emissions ie the level of emissions per unit of economic output.

    In 1997, for every one million pounds of economic output, the UK emitted 610 tonnes (or 0.61 thousand tonnes as the ONS prefers) of Carbon Dioxide. This fell 37.7% to reach 380 tonnes of CO2 per million pounds of output in 2012. Over the same period, real GDP grew by 32.7% which gives the strong negative correlation between emissions intensity and GDP which is so clear in the graph below.

    Perhaps unsurprisingly, emissions intensity is greatest in the sector compiling agriculture, forestry and fishing as well as the sector compiling energy supply, water and waste.

    Obviously we need to apply the usual caveats about correlation not equalling causation and should consider that rising prices are also part of the picture. It is also simplistic to equate carbon emissions with the environment but let's leave that point to the side for the moment.

    Nevertheless, it is quite clear that as economies grow and become more efficient, new ways of producing goods and delivering services are developed. Growth and innovation will solve our environmental problems not “la décroissance.”

     

    Adam joined the Centre for Policy Studies as Head of Economic Research in January 2014. 

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