The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Aayush Sharma, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur
Amidst the global discussion of not being able to contain the global temperature rise to 2 degree of pre-industrial levels, a recent news must have spread smiles across the faces of everyone working for the environment. For the first time in history, for the second year in a row, the global carbon dioxide (CO2) emissions did not increase while the global economy grew.
The data on emissions for 2015 was released by International Energy Agency (IEA) in Paris recently. It said that while global economic growth averaged over 3% in the past two years (2014, 2015), CO2 emissions remained fairly stable. This may well be the first time that we have an indication towards decoupling of the economic growth and emissions, which is a good trend in the making.
There are two observations about this development:
Firstly, the relatively recent concept of green bonds (which showed oversubscription in the bond market) and usage of renewable energy sources have started showing their impact. The long-term trend is definitely indicating towards green technologies being more and more embraced throughout the world. Irrespective of the oil prices spiraling, green technologies are breaking records each year with increasing investment.
What started in India with Yes Bank, CLP India, Exim Bank of India and IDBI Bank (issue of green bonds) and more recently with SEBI clearing the air on rules related to issue of such bonds1, is no different from what is happening around the world. Businesses are already moving in this direction. Apple2 has already achieved 100% renewable energy milestone for its US operations and is fast moving in the direction of replicating the feat globally across its corporate offices, retail stores and data centers.
Secondly, something unique just happened this year. Historically there were three other times when the trend of stagnant emissions came up. These were in 1980-82, 1991-92 and 2008-09. All of these were marked by weak global economies. In 2015, it was for the first time that global economic expansion and stagnant CO2 emissions happened together, strengthening the view that economic growth may well be possible without harming the environment that much.
This may actually prove Sheikh Yamani (former Saudi Arabian Minister of Oil) correct when he said “The Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil”.
- Business Standard article (Jan 11, 2016): www.business-standard.com/article/pti-stories/sebi-clears-new-norms-for-issuance-listing-of-green-bonds-116011100749_1.html
- Apple’s sustainable energy practices: www.apple.com/environment/our-progress/