You can cut carbon emissions and grow the economy. Proof from the EU

May 24, 2023

This article is published in collaboration with Quartz

The European Union has shown that it is possible to reduce carbon emissions while still growing the economy.

The European Union announced falling carbon emissions and rising GDP in the final quarter of 2022. Image: Pexels/Marcin Jozwiak

Diego Lasarte

Author, Quartz

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SDG 07: Affordable and Clean Energy

The EU has set a target of reducing its greenhouse gas emissions by 55% by 2030.
The region has already made significant progress in reducing its carbon emissions, with a 23% reduction since 1990.
Renewable energy sources, such as solar and wind, now account for 20% of the EU's electricity generation. Energy efficiency measures have also helped to reduce the EU's energy consumption.
The bloc's experience shows that it is possible to achieve ambitious climate goals without sacrificing economic growth.

The European Union (EU) has announced that its carbon emissions significantly declined in the final fiscal quarter of 2022, even as its gross domestic product (GDP) grew. Emissions fell by 4% year-over-year, while GDP increased by 1.5% during the same period.

This is a major milestone for the trading bloc, which has looked to balance economic growth with its aggressive plan to transition to renewable energy sources.

Greenhouse gas emissions fell in 23 of the 27 EU member states, with only Denmark, Ireland, Latvia, and Malta seeing increases. The Netherlands, Slovakia, and Slovenia posted the biggest drops in emissions while also managing to boost GDP.

Emissions declined across all EU industry categories except services, mining, and transportation. The largest decline was in electricity, gas, and steam, buoyed by a concerted effort to reduce reliance on Russian gas, as well as unseasonably mild weather.

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What's the World Economic Forum doing about the transition to clean energy?

Moving to clean energy is key to combating climate change, yet in the past five years, the energy transition has stagnated.

Energy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago. Plus, improvements in the energy intensity of the global economy (the amount of energy used per unit of economic activity) are slowing. In 2018 energy intensity improved by 1.2%, the slowest rate since 2010.

Effective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system.

Benchmarking progress is essential to a successful transition. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. The 10 countries that score the highest in terms of readiness account for only 2.6% of global annual emissions.

To future-proof the global energy system, the Forum’s Centre for Energy & Materials is working on initiatives including Clean Power and Electrification, Energy and Industry Transition Intelligence, Industrial Ecosystems Transformation, and Transition Enablers to encourage and enable innovative energy investments, technologies and solutions.

Additionally, the Mission Possible Partnership (MPP) is working to assemble public and private partners to further the industry transition to set heavy industry and mobility sectors on the pathway towards net-zero emissions. MPP is an initiative created by the World Economic Forum and the Energy Transitions Commission.

Is your organisation interested in working with the World Economic Forum? Find out more here.

Europe’s renewable energy transition: by the digits

55%: Minimum cut in carbon emissions the EU is targeting by the end of the decade. That figure, announced last month as part of its 2030 Climate Target Plan, is much higher than the previous target of 40%.

32%: Share of European electricity created by renewable energy sources (hydro, wind, and solar) in 2021. Fossil fuels produced 36% of the total that year.

600 gigawatts: EU goal for new solar panel production by 2030. Solar is the fastest-growing energy source in Europe.

300 gigawatts: EU goal for new offshore wind energy production by 2050. Offshore wind turbines currently generate 15% of Europe’s electricity.

2035: Deadline for all new EU-manufactured cars to be emissions-free.

2050: Deadline for Europe to become a “climate-neutral continent.”

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