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Economic growth and development with low-carbon energy

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  • Sam Fankhauser

    (Grantham Research Institute on Climate Change and Centre for Climate Change Economics and Policy, London School of Economics)

  • Frank Jotzo

Abstract

Energy is needed for economic growth, and access to cheap, reliable energy is an essential development objective. Historically most incremental energy demand has been met through fossil fuels, however in future that energy will have to be low-carbon and ultimately zero-carbon. Decarbonisation can and needs to happen at varying speeds in all countries, depending on national circumstances. This paper reviews the implications of a transition to low-carbon energy on economic growth and development in current low income countries. It sets out empirical findings about trajectories for energy intensity and emissions intensity of economic growth; explores pathways to accelerate decarbonisation; reviews the theoretical and empirical literature on economic costs and co-benefits of energy decarbonisation; and assesses analytical approaches. It discusses the opportunities that might arise in terms of a cleaner, more dynamic and more sustainable growth model, and the options for developing countries to implement a less carbon intensive model of economic development.

Suggested Citation

  • Sam Fankhauser & Frank Jotzo, 2017. "Economic growth and development with low-carbon energy," CCEP Working Papers 1705, Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:ccepwp:1705
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    Keywords

    Economic growth; Developing countries; Decarbonisation; Low-emissions trajectories; Climate change mitigation; Emissions intensity;

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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