Green growth gets a reality check

By James Langton | April 27, 2022 | Last updated on April 27, 2022
2 min read
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At some point, generating economic growth without destroying the planet will require a decoupling of carbon emissions from GDP — but, according to Fitch Ratings, that hasn’t happened yet.

In a new report, the rating agency noted that the surge in the volatility of global GDP activity over the past couple of years — with economic activity plunging in response to the onset of the pandemic, and then rapidly rebounding — highlighted the still-strong links between prosperity and pollution.

“Emissions fell during the global recession in 2020 but then grew in line with the recovery in world GDP in 2021, the first year since 2010 when the carbon intensity of global GDP failed to improve,” the report noted.

Ultimately, for policymakers to meet their climate goals, it will be “crucial” to break the link between emissions and GDP, Fitch said — given that world GDP is expected to continue rising by 2.5%-3% over the next two decades.

The report noted that, while the carbon intensity of GDP has fallen by 45% since 1965, this is largely due to improvements in efficiency, and that the carbon intensity of energy “has improved only very modestly since the late 1990s, reflecting the rapid increase in China’s share of global energy consumption after 2000 and its relatively high reliance on coal.”

In 2021, while energy efficiency improved, Fitch said this was more than offset by an estimated 1.4% increase in the carbon intensity of energy.

“Last year’s deterioration in the carbon intensity of energy is notable in terms of the decarbonisation challenge ahead,” the report said, noting that, “the projected decline in the carbon intensity of GDP over the next 20 years in the scenario is dominated by projected reductions in the carbon intensity of energy.”

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James Langton

James is a senior reporter for and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.