"Misleading Talk about Decoupling CO2 Emissions and Economic Growth"

Rob Stavins is annoyed but I'm not sure at who. Is it the steady state ecological economists ("We should encourage our public bodies, to adopt an economic policy that rejects the endless pursuit of aggregate growth") or the folks who that that a technological solution exists such that GDP increases and CO2 emissions goes down? I think both. Anyway, he asks "what factors affect CO₂ emissions?"

... in some cases, as economies grow, CO₂ emissions can actually fall.  First, picture an economy which is growing exclusively in its services sector.  In this case, economic growth might be accompanied by no change in CO₂ emissions.  Now picture an economy which is growing in its services sector, while shrinking in its manufacturing sector (sound familiar?).  In this case, economic growth might be accompanied by reduced CO₂ emissions.  Now add to this picture the presence of some public policies, such as those that cause the closure of coal-fired electric generation plants, as well as greater dispatch of electricity from natural gas-fired plants.  The result:  economic growth continues, with falling CO₂ emissions.  But there has been no decoupling. ...

So, why have CO₂ emissions been declining in some countries?  Or, more broadly and more to the point, what factors have affected CO₂ emissions?  Four stand out (although there are others).

First, energy comes at a cost in all economies, and so economic incentives exist to economize on energy use through technological change.  The energy-intensity of the U.S. economy has gradually fallen – almost monotonically – since early in the twentieth century.

Second, putting aside energy-intensity and focusing on carbon intensity, some technological change has worked against the use of carbon-intensive sources of energy.  The most dramatic example, particular to the United States, has been the combination of horizontal drilling and hydraulic fracturing (fracking), which has caused a significant increase in supply and dramatic fall in the market price of natural gas, which has led to a massive shift of investment and electricity dispatch from coal to natural gas.

Third, in the richer countries of the world, including this one, the process of economic growth has led to changing sectoral composition:  heavy industry to light manufacturing to services.  The deindustrialization of California is a graphic example.  Does the fact that California’s economy has grown while emissions have fallen mean that decoupling has occurred?  Of course not.  And, in the California case, there has also been a fourth factor …

Fourth, public policies have in some jurisdictions of the world (Europe, the United States, and most of the OECD countries) discourage carbon intensity.  In the USA, this has happened both through climate policies and non-climate policies.  Some non-climate policies, such as EPA’s Mercury Rule, discourage investment, encourage retirement, and discourage dispatch of coal-fired electricity, while other non-climate policies, such as CAFE standards for motor vehicles, bring about greater energy efficiency of the fleet of cars and trucks over time. Climate-specific policies have also mattered, such as in California, where the Global Warming Solutions Act of 2006 (AB-32) has brought down emissions through a portfolio of policies, including an economy-wide CO₂ cap-and-trade system. ...

via www.robertstavinsblog.org