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Summary

  • Economic growth is highly correlated with the availability of low-cost, high-quality energy
  • Advanced economies may accomplish some decoupling based on the outsour-cing of heavy industrial activity
  • Given the superior characteristics of fossil fuels in terms of cost, density and manageability, renewables will offer only limited potential to replace them as key drivers of industrial output
  • While this limits the chances for middle-income economies to reduce emissions, low-income countries have opportunities to grow wealth and well-being without adding large amounts of CO2
IIER logo In December 2009, the 15th Annual UN Climate Change Conference ended without a globally bin­ding agreement to reduce green­house gas emissions. The outcomes from the 2010 talks in Cancún were equally non-committing. Among the reasons for these failures were concerns of emerging na­tions such as In­dia and China that limits on carbon-dio­xide emissions would impair their ability to fur­ther grow their economies. Given the evi­dence we outline below, they pro­bably have a valid point.
 
 
About IIER
The Institute for Integrated Economic Research is a Switzerland and U.S. based based non-profit organization focused on developing new macroeconomic models for academic and policy-making purposes. The objective is to establish a thorough understanding of mechanisms and constraints underpinning human economic activity, and turn this knowledge into models and policy advice for the future.
 

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