Sweden Shows How Economic Growth Can Continue While Carbon Emissions Fall

One common argument in the climate change debate is that fossil fuels are beneficial because they drive economic growth and make most people better off overall. To a certain extent, that is true—but it is also an incomplete view of the costs.

The economic growth promoted by fossil fuels has created significant environmental consequences. We are only beginning to pay some of those costs through damage and disruption caused by extreme weather events. The ultimate price remains difficult to estimate, especially because impacts such as sea-level rise could continue for centuries even after the world reaches net-zero emissions.

There is, however, another way to support economic growth: build an economy that is less damaging to the environment and does not leave future generations with a difficult carbon debt to manage.

What Does “Opening the Scissors” Mean?

In 2013, I was introduced to a metaphor describing the changing relationship between economic growth and fossil fuel use: “opening the scissors.” For decades, GDP growth and carbon emissions moved together like the two blades of a closed pair of scissors.

The goal was to open those blades—to allow GDP to continue growing, ideally in ways that improve people’s lives, while reducing the carbon emissions associated with that growth. Economists often describe this process as decoupling economic growth from carbon emissions.

Sweden’s Economic Growth and Emissions Decline

Sweden offered an early example of this transition. In 1996, the country’s carbon emissions began a gradual decline that has continued to the present. Total emissions have fallen by roughly one-third from their recent peak in 1996 and by more than half from their peak levels in 1970.

At the same time, Sweden’s economy continued to grow. In 2013, available data extended only through 2011. The World Bank now shows that Sweden’s GDP has more than doubled since 1996.

Three decades of data make the trend increasingly clear: Sweden has opened its scissors. Economic output has continued to rise even as carbon emissions have declined.

Can Other Countries Follow Sweden’s Example?

The larger question is whether Sweden’s experience can be replicated elsewhere. Sweden benefited from substantial hydroelectric power and an established nuclear reactor base. Its economy is also strong, although it is less diversified than the economies of some larger countries, such as the United States.

Those differences matter. Still, Sweden’s long-term record shows that economic growth and falling carbon emissions do not have to be mutually exclusive. The challenge is determining how other countries can achieve the same separation between prosperity and fossil fuel use.