How lowering carbon emissions can lead to greater prosperity

Jonas Grafström

September 9, 2020

The late Professor Hans Rosling emphasised that the state of the world is better than we think. Think about the world. War, violence, natural disaster, man-made disasters, corruption. Things are bad, and it feels like they are getting worse, right, he once said. Rosling surveyed people’s perceptions of the state of the world. Respondents performed worse on multiple-choice questions than monkeys picking bananas at random.

In essence, most people had a significantly more negative view of the world than reality. Rosling is not alone in observing that the world is in a much better state than we seem to think. Steven Pinker showed that the development in areas such as child mortality, literacy, violence and war is significantly better than people believe.

Headlines convey little hope. The impression given by the media and public discourse is that the environment only deteriorates more and more as time passes. The Ratio Institute’s new report, (Much) More for Less – How sustainable is Swedish economic growth?, seeks to counteract that misconception. It addresses resource use and emissions in Sweden. We investigated 50 different emissions, pollutants and environmental factors, and found an overwhelming improvement over time.

The purpose of our report was not to trivialise the seriousness of environmental issues. The ambition was to conduct an empirical survey of how emissions and natural resource use in Sweden have changed over time. We found, quite simply, that we get more wealth out of less environmental harm.

Since 1990, Sweden’s population has increased by more than 1.6 million and the economy has almost doubled in size. Over that same period, domestic carbon dioxide emissions have decreased by 27 per cent. GDP per carbon dioxide unit thus decreased by 60 per cent during that period. Did we just export the emissions? That doesn’t seem to be the case. Data from the Swedish Environmental Protection Agency revealed a decrease in foreign imported emissions.

In many areas, we saw examples of absolute decoupling between emissions and economic growth. For instance, when the economy grows by one per cent, emissions go down by 0.5 per cent. In other areas, we saw economic growth that is greater than the additional resource utilisation; that is, relative decoupling. An example of relative decoupling could be that if growth increases by one per cent, emissions only increase by 0.2 per cent.

To name a few Swedish examples, total emissions from passenger cars decreased by 21 per cent from 1990 to 2018. Many people’s initial reaction to that is that there must be fewer cars on the streets. That is not the case. During that period, the number of cars increased by 1.2 million. What happened was that through technological change, the amount of fuel required to travel the same distance was reduced. During the last twenty years, average gasoline use has decreased from 1.1 litres per 10 kilometres to 0.5 litres. The gasoline also now contains biofuel, which reduces emissions further.

We have seen similar progress in the emissions produced by domestic flights. Numbers of domestic flights taken have remained constant over the last thirty years, but the emissions from domestic flights decreased from 687,000 tons of carbon dioxide equivalents in 1990 to 531,000 in 2018, a decline of about 13 per cent. Emissions per person and per kilometre travelled have decreased by an average of 1.9 per cent per year, but are still high compared to cars or trains.

In an overwhelming majority of the cases we studied, we found more wealth correlating with lower emissions. We found enormous progress being made, especially around environmentally- and health-hazardous emissions.

We can fly more, drive further and generally produce less carbon dioxide. The results of our report are important because our environmental goals are ambitious. This data shows that we can achieve rapid reductions in harmful emissions while our prosperity is still growing. Sweden’s environmental goals have not yet been reached and there is much that needs to be done, but there is hope for the environment. We can sustain living standards while improving the environment.


Written by Jonas Grafström

Dr Jonas Grafström is a researcher at the Ratio Institute in Stockholm, Sweden.


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