Keywords : Climate Financing; Carbon; Agriculture; Emissions; Decoupling
Source: World Bank, 2021.
The Environmental Kuznets Curve (EKC) hypotheses a relationship between a number of environmental degradation indicators and per capita income. As countries develop economically, they tend to increase pollution levels until they reach a certain income level, where they begin to permanently reduce their emissions. This reduction is typically due to a structural shift from agriculture to industrial and then to services, alongside scaling production and improved efficiencies. This model emphasises the role of civic engagement in government. With rising economic prosperity, citizens demand higher living standards, including essential services like electricity and cleaner air, which contribute to the bending of the curve.
Most OECD countries, and most of Europe since the 1990s, have reached the inflection point. These countries have successfully managed to ‘decouple’ their modes of production from emissions, allowing them to expand their economies while reducing their carbon footprints. Post-1997, following the Kyoto Protocol, a significant goal of climate financing has been to facilitate support from developed countries to developing countries to bypass the more pollutive phases of development by adopting low-carbon development pathways. To do otherwise would break the global carbon budget, increasing costs for everyone.
Figure: Environmental Kuznets curve for the Sahel region, 1990-2030.
Source: This graphic was developed by OAM Consult based on data from the World Bank and Climate Watch, 2021.
The Global North developed using carbon-intensive modes of production and has, since the 1990s, started to decouple their growth from carbon emissions. However, given the current trajectories of our Earth System, the Global South—including the Sahel region—needs to fast-track to low-carbon development if we are to achieve a safe operating space for humanity.
Key Take-aways
The Environmental Kuznets Curve (EKC) suggests that economic development initially leads to increased pollution, but reaches a point where emissions start to decline due to structural shifts and improved efficiencies. This model is evidenced in most OECD countries, which have managed to expand their economies while reducing their carbon footprint since the 1990s.
Economic Development and Pollution: The EKC hypothesis that as countries develop, pollution increases until a peak income threshold is reached, after which pollution decreases as economies transition from agriculture to industrial and services sectors.
Role of Civic Engagement: Increased economic prosperity leads to higher citizen demands for improved living standards and essential services, such as cleaner air and electricity, which contribute to environmental improvements.
Climate Finance Goals Post-Kyoto: Following the Kyoto Protocol, climate financing aims to help developing countries adopt low-carbon pathways and skip pollution-intensive stages of development.
Sahel's Decoupling Challenge: The Sahel faces unique challenges in moving away from a carbon-intensive development model. Key interventions needed include adopting climate-smart agriculture, transitioning to cleaner energy, and enhancing economic efficiency.
Currently, Sahel countries are following the traditional carbon-intensive method of development, where GDP growth is accompanied by a proportional increase in carbon emissions. These countries require a wide range of interventions to begin the' decoupling' process. These include intensifying climate-smart agricultural practices, evolving economic structures towards industry and service sectors, speeding up the transition to cleaner energy sources, and improving efficiency. The success of such transformative actions in the Sahel critically hinges on the region's ambition and the support it receives.
