A weekly presentation of downloadable charts and short analyses designed to graphically illustrate important economic issues. Updated every Wednesday.

Snapshot for August 25, 1999

Fossil fuel restrictions won’t hurt economy

Scientists agree that emissions of “greenhouse gases” pose a serious threat to the global climate. Certain levels of these gases exist naturally, trapping the sun’s heat and making the planet inhabitable. However, increased emissions of these gases also have the potential to trap too much heat, altering the climate in major and unpredictable ways.

Carbon, the most important greenhouse gas, is a direct byproduct of fossil fuel use. When the United States tentatively agreed in December 1997 to reduce greenhouse gas emissions 7% below 1990 levels by 2010, many economists worried that such a reduction in carbon emissions would wreak havoc on the U.S. economy.

Historically, economic output and carbon emissions have gone hand in hand. Lately, however, this link has begun to weaken.

The chart below shows the relationship between carbon emissions and gross domestic product (GDP) from the end of the last oil shortage in 1986 to the present, indexed to 1986 levels. As the graph shows, the link between carbon emissions and GDP first began to weaken in the early 1990s, and this has continued to deteriorate over the course of the decade.

Whatever the factors behind this break in the relationship, the last few years have clearly demonstrated that slowing carbon emissions — and preserving the environment in the process — does not have to come at the expense of a vibrant economy.

Source: Energy Information Administration and Bureau of Economic Analysis.

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