Tracking Carbon Neutrality Around the World with the Decarbonization Index

Cape Town, South Africa. Photo by Marlin Clark via Unsplash.

By Jiaqi Lu

The phasing down of carbon-based fossil energy in a just and orderly way is essential for mitigating the worst impacts of climate change.

To ensure political feasibility, the Paris Agreement incorporates all existing types of measurements for climate commitments, including intensity, emissions peak, absolute emissions mitigation and share of clean energy, and carbon neutrality.

While such flexibility allows for the accommodation of differences and promotes consensus, it simultaneously complicates the standardization and monitoring of progress, significant uncertainties.

In a new journal article published in Renewable and Sustainable Energy Reviews, my coauthors and I developed the Decarbonization Index (DCI), a novel indicator for measuring the progress of countries towards a carbon-neutral future.

The DCI assesses the transition efforts of countries, quantifying how far they have moved away from carbon-intensive fossil fuel energy to cleaner energy sources. Using the carbon intensity of coal as the baseline, the DCI quantifies the extent to which a country has transitioned away from fossil fuels to power its economy. Thus, the DCI provides insights into the carbon footprint of various fuels, capturing the primary source of carbon dioxide (CO₂) emissions from energy consumption. The Index can also further break down contributions from different energy sources, enabling a detailed analysis of progress and setbacks of energy transitions around the world. This approach highlights the varying speeds at which different countries can and are advancing toward their neutrality goals.

In addition to helping policymakers track their country’s decarbonization progress, the DCI also enables a review of the evolution of the modern energy system. Figure 1 shows the energy transitions of the United Kingdom, the United States, India and China over time (1830-2022), in terms of the DCI.

Figure 1: Historical trajectories of DCI for the United Kingdom, the United States, India and China, 1830-2022

Coal fueled the first Industrial Revolution. Steam engines as a new innovation transformed chemical energy in coal into mechanical power to enable massive production and mobilization. While the rest of the world was dependent on biomass, Great Britain gained a critical competitive economic advantage and became the first global superpower.

In the late 1850s, oil was discovered and commercialized in the US. The rise of the oil industry led to an increase of the total amount of emissions, but marked the start of decarbonization in the modern energy system, as oil has a lower carbon intensity than coal. As seen in Figure 1, the DCI of the US began to rise above zero, meaning its overall energy structure was becoming less carbon intensive. During the second Industrial Revolution that occurred around 1870, the decarbonization process accelerated in close correspondence with technological advancement and diffusion. Internal combustion engines fueled by oil products promoted productivity and mobility, which ensured a market share for oil. The power of decarbonization by oil and gas was enormous. As Daniel Yergin noted, oil “was generous to his loyal subjects…(his) reign was a time of confidence, of growth, of expansion of astonishing economic performance.”

This is certainly true of the US. Since the 1900s, oil and gas consumption has increased dramatically, and so has its decarbonization. Until 1945, the share of oil and gas consumption in the nation’s total energy mix reached 0.48, decarbonizing its energy system by nearly 20 percent. It was also during this time that the US became the dominant superpower, surpassing the UK, which stagnated and depended on coal.

Riding the tide of the third Industrial Revolution after World War II, the UK diversified its energy system and decarbonized its economy at an incredible speed. By the end of the century, the UK had removed 36 percent of carbon from its energy system; about the same progress it took the US nearly 150 years to accomplish. The UK received significant economic and environmental benefits from decarbonizing its energy system, perhaps most conspicuously in the disappearance of the persistent industrial smog that haunted London since the late 19^th to mid-20^th century.

During the same period, China started industrialization while slowly diversifying its energy consumption. By 2000, China removed 16 percent of carbon from its energy mix, driven mainly by oil and hydroelectricity. Yet in the first few years of the 21st century^st century, its DCI fell, mainly due to rapid economic expansion and increasing dependence on coal. This downward trend was reversed again around 2008. From 2008-2016, China’s energy decarbonization accelerated, with a rapid increase of 39 percent, more than half of which came from non-carbon sources, as seen in Figure 2.

Figure 2: Historical trajectory of DCI and contributions from different energy sources.

The acceleration of decarbonization was not unique to China. Both the US and the UK experienced dramatic increases in their DCI around 2010. As shown in Figure 2, from 2010-2016, the DCI of the UK increased by 27 percent, with non-carbon energy contributing to nearly 90 percent of the total decarbonization progress. While the contribution from non-carbon energy almost doubled in the UK, three-quarters of the US decarbonization progress were due to oil and gas, which explains its much slower rate of improvement (just 10 percent in six years). If these countries manage to continue decarbonizing at the same respective speeds, the UK will reach zero carbon emissions in 2056, China in 2080s and the US in the 2100s.

However, in sharp contrast, India has experienced a 10 percent retrogression in decarbonization since 2010. Considering the size of the Indian population and economy, this has enormous implications for global climate change. Additional effective climate-friendly energy policies and regulations must be implemented to reverse this trend.

Furthermore, we analyzed energy transitions in 14 countries and the European Union, all of which have committed to carbon neutrality under the Paris Agreement. To assess their progress towards achieving carbon neutrality in line with their NDCs, the DCI categorizes them into three tiers, as seen in Figure 3.

Figure 3: The DCI Score and Annual Growth Rate of 15 Countries

Tier 1 includes South Africa, which faces the greatest challenge, requiring the highest annual decarbonization growth rate to meet its targets. This illustrates the significant hurdles faced by some countries with significant coal endowment. The second tier encompasses countries like Japan, Germany, the Netherlands, China, Korea, US, EU, UK and Spain, which can afford a relatively slower pace of DCI growth due to their existing advancements in renewable energy. The third tier countries, especially Canada, Brazil and France, are well-positioned to achieve carbon neutrality within their planned timelines, primarily due to their utilization of nuclear energy or hydropower.

This analysis demonstrates the DCI’s utility in crafting tailored strategies to aid countries with underdeveloped infrastructure or high carbon footprints in their shift towards renewable energy and meeting their decarbonization goals.

Overall, we conclude that current business-as-usual scenarios are insufficient for achieving carbon neutrality, highlighting the urgent need for bold policy change and increased international cooperation to accelerate the shift to low-carbon energy sources. This November, countries around the world will convene in Baku for the 2024 United Nations Climate Change Conference (COP29), where a major task will be to bolster the global ambition for NDC updates by early 2025. The new cycle of NDCs provide countries with an opportunity to ensure their national climate targets are aligned with their climate neutrality commitments.

If recent history is defined by a widespread reliance on fossil fuels, the future must be built on non-carbon energy. Rapid decarbonization driven by a new industrial revolution could be the beginning of the end. Placing a net-zero emissions goal into a binding international climate agreement was a major political breakthrough, but to realize a carbon-free future, countries need to further enhance international cooperation within and outside the Paris Agreement framework.

Tracking progress in decarbonization is also crucial for achieving climate goals. The DCI is an effective indicator of country progress and can serve as the quantifiable basis of robust policymaking and international climate cooperation.

As the trajectories of the DCI for several economies reveal, a responsible global power should not hesitate to take the lead in decarbonizing its economy, as doing so would not only eliminate anthropogenic carbon emissions, but also build up economic competitiveness, resulting in a win-win scenario for climate and the economy.

Read the Journal Article

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