Research
Assessing decoupling greenhouse gas emissions from economic growth in the Netherlands (1990-2022): A non-technical summary
Governments aim to meet Paris climate goals while sustaining economic growth by decoupling greenhouse gas emissions from economic activity. Our report shows the Netherlands achieved absolute decoupling of production-based GHG emissions from GDP growth (1990-2022) after adjusting for cyclical fluctuations, with non-CO2 gases like CH4 and N2O decoupling more strongly than CO2. Policies may have reduced emission, but more effort is needed to meet climate goals.
Governments have been making efforts to fulfill their commitments to the Paris Agreement while seeking to maintain economic growth. Achieving this balance depends on the extent of decoupling between greenhouse gas (GHG) emissions and economic activity. This report analyses how much Dutch economic activity (defined as real gross domestic product (GDP), or simply the value of all goods and services produced, adjusted for inflation) has decoupled from GHG emissions over the years. It also explores how this decoupling varies across different types of GHG.
As decoupling is a complex concept, we limit our scope
Literature suggests that historically, as economies grew, so did GHG emissions. However, this relationship may have changed over time. Studies on this relationship show mixed results, depending on the choice of data, metrics used, country, time horizons, and methods. In the light of this complexity, we limit our scope. Here are the specific choices we made:
It is worth mentioning that imported goods in the Netherlands have been more emission-intensive than exported goods. Therefore, in addition to the production approach, more research on consumption-based emissions can provide further insight into the Dutch contribution to global climate change.
The most important findings from our analysis are:
Decoupling in the Netherlands…
Our findings indicate relative decoupling in the Netherlands: From 1990 to 2022, the Dutch economy grew, but GHG emissions did not increase as much. When we filter the data to look at long-term trends, the economy grew while emissions actually decreased. This is known as absolute decoupling.
…varies across gas types…
When examining different types of gases, we observed that the Netherlands economic activity has decoupled from emissions of all major GHGs, including carbon dioxide (CO2), methane (CH4), and nitrous oxide, or laughing gas (N2O). CO2 is particularly important as it is the biggest contributor to total GHG emissions, making up an average of 85%. While it’s harder to find absolute decoupling for CO2, excluding biomass-related emissions provides stronger evidence that economic growth can occur alongside a reduction in CO2 emissions.
… and case for CO2 is particularly complex
CO2 emissions only modestly decouple from GDP because the use of biomass has increased, driven by Europe’s focus on bioenergy. In the Netherlands, the use of biomass has increased, particularly through co-firing of biomass (mostly wood pellets) in coal power plants. These increased emissions from biomass mask the reductions in non-biomass emissions of CO2.
Three sectors stand out as biggest emitters of non-biomass CO2 emissions:
Policy decisions appear to have been the main driver behind the reduction of GHG emissions
Similar to the impact of biomass CO2 (mentioned above), policy changes may have contributed to emissions from the other two gases.
Methane (CH4) emissions seem to be mainly the result of changes in landfill policies. Since 1990, new Dutch landfill regulations may have significantly reduced CH4 emissions, highlighting the critical role of policy interventions. Among the economic sectors, the agriculture sector has also contributed to reducing CH4 emissions. In the F&A sector, policy decisions, such as the elimination of milk quotas by the European Commission and the introduction of phosphate rights have affected cattle numbers, which in turn impacted CH4 emissions.
The sharp drop in N2O emissions is mainly driven by lower emissions from the chemicals sector and agriculture. Agriculture led the reduction in N2O emissions until around the early 2000s, after which it stabilized. Notably, in 2008, a sharp decrease in N2O emissions from the chemical industry led to a significant overall decline compared to 2007. This decrease coincided with changes in nitric acid production as the sector came under the European Emissions Trading System (ETS).
Meeting Paris climate goals will require much more effort
Despite these positive trends, much more effort is needed to meet the Paris climate goals. This aligns with the most recent assessment in the Climate and Energy Outlook of the Netherlands 2023 (KEV) by the Netherlands Environmental Assessment Agency (PBL). Given the modest long-term growth in the economy and population, improvements in energy efficiency and carbon intensity are not happening fast enough to meet the target. All relevant stakeholders in the Netherlands need to intensify their efforts to achieve this goal.