The long-term U.S. experience
emphasizes the importance of controlling for electrification and other
major technology transformations when evaluating the growth of carbon
emissions at different stages of development. Prior to World War I,
carbon emissions grew faster than economic growth by 2.3% per year. As
electricity use expanded and steam engines became much larger, carbon
emissions began to grow slower than economic growth by 1.6% per year.
Adjusting for this technological shift, an expanding economy continues
to increase carbon emissions by about 9% for each 10% faster growth.
There is little evidence for a decline in this elasticity as the income
level rises. These results suggest that the United States today will
need to find additional policies to curb carbon emissions if it wishes
to prevent any further increase in its per capita emissions and its per
capita economy grows by more than 1.8 percent per year.