clean

technologies

Review
Decoupling Economic Growth from Carbon Emissions:
A Transition toward Low-Carbon Energy Systems—A Critical Review
Oluwatoyin J. Gbadeyan 1, * , Joseph Muthivhi 1 , Linda Z. Linganiso 2 and Nirmala Deenadayalu 1

1 Department of Chemistry, Durban University of Technology, Durban 4001, South Africa;

[email protected] (J.M.); [email protected] (N.D.)
2 Department of Physical Chemistry, University of South Africa, Pretoria 0003, South Africa;
[email protected]
* Correspondence: [email protected]

Abstract: Climate change has become a global nightmare, and the awareness of the causes of carbon
emissions has resulted in rigorous studies. These studies linked the increase in global warming
with booming economic growth. Since global warming has become more apparent, researchers
have explored ways to decouple economic activities from carbon growth. Economic and carbon
growth must be decoupled to achieve a low-carbon economy to support the carbon-growth plan or
emission-reduction strategy. The world is transitioning toward a carbon-neutral and green ecosystem,
so finding ways to decouple carbon emissions from economic activities is an exciting topic to explore.
This study reviews current information on the importance of decoupling energy from economic
growth innovative techniques that thoroughly examine the challenges and constraints of low-carbon
energy systems. In order to examine the detrimental effects of carbon emissions on ecosystems and
the ways in which economic expansion contributes to carbon footprints, more than three hundred
research papers were gathered using several search engines, including Elsevier and Google Scholar.
This review revealed that decarbonization and dematerialization had been achieved without declining
global economic growth. It also provides information on energy use and economic activities leading
Citation: Gbadeyan, O.J.; Muthivhi, J.; to global carbon emissions and alternative solutions to the global challenge of climate change. The
Linganiso, L.Z.; Deenadayalu, N. decoupling methods commonly used to determine the impact of energy decarbonization on economic
Decoupling Economic Growth from growth are explored. All the results suggest that economic growth is a primary mover of global
Carbon Emissions: A Transition carbon emission increase and must be separated to achieve a carbon environment.
toward Low-Carbon Energy
Systems—A Critical Review. Clean Keywords: decoupling; economic growth; carbon emissions; low carbon; energy systems
Technol. 2024, 6, 1076–1113.
https://doi.org/10.3390/
cleantechnol6030054

Academic Editor: Patricia Luis 1. Introduction

Alconero Global warming caused by greenhouse gas emissions (GHG) has led to the loss of
Received: 12 February 2024
lives and infrastructures worldwide. This unfortunate incident has become a disturbing
Revised: 17 July 2024 problem facing the global community. Fossil fuel consumption has been identified as the
Accepted: 1 August 2024 primary source of greenhouse gas emissions [1,2]. In 2012, the carbon dioxide generated by
Published: 19 August 2024 GHGs and released into the atmosphere was 47,599 million tons (MtCO2 ), increasing to
about three times in the past six decades. In 1960, it was 9385.8 million tons and drastically
increased to 36,138.3 in 2014, with a compound growth of 2.6% [3,4]. The increase in gas
emissions shown in has contributed to global warming, ravaging the world. Economic
Copyright: © 2024 by the authors. growth is identified as the principal mover of climate change and reducing the consequence
Licensee MDPI, Basel, Switzerland. of CE. Delinking economic growth from environmental harm is essential. The United
This article is an open access article Nations Environmental Protection Agency defines “Decoupling” as the process where
distributed under the terms and
economic growth is decoupled from GHG emissions, according to [5]. Similarly, according
conditions of the Creative Commons
to Organization for Economic Cooperation and Development (OECD), decoupling helps
Attribution (CC BY) license (https://
reduce economic advances’ effect on the environment [6].
creativecommons.org/licenses/by/
4.0/).

Clean Technol. 2024, 6, 1076–1113. https://doi.org/10.3390/cleantechnol6030054 https://www.mdpi.com/journal/cleantechnol

Clean Technol. 2024, 6 1077

Correspondingly, Juknys [7] confirmed that the decoupling initiation aimed to detach
economic growth from resource usage, which may reduce carbon discharge with the evolu-
tion toward a low-carbon energy system. However, this process requires joint participation
and effort from other countries to succeed. The shift from fossil fuels and coal to renewable
energy is still a big issue in South Africa and globally. For instance, the conflict between
Russia and Ukraine shows that several countries still depend on fossil fuels [6]. The global
world should focus and invest more in renewable energy initiatives to overcome global
emissions. There is a need for scholars to pay more attention to this challenge and propose
viable solutions.
Furthermore, Africa has not only redirected resources toward building and establish-
ing a low-carbon economy, but Europe and other countries are doing the same [5] and
projected and committed to carbon neutrality by 2050 [8,9]. However, extreme weather
conditions such as heat waves, drought, floods, heavy rain, and landslides from climate
change ravage the world’s nations, including the Europeans. The ravaging consequences of
the rapidly changing climate, such as ocean acidification, rising sea levels, and biodiversity
damage, need quick solutions. Countries focus on helping the world transition toward
low-carbon systems for a sustainable future. South Africa, for example, in its transition
toward carbon neutrality, presented the Bioeconomy Strategy, its strategy that plans to
make South Africa green by 2050 [5–9].
Furthermore 2002, the Organization for Economic Cooperation and Development
(OECD) proposed a decoupling theory to separate economic growth from environmental
pressure [9,10]. Moreover, the literature on decoupling has expanded to include envi-
ronmental pressure sources, including energy usage, soot, SO2 , and wastewater [11–15].
Researchers worldwide have been exploring ways to decouple economic growth (DEG) from
carbon emissions (CE) since the consequences of global warming have become more evident.

1.1. Definitions and Aims of Decoupling

According to the United Nations Environment Programme (UNEP) [5], “decoupling”
means decoupling economic growth from environmental degradation and reducing re-
sources used to generate economic growth. Decoupling aims to ensure a rapidly growing
economy, as defined in both definitions. Growth and emissions need to be decoupled
to achieve low-carbon global development. The literature on carbon dioxide emissions
CDE revealed that even if CE is reduced further and stricter policies are established before
2030, fossil fuels would still emit 850 to 1150 Gt of CO2 from 2016 to 2100 [16]. Despite
many empirical studies analyzing the relationship between CE and economic growth (EG),
the exploration has yet to demonstrate uniformity regarding this relationship’s possible
channels, key drivers, and levels (states). For example, recent studies have demonstrated
a decoupling between CDE and EG [17–19]. However, a study by Hilmi et al. [20] and
Jiborn et al. [21] found no evidence of decoupling.
Moreover, “decoupling” happens once the growth rate of GHG emissions is less than or
stable relative to the growth rate of economic factors (e.g., GDP). In 2016, over 170 countries
endorsed the Paris Agreement, limiting temperature increases by less than 2 degrees Celsius
over the next century [22]. The United Nations Framework Convention on Climate Change
(UNFCCC) requires members to reduce their carbon emissions immediately [23]. 2015,
China identified the highest CDE emitted globally and quantified 750 million tons between
2019 and 2020 [24]. This CDE makes China a central point for reducing global carbon
dioxide emissions [24].

1.2. Adverse Impact of Carbon Emission on Environment and the Way Out
Several studies have pointed to China as one of the principal carbon emitters globally,
drawing international attention [25,26]. Studies have also shown that climate change nega-
tively impacts human health, well-being, and livelihood [27–29]. Despite unprecedented
growth and development of the world’s economy since 2000 and emissions from differ-
 1.2. Adverse Impact of Carbon Emission on Environment and the Way Out
Several studies have pointed to China as one of the principal carbon emitters globally
drawing international attention [25,26]. Studies have also shown that climate change neg-
atively impacts human health, well-being, and livelihood [27–29]. Despite unprecedented
Clean Technol. 2024, 6 1078
growth and development of the world’s economy since 2000 and emissions from different
sources shown in Figure 1, carbon dioxide emissions have also increased, leading to in-
creased temperature-related
ent sources record-breaking
shown in Figure 1, carbon rates [30].
dioxide emissions have also increased, leading to
increased temperature-related record-breaking rates [30].

Figure 1. The sources of carbon emission and their adverse impacts on the environment.

Figure 1. The
Even sources ofare
if emissions carbon emission
reduced andconsistent
to levels their adverse
withimpacts on the environment.
representative concentration
pathway 2.6 (RCP 2.6), extreme temperatures may still occur in the coming decades [30].
Evencompletely
Therefore, if emissions are reduced
decoupling to levelsgrowth
of economic consistent
from with
carbonrepresentative
emissions is a concentration
viable
way to reduce extreme temperatures resulting in global warming. This
pathway 2.6 (RCP 2.6), extreme temperatures may still occur in the coming decades present study re- [30]
views recent literature that focuses on decoupling economic growth from
Therefore, completely decoupling of economic growth from carbon emissions is a viablecarbon emissions
and analyzes the root cause of climate change, which has become a global monster. Using
way to reduce extreme temperatures resulting in global warming. This present study re-
search engines like Google Scholar and Elsevier, more than three hundred research articles
views recent literature that focuses on decoupling economic growth from carbon emis-
were reviewed to determine the detrimental effects of carbon emissions on ecosystems and
sions and analyzes
how economic the root
expansion addscause of climate
to carbon change,
footprints. It alsowhich hasvalid
provides become a globalonmonster
information
Using
the overviews of decoupling techniques and strategies implemented to reduce the conse-research
search engines like Google Scholar and Elsevier, more than three hundred
articlesofwere
quence climatereviewed
change to determine
and the detrimental
factors limiting decouplingeffects of carbon
activities, emissions on eco-
climate economics,
systems
policy and how economic
implications, expansion
decarbonization, adds to carbon
dematerialization, and footprints.
informationItonalso provides valid
techniques
available to tackle these challenges were discussed.
information on the overviews of decoupling techniques and strategies implemented to
reduce the consequence of climate change and factors limiting decoupling activities, cli-
2. Overview of Decoupling Techniques
mate economics, policy implications, decarbonization, dematerialization, and information
According to Zhang [31], Von Weizsacker first proposed decoupling in 1989 to cap-
on techniques available to tackle these challenges were discussed.
ture the coincident interplay between EG and environmental damage. Knowing this, he
studied the dependence on emitting carbon dioxide emissions to boost China’s economy,
2. Overview
attempting to of Decoupling
apply Techniques
the decoupling concept to the environmental sphere. Decoupling
According to Zhang [31], Von Weizsacker
indicators, namely, absolute and relative decoupling, first
wereproposed
introduceddecoupling in 1989 to cap-
by the Organization
for Economic Cooperation and Development (OECD) into its
ture the coincident interplay between EG and environmental damage.decoupling modelKnowing
to clarify this, he
the decoupling
studied concept [10].
the dependence on emitting carbon dioxide emissions to boost China’s economy
attempting to Methods
2.1. Decoupling apply thefor decoupling concept
Separating Energy to the
Use from environmental
Economic Growth sphere. Decoupling in-
dicators, namely, absolute and relative decoupling, were introduced by the Organization
Juknys [32] distinguished primary decoupling from environmental pollution and
for Economic
secondary Cooperation
decoupling and Development
from natural (OECD)whereas
resource consumption, into itsdual
decoupling model
decoupling occursto clarify
the decoupling
when primary andconcept [10].decoupling coincide. Currently, three decoupling methods
secondary
are commonly explored to examine the fundamental association between energy use and
the degradation of the environment due to energy use. One of these methods is the
Taipo decoupling technique, which outlines three types: primary, secondary, and doubled
decoupling, as shown in Figure 2 [32,33].
 curs when primary and secondary decoupling coincide. Currently, three decoupling
methods are commonly explored to examine the fundamental association between energy
use and the degradation of the environment due to energy use. One of these methods is
the Taipo decoupling technique, which outlines three types: primary, secondary, and dou-
Clean Technol. 2024, 6 1079
bled decoupling, as shown in Figure 2 [32,33].

Figure
Figure 2. Classifying taipo 2. Classifying
decoupling taipo decoupling
technique technique
commonly commonly
used used for decoupling
for decoupling of carbon
of carbon emission
emission
and economic growth.
and economic growth.
Primary decoupling is defined as decoupling the use of natural resources from EG.
Primary decoupling is defined
Secondary as is
decoupling decoupling the usethe
defined as decoupling ofconsumption
natural resources from EG.
of natural resources from
environmental pollution. Double decoupling materializes when primary and secondary
Secondary decouplingdecoupling
is defined as decoupling the consumption of natural resources
coincides. Based on decoupling elasticity, this model was classified into eight
from environmental pollution. Double
types. Decoupling decoupling
includes materializes
strong, weak, and expansivewhen primaryexpansive
decoupling; and sec- and
ondary decoupling coincides. Based and
recessive couplings; on strong,
decoupling elasticity,
weak, and recessive. this model was classified
into eight types. Decoupling includes
2.2. Theoretical strong,
Foundations weak, and
for Decoupling expansive
Economic decoupling;
Growth and expansive
Carbon Emissions
and recessive couplings;
2.2.1.and strong,
Kuznets Curveweak, and recessive.
The Kuznets curve is one of the most important theoretical foundations for decoupling
2.2. Theoretical Foundations for growth
economic and carbon
Decoupling emission,
Economic commonly
Growth andexplored
CarbonforEmissions
coupling and decoupling
economic growth and pollutants. It is used to define how economic growth relates to
2.2.1. Kuznets Curve environmental quality [34–38]. Wang, Yang, and Rongrong [35] explored the traditional
environmental Kuznets curve (EKC) to investigate the influence of urbanization on the
The Kuznets curve is one of the most important theoretical foundations for decou-
coupling of economic growth and environmental quality. They developed threshold panel
pling economic growth andusing
models carbon emission,
56 countries’ data,commonly explored
setting economic growth asforexplanatory
couplingvariables
and de- and
carbon emission as the explained variable. This study confirmed
coupling economic growth and pollutants. It is used to define how economic growth re- that economic growth
strongly influences the increase in carbon emissions during low-income inequality as
lates to environmental quality [34–38]. Wang, Yang, and Rongrong [35] explored the
this income severely increases the complexity of economic growth and carbon emission
traditional environmental Kuznets
decoupling. curve
This implies (EKC)
that income to investigate
inequality the influence
significantly increases of
carbon emissions,
urbanization on the and an income
coupling ofdistribution
economic policy was suggested
growth to regulate excessivequality.
and environmental income inequality.
They
They analyzed the decoupling influence of the impact of trade on carbon emissions and
developed threshold panel models using 56 countries’ data, setting economic growth as
which circumstance trade can decouple carbon emission using the combination of Tapio
explanatory variables and carbon emission as the explained variable. This study
confirmed that economic growth strongly influences the increase in carbon emissions
during low-income inequality as this income severely increases the complexity of
economic growth and carbon emission decoupling. This implies that income inequality
Clean Technol. 2024, 6 1080

and the decoupling threshold model for 124 countries selected globally between 2000 and
2018. A weak relationship between economic growth, carbon emission, and trade openness
was observed and suggested that countries of different income groups must benefit from
fairer free trade before carbon neutralization [38].
Erdogan, Okumus, and Guzel [34] used EKC to examine the impact of renewable
and non-renewable energy, economic growth, oil price, energy consumption, and trade
openness on carbon emission in 25 OECD countries from 1990 to 2014. First- and second-
generation estimation techniques, which are dynamic ordinary least squares (DOLS) and
fully modified ordinary least squares (FMOLS), were adopted to provide comparative
panel data shreds of evidence. The EKC hypothesis is confirmed valid in OECD countries,
but the augmented mean group (AMG), the second-generation estimator, revealed that the
EKC hypothesis is invalid. At the same time, the augmented mean group estimator offers
stronger results under sectional dependence than DOLS. They also discovered that trade
openness and carbon emissions are unrelated [37].

2.2.2. Tapio Model

The introduction of the Tapio model and its uses have become increasingly common
in environmental science [39,40]. Many scholars have used this model to investigate the
affiliation between resource consumption and carbon dioxide emissions [41–46]. The
scientific evaluation mechanisms of Tapio’s model, such as the elastic analysis method
and the decoupling index model (OECD’s model), increase their application, leading to
the wide use of scientific evaluation mechanisms [47]. Tapio [33] used the decoupling
elasticity concept of Juknys to develop a decoupling indicator used by the European
transport industry by identifying three categories of complement: coupling, decoupling,
and negative decoupling. After this, eight reasonable possibilities were particularized for
distinguishing between decoupling states: recessive coupling; expansive coupling; weak
negative decoupling; strong negative decoupling; expansive negative decoupling; and
weak, strong, and expansive decoupling. These methods are widely acknowledged and
used to examine EG, EC, or environmental concerns [48].
Furthermore, Freitas and Kaneko adopted this method [49] to analyze the relationship
between Spanish EG and EC. They were similarly used to study the decoupling of Brazil’s
EG from 2004 to 2009 regarding CO2 emissions related to energy. Zhang and Wang [50]
also used this method to analyze the decoupling between energy-related CO2 emissions
and GDP in Jiangsu Province (China) from 1995 to 2009. An experimental study by
Jiang et al. [50] determined whether six major industries in China are decoupled from EG
and CO2 emissions using the same model. Wang et al. [51] used three decoupling models to
explore the decoupling between the world economy and CE: the IGTX decoupling model,
the Tapio decoupling elastic model, and the OECD decoupling factor model. Based on the
comparative analysis, it was concluded that the Tapio model was more precise and was not
time-bound. Wang et al. [51] used it to create a model to decouple water resources from
the environment. Research into the relationship between China’s urban water resources
environment and the economic development of regional cities was conducted in the three
developed cities of Beijing, Shanghai, and Guangzhou [50].
Zhang and Bai [52] investigated the decoupling relationship between populated en-
ergy consumption and income levels using the Tapio decoupling model and showed a
significantly decreased decoupling index since 2000. A study by Wang et al. [53] utilized the
Generalized Divisia Index method and the enhanced Tapio model to evaluate the drivers
of CE in the Chinese transport sector and the elasticity decoupling between EG and CE.

2.2.3. Log Mean Divisia Index (LMDI)

According to Zhang et al. [54], the Log Mean Divisia Index (LMDI) theory identifies
the profound reason behind the decoupling status. Diakoulaki and Mandaraka [55] created
a decoupling indicator for each country, based on a sophisticated Laspeyres decomposition
model, to evaluate the effectiveness of the efforts commenced in each country. The LMDI
 2.2.3. Log Mean Divisia Index (LMDI)
According to Zhang et al. [54], the Log Mean Divisia Index (LMDI) theory identifies
the profound reason behind the decoupling status. Diakoulaki and Mandaraka [55] cre-
ated a decoupling indicator for each country, based on a sophisticated Laspeyres decom-
Clean Technol. 2024, 6 position model, to evaluate the effectiveness of the efforts commenced in each country. 1081
The LMDI method was the most effective method of studying influencing factors in Ang’s
[56] review of all decomposition techniques.
method was the
Another most effective
decoupling method
pointer of studyingby
was developed influencing
Zhang and factors
Wang in[57]
Ang’s [56]the
using review
LMDI
of all decomposition
method to analyze thetechniques.
electricity consumption decoupling from China’s EG. In the envi-
Another
ronmental decoupling
literature, pointer
the Kaya was developed
identity by Zhang and
and the decoupling Wang
index [57]proposed
were using the by
LMDITapio
method to analyze the electricity consumption decoupling from
[33], and the LMDI was proposed by Ang [56]. These identified indexes analyze the China’s EG. In the en-de-
coupling energy consumption trajectory per capita and year of household income.by
vironmental literature, the Kaya identity and the decoupling index were proposed The
Tapio [33], and the LMDI was proposed by Ang [56]. These identified indexes analyze the
Tapio decoupling index and the LMDI decomposition approach shown in Figure 3 are
decoupling energy consumption trajectory per capita and year of household income. The
employed to study the relationship between EG and CO2 emissions and decompose total
Tapio decoupling index and the LMDI decomposition approach shown in Figure 3 are em-
CO2 emissions into predetermined factors to determine the Kaya identity. The rapidly
ployed to study the relationship between EG and CO2 emissions and decompose total CO2
changing
emissionsclimate pattern across
into predetermined the globe
factors is considered
to determine a result
the Kaya of environmental
identity. changes
The rapidly changing
caused by China [58]. Siping et al. [59] studied the decoupling of economic
climate pattern across the globe is considered a result of environmental changes caused output and
pollutant
by Chinadischarge
[58]. Sipingfees for[59]
et al. China’s
studiedYunnan provinceof
the decoupling byeconomic
applyingoutput
the Tapio decoupling
and pollutant
elasticity.
discharge fees for China’s Yunnan province by applying the Tapio decoupling elasticity.

Figure
Figure3.3.The
Thedecoupling
decouplingtechnique used for
technique used for separating
separatingeconomic
economicgrowth
growth from
from carbon
carbon emissions.
emissions.

Overall,the
Overall, theYunnan
Yunnan province
province showed
showedstrong
strongdecoupling,
decoupling,while whileweak
weakandandexpensive
expensive
negative decoupling was pragmatic in some years. Jiang et
negative decoupling was pragmatic in some years. Jiang et al. [60] combined al. [60] combined thethe
Tapio
Tapio
model with the environmental Kuznets curve (EKC) model to examine the CO2 emissions of
model with the environmental Kuznets curve (EKC) model to examine the CO2 emissions
China’s Guangdong province from 1995 to 2014. Wang et al. [61] examined the decoupling
of China’s Guangdong province from 1995 to 2014. Wang et al. [61] examined the decou-
status of individual sectors in China and the United States and the driving forces of CO
pling status of individual sectors in China and the United States and the driving forces2 of
emissions by employing the Tapio and LMDI modeling methods. In this regard, this review
CO 2 emissions by employing the Tapio and LMDI modeling methods. In this regard, this
provides current information on the importance of decoupling energy from economic
review
growth.provides current
It examined the information
techniques and on factors
the importance of decoupling
limiting decoupling energy
activities from eco-
to achieve
nomic
low-carbon energy systems. It also analyzes the limitations of the impact of economic and to
growth. It examined the techniques and factors limiting decoupling activities
achieve low-carbon energy
policy implications systems.
of climate change.ItItalso
alsoanalyzes the recent
investigates limitations of the
research andimpact of eco-
innovation
nomic and
and the policy implications
challenges and constraintsof climate
in usingchange.
low-carbonIt also investigates
energy recent
systems. This research
study provedand
innovation and the challenges and constraints in using low-carbon energy
that the development of low-carbon energy sectors is critical to achieving the decoupling systems. This
of economic
study proved growth
that thefrom carbon emissions.
development The low-carbon
of low-carbon energy sectors energy systemtocould
is critical be
achieving
achieved
the by reducing
decoupling the carbon
of economic intensity
growth fromofcarbon
energyemissions.
and energy The intensity of gross energy
low-carbon domesticsys-
product (GDP), which may eventually reduce the impact of energy decarbonization
tem could be achieved by reducing the carbon intensity of energy and energy intensity of on
economic
gross domesticgrowth.
productMoreover,
(GDP), this
whichnewmayinsight provides
eventually a better
reduce understanding
the impact of energyof decar-
the
decoupling between economic growth and carbon mission, which
bonization on economic growth. Moreover, this new insight provides a better understand-might contribute to
carbon footprint-reduction pathways.
ing of the decoupling between economic growth and carbon mission, which might con-
tribute to carbon
3. Factors footprint-reduction
Limiting/Contributing pathways. Activities
to Decoupling
Several factors restrict decoupling, including the carbon coefficient, the economic struc-
ture effect, the labor force input effect, and the investment effect. In addition, Xie et al. [62]
employed the Tapio and LMDI models to investigate the influences prompting the decou-
pling of CO2 emissions from the gross domestic product (GDP) in China’s power industry,
concluding that economic scale and electrification were two significant deterrents. Li and
Qin [63] reported that between 2015 and 2030, China’s CO2 emissions would decouple from
its economic development significantly. Many scholars have analyzed the Tapio decoupling
Clean Technol. 2024, 6 1082

model to quantify the contributions of solid factors influencing decoupling [64]. It was
determined that income, carbon intensity, population, and energy structure contributed to
decoupling CE from China and the U.S. economy. However, most of the outcomes of these
studies are just in black and white but not implemented. Implementing these findings may
have helped reduce CE.
To investigate the decoupling between Liaoning’s energy consumption and GDP,
Dong et al. [65] considered five decoupling indicator factors: the energy mix, labor, eco-
nomic activity, energy intensity, and investment. Zhao et al. [66] used these factors to
assess the impact of specific sectors on decoupling China’s economy from CE. Also, to
measure the variables that impact decoupling, certain scholars have sought to determine
the effectiveness of environmental policies [67–71] and premeditated the decoupling effort
indices of CE from the economy for each province. They analyzed the effectiveness of
energy efficiency implementations, energy structure changes, and other procedures aimed
at decoupling achievement. Having calculated the current decoupling effort index and
evaluating the contributions of energy intensity, energy structure, and population to the
decoupling efforts, Román et al. [12] decided that the current decoupling dealings were
meticulous. Nonetheless, additional effort was required. Jiang [70] determined the decou-
pling effort index measures the influence of energy-conservation and emission-reduction
measures on the decoupling of China’s construction industry carbon emissions.

3.1. Protectionism
Protectionism is another limitation to decoupling activities, becoming the primary
hesitation accompanying the global economy, energy, and the environment. The restriction
implemented by public health emergency international concern and different countries
to curb the spread of COVID-19 adversely affected international trade. Consequently,
this isolationism induced challenges to carbon footprint reduction in both developed and
developing countries. Wang and Zhang [71] investigated the impact of trade openness
on separating carbon emissions from economic growth after recognizing and increasing
awareness of protectionism. The crucial need for implementing economic growth and
carbon emission decoupling by the intended nationally determined contributions (INDCs)
was one of the motivations for this study. They explored the influence of protectionism
on the disconnect economic growth from carbon emission, considering data available for
182 countries between 1990 and 2015. This study’s outcome shows that trade openness
benefits only high- and upper-middle-income countries, as a decrease in carbon emission
is seen in countries of these categories. In contracts, trade openness adversely affects
low-income countries as their carbon emission drastically increases with trade openness.
A targeted policy to regulate countries’ income with trade openness is advised. This
study corresponds with Wang, Yang, and Rongrong’s [34] study, stressing the creation and
implementation of targeted policies to regulate countries’ income.

3.2. Effect of Energy Transiting on Energy Uses and Economic Growth

The impact of energy transiting on energy uses and economic growth must be con-
sidered for achieving decoupling activities—the question of whether energy transition
encourages economic growth and CE must be answered. Wang and Wang [72] answered
this question by investigating how energy transition influences CE and economic growth
at national and global scales using a decoupling index model and decomposition approach.
This combined approach detected the decoupling state and the factor that drives the global
decoupling process. One hundred eighty-six countries considered between 1990 and 2014
were categorized into three classes, lower middle income (LMI), upper middle income
(UMI), and high income (HI). The Hi experienced initial realization of desirable strong
decoupling, but UMI and LMI decoupling states were not yet realized, and LMI showed
no clear improvement trend.
Clean Technol. 2024, 6 1083

4. Climate Economics and Policy Implications

First, individuals need basic information about climate change and its implications.
Climate change mitigation will benefit those motivated to engage in appropriate activi-
ties [73–75]. Given this, regular media communication is necessary, regardless of media
sequences of consideration [76], for keeping the effect of climate change on the public’s
mind. In the U.K.‘s climate change policies [66,77–79], little attention is given to behav-
ioral change, primarily directed toward individuals reducing their energy use by giving
information and providing economic incentives and subsidies. In late 2009, the European
Commission established strategic policy targets (20-20-20) for 2020. This policy target was
reviewed in the Climate and Energy Policy 2030 document in October 2014. The European
Commission published an update to its energy policy framework for 2020 to 2030 titled
“Clean Energy for All Europeans” in November 2016. Regulation (E.U.) 2018/842 [80] has
been published on binding annual greenhouse gas emissions reductions by the Member
States from 2021 to 2030. The European Union’s introduction of successive new emission-
reduction targets proposes a need to evaluate how current E.U. energy policies have
impacted the decoupling of emissions from economic growth [81,82].

4.1. Emission Scenarios and Options for Greenhouse Gas Emission Reduction
The IPCC reported scenarios representing alternative visions of how the future may
unfold and represent a suitable means for scrutinizing how driving forces may impact
future emissions outcomes and evaluating the reservations surrounding them. Their re-
sponsibilities include analyzing climate change and assessing impacts, climate modeling,
mitigation, and adaptation. Ongoing evaluation and comparison of long-term emission sce-
narios, such as frequently updated scenario database, must be established [83]; (1) capacity
building should be performed, particularly in developing countries, modeling tools, and
emission scenarios [84]; (2) future scenario analyses should be performed using multiple
storylines and models [85]; (3) the development of innovative research actions should be
performed to assess impending developments in critical GHG powerful drive in greater
detail at the subregional, regional, and sectoral levels, allowing more specific emissions
scenarios and mitigation option linkages [86]; (4) enhanced specification and data for and
integration of the non-CO2 GHG and non-energy sectors should be targeted, such as land-
use change, model inter-comparison, and forestry, to advance situations and scrutinize [87];
(5) integrating particulates, hydrogen, or aerosol nitrate precursor emissions into models
and progressions, such as a response from climate change on emissions, may meaningfully
impact situation analysis and results.
Developing further gridded emissions for scenarios could enhance regional assess-
ment [88]; (6) this can be performed along with priorities to assess strategies addressing
multiple national, regional, or global issues [89]; (7) China seems to be taking a comparable
emission pathway to the global one. China’s 1.5 C scenario motivation primarily empha-
sizes the subsequent influences, as opposed to the 2 C scenario analysis: this includes a
significantly sophisticated stake of electricity consumption in end-use sectors such as trans-
portation, construction, and industry, and by or before 2050, zero or negative emissions
from the power generation sector. Generally, most emission scenarios that target 1.5 ◦ C
by 2100 exceed those shown in Figure 4, meaning the net carbon budget will be 400 Gt
CO2 . The number of CO2 emissions previously going to zero depends on the harmful
emissions following zero. Global CO2 emissions may reach zero in 2050 and 2060 if the cur-
rent Shared Socio-Economic Pathways (SSPs) with the subsection designated for Coupled
Model Intercomparison Project Phase 6 (CMIP6) are well followed and implemented [90].
 emissions following zero. Global CO2 emissions may reach zero in 2050 and 2060 if the
current Shared Socio-Economic Pathways (SSPs) with the subsection designated for Cou-
Clean Technol. 2024, 6 pled Model Intercomparison Project Phase 6 (CMIP6) are well followed and implemented
1084
[90].

Figure 4. The
Figure 4. The °C◦ C
1.51.5 scenario
scenariomap underdifferent
map under different levels
levels of energy--GDP
of energy—GDP decoupling,
decoupling, REand
RE speed, speed, and
NETs [89].[89].
NETs

According to the SSPs, CD-LINKS, and ADVANCE study, the global carbon budget
According to the SSPs, CD-LINKS, and ADVANCE study, the global carbon budget
should range from 800 to 900 Gt with harmful emissions of 400 to 500 Gt [90–92]. In both
should rangethe
countries, from 800 sector
power to 900isGt thewith
mostharmful emissions
substantial source ofofGHG
400 emissions.
to 500 Gt [90–92].
By 2050, In both
countries, the power sector is the most substantial source of GHG emissions.
the fossil-fuel-dominated power sector will account for over half of all GHG. Growth By 2050, the
fossil-fuel-dominated powerinsector
in income and an increase will account
electrification forexpected
rates are over half of allaGHG.
to drive rise in Growth
power in in-
demand in both countries in the future [93–95]. Researchers have noted that
come and an increase in electrification rates are expected to drive a rise in power demand renewable
energy
in both (RE) technologies
countries may[93–95].
in the future be critical in reducinghave
Researchers GHGnoted
to stabilize at 450 ppm energy
that renewable CO2 (RE)
equivalent attentiveness by 2100 [96]. In absolute terms, India and China are projected to
technologies may be critical in reducing GHG to stabilize at 450 ppm CO2 equivalent at-
become the largest energy consumers by 2030, as predicted by the International Energy
tentiveness
Agency 2017by 2100 [96]. In absolute
[97]. Consequently, terms, India
both countries must and China
reduce their are projected
emissions to become the
substantially
largest energy consumers by 2030, as predicted by the International Energy
to accomplish the 450 ppm CO2 -Equiv concentration stabilization target, but decisive Agency 2017
[97].extenuation
Consequently,
actionsboth
couldcountries
also hindermustthese reduce their
countries’ EG. emissions substantially to accom-
plish the 450 ppm CO2-Equiv concentration stabilization target, but decisive extenuation
4.2. Costs of Greenhouse Gas Emission Reduction
actions could also hinder these countries’ EG.
As a standard unit of measurement, emissions, costs, and profits are often expressed as
dollars per metric ton and costs beyond business as usual to 2030, as shown in Figure 5. A
4.2. general
Costs ofcost
Greenhouse
of carbon, Gas Emission Reduction
as a comparison, is an estimate of the net current value of monetized
As a compensations
social standard unitafterof measurement, emissions,
emissions of more costs, to
CO2 ; according and
theprofits are oftenthe
US government, expressed
social cost of carbon for a ton of emissions in 2017 was approximately USD
as dollars per metric ton and costs beyond business as usual to 2030, as shown in Figure 46 in 2017
5. Adollars
general[96] (1). Approximately nine kilograms of CO2 is produced by burning one gallon
cost of carbon, as a comparison, is an estimate of the net current value of
of gasoline, so a social cost of carbon of USD 46 per metric ton corresponds to USD 0.41
monetized social compensations after emissions of more CO2; according to the US gov-
per gallon (2). The estimates are based on the leveled cost of electricity published by the
ernment, the social
US Energy cost ofAdministration
Information carbon for a ton of emissions
(2018). The energyin 2017
cost perwas approximately
megawatt-hour is USD
46 in 2017 dollars [96] (1). Approximately nine kilograms of CO2 is produced by burning
one gallon of gasoline, so a social cost of carbon of USD 46 per metric ton corresponds to
USD 0.41 per gallon (2). The estimates are based on the leveled cost of electricity published
 based on the typical generator utilization rate.
These estimates are comparable to those in the private sector [97]. As a result of these
estimates, natural gas combined cycles, onshore wind, utility-scale solar photovoltaics
and natural gas with carbon seizure and storage are the least expensive technologies that
Clean Technol. 2024, 6 1085
can be used to reduce emissions relative to coal. This reduction with some land use rules
is relatively low because a randomized controlled experiment conducted by [98] identified
thatcalculated
forest conservation
by combiningcosts in Uganda
discounted considerably
capital, reduced
operating, and deforestation
maintenance at the cost of
expenses based
USDon1/ton.
the typical generator utilization rate.

Figure 5. The
Figure McKinsey
5. The McKinseymarginal abatementcost
marginal abatement cost curve
curve (Mckinsely
(Mckinsely 2009).2009).

These estimates
Consequently, are comparable
low-cost, to those in
zero-carbon, the private
fossil sector [97]. As aare
fuel substitutions result of these for de-
essential
estimates, natural gas combined cycles, onshore wind, utility-scale solar photovoltaics, and
creasing GHGE in the future. Therefore, investment or intervention costs must comprise
natural gas with carbon seizure and storage are the least expensive technologies that can
facebevalue,
used tocost, andemissions
reduce spillovers, which
relative to may reduce
coal. This emissions
reduction costs land
with some soon.use Several
rules isalterna-
tive relatively
cost measures have been
low because reported
a randomized to be aimed
controlled at reducing
experiment this cost,
conducted by [98]including,
identified but not
limited to (1) the carbon tax required for measuring the marginal cost of reducing
that forest conservation costs in Uganda considerably reduced deforestation at the cost of emis-
sionsUSDfor1/ton.
each ton of emission reduced; (2) the marginal cost of reducing emissions com-
Consequently,
bined with all reductions low-cost,
knownzero-carbon, fossildirect
as the total fuel substitutions are essentialin
cost; (3) a reduction forthe
decreas-
GDP, which
ing GHGE in the future. Therefore, investment or intervention costs must comprise face
is a value,
measure of the total amount of goods and services produced by the economy, and as
cost, and spillovers, which may reduce emissions costs soon. Several alternative cost
suchmeasures
may also havetake into
been account
reported to bethe influence
aimed of CE
at reducing decreases
this on technology
cost, including, and capital
but not limited
accumulation; as well
to (1) the carbon as (4) compensated
tax required for measuringincome variation,
the marginal cost ofwhich is the
reducing amountforthat con-
emissions
sumers would require to be compensated for to have the same utility level as with
each ton of emission reduced; (2) the marginal cost of reducing emissions combined they would
haveallwith
reductions known as the total direct
the emissions-reduction cost; (3) a reduction in the GDP, which is a measure
program.
of the total amount of goods and services produced by the economy, and as such may also
take into account the influence of CE decreases on technology and capital accumulation;
5. Policy Instruments for Greenhouse Gas Emission Reduction
as well as (4) compensated income variation, which is the amount that consumers would
In Austria,
require several policy
to be compensated forinstruments
to have the sameare utility
in place orasare
level currently
they would havebeing discussed
with the to
emissions-reduction program.
simplify accomplishing these policy goals. A policy instrument premeditated to reduce
Clean Technol. 2024, 6 1086

5. Policy Instruments for Greenhouse Gas Emission Reduction

In Austria, several policy instruments are in place or are currently being discussed to
simplify accomplishing these policy goals. A policy instrument premeditated to reduce
GHG emissions directly is anticipated to be cost-effective if it allows efficient distribution
of reduction efforts between market contributors and knowhows. However, in this sce-
nario, cost-effectiveness concerning fossil fuel replacement may still be low since reducing
GHG emissions does not necessarily correspond to substituting fossil fuels [99]. A policy
instrument’s cost-effectiveness relates to the costs of achieving its objectives and is strongly
influenced by the accessibility of bioenergy technologies in energy-consuming industries.
Environmental policy instruments used to change polluters’ behavior impact the choice
of technical measures, the outcome, and the cost of abatement and transactions related
to those policies. Some policies may have adverse environmental consequences, such as
subsidies tied to production.

5.1. Impacts of and Adaptation to Climate Change

There is an increasing necessity to adapt to climate change across human and nat-
ural systems, despite global efforts to reduce emissions, such as those arising from the
Paris Agreement. This reduction can involve various short- to long-term adjustments
in socio-ecological systems, influenced by interacting non-climatic factors to moderate
damage or take advantage of opportunities that may arise from climate change’s actual or
anticipated impact [100]. The concept of adaptation cannot be easily reduced to theoretical
or computational rules [101]. This is due to objective and subjective uncertainties associated
with climate change impacts, vulnerability, and an adapting factor’s options [102].
Additionally, adaptation is limited by real-world constraints such as resource availabil-
ity and human and institutional capacity. It can be complicated by organisms’ spontaneous
and natural responses to changing conditions [103]. Multiple systems are included in adap-
tation initiatives, such as the environment, coasts, agriculture, water, health, and urban
areas. As far as effective adaptation is concerned, there is little consensus. Despite several
frequently proposed plans, for this reason, implementation has been a great challenge.
Moreover, adaptation efforts are frequently hampered by competing or conflicting priorities
for action, prohibitive policies, insufficient resources, and uncertainty about future devel-
opments [104]. Various factors influence adaptation efforts, including power dynamics,
politics, motivation, funding, and cultural values.
Depending on the creativity setting, it may produce different results in a different
community. Lastly, it is sometimes challenging to differentiate climate adaptation from
other related activities, including but not limited to dropping risks associated with environ-
mental disasters or alleviating poverty, thus complicating the acknowledgment process.
For example, the IPCC claims that the addition of climate adaptation into sustainable
development strategies may lead to win–win scenarios [105].

5.2. Economic Impacts of Climate and the Social Cost of Carbon

The probable impacts of climate change are typically measured using a neoclassical
welfare economics standpoint [106]. Several experts were mobilized to evaluate the impact
of global warming in 2001. Their evaluation revealed that this measurable phenomenon
would affect weather patterns and probably worsen under the effect of human doings [107].
The growing understanding of this phenomenon resulted in an empirical study of the
economy to mitigate risks that could affect human well-being and habitation. Their study
shows that the SCC concept is essential for analyzing economic development and exe-
cuting climate policies [108]. It was also defined as the economic cost associated with an
incremental unit of CO2 emissions [109].
The Interagency Working Group (IWG) of the U.S. federal government initially used
SCC to monetarize the external cost of CE and evaluate climate and energy strategies in
2010 [110]. Several methodologies have been used to approximate SCC by dividing it
into two alternative approaches with high uncertainty: the cost–benefit scrutiny and the
Clean Technol. 2024, 6 1087

marginal cost technique. Integrated assessment models (IAMs), including the dynamic
integrated climate-economy model (DICE); policy analysis of the greenhouse effect model
(PAGE); and Framework for Uncertainty, Negotiation, and Distribution Model (FUND),
have been updated through the probability density purpose and other trivial revisions’
incorporation [111]. Following reference emission scenario 1, the SCC displayed the future
cost consequent to global climate change associated with one extra ton of CO2 emitted per
year. Due to CO2 ′ s long atmospheric lifetime, these effects are aggregated and bargain-
basement over a century [112]. Putting the outcome of this study into concentration and
scrutinizing it further may help to create policies aimed at reducing future cost conse-
quences, which will invariably lower the amount of CO2 emitted per year. Achieving this
requires proper implementation of these policies with close monitoring.

5.3. Optimal Climate Policy and the Social Discount Rate

To set an optimal carbon price, its social (welfare) costs should be equivalent to the
present consumption rate of the revolution in the discounted utility of consumption per
unit of additional emissions. Discount rates decline under hesitation and over time [113].
According to Giglio et al., 2015, discount rates for prospects around 100 years are 2.6%. The
optimal tax is 126 dollars/tCO2 e for a high discount rate: an eight-fold upsurge over the
16 dollars/tCO2 e reference point. The increasing probability of at least one sloping point
achieved in 2100 was 11 percent, compared to 46 percent for a tax of 16 USD/tCO2 e [114].
A discount rate decrease may increase the optimum to about 460 USD/tCO2 e.
The social discount rate (SDR) renovates future costs and benefits into existing units of
account, called “present values”, for evaluating public policy, programs, and projects. These
reflect how time values evolve with time horizons and can be used to compare alternative
courses of action with various time outlines of costs and benefits. As a result, social
discounting is essential in determining whether government action is cost-effective [115].
According to the approach taken in the general appraisal, SDRs represent the expected
state of the world in which net benefits will accumulate in the future, as well as the risks
allied with future income advance [116], societal favorites for the intertemporal trade-offs
associated with the investment [117], and alternatives available in the economy because of
public investment [118].
Discount rates are directly related to uncertainty topics: as with any other interest rate,
the discount rate is determined by the inherent risk of the transaction under consideration,
whether it is equity (investment financed by the investor’s capital), debt (an investment fi-
nanced by third parties), etc. This is a function of the stakeholders’ perceived risk (and their
desire to safeguard against unfavorable future events) under a given macroeconomic and
regulatory environment [45]. In contrast, high discount rates oppose policies that reduce
greenhouse gas emissions by improving building energy efficiency [119]. Additionally, it is
suggested that benchmark discount rates used in life-cycle assessments of energy supply
facilities be lowered so that project options intended to reduce consumption and emissions
do not fall under the radar [120]. Sustainable energies are generated using solar, wind,
inverter, and batteries. These devices are currently expensive and need benchmark discount
rates to be affordable for masses use. The massive adaptation of sustainable energy may
reduce the consumption of energy generated from carbon emission facilities.

6. The Possibility of Decarbonization and Dematerialization without Global Economic

Growth Decline
A decrease in CE is attributed to energy efficiency gains and substantial progress in
decarbonizing the energy sector, following the expectations found in the academic literature
concerning dropping carbon intensity [121]. As a result of a global carbon price placing the
global economy on a 2 ◦ C warming path, decarbonization is motivated by altering price
relationships for diverse energy technologies. Deep Decarbonization Pathways (DDPs) are
critical in filling the climate policy dialogue gaps since they provide additional detail on the
requirement for reducing emissions following 28 ◦ C. The DDPs contain detailed plans for
Clean Technol. 2024, 6 1088

deep decarbonization activities by sector and overtime as a condition for remaining within
the carbon budget. Many technologies and machinery contributing to CO2 emissions—such
as industrial boilers, power plants, heavy-duty vehicles, industrial boilers, agricultural
sectors, transportation, and buildings—have elongated operational lives over the remaining
time between now and 2050 [122]. DDPs must serve as a public reference point for nations
to guarantee that changes in the energy sector and other decarbonization efforts (e.g., land
use) support long-term goals, such as environmental protection, energy access, public
health, employment opportunities, public health, etc.
According to recent studies, using just energy sectors and direct emissions alone might
flop to achieve profound greenhouse gas reductions unless it is supplemented by policies
targeting materials’ usage and their associated embodied emissions directly [123–127]. The
use of materials and their embodied emissions is significant from two perspectives. In
the first instance, the increase in material consumption is expressively higher than energy
consumption, according to the International Resource Panel (IRP) [128]. Interestingly, while
the report indicates that material extraction grew 3.4 times between 1970 and 2017, fossil
energy extraction grew 2.5 times during that time. Therefore, material use per capita rose
from 7.4 tons in 1970 to 12.2 tons in 2017 [129].
Because of such excess material use, a 120% increase in climate-related emissions was
observed between 1995 and 2015, with their portion reaching 25% of total global greenhouse
gas emissions [130,131]. Secondly, the current emission-reduction efforts focus primarily
on reducing direct emissions originating from point sources of energy combustion. Even
though materials currently represent almost half of the carbon footprint of significant value
chains and most heavy industries utilize materials, there is a projection that embodied
emissions are projected to rise further if the situation is not addressed [131]. Accordingly,
material efficiency should receive more attention in production because it represents a
substantial proportion of energy consumption and associated emissions intimately linked
to transportation, processing, and material extraction [38,132].
Going by the energy and climate strategy, reducing material consumption through
leveraging material efficiencies could help in expanding the scope of coverage of emissions
as well as assist in addressing the issue of outsourcing carbon emissions, which is where
countries reduce their emissions by importing or shifting production overseas [38,123,131].
In this case, absolute decoupling is required, which could be achieved by aiming at growing
the countries or regional economy with a reduced use of natural resources and greenhouse
emissions [133]. Haberl et al. [134] systematically evaluated resource uses, GDP, and green-
house gas emission evidence. This study suggested strict enforcement of absolute reduction
targets using appropriate strategies could be a viable way to decouple natural resource uses,
GDP, and greenhouse gas emissions from economic growth [135]. United Nations SDGs
identified dematerialization as one of the primary sustainable development strategies. This
strategy was challenging despite having goals such as reducing environmental adversity
and total material consumption to preserve and increase the quality and services rendered
to the public. Despite efforts and policies created and implemented at national and regional
levels, absolute global dematerialization is yet to be achieved.
Consequently, Aktaş [136] summarized dematerialization, the existing techniques
used, and how it affects development by providing information on current difficulties
experienced based on past attempts, which gives more precise information that could
guide future policies and studies. This study pinpointed more constant factors challenging
implemented policies aimed at achieving dematerialization. This factor includes but is not
limited to economic recession, the product lifetime, and the effectiveness of decoupling
on national and regional levels. Furthermore, matching solutions and studies for future
implementation are also provided.
According to Aktaş [136], economic conditions must be considered when developing
a policy aimed at dematerialization evaluation if policies are made during the recession to
prevent most of the considerable profits in complete material control or reduction, which
could be used to meet public services and needs. A service-oriented model is a potential
Clean Technol. 2024, 6 1089

technique for providing lasting solutions to national or cities’ absolute material reduction.
Additionally, product evaluation should be performed individually and not in general-
izing lifespan, and this method often has better effectiveness on national than regional
policies. Considering this solution or suggestions would give headways when developing
policies or conducting studies on dematerialization in the future. The strategies aimed
at decarbonization require power generation from renewable sources, building energy
transmission from renewables-generated power, and encouraging appliance production
using low voltage, which may reduce energy usage.

7. Decarbonization Strategies
7.1. Building Transmission Renewable Energy
The most efficient set of a fast-increasing fleet, wind- and solar-generating facilities
have fully benefited from natural wind and solar resources. These facilities involve con-
siderable assets in new transmission amenities. Incumbent transmission system workers
and controllers must expand the capacity between existing transmission networks, called
interconnectors. It is necessary to remove the barriers to escalating transmission capacity
across heritage transmission networks so inter-system and inter-regional transmission
facilities can be operated efficiently, planned, constructed, and financed [85].

7.2. Developing Grid-Integration Strategies to Match Loads to Variable Renewable Energy

To reduce dependence on fossil fuels, decentralizing the electricity sector is a significant
step in spreading renewable energy sources [55]. There are several ways in which variable
renewable energy (VRE) differs from conventional generation, and it must be integrated
with power systems to achieve the decarbonization target [113]. There is an increasing
trend toward integrating renewable energy bases, such as solar and wind power, into
different sectors of the economy. In this setting, the coupling between the power and
heat sectors is gaining more attention among policymakers and researchers. It is often
considered promising to link the power and heat sectors to sector coupling strategies and
other flexibility options because the costs of generating heat from electricity and storing heat
are relatively low [137]. However, several factors must be considered to integrate the grid.
It is vital to equilibrium variable wind and solar resources, as well as to consider how all
power system components, at supply and demand sides, could be integrated to guarantee
dependability (“keep the lights on”) and reduce costs [100]. Designing electricity markets
to facilitate grid integration while ensuring they function most efficiently is also essential.
Additionally, transmission grids should be planned and strengthened to balance
the geographical patterns for renewable energy resources and power demand. Finally,
there is the issue of enhancing grid integration and flexibility at the distribution level by
transforming how distribution systems are planned and operated in terms of grid flexibility,
which is the responsibility of a grid to changes in supply and demand from multiple sources.
In addition to growing the incorporation of renewable energy into the electric grid, the
ambiguity of electricity generation by different sources poses a challenge to grid operations.
It negatively impacts grid stability (IEA, 2016b). Nevertheless, technological solutions
have been developed to address the technical complications associated with assimilating
significant amounts of renewable energy, and grid operational variations are required
to increase grid flexibility. Sayed et al. [138] suggested that adopting electric vehicles is
a viable way to reduce attacks on power grids, which will protect the future grid. This
suggestion has exponentially increased electric vehicles on the road, which correspondingly
increased the sale of electric vehicles globally. Its sales were over 3.2 million in 2020 and
increased to 6.6 million in 2021. According to the IEA 2022, almost 14 million electric
vehicles were sold in 2023.

7.3. Protecting and Expanding Policies That Encourage Renewable Growth

According to economists, carbon pricing is a cost-efficient approach to decarbonizing
energy systems [121]. Moreover, some evidence proves that essential research subventions
Clean Technol. 2024, 6 1090

might be part of an ideal policy [139]. Most economists consider sponsoring the deployment
of low-carbon technologies to be a costly second-best policy [139,140]. Through systematic
change and lifecycle-based efficiency of socio-technical systems, environmental policies
and business tactics have steadily moved away from cleaner production, which prevents
pollution. According to the discourse analysis of environmental policy [141,142], this
section describes the SCP policy domain through a few decades using the phases of SCPs
1.0, 2.0, and 3.0.
Climate change impacts were addressed through the Paris Agreement (PA) imple-
mented in December 2015. This plan aims to keep the global temperature below 2 degrees
Celsius above pre-industrial levels this century and to chase efforts to reduce the increase
even further to 1.5 degrees Celsius. Achieving the PA’s long-term goal led to arguing that
de facto zero emissions of GHGs and decarbonization should be achieved in the 21st cen-
tury [69]. A multi-decade and even centuries-long process of climate change has occurred
due to the increase in greenhouse gas emissions since the Industrial Revolution.
Current emissions will have long-term impacts, mainly if critical thresholds are crossed
by the climate system [103]. For a credible policy response to be implemented, costs must
be borne now so that future consequences will not be as severe [104]. The short-term
nature of this challenge is hindered by political systems oriented toward political cycles and
short-term economics [30,31]. In battles over interests, ideas, and identities, shifting arrays
of social, economic, and political actors pursue impact policy rejoinders. Policymakers
are plagued by uncertainty regarding climate policy [38]. A climate change crisis does not
affect the future of the climate system or people but is about the factors driving emissions
growth and influencing policy.

7.4. Capitalizing on the Renewable Energy Sector

Providing the lowest-cost options for reducing CO2 emissions is achievable with the
incorporation of states and the effective use of market-based carbon-trading programs.
A practical and proven method of controlling a program involves auctioning emission
allowances to prevent dividend profits among fossil fuel-based electricity generators and
permitting states to generate revenues for residents’ benefit [143]. Several studies have
indicated that institutional investors’ main motivations for investing in renewable energy
are stable long-term cash flows and portfolio diversification, with low sustainability and
ethical standards among their priorities [144,145]. Financing costs must be lowered due to
the up-front nature of the investments compared to conservative energy sources to expand
the use of renewable energy.
New-generation investment activities can be encouraged through access to public
capital markets, and secondary markets can be developed [146]. Securities investment
funds specializing in energy investments will emerge as capital markets develop. Some
governments have established research and development subsidies to improve corporate
financial performance. Various studies have shown that subsidizing renewable energy has
reduced profitability for Chinese companies, causing their stocks to be more volatile [147–149].

7.5. The Relationship between Decarbonizing the Electricity Grid and the Transportation Sector
According to Europe 2020′ s communication [141], the European Union in 1990 aimed
to reduce CO2 emissions, increase renewable energy, and improve energy efficiency by 20%
by 2020. As outlined in the 2011 Transport White Paper [142], GHG emissions from the
transportation sector are expected to be reduced by 20% by 2030 (reference year: 2008) and
60% by 2050 (reference year: 1990). The EC has outlined two targets for 2030 in its 2014
climate-energy package communication: a 40% greenhouse gas emissions reduction over
1990 and a 27% portion of renewable energy in European Union energy consumption by
2030. The most significant contribution to the transport sector’s 10% renewable energy
share is expected from liquid biofuels in road transport.
One of the most prevalent propulsion systems in the EU’s transportation sector is
the steps to decarbonize the transport sector’s combustion engines. According to Ger-
Clean Technol. 2024, 6 1091

baulet et al. [149], investment decisions significantly impact the decarbonization of the power
sector. However, the results indicate that petroleum-based fuels will be economically infeasi-
ble around 2025, and the 2040s will phase out coal and natural gas. Most studies [150–152]
focus on decarbonizing the power sector and analyzing the economic scenarios. Based on
sector-wise emission data, the power sector is the most significant contributor to emissions
in the EU alone (electricity and heat energy). Still, industry, transport, residential, and
agriculture collectively contribute more than the energy sector alone (2.2 times the carbon
equivalent of the power sector in 2016). Electricity plays a crucial part in decarbonizing the
road transport sector, according to Broghan et al. Electricity will account for 37% of road
transport fuel, power-to-x fuels will account for 27%, and additional electricity will account
for 1200 TWh by 2050 [140].

8. Biobased Fuel for Marine, Aviation, and Long-Distance Freight to Achieve

Low-Carbon Emission
The competition in the energy sector for the use of biomass resources may favor
their application, including but not limited to road freight, aviation, maritime, power, and
industrial applications. Even though these factors are considered, advanced, low-carbon
biofuels may be essential for the next few decades as a bridge between fossil-powered
structures for road freight and the upcoming infrastructures required for ultra-low and
zero-emission energy movers like hydrogen and electricity. There are well-established
alleyways for decarbonizing power generation [2], light-duty transportation [3], and domes-
tic heating/cooling [4]. However, reducing emissions from heavy agriculture, industrial
machinery, and heavy transport (aviation, railways, buses, trucks, and maritime shipping)
is more complicated. GHG emissions from transport (including aviation) in the EU account
for 27% of all emissions and are higher than in 1990 [131].
Despite car emissions contributing 43.9% of total emissions, heavy-duty transport is
responsible for 46.2% [132]. Substitute fuels and powertrains are needed to accomplish the
profound decarbonization of heavy-duty transport. The transportation industry [135], the
shipping industry [135], and the aviation industry [136] are all dependent on fossil fuels.
Fuel alternatives to combustion engines can be divided into two broad groupings: those
that rely on prevailing combustion engine technology and infrastructure and equipment
that use fuel cells or batteries to power electric motors. A biofuel [137] can be a liquid or
gaseous electrofuel [138]; hydrogen or electricity can also be used as these fuels.

8.1. Interconnection of Building Energy Efficiency and Electric Vehicles

Due to decreased fossil fuel availability and environmental concerns, wind and solar
energy are extensively employed to produce electric energy [126,127]. In addition, some
literature has provided information on EV charging stations that explored wind energy
to provide electric power to charge EVs. However, these works have been simulation-
based [25,26]. The latest IPCC climate change report shows that the transport sector
produces 13% of global GHG emissions. Incorporating electric vehicles (EVs) and renewable
energies and improving energy conversion efficiencies have reportedly improved energy
security [133]. These could be accomplished through good planning and the harmonious
construction of EVCS with urban planning or power grid planning, especially with the
inclusion of renewable energy [131]. Based on operating cost, construction cost, and
geographic information, an objective function was developed that reflected the challenge
of comprehensively locating and sizing electric vehicle charging stations [132].
Sadeghi et al. developed a Mixed-Integer Non-Linear (MINLP) model to determine
the optimum placement and size of fast charging stations, including station development
costs, EV efficiency losses, and power line losses [132]. Commercial buildings and road
transportation sectors have been paying increasing attention to intelligent buildings and
electric vehicles (EVs) due to concerns about energy efficiency, fossil fuel dependency, and
environmental impact. The definition of an intelligent building is a structure that utilizes
automated approaches to automate the operation of the building. This includes lighting,
Clean Technol. 2024, 6 1092

heating, air conditioning, ventilation, security, and other systems. EV charging stations
could be designed to integrate renewable energy resources with vehicle-to-grid (V2G)
resources while optimizing EV charging schedules to alleviate excessive power grid loads.

8.2. Carbon Emissions, Energy Use, and Economic Activity

Several studies have looked at the relationship between economic growth (EG), energy
consumption, and CO2 emissions at a population level, resulting in mixed empirical conclu-
sions [153–169]. Seeing the growing effects of climate change, numerous researchers have
examined the empirical relationships between CO2 emissions, energy consumption, and
EG [96–99]. The relationship between CE, energy consumption, and EG at the aggregated
level has been characterized as complex by some researchers. This complexity is due to the
different causal effects of different energy sources.
Wolde-Rufael and Menyah, Ziramba, and Nain et al. [158–160] investigated the rela-
tionship between CEs, energy consumption, and EG at the accumulated and sectoral levels.
They concluded that increased CO2 emissions resulted in higher electricity consumption.
Energy consumption maintained a consistent long-run connection with CO2 , according to
Ang [161], which validated the environmental Kuznets curve (EKC) hypothesis.
Additionally, Ang [162] noted similar results for Malaysia, Shahbaz et al. [163] found
similar results for Pakistan, and Kanjilal [164] reported similar results for India. In con-
trast, Ghosh [166] found no long-term link between India’s energy consumption and CO2
emissions. Due to this, the EKC hypothesis for that country could not be authenticated. A
study that examined the Commonwealth of Independent States concluded that fossil fuel
usage and EG are both associated with CO2 emissions in the rapid route but are eventually
linked in the long term. Concerning West African countries, Olarinde and Martins [167]
used a Fixed Effects Panel Regression Model to examine the linkage of carbon dioxide
emissions with EG systematically. They concluded that, in the long run, the connection
between income and carbon dioxide emissions is N-shaped, and the EKC hypothesis is not
valid. Shuaibu and Oyinlola [168] established that the relationship between carbon dioxide
emissions and EG is not causal due to structural shifts in Nigeria by relying upon the Zivot
and Andrews unit root test and the Gregory and Hansen cointegration tests.
Analyzing the relationship between CO2 emissions and EG can take a linear form of
U-shaped, inverted U-shaped, or another form of Warner [169]. However, a few studies
established the EKC hypothesis with a reversed U-shaped relationship [170–173], sug-
gesting that economic growth can improve the environment through reduced emissions.
Holtz-Eakin and Selden [174] state that the rising curve is monotonic. Contrarily, others
report a non-monotonic relationship [175,176]. Furthermore, Shafik [177] determined an
N-shaped curve between CO2 emission and GDP per capita. At the same time, Ozturk and
Acaravci [178] conclude that there is no causal relationship between these two factors.
According to Ang [162], there is an inverted U-shaped relationship between CO2 emis-
sions and output in France, which indicates that EKC is feasible. In his study, he observed
that output was positively correlated with CO2 emissions and energy consumption in the
long run. Energy consumption and economic growth were negatively correlated in the
short run. Therefore, Soytas et al. [179] concluded that income has an insignificant effect on
CO2 emissions in the long run, whereas energy consumption does. ased on Autoregressive
Distributed Lag (ARDL) bound testing approaches, Acaravci and Ozturk [178] found that
Germany, Portugal, Denmark, Iceland, Greece, Switzerland, and Italy cointegrate relation-
ships between CO2 emissions, energy consumption, and real income. Only Denmark and
Italy were found to have satisfied the EKC. Ang, Zhang, and Cheng [158,164,180] found
that GDP is causally connected to energy consumption in Malaysia and China.
Ghosh’s [165] study showed a bidirectional causal relationship between CE and EG
in India in the short term and a unidirectional causal connection between EG and energy
supply. Menyah and Rafael’s [158] study on South Africa found unidirectional causality
between energy consumption, pollutant emissions, EG, CO2 emissions, and energy con-
sumption. In addition, Lotfalipour et al. [181] found a unidirectional causality between
Clean Technol. 2024, 6 1093

energy consumption and carbon dioxide emissions in Iran. Saboori et al. [182] analyzed
the causal relationship between CO2 , energy consumption, and economic growth in OECD
countries. The results indicated that CO2 is a bidirectional indicator of economic growth.
In some studies, EG and CO2 emissions are linear [183–185].
Moreover, many other studies [158,168] discovered that the relationship between CO2
emissions and the economy’s growth does not exhibit a U-shaped pattern; the relationship,
instead, resembles an N-shape. As an additional point of interest, Al-mulali et al. [186,187]
examined the long-run bi-directional relationship between energy consumption, CO2
emissions, and economic growth in the Caribbean and Latin American countries. On-
afowora et al. [188] examined the long-term and temporal dynamics of EG, popula-
tion density, energy consumption, CO2 emissions, and trade openness in Mexico, Brazil,
China, South Korea, Egypt, Nigeria, Japan, and South Africa. Using data from Malaysia,
Lau et al. [189] examined the cointegration relationship between CO2 , exports, EG, and
institutional quality and found a positive correlation between institutional quality and CO2 .
Many other studies on decoupling energy consumption are presented in Table 1.

Table 1. Synopsis of current research for decoupling of energy consumption.

Study Zone Researchers Techniques Decomposed Features

Innovation drive and development
The difference-in-difference based of cities through low-carbon goals
Chen et al. [9] on propensity score-matching and low-carbon city pilot policy on
(PSM-DID) method the total factor productivity of listed
enterprises [9]
Tapio, C-D function, and Energy efficiency and advancing
Wang et al. [45]
MRIO model technology [44]
Threshold model to empirically Economic growth, energy efficiency,
Moreau and Vuille [42]
analyze panel data and structural changes [42]
National levels and
energy consumption The renewable energy consumption
Wang et al. [117] Index decomposition analysis
and economic growth [109]
Energy efficiency, oil price,
Multiple co-integration environmental pressure, research
Wang et al. [118]
estimation approaches and development, and
policy relationship
Multi-regional input–output (MRIO) Types of energy and economic
Wei et al. [119]
and LMDI model growth [121]
Multiregional input–output and Population, affluence, and
Zhang [120]
Tapio decoupling model technology [125]
LMDI, Energy Alternatives
Different industrial sectors, effect of
Dong et al. [65] Planning system (LEAP), and Tapio
industrial sectors [68]
decoupling model
Energy efficiency, market conditions,
Zhang et al. [151] Data-driven selection
and environmental compliance [180]
Decoupling index between CO2
Wang et al. [148] LMDI model emissions and across
provinces [148]

National levels and Understanding carbon dioxide

CO2 emission Steblyanskaya et al. [150] Input and output (IO) table’s data (CO2 ) emission and carbon
neutrality status [150]
Impact of structural changes on per
Fully modified ordinary least
capita carbon emissions from the
Li, Rongrong et al. [190] squares regression analysis and
four aspects of energy, trade, society
Granger causality test
and economy [190]
Effects of population aging, life
Linear panel data analysis and expectancy, population density,
Wang, Q., and Li [191]
panel threshold regression approach unemployment rate, per capita GDP,
and urbanization on per capita CO2
Clean Technol. 2024, 6 1094

Table 1. Cont.

Study Zone Researchers Techniques Decomposed Features

Energy intensity, decarburization,
Zhang et al. [151] LMDI Model
and the per capita GPD effect [151].
Factors of decoupling carbon
Yang et al. [192] Tapio, LMDI and DEA model emissions from global economic
growth [192]
Panel Smooth Transition Regression Financial development and
Li and Wei [193]
(PSTR) Models innovation [193]
Statuses of higher-income countries
Regional CO2 emission and lower-income countries,
Hu et al. [194] Kaya-LMDI model
economic growth, energy intensity,
and energy exports [194]
Promotion of nuclear and renewable
Environmental Kuznets
Nathaniel et al. [195] energy consumption and the
curve model
abating role of nuclear energy [195]
The increase in carbon emissions
Wang, Qiang, and Shasha Tapio decoupling model and Log and separation of carbon emission
Wang [196] Mean Divisia Index and economic growth in transport
sectors [196]

9. Pathways to a Low-Carbon Energy Sector

To decrease global average temperatures to ≤2 ◦ C in the century ahead, we must
limit cumulative global emissions to 600 to 1100 gigatons of carbon dioxide per year [197].
Comparatively, GHG emissions are approximately 50 GtCO2 annually, of which approx-
imately two-thirds are produced from burning fossil fuels [198]. As of 2013, fossil fuel
reserves have approximately 3000 GtCO2 of carbon contents [199]. According to a study
conducted in 2014, low-carbon power grid revolutions may prove expensive, challenging,
and cost-effective. However, extenuation measures like decentralized modern energy access
expansion, fuel switching, and fossil fuel subsidy reform are feasible and affordable [200].
The near future is expected to see these countries significantly contribute to climate
change and be significantly affected [201,202]. However, fossil fuels as an energy source may
not be necessary for economic growth [203]. In this context, some research investigating
low-carbon energy transitions remains largely hypothetical [204]. Ideally, as we move
to low-carbon energy supply and service provision, radical changes in technology, user
practices, business strategies, institutions, and user practices are needed; therefore, this will
pose challenges to the governance when engaging different actors as well as dealing with
the temptations and obstructions they face [205–207].
Numerous energy–economy models have been developed and explored for different
emissions path simulations. Several of these models were examined in the Intergovernmen-
tal Panel on Climate Change’s 5th assessment report [207]. Furthermore, several model
comparison exercises run under standardized assumptions and with corresponding cli-
mate outcomes [207,208]. In presenting transition pathways, Foxon et al. [209] describe a
multi-level method for analyzing socio-technical systems transitions like coevolutionary
frameworks and energy systems for analyzing low-carbon transitions [210–213]. Many
countries and organizations have already begun accelerating the shift to a low-carbon
economy. For example, Nordic nations plan to be fossil-free by 2050 [214].
They promote energy transition as part of the European Union’s (E.U.’s) European
Regional Development Fund (ERDF) program for Baden-Württemberg 2014–2020. As a
result, the energy transition has been extended beyond borders [81]. In facilitating the
global energy transition, the International Energy Agency (IEA) developed the Clean
Energy Transitions Programme (CETP) [214]. The study by Foxon [209] compared factors
contributing to the Chinese and German energy transition (an innovator of the energy
transition). It has been asserted by La Viña et al. [213] that energy transition can address
the trilemma of energy sustainability, equity, and security in the Philippines. In its annual
Clean Technol. 2024, 6 1095

2018 [214] report, IEA, stated that energy transition could improve energy security, a robust
energy system, and a thriving economy [215]. Their research investigated how culture
impedes the transition to a low-carbon economy.
According to Wang, and Li [192], there is a link between energy transition and changes
in political systems. Additionally, they explained that technology was essential in achieving
energy transition. A study by Bayulgen [216] examined the political and economic drivers
of the United States’ energy transition. It was confirmed that economic growth and carbon
emissions were directly related to the energy transition. Li and Wang [196] examing
emissions of 30 China provinces’ transport sector and confirmed that carbon emissions
increase with a corresponding growth in urbanization. Their study suggested creating
more effective policies to curb carbon emissions in this sector, which should be monitored
rigorously. Nevertheless, few studies have investigated pathways’ contribution to the low-
carbon energy sector. Therefore, the global focus should scrutinize the sectors generating
high emissions to understand their impact and provide information that could help develop
curbing policies.

9.1. Reducing the Carbon Intensity of Energy

Energy emissions decrease significantly faster than other sectors [167,217]. Currently,
clean and renewable energy is receiving a lot of consideration. It is considered one of
the most effective ways to decrease CE and reach a low-carbon development [218,219].
Le Qu et al. [220] recently asserted that substituting renewable energy for fossil fuel
consumption would reduce carbon emissions. Several studies [221,222] have deliberated
on openings and challenges associated with the transition toward a greener future. In their
study, shifting from fossil fuel-based to renewable-based industries was encouraged. The
Intergovernmental Panel on Climate Change (IPCC) confirmed the availability of 2.5%
renewable potential by 2050, which can supply 80% of global energy consumption. It is
important to note that the fuel choice determines the carbon intensity. Exacting the balance
between types of fossil fuels and renewable energies, including nuclear power, is needed.
Fossil fuels generate approximately 80 percent of global energy. Several studies suggested
that energy generation from biofuel from biomass and agricultural wastes may be a viable
way of reducing CE and reliance on fossil fuel-based energy [223,224].
About 30 percent of global energy consumption comes from oil and coal, while just
over 20 percent comes from natural gas [225,226]. Most of the remaining energy is produced
using biomass and nuclear power. Renewable energy sources like solar P.V., thermal, and
wind are widely increasing but coming from a small base, according to IEA 2013. Based on
Calvin et al.‘s [207] findings, solid fuels in residential energy use decrease dramatically as
urbanization increases. Organizations, economists, and policymakers have recently focused
on the energy transition, attempting to accelerate the swing from a carbon-intensive to a
low-carbon or zero-carbon energy system [227,228].
Generally, the energy transition has many advantages, including improving interna-
tional relations, promoting economic development, alleviating global warming, etc. [227].
With the decreasing emission levels in the power sector, low-carbon fuels like gas can be
substituted for high-carbon fuels, including coal, and carbon-free energy sources can be
employed. The implications of this are most evident in coal. The development of coal-
fired power is a reliable structure of all energy decarbonization circumstances [229,230].
Globally, people have concluded that we should reduce carbon emissions to combat global
warming [231,232]. The world economy increased at an average annual rate of 2.14% in
the last six decades. This growth makes it impossible to lower economic advances to
reduce carbon emissions. Several decoupling theories have been developed to deal with
the economic growth paradox and environmental degradation [233]. It is easy to use and
provides real-time information about CE and EG’s relationship [234].
Clean Technol. 2024, 6 1096

9.2. Energy Intensity of GDP Reduction

The amount of energy consumed per unit of GPD, known as energy intensity, is used
to measure the energy efficiency of a country [235]. Reducing energy intensity can be a
viable method for decreasing energy consumption and CE globally. Due to an enhancement
in energy use machinery in substantial economies (the United States and China), global
energy intensity has experienced a gradual decrease from 7.3 MJ/USD (constant purchasing
power parity (PPP) in 1995 to 5.0 MJ/USD (constant 2011 PPP) in 2017, which represents
a 1.4% fall on average annually. The decrease in energy intensity has, however, slowed
down in recent years. The International Energy Agency confirmed that the global energy
intensity decreased by 1.2% in 2018—roughly half the average level since 2010 [236].
At the same time, renewable energy has been growing around the world. Within the
global energy consumption structure, the quantity of modern renewables has risen between
7.1 and 10.5% from 1995 to 2017, representing a 0.23% increase rate in the past ten years.
The Chinese government targeted to reduce emissions intensity by 40 to 45% between the
years 2005 and 2020 [237], which resulted in industrial modernization in the 1990s. China
has recorded rapid increases in energy efficiency since the 1990s, resulting in approximately
a 6% decrease in energy intensity annually [237]. Although progress in the early 2000s was
very modest, from 2005 to 2013, the reduction rate was robust, averaging 3.8 percent yearly.
According to the International Energy Agency [238], China’s energy intensity is around
50% greater than the USA’s when measured at purchasing power parity.
Some countries have witnessed a vast increase in renewable energy, including New
Zealand, Greece, and others. However, an increase in energy intensity rather than a decrease
was observed. Greece and New Zealand increased their share of modern renewable energy
by 5.0% and 1.9%, while an increase in energy intensity of 2.8% and 9.1% were obtained. It
is fundamental to understand that the energy intensity of an economy, and its projection
over time, is determined primarily by the economy’s structure and the efficiency of its
technologies. In both cases, progress can be achieved through development, but in the
latter case, targeted interventions can help speed things up [239,240]. An ongoing debate
concerns how noticed energy efficiency levels lag the potential, i.e., there may be a gap in
energy efficiency.
Economic studies tend to be skeptical [241], whereas engineering studies frequently
identify significant energy savings. Studies undertaken in South Africa have demonstrated
the potential to save significant amounts of energy in diverse industrial sectors such as
wood, steel, mining, iron products, and chemicals [242,243]. By 2050, the International
Institute for Energy Analysis estimates a heating and cooling energy demand decrease
of about 46% [244]. Most residential energy efficiency measures are related to the energy
consumption of middle- and high-income households, such as more energy-saving lighting
bulbs and appliances [245]. Low-income households can save energy due to the thermal
efficiency of their homes [246,247]. These measures are usually intended to alleviate poverty
rather than save energy.
As a result of efficiency improvements, most households increase their coziness level
rather than reduce their energy bills. It is, therefore, evident that lower prices result in a
rebound effect, leading to higher consumption [248]. The Chinese government has taken
steady steps toward energy intensity reduction since the 1980s, primarily responding to
severe energy deficiencies. China has lately emphasized reducing energy intensity as a
central element in mitigating climate change [148,249,250]. Various countries and periods
can have different energy intensities of GDP [251,252]. Many studies have examined the
variances in energy intensity between countries and the evolution of those variances over
time. Many studies, such as [253,254], examine a shift in the energy intensity between the
Organization for Economic Cooperation and Development (OECD) countries. The devia-
tions from the mean were analyzed by [255]. Alcántara and Duro [253] utilized the Theil
index based on GDP and observed the share each country contributes to global production.
Clean Technol. 2024, 6 1097

10. The Influence of Energy Decarbonization on Economic Growth

Among the biggest challenges facing economies are decarbonization (eradicating
carbon dioxide emissions caused by their harmful effects on the environment) and en-
hancing energy transmission efficiency (using energy efficiency means achieving the same
effects under the same circumstances while using a smaller amount of energy). Macroeco-
nomic stabilization is necessary to achieve decarbonization (DCO2 ) and energy efficiency
(EN) [256,257].
Stabilizing macroeconomic conditions is an essential objective of state intervention
in the economy. Combining economic indicators, political conditions, and the coun-
try’s position on international markets’ effectiveness determines macroeconomic stabil-
ity [258,259]. A balanced economy impacts citizens’ quality of life and contributes to
environmental awareness and education [260,261]. Most research emphasizes that eco-
nomic growth, globalization, and urbanization are associated with increased carbon dioxide
emissions [262,263]. As of now, it is unclear what impact macroeconomic stabilization will
have on decarbonization. Decarbonization aims to reduce carbon dioxide emissions to the
atmosphere, which is vital to halting global warming [264,265].
Decarbonization can occur in several ways, such as through energy efficiency, delayed
carbon capture, diversified energy sources and storage, and low nuclear power. The
most significant challenge is applying an economic growth model considering social and
environmental goals [266,267]. For the Korean economy to decarbonize effectively, several
drivers should be addressed, not just the expansion of low-carbon technologies. Korea’s
energy needs solely rely on fossil fuels in the predictable future. Concentrating large shares
of GDP on a limited energy-intensive industry is not only environmentally damaging [268],
but it can also increase the economy’s vulnerability, which implies supporting a low-carbon
economy by strengthening the service sector [269,270].
According to the “Deep Decarbonization Pathways Project”, the process of low-carbon
transformation requires three central pillars [263]. Firstly, there needs to be a low-carbon
transition to electricity supply; secondly, there needs to be the electrification of energy-
consuming activities that currently burn fossil fuels directly, such as transport, heating, and
industrial processes; and thirdly, there needs to be increased energy efficiency, a significant
factor in decarbonization’s cost-effectiveness.
Additionally, deep decarbonization can also lead to economic growth in developed
economies. Efficient and rapid DCO2 is vital for environmental strategy in many economi-
cally developed countries, helping them focus on EN on an enormous scale and switching
to zero-emission energy production [264–267]. A low-carbon or zero-carbon electricity
supply is likely to primarily depend on renewable energy sources in most nations—mainly
hydro, wind, and solar power—although nuclear energy may also be significant, and stor-
age for coal, carbon capture, and gas-fired power plants might be necessary as well [268].
Also, developed countries must consider and adopt deep decarbonization as a prerequisite
for long-term economic growth [257,269,270]. In growing and developing countries, whose
industries depend on coal power, the situation may differ (sustaining macroeconomic
stability may intensify carbon dioxide emissions). Therefore, it is essential to invest in new
green technologies and eco-friendly solutions (thereby generating additional costs) [271].
The concept of deep decarbonization entails reducing energy-related CO2 emissions.
Biomass is fundamental to developing a solid decarbonizing energy system in the future.
As a result, a biomass pathway in Sichuan has been anticipated to appraise the effects of
bioenergy. However, how to apply the biogenic carbon neutrality principle throughout
its lifetime has raised some controversial questions among academics [272,273] and poses
a challenge to implementing CO2 emissions. Social and environmental objectives must
be considered more broadly for economic growth (or macroeconomic stabilization). Sta-
bilizing the macroeconomic environment should lessen CE to the atmosphere over the
long term. Stabilizing macroeconomic conditions can improve research, development, and
environmental awareness [163,274,275]. Decarbonization requires additional expenditures,
energy balance shifts, and environmentally friendly technologies [276,277]. In contrast,
Clean Technol. 2024, 6 1098

decarbonization is likely to progress the country’s trade balance (due to a decrease in fossil
fuel imports). There are numerous benefits to a low-carbon economy, such as increased
investments, increased quality of life, and decreased environmental degradation [278,279].

11. Low-Carbon Energy Systems

Several studies focus on low-energy systems due to the increase in carbon emissions.
Researchers suggested using renewable energy to replace fossil fuels for a low-energy system
with several benefits [156,157,280–284]. Clean and renewable energy is considered one of the
most effective ways to decrease CE and reach low-carbon development [156,157]. Stringent
policies toward carbon emissions have also been proposed [155,156]. Implementing these
policies promises to increase the quality of life and reduce environmental pollution.

11.1. New Developments

Implementing technologies through marketing alone may not result in building a
low-carbon innovation system. Therefore, effective innovation systems include strategic
policy interventions, a commitment to ban fossil fuels, and the active contribution of
people experiencing poverty [234,285–288]. Undoubtedly, the world is responsible for
transitioning to a reduced amount of carbon-intensive and more just energy system. Given
the critical role of energy in enhancing human capabilities and opportunities, a range of safe,
clean, affordable, and reliable energy services must be made available (lighting, heating,
cooling, etc.). A low-carbon energy transition requires various reception, mobilization, and
authorization processes.
Lacey-Barnacle [240] examined the role of intermediate organizations in the civic
energy sector and showed in what way they serve as a conduit between local low-carbon
energy initiatives and deprived societies, assist community groups in being aware of
funding opportunities, and, where possible, promote a local emphasis on the low-carbon
transitions economic benefits. Preliminary with the first point, the energy transition has
enhanced energy flows closely related to “production” and “consumption,” actions co-
ordinated via the energy market. Moreover, technological advances have been made to
extract, transform, and utilize energy. Additionally, changes have occurred regarding rules
modifiable the socio-political role of energy systems, for example, revolutionizing a country,
enhancing freedom, or decreasing poverty [289].
In 2008, the European Commission launched the Citizens’ Energy Forum. An explo-
ration of the consumer standpoint in the new era of the merchandizing energy market was
intended. The citizens’ forum, which took place in 2018 at the European Commission [290],
was devoted to presenting innovative solutions for consumer engagement and business
models interrelated to the retail energy market. A growing number of renewable energy
projects are being proposed around the globe, which has contributed to public skepticism
regarding this development’s siting decisions, often resulting in intense public debates and
conflicts. Bartiaux et al. [288] analyzed household energy consumption patterns in Belgium
to demonstrate the consequences of the lack of capability to envision alternative shifts to
low-carbon energy systems.
In recent work, Willand and Horne [289] analyzed one example of a retrofit interven-
tion to uncover recognized and veiled susceptibilities and the experienced distribution and
technical energy impartiality in the existing experience of older and delicate householders
in a low-income area near Melbourne, Australia. In their study, Castan Broto et al. [290]
developed a fuller understanding of the British and Dutch public debates on intelligent grid
structures by exploring the values and concepts underpinning these debates. It is expected
that advancing energy effectiveness and reductions in energy use will be responsible for
greater than half of the reductions in the world’s CO2 emissions over future decades. For ex-
ample, to slow global temperature increases to below 2 ◦ C at a reasonable probability (66%)
within the next 35 years, an over 70% fall in global energy-related carbon emissions must
be ensured by 2020. For example, this would require a yearly tripling of energy efficiency
Clean Technol. 2024, 6 1099

improvements, retrofitting all existing buildings, ensuring 95% of electricity is generated

from low-carbon sources by 2050, and moving almost entirely to electric vehicles [291].
As of 2011, carbon dioxide concentrations in the atmosphere have increased from
280 shares per million (ppm) before the Industrial Revolution to 391 parts per million
(ppm). As of 2014, the concentration was above 400 parts per million. It is, therefore,
a matter of global concern that carbon emissions are continuously rising [193]. China
has adopted revolutionary measures to encourage energy production and consumption.
These include imposing an annual limit on encouraging energy conservation, total energy
consumption, renewable energy sources, and supporting the development of new energy
sources. Furthermore, the Chinese government has declared its intention to realize the peak
of CO2 emissions by 2030, aiming to reach the peak early by trying to strengthen the share
of non-fossil energy in primary energy consumption to about 20% by 2030, as indicated in
the China-U.S. speech on climate change published in 2014 [292].
As outlined in China’s intended nationally determined contributions (INDCs) in
2015 [293], China’s new commitment to reduce emissions intensity by 60% to 65% per year
from 2005 to 2030 was recently released. In fulfilling the U.N.’s Sustainable Development
Goals, SDG7 highlights the importance of inexpensive and green energy. A sustainable
energy transition calls for launching a new era of the energy model, requiring an updated
energy blend and revision of the regulatory framework [294]. Industrialized nations rely
heavily on oil and gas for most of their energy needs, making adopting local renewable or
low-carbon energy models challenging. Tilos, with over 50% renewable energy consump-
tion, located southeast of the Aegean Sea, Greece, demonstrates how local-scale energy
storage can be seamlessly integrated into a fully operational M.G. Kos Island presently
supplied oil-based generated electricity through an undersea cable to Tilos Island.
Developing clean and low-carbon energy has succeeded and is expected to progress
rapidly. China put several policy frameworks and institutional mechanisms in place to
motivate the production of natural gas and non-fossil fuels. It is estimated that China
consumed 180 billion m3 of natural gas in 2014, increasing from 34.1 billion m3 in 2004,
making China the third-largest consumer of natural gas globally. Moreover, non-fossil
energy consumption has increased from 4.0% in 1980 to 11.2% in 2014 [295]. According to
the China Electricity Council [296], in 2014, there were 301.8, 19.9, 95.7, and 26.5 GW of
installed capacity for hydropower, nuclear power, and wind power, respectively, which
is 1.4, 1.8, 3.2, and 102.0 times higher than the amount in 2010 [297]. Nathaniel et al. [196]
claimed that more importance had been added to energy security by prioritizing generating
energy from low-carbon sources such as renewables and nuclear energy. The G7 currently
harnesses these techniques for generating power. However, with a slight improvement in
the environmental quality in most of these countries, the positive effect of the process is
not yet attained.
Similarly, Sweden’s government aims to generate 100% electricity from renewable
sources by 2040. However, they currently generate 41% of their annual electricity from
nuclear power for low-carbon power generation and transition, but with decommissioning
aniticipated in future decades due to economic and aging factors. High investment, radia-
tion risk, and social acceptability depict uncertainty in generating electricity through nuclear
sources in European countries [100–104]. Nathaniel et al.‘s study suggested renewably
sourced electricity production as an alternative route and advised additional investments
into the transmission, which may benefit Sweden and other European countries’ economies
through increased profit from the power tariff [196].

11.2. Challenges and Constraints

To achieve sustainable low-carbon energy systems and increase access to affordable
and equitable innovations, a subtle understanding of concerns regarding social justice is
necessary. A different approach is needed to produce affordable and clean energy access
for everyone around the globe. Similarly, climate change must be addressed by reducing
fossil fuel usage. As articulated within Sustainable Development Goals 1, 7, and 13, both
Clean Technol. 2024, 6 1100

challenges require social justice deliberation regarding access to resources and technologies.
Generally, energy systems both generate and consume energy. These components are
extracting resources, producing them, converting them, distributing, delivering, using
energy, and providing energy services [298]. Political institutions and processes face
unprecedented challenges in low-carbon futures, particularly in the energy sector.
Furthermore, developing new and pioneering governance approaches is necessary [299].
Renewable energy sources face several challenges: low resource availability, limited re-
source access, limited resource location, insecurity of supply, sustainability, and afford-
ability [300]. As a result of the increasing electricity demand, the consumption of fossil
fuels has increased, thereby contributing to the growth of greenhouse gas emissions and,
consequently, global warming [291].
A further barrier to effective transition is that efforts to promote more sustainable,
resilient, and equitable energy disrupt economic, political, and institutional relationships.
As a result, power and political issues are now at the heart of sustainable innovation in the
energy sector [301]. Energy access and controlling greenhouse gas emissions are crucial to
achieving a sustainable energy future [302]. Since over two-thirds of greenhouse gas emis-
sions are attributed to energy production and consumption and over eighty percent of CO2
emissions are from power plants, countries that wish to meet the Paris climate objectives
must develop measures and strategies to reduce emissions from power plants and other
energy-based activities. Developing countries should address their challenges individually
and collectively by implementing suitable and effective energy policy measures [303].
A significant obstacle to the development of low-carbon energy is inefficient energy use.
According to the World Bank [304], in 2013, China had an estimated 8.7% share of global
GDP but consumed 22.6% of the world’s total energy [305], with energy consumption
per GDP being more than four times that of developed countries and more than two
times that of the world average. Despite the waste of energy resources and ensuing
increased emissions, the inefficiency of the energy system has also contributed to extensive
development of the energy system, hindering innovation regarding a low-carbon energy
system and renovation of an existing system [306]. The lack of institutional mechanisms
and market reforms is one of the main obstacles to low-carbon energy development.
Energy markets are characterized by cured profit distribution patterns that can result
in administrative monopolies, market monopolies, and disorderly competition, which
act to hamper improvements in technological and environmental standards [307]. Con-
sidering the government’s continued dominance of energy pricing, an improvement is
necessary for the existing energy-pricing mechanism. This is because market prices become
distorted, hampering the development of low-carbon energy technologies such as wind,
solar, small hydro, and distributed generation [308]. As a result of abandoning wind,
solar, hydro, and nuclear energy in recent years, coal power has maintained a high level
of operation. Transforming a coal-based high-carbon energy structure is a considerable
challenge in developing a low-carbon energy system. Energy demands are rigid, and
extensive development pathways increase reliance on high-carbon resources [308].

12. Future Projections/Aspects

Based on these findings, decoupling techniques have limitations. Most studies are
centered around Tapio and IDA (index decomposition techniques). Developing countries
develop faster. Therefore, reducing emissions in those countries is more complicated.
The E.U.’s energy policy has noted this obstacle that permits countries with a low per
capita GDP to increase GHG emissions. Global and climate change are humanity’s most
significant sustainability challenges, with oil, coal, and natural gas accounting for 61.3%
of global electricity generation in 2020. Sustainable energy reduces fossil fuel dependence
while growing renewable energy sources to reduce GHG emissions.
The application of evolution procedures and strategies to decouple economic growth
should be guided by more research into technologies and measures details. Considering
these findings, this review recommends that impending studies generate more data on the
Clean Technol. 2024, 6 1101

industrial structure to examine the factors affecting CE in a broader context. Hence, the
studies discussed in this paper confirm that climate economics and policy implications are
fundamental for decoupling EG from CE. Further demonstrates that a transition to low-
carbon energy systems is still becoming a norm, as developing countries are still far behind
in attaining the target. The strategies toward decarbonization require power generation
from renewable sources, encouraging the use of electric cars, and appliance production
using low voltages, which may reduce energy usage. Adopting these strategies worldwide
may help in achieving a low-carbon planet. Therefore, more studies and implementation of
policies aiming at a low-carbon planet must be prioritized globally.

13. Conclusions
This study reviews recent literature that focuses on decoupling economic growth
from carbon emissions, the root cause of climate change, which has become a monster,
taking life and destroying properties globally. It reviews decoupling techniques and factors
limiting decoupling activities, climate economics, policy implications, dematerialization,
and decarbonization, which are vital instruments in achieving carbon emission reductions.
Studies have confirmed that economic growth is the principal mover of climate change.
This study provides information on current challenges, what to consider for future demate-
rialization policy development, and the techniques available to tackle these challenges. It
also discussed several decoupling techniques, such as carbon capture using Tapio’s model
scientific evaluation mechanisms to analyze the effect of delinking economic growth and
gas emission. It discovered the consequences of climate change and economic growth
and suggested the disconnection of carbon generated from energy generation, material
production processes (dematerialization), logistics, and industrialization. This implies that
completely decoupling economic growth from carbon emissions is a viable way to reduce
extreme temperatures resulting in global warming. This reduction can be achieved through
a global focus on scrutinizing high-emission-generating sectors to understand their impact
and provide information for developing carbon emission-curbing policies.
Similarly, decarbonate and dematerialization policies and other created policies should
be implemented while considering economic conditions, product lifespan features, and
which policies will work at national and regional levels. More studies on policy devel-
opment should be conducted and implemented to achieve absolute material reduction.
The economic situation should be considered before creating a decoupling policy, and
generating electricity from renewable sources should be encouraged. Furthermore, study-
ing the product lifespan and analyzing national and regional challenges using UN SDG
goals before developing policies may lead to the absolute decoupling of the world’s aim
to achieve a low-carbon system. The decoupling of power from economic growth needs
more investment to enhance electricity generation from renewable sources, as generat-
ing power from nuclear is expensive. The rigorous change in recent research to evaluate
the challenges and constraints of low-carbon energy systems should be encouraged, as
this will provide innovative strategies (new developments) and suggestive plans for re-
ducing the carbon emission rate. This review suggests global policies aiming at energy
intensity reduction, macroeconomic stabilization, replacing fossil fuel plant systems with
renewable energy-based plants, and electric car usage should be implemented to create a
carbon-freeenvironment.
Furthermore, global society sensitization to climate change and its implications is
necessary and must be encouraged to achieve a zero-carbon planet. A subtle understanding
of social justice is necessary to achieve sustainable low-carbon energy systems and increase
access to affordable and equitable innovations. Therefore, it must be enforced. Additional
implementation and monitoring of climate economics and policy implications must be
encouraged and taken seriously to reduce climate change and its impact.
Clean Technol. 2024, 6 1102

Author Contributions: All authors contributed to the review article. J.M. and O.J.G. wrote the
literature study and the article’s first draft, and all authors reviewed, revised, and made relevant
contributions and suggestions for the submitted manuscript. All authors have read and agreed to the
published version of the manuscript.
Funding: This research received no external funding.
Institutional Review Board Statement: Not applicable.
Informed Consent Statement: All the authors give consent for the publication of this manuscript.
Data Availability Statement: Not applicable.
Acknowledgments: The authors would like to acknowledge the support from the Durban University
of Technology, where this study was conducted.
Conflicts of Interest: The authors declare that they have no known competing financial interests or
personal relationships that could have influenced the work reported in this paper.

Nomenclature

GHG Greenhouse gas emissions.

GDP Gross domestic product.
CE Carbon emission.
OECD Organization for Economic Cooperation and Development.
DEG Decouple economic growth.
UNEP United Nations Environment Programme.
EG Economic growth.
UNFCCC United Nations Framework Convention on Climate Change.
CDE Carbon dioxide emissions.
EKC Environmental Kuznets curve.
DOLS Dynamic ordinary least squares.
FMOLS Fully modified ordinary least squares.
MINLP Mixed-Integer Non-Linear model.
AMG Augmented mean group.
LMDI Log Mean Divisia Index.
IDA Index decomposition.
INDCs Nationally determined contributions.
EU European Union.
IPCC Intergovernmental Panel on Climate Change.
CMIP6 Model Intercomparison Project Phase 6.
SSPs Shared Socio-Economic Pathways.
RE Renewable energy.
USA United States of America.
IWG Interagency Working Group.
IAMs Integrated assessment models.
DICE Dynamic integrated climate–economy model.
PAGE Policy analysis of the greenhouse effect model.
FUND Framework for Uncertainty, Negotiation, and Distribution Model.
SDRs Special Drawing Rights.
DDPs Deep Decarbonization Pathways.
IRP International Resource Panel.
SDGs Sustainable Development Goals.
VRE Variable renewable energy.
PA Paris Agreement.
EVs Electric vehicles.
EVCS Electric vehicle charging station.
V2G Vehicle-to-grid.
ERDF European Regional Development Fund.
IEA International Energy Agency.
CETP Clean Energy Transitions Programme.
Clean Technol. 2024, 6 1103

PV Photovoltaics.
PPP Purchasing power parity.
EN Energy efficiency.
DCO2 Decarbonization of Carbon Monoxide.
INDCs Intended nationally determined contributions.
IDA Index decomposition techniques.

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