Net Zero Economy Index 2022

Decoupling economic growth and CO2 emissions not successful yet

The world is far behind in reducing CO2 emissions. The 20 largest countries responsible for eighty percent of global emissions have reduced the "carbon intensity" of their economies - CO2 emissions per unit of GDP - by only half a percent by 2021. If the world is to limit global warming to 1.5 degrees, it must reduce this carbon intensity by 15.2 percent annually until 2030. That's according to PwC's recently published Net Zero Economy Index 2022.

Seven years ago, the Paris Climate Agreement was signed, with 195 countries agreeing to limit global warming to a temperature increase of 1.5°C above pre-industrial levels (and at least below 2°C).

The results of our 2022 net zero analysis should be a wake-up call. We must act now to meet the ambitious net zero goals. Companies also seem ready to cash in on new opportunities, we need to make sure climate change is at the top of the transformation agenda.'

Karin MeijerPartner and Climate Lead

Jan Willem Velthuijsen, chief economist PwC

'High energy prices mean we are using less energy because activities have been shut down, not caused by a further decoupling between economic growth and CO2 emissions. So this argues all the more for continuing the energy transition precisely now - with high gas prices as an incentive.'

Jan Willem Velthuijsenchief economist PwC

Buttons to press to reduce CO2 emissions

Annually PwC’s Net Zero Economy Index measures the amount of CO2 emissions per unit of GDP, coming from the 20 largest economies (G20). This is called the carbon intensity. The EU is one of the G20 economies. 

The index is based on: 

  • The fuel factor - the amount of CO2 emitted per unit of energy. Simply put, the 'fuel factor' shows the extent of green (or gray) energy consumption. 
  • The energy intensity - the amount of energy required to generate a unit of GDP, which is an indicator of, for example, the efficient use of energy, but also the composition of an economy.

CO2 emissions can thus be reduced by pressing two buttons: a greener energy mix (the fuel factor) or a more efficient use of energy (the intensity). 'Besides fuel factor and energy intensity, there is a third button you can press to reduce CO2 emissions, says PwC chief economist Jan Willem Velthuijsen. 'And that is less economic growth. That's not popular anyway, but a little economic growth has advantages. It makes redistribution - taxes are part of that - much easier. That's why it's so important to decouple economic growth and CO2 emissions.' 

Within the Netherlands, decoupling has been partially achieved, but not by pressing these two buttons, Velthuijsen says. 'The increase of CO2 emissions has lagged far behind economic growth since 1990, but that is mainly because the Netherlands  moved CO2-intensive activity to Asia. Currently we are in a situation where there is talk of bringing production back to Europe, so meaning deglobalization. This means that we do have to press these two buttons and those are the expensive, difficult ways to achieve that decoupling.'

Karin Meijer, Partner and Climate Lead

Post Covid economic recovery was not green

The numbers from the Net Zero Economy Index shown below reveal how little the 'carbon intensity' (CO2 emissions per unit of GDP) has been reduced. Reducing 'carbon intensity' by 0.5 percent in 2021 turned out to be the lowest level in the last 20 years. Over that entire time frame, the annual reduction averaged 1.4 percentage points. 

Within the EU, carbon intensity actually increased. The Netherlands appears to be doing better relative to the G20 and the EU, but this is marginal and far below the 15.2 percent needed from now to limit climate change to 1.5 degrees. 

Jan Willem Velthuijsen: "The emissions per citizen are high, compared to those of other European countries. The Netherlands' CO2 emissions over 2021 were 178.2 million tons, equivalent to about 10.2 tons per person. When compared to the average of 6.3 tons per person in the EU and 4.9 tons per person worldwide, it becomes very clear how significant our share in climate change is. 

Velthuijsen: "Currently our energy use is decreasing, partly because high energy prices made households more economical and partly because some industries have shut down production sites. So we are using less because activity has decreased, not because there is a further decoupling between economic growth and CO2 emissions. So this argues all the more for continuing the energy transition just now - with high gas prices as an incentive.

2021 (% change from 2020)




Carbon intensity
tCO2 / m$GDP

265,6 (-0,5) 

550 (+0,82%)

159.52 (-2,87%)

Fuel factor
tCO2 / TJ Energy

65,5 (-0,07%) 

47 (+0,86%)

51.33 (-0,62%)

Energy intensity
TJ energy / m$GPD 

4,1 (-0,42%)

7,5  (-0,04%) 

3.11 (-2,27%) 

Total tCO2-emissions (million tons CO2 equivalent) 

389776.6 (+5,7%)

2825.5 (+6,5%)

178.4 (+2,3%) 

lower is better      
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Karin Meijer

Karin Meijer

Partner, PwC Netherlands

Tel: +31 (0)62 030 39 90

Jan Willem Velthuijsen

Jan Willem Velthuijsen

Chief Economist, PwC Netherlands

Tel: +31 (0)62 248 32 93