TriplePundit • What Is “Crocodile Economics,” and What Does It Mean for Fossil Fuels?

“Crocodile Economics” is a newly adopted, colorful term for the familiar decarbonization model that climate advocates have championed for decades: If renewables can beat fossil fuels on cost, then a country’s global warming emissions will fall while economic growth continues upward.

Represented on a line graph, fossil fuels evoke the lower jaw of a crocodile’s open mouth sinking downward, with economic growth represented by the upper jaw rising. Said differently, it’s another way to think about decoupling economic growth from fossil fuel use and emissions.

The “Crocodile Economy” has already taken form in 49 countries, mostly concentrated in Europe and Oceania, the region represented by Australia and surrounding nations, according to a study published last year in the journal Nature. In new research out last week, the nonprofit Energy and Climate Intelligence Unit estimates that countries representing 92 percent of the global economy have decoupled their emissions from economic growth in the 10 years since the Paris Climate Agreement.

Emerging economies will accelerate the pace of change by going directly to renewables as their energy needs grow, the business climate group Exponential Roadmap Initiative projects. “Emerging economies can skip carbon-intensive development altogether by leveraging today’s affordable clean technologies,” Katarina Wangler Björk, chief impact officer of Exponential Roadmap, and Owen Gaffney, co-founder of the climate-focused researcher coalition Future Earth Media Lab, wrote on the World Economic Forum.

“Even in the United States, energy-related CO2 emissions are ~20 percent lower than in 2005, while GDP has continued to rise,” Exponential Roadmap wrote in its October report, citing the U.S. government’s own data. Jonathan Watts of The Guardian added: “Donald Trump has tried to move the U.S. in the opposite direction, but his first term as president caused only a brief uptick in emissions. For most of the past two decades, U.S. emissions have been falling.”

Leading the pack in the U.S., the state of California demonstrates that decoupling emissions from growth is a matter of political will, not lack of technology. Due to the state’s longstanding pollution control efforts, California continues to reduce greenhouse gas emissions at rates faster than almost any other state while growing its economy.

“In California, we know that a healthy, clean climate and thriving economy aren’t zero-sum games. We can excel at both,” California Gov. Gavin Newsom said in a statement this fall. The state cut greenhouse gas emissions by 21 percent since 2000 while its economy grew 81 percent,, according to the governor’s office.

Most sustainability investors commit to stepping up the pace

Regardless of federal energy policy, the U.S. financial sector is “already behaving as if a fossil fuel phase-out is underway,” Ingmar Rentzhog, CEO and founder of the influential climate action organization We Don’t Have Time, wrote in Forbes over the weekend.

“Not through headlines or pledges, but through mandates, risk models, and capital allocation decisions that quietly reroute money away from assets with declining transition credibility,” Retzhog wrote, citing a new Morgan Stanley survey of sustainability-oriented institutional investors.

The survey included more than 900 investors that practice sustainable investing, or plan to do so. “Regionally, more than 90 percent of North American asset owners surveyed said they expect to increase the proportion of their assets in sustainable strategies in the next two years, slightly ahead of investors in Europe (82 percent) and APAC (85 percent),” Morgan Stanley found.

While the Morgan Stanley report did not distinguish between Canadian and U.S. investors, other surveys indicate a strong commitment to sustainability by U.S. investors and businesses in particular. Pitchbook’s Sixth Annual Sustainable Investment Survey published this fall, for example, showed strong interest in sustainable investment practices among U.S. fund managers, investment consultants and other financial professionals.

“Among respondents, 72 percent say they currently incorporate ESG factors into their investment evaluation and management process,” Anikka Sophia Villegas, senior analyst of fund strategies and sustainable investing at PitchBook, wrote of the research for Morningstar. “Just 5 percent indicated that they used to, but no longer do.”

While those who responded to the survey remain engaged in sustainable investing, Pitchbook saw the number of survey responses drop sharply this year as business leaders are reluctant to articulate ESG (environmental, social and governance) principles in public. Skittishness over the “ESG” acronym predates this year. Companies began responding to a growing surge in anti-ESG backlash during the Joe Biden administration, a trend that has intensified in 2025.

Over the summer, EcoVadis published the results of a survey of 400 executives representing U.S. companies with more than $1 billion in revenue. While fewer companies are talking openly about ESG, 87 percent of executives told EcoVadis they maintained or increased their sustainability investments this year. “Technology remained a key focus area for investment, according to the survey, with 89 percent of respondents planning further ESG tech investments over the next 12 months,” reported Mark Segal, founder of the news organization ESG Today.

The inevitable rise of the Crocodile Economy

President Donald Trump declared an “energy emergency” upon taking office with the intention of supporting oil, gas and coal producers in the U.S. However, the new White House policy also explicitly supports several forms of renewable energy. The president tapped hydropower and biomass for support in his emergency declaration on Jan. 20, and Energy Secretary Chris Wright added geothermal energy in his first Secretarial Order issued in February.

In addition, the Energy Department has continued to support the development of new, long-duration energy storage systems and new marine energy devices that harvest electricity from the movement of waves, tides and currents.

While none of these renewables offer the present-day scalability demonstrated by wind turbines and solar panels, all of them have the potential to help accelerate the renewable transition in the near future. In particular, the geothermal industry is already deploying new drilling technologies to extend into new, previously untapped regions of the U.S.

The biomass sector also shows signs of scaling as activity in the domestic SAF (sustainable aviation fuel) industry ramps up. “Momentum is building fast,” the leading domestic SAF producer XCF Global noted in November. “Under the U.S. SAF Grand Challenge, federal targets call for 3 billion gallons of annual production by 2030 — scaling to 35 billion gallons by 2050 to meet 100 percent of domestic demand.”

That may seem somewhat optimistic, considering that SAF only accounted for about 1 percent of the global supply of jet fuel last year. Nevertheless, XCF Global is planning to expand its existing 40 million gallons-per-year SAF facility in Nevada to approximately 80 million gallons. The company has also partnered with the bio-waste gasification specialist Southern Energy Renewables and the carbon management firm DevvStream to evaluate the potential for an SAF facility in Louisiana to produce about 40 million gallons per year.

XCF is just one example among many as more U.S. states, cities and businesses follow California’s lead and join other nations around the world in decoupling economic growth from greenhouse gas emissions.

Image: David Clode/Unsplash and Nature