No sign of break in the link between emissions and higher GDP

An important recent paper looked at the links between economic prosperity and carbon footprint.[1] It compared the average emissions per head in 73 different countries at all different stages in development. Unsurprisingly, it showed that richer countries have much higher greenhouse gas outputs. The interesting and somewhat depressing finding is that a country with 10% higher GDP per head than another will generally have emissions about 8% higher. The correlation is strong – very few countries diverge much from the norm for their level of income.

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Why is this an important finding? It suggests that economic growth brings a highly predictable increase in greenhouse gases.[2] Without very significant changes, the continued growth of the world economy will commit us to nearly commensurate increases in emissions.

For a long time policy makers had a sense that economic growth was only partly coupled to greenhouse gas emissions. It was optimistically assumed that as countries grew their use of energy tended to increase much less than their GDP. The theory was that growth was fastest in service activities that don’t use much energy. Energy-intensive economic activity, such as manufacturing and construction, would decline in importance. This was the consensus view, and probably still is in many policy-making clusters.

This important paper shows that this cheery hypothesis is, at best, only partly true:

  • a) Richer countries do have larger service sectors. A 10% higher GDP per head country has a 12% larger service sector.
  • b) The importance of manufacturing, both of domestically manufactured and imported goods, increases as well. A country with a 10% higher GDP per head will typically have 11% larger expenditure on manufactured goods.
  • c) What the paper calls ‘mobility’ (travel in cars, air, public transport) also increases faster than GDP.
  • d) The only really important beneficial change is that the emissions from food production tend to decline as a share of total emissions among richer economies.

Typically a country with per capita expenditure of $4,000 per year will have service-sector emissions of about 1 tonne per head rising to 4 tonnes in a very rich $50,000 expenditure country, a four times increase. But the emissions from manufactured products are nine times higher in the richer country and ‘mobility’ emissions are eight times greater. The unfortunate truth is that rich country emissions are more dominated by manufacturing, traded goods, and mobility, not less.

The analysis in the paper also includes an estimate of the impact of imported goods. In the UK our emissions are very substantially disguised by the invisible GHGs created by the factories in China that make our plastic goods, our electronics, and our furniture. The analysis shows that imported goods (after deducting the emissions produced by exports) add about 11% to UK emissions, almost the highest figure in the world. We have made little measurable progress in ‘decarbonising’ emissions.

This leads on to the second important point from this paper, and one which I think the authors under-emphasise. If you know a country’s GDP per head, you can estimate its emissions reasonably accurately. Across the main categories – building, mobility, clothing, etc. – the plots of emissions versus expenditure per capita show smooth curves. (Of course this visual impression is encouraged by log/log plotting.) Cold countries have higher emissions from domestic buildings than would be predicted from the equations, but the reason is obvious. They need more heat. But in the case of mobility, there is a very tight distribution and few countries diverge far from the curve.

What this says is that there is almost a mechanical relationship between GDP and emissions. No country has found a way of delinking greenhouse gases and growth. If GDP goes up by 10%, emissions are almost certainly going to rise about 8%.

The work in this very thought-provoking paper compares different countries at the same time. Other studies have examined the same country at different times. The third way of looking at the issue is to plot the emissions of people at differing income levels in one country at one particular time. (All these techniques are trying to get a grip on the issue of how much emissions will rise as an economy grows.)

Eighteen months ago, I looked at the UK’s national household expenditure database to assess how carbon footprints change with higher household expenditure. The database groups households into deciles (ten per cent groups) ranked by the money spent. It breaks it down into matters like gas and electricity, petrol and transport spending. I had to estimate, for example, how much petrol was bought by a typical weekly expenditure of £10 and this makes the numbers only of indicative accuracy.

A table from this work is given below:

Approximate greenhouse gas emissions per person (tonnes per year)

Bottom 10% Average income Top 10%
Electricity 0.9 0.8 0.9
Gas 1.7 1.6 1.7
Motor fuels 0.4 1.1 1.8
Public transport 0.1 0.1 0.2
Air travel 0.4 1.5 4.0
Meat 0.3 0.3 0.4
TOTAL 3.8 5.4 9.0
Approximate expenditure per person per week £80 £200 £450


This table only covers some of the main sources of emissions for which we are directly responsible but it shows the approximate connection between emissions and income. Money spent on gas and electricity does not rise rapidly with greater prosperity. Poorer households are much smaller than the average, often being composed of just one pensioner, but the cost of heating a building does not rise much with the number of people in the house. Second, many poorer people live in badly insulated properties that inflate energy bills. Expenditure on meat also isn’t much higher in richer households. But mobility expenditure rises far faster than income. In sum, as average per-person expenditure rises from the median household to the top 10%, the most obvious sources of greenhouse gases increase by about 67%, while expenditure goes up by 125%, or about twice as much.

This analysis provides further support for the view that increasing prosperity seems to involve major increases in greenhouse gases inside countries, across different countries at different stages of development, and in one country over time. The many people who say that increasing prosperity makes it easier to find solutions to the need to reduce climate-changing emissions should acknowledge that economic growth also introduces a strong upward and apparently unavoidable tendency for higher GHG outputs.

Footnotes
[1] Edgar G. Hertwich and Glen P. Peters, ‘Carbon Footprint of Nations: A Global, Trade-Linked Analysis’, Environmental Science and Technology (2009) http://dx.doi.org/10.1021/es803496a (doi:10.1021/es803496a).
[2] The Hertwich and Peters study is a cross-sectional study at one point in time. Rich countries have much higher emissions than poor countries. This does not necessarily mean that when a poor country becomes a rich country through economic growth its emissions will increase. It just makes it very likely.

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  1. Dr. James A. Singmaster’s avatar

    Talking about carbon footprints with lots of figures does nothing to get the climate crisis and more slowed. Since we already have an energy overload as well as GHG overload rolling along to cause an 80 ft-25 mt ocean rise by 4,000 AD according to report in New Scientist online Environment section, June21, we need to be developing a program that can remove energy and GHGs principally carbon dioxide from the overloads.
    In numerous blog comments, I have outlined a pyrolysis program to use the massive messes of human organic wastes and sewage solids as a resource in the climate crisis and more because the messes have about 50% of the carbon converted to inert charcoal. A distillate expelled in the process contains the other 50% in a collectable oil that can be refined to use as a renewable fuel for the process or as a raw material for chemical manufacturing for drugs, soaps etc.. By doing this with those messes, we stop them from getting dumped to then undergo natural biodegrading to be reemitting GHGs, mainly carbon dioxide, but also methane. The pyrolysis of those messes has perhaps an even bigger benefit in the destroying of germs, toxics and drugs in the messes to greatly reduce costs for new dumps not having those hazards present and greatly reducing escapes of those hazards to cause water pollution. I have detailed this in many comments on the GreenInc NYTimes blog including comment #1 on the June 29 posting concerning views of Sweden’s Environment Minister. If you search my name on that blog, you will find more details about using pyrolysis as well as the reasons why CCS for coal will never work.
    It is time to stop flashing all kinds of data on how and where we are emitting GHGs and making up scenarios about what will happen if we do something, but what just cut emissions, or don’t. Unfortunately, all that gets talked about is getting control of emissions(It seems no one recognizes the emissions from those messes as being controllable) with no means being proposed to some removal of the carbon dioxide and energy in the overloads We need action to remove some part of those overloads, and these kinds of footprint reports do not bring about any meaningful action as the squabbling recently making news now at the G8 meeting shows that no one can make much sense of the various almost useless emission control proposals.
    I hope that readers here will join with me in trying to get attention to the use of the pyrolysis process on the messes for the benefits indicated.
    Dr. J. Singmaster, Environmental Toxicologist, Ret., Fremont CA, USA

  2. Russell Lerman’s avatar

    Companies should be rewarded for saving energy. Economic growth and greater environmental responsibility can exist together. The drive to reduce carbon is an opportunity to cut energy costs for businesses that must not be allowed to pass by.

    Climate change in now on the global agenda and governments are at last starting to legislate against the problem. Improvements in energy efficiency would achieve the bulk of carbon emissions reductions necessary to meet EU targets and UK targets. But the government will need to get businesses on board.

    Businesses should look at this as a great opportunity to improve their bottom line performance, and at the same time boost their green credentials. It is not often that a company gets the chance to keep their head of investor relations and financial director happy at the same time.
    With a modest investment in energy efficiency measures, companies can make immediate reductions in carbon emissions and long-term savings in energy costs. As energy prices continue to soar, the savings will only get bigger and bigger. Wholesale electricity prices have more than doubled in the last 12 months which has put a huge strain on British business in already financially difficult times. However, it only takes between 12 to 18 months for a mid-sized organisation to make its money back on a holistic energy savings package. And the quicker the energy prices rise, the quicker the payback time. As David O’Reilly, the chief executive of oil and gas giant Chevron said….energy efficiency is the cheapest form of energy we have.

    While the economic rewards of energy efficiency measures are attractive, businesses should also be encouraged by government policy- upcoming CRC legislation and Smart-meter roll out are sure signs that the government is taking steps to address energy issues and businesses need to be sure that they keep up and not lose out when such legislation is implemented.

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