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.


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) (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.