Friday, October 30, 2009

Eco-nomics: Energy and Development

As a companion to the post on population here is a little data to think about regarding development and energy usage. We often see the chart of energy usage per capita which shows the high income countries (and especially the US) as outliers using huge amounts of energy per person. But this is not the right way to think about it in my mind. Compared to most of the world we in the US enjoy long lives relatively free of hunger, malnutrition, disease, infant mortality, war, famine, etc. I would hope that we all think that every human being should be able to live similar lives. So a chart of energy per capita seems to suggest that the best thing for the planet is for us all to be poor. But I am uncomfortable with the notion that the rest of the world should not strive to have an equal quality of life.

We know this connection between poverty and environmental sustainability is not true either, just look at the way poverty taxes natural resources - the deforestation of the Brazilian Amazon for example. Rich countries can afford to protect natural resources much more than can low income countries. A picture of energy use per capita also diverts attention to the big threats in the future: densely populated developing countries that are experiencing fast growth.

The fact is that the energy efficiency of the US economy has improved tremendously. Here is a graph of the energy use per dollar of GDP since just 1980.

Here is a similar picture for the US since 1950.

How does this compare to the rest of the world? Here is a graph of a set of countries and their energy use per GDP. Note that the middle income countries, those that are moderately industrialized, tend to be the least efficient (there is also a very strong correlation between inefficiency and resource availability - take Venezuela for example). While the US, and especially Western Europe where energy is very expensive, are relatively efficient. So are lower income economies that are still largely traditional. [As I mentioned above, don't romanticize traditional economies, they tend to have things like infant mortality rates and life expectancy rates that would make you wince] By the way, these are selected from a list of countries from North America, South American, Western Europe, Eastern Europe, Middle East, Africa, and Asia, in that order. Here is the source data for both this graph and the first one.

Finally, here is a scatterplot that plots energy usage per GDP against GDP (in this case using a PPP rather than an exchange rate comparison - better but harder - so you might notice a difference)

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