I saw this article today – “US Getting More Economic Bang for Its Energy Buck” and wanted to make some observations about it. The article contains the following assertion:
Energy intensity, or the amount of energy we use to create one dollar of GDP, has plummeted 58 percent between 1949 and 2011. Even more impressive is the 66 percent decrease in carbon intensity, or the amount of carbon emitted per real dollar of GDP.
The data are what the data are. This comment follows the data:
These improvements are what greens miss when they call for Americans to make painful, costly cutbacks on energy usage.
Let’s take another look at that data, now that we know the bias of the author. There are 62 years in the data cited. That means there was a 0.94% annual decrease in energy intensity. The good news is there was a decrease. We generated the same GDP dollar for less energy, as we expect in an advanced society with research and innovation. Similarly, there was a 1.06% reduction in carbon intensity. This value is important for energy and climate policy. The amount of carbon required for every GDP dollar fell over the past 62 years. Again, this is a good thing generally speaking. Technological efficiency permeated the economy over that time, which reduced the amount of carbon we emitted.
Now an important question: What caused this decrease? Was it emission reductions? No, US emissions have increased since 1950, with only a couple of periods when emission values didn’t increase every year. The US emitted just over 600 million metric tons (MMT) of carbon in 1950 and over 1500MMT in 2011. If carbon intensity is a measure of carbon per unit GDP, then the denominator increased faster than the numerator (GDP rather than carbon), in order for the ratio to decline over time. In 1950, the US real GDP was $2 trillion; in 2011, it was $13 trillion. Indeed, GDP increased faster than carbon emissions over the past 60 years.
What magnitude carbon intensity decrease is necessary to achieve carbon concentration reductions? First of all, carbon emissions have to decrease. Granted this has to occur globally, but let’s keep our focus on the US since we can actually control those emissions. Something between 3% and 4% annual decrease would do the trick. That is 3 to 4 times the historical rate! Let’s go back to the ratio: what has to change to achieve this decrease? It’s one of two things: carbon emissions or GDP. If GDP increases at the same rate it has historically, carbon emissions would have to decrease in value. If carbon emissions increased at the same rate they have historically, GDP would have to triple or quadruple in value. The former case is more likely because while we want GDP to grow as much as possible, tripling or quadrupling the rate of GDP growth won’t happen.
So our goal should be to decrease carbon emissions. If we can simultaneously increase GDP along the way, so much the better. We obviously should not look at “solutions” that decrease GDP. Walter Russell is unfortunately partially correct when he says that some greens miss part of reality. They place too much focus on decreasing emissions regardless of the consequences. In the real world, people still have to eat and pay for the mortgage. Walter does miss his own share of reality however. These graphs do not indicate a wildly efficient economy. We should not break out into celebration because of the graphs. We should instead examine them soberly and then determine what our goals should be. Do we want to decrease emissions and concentrations and if so to what level? Those goals will help us establish the requisite policies to achieve them. I for one do not think we are decarbonizing nearly fast enough and I think we can decarbonize faster via some common sense policies.