Friday, April 15, 2016

Energy, Economics and Correlation versus Causation:

Drawing the Right Conclusions

I recently came across an article that left me scratching my head.  Entitled "Economic development does mean a greater carbon footprint," it reports on a study by Max Koch, a professor in Social Work from Lund University in Sweden, and Martin Fritz from the University of Bonn in Germany, on the connections between growth, prosperity and ecological sustainability in 138 countries.  Professor Koch is quoted as saying that he conducted the study in an effort to test the assumption "that extensive investments in green production and sustainable consumption can increase economic growth without increasing the emissions of greenhouse gases."

That sounded like an interesting idea, so I read on.  They divided the world's countries into four groups based on their gross domestic product (GDP) per capita: poor countries, developing countries, emerging countries, and rich countries.  That's pretty standard, I thought.  But then they identified a category of 8 countries they called "overdeveloped."  These are countries in which the average annual income exceeds $50,000 (US) per person.  Five of the 8 countries in this group are identified:  the United States, Singapore and Switzerland, as well as "rich oil nations, such as Norway and Qatar."  Although the article didn't state the other three countries, it did include an infographic with a map that indicates the other 3 countries are Saudi Arabia, Kuwait and the United Arab Emirates. 

Hmm, I wondered, seeing the word "overdeveloped."  That seems to have a bit of a negative connotation, as in "more developed than they need to be."  Is a bit of bias creeping in?   And given the diversity of these countries, should the same designation really apply to all of them--as opposed to, for example, most of the rest of Western Europe, which merely falls in the category of "rich countries."

But I read on.  They then looked at the prosperity of the different groups of countries according to several metrics: ecological sustainability, social inclusion and quality of life (including life expectancy, literacy rates and subjective well-being).  Their conclusion was that there was greater social inclusion and the quality of life as the countries became increasingly wealthy at the expense of environmental sustainability such as greater emissions and carbon footprint.

While they acknowledged in some sense that the GDP and the environmental emissions might be separable, saying, "We are not saying that it is impossible to separate economic growth from ecological issues," they nevertheless go on to say that there is "a clear connection between economic development and increased greenhouse gas emissions that cannot be ignored."

From this, they conclude that, because of the urgent need to reduce emissions globally, "the possibility of economic degrowth should be seriously considered"--in other words, that economic growth should be given less priority as a policy objective than has been the case.

I had to wonder about this conclusion on several grounds.  In the first place, I don't think that the study ever really made the projections that had been promised.  I could see what the emissions are today, but I could not see an analysis of how different levels of investments in some of the many possible options--nuclear power, renewable energy, biofuels, energy-saving devices, etc.--might affect economic growth--and environmental conditions--in the future.

In the second place, it is likely that that the greatest impact of trying to achieve environment sustainability by curbing economic growth would be to condemn the poorest countries in the world to continued poverty.  Yes, I suppose the conclusion implies that the overdeveloped countries may have to shave their own growth, too, but clearly, the impact on richer countries will be much more modest than the impact on the poorest countries.  In effect, the benefits of an improved global environment will accrue to all countries, but the poorest countries would bear a disproportionate share of the burden. 

Therefore, while the kind of data gathered in this study can be very useful, I believe that the authors have not looked at all the dimensions of the issue.  Given the seriousness and importance of the issue, I think that is a serious shortcoming of the study.  While I do not expect to find a solution that allows the world to "have its cake and eat it, too," I think far more exploration is needed of all the issues and options before we conclude that we need to move civilization backwards. 




  1. This all depends on what you consider to be most important. To me, increased human welfare is far more important than any concern about greenhouse gases. Besides, if we really wished, we could build the breeder reactors, generate electricity and manufacture synthetic fuels to sustain any type of lifestyle we prefer without greenhouse emissions. As for the concept of over-development, I'd be happy to see the people whining about this experience a drastic degrowth of their living standards. As for the rest of us, I'm sure we all agree that the world is actually grossly underdeveloped, and we'd like a lot more of that development to end up in our pockets.