decarbonisation of the economy

Some reasons for supporting an acceleration of the already established decarbonisation of the economy are that:

  • anthropogenic global warming is real, although we are not particularly clear about the urgency of the issue
  • the oceans absorb vast amounts of CO2 and a particular reason for concern is the biogeochemical effects of this

The environmental issues are real but subsidiary to the need for economic development, particularly in the developing world but also in the developed world.

Politically, the correct position is:

  1. full steam ahead with economic development which means more coal use now because coal is the cheapest energy producing fuel
  2. full steam ahead with R&D, with the goal of decarbonisation of the energy economy, ie. finding a cheap alternative to coal

John McCarthy has said that “He who refuses to do arithmetic is doomed to talk nonsense”. I think he meant science and maths as well as arithmetic.

In this article I present the Kaya identity which provides us with the basic maths required to understand carbon emissions.

carbon emissions = population * GDP per person * energy intensity of the economy * carbon intensity of energy use


carbon emissions = P * GDP/P * E/GDP * C/E

Energy intensity of the economy is the amount of energy used, E, divided by the GDP of the economy, or, energy per unit GDP

Carbon intensity of the energy use is the amount of carbon released, C, (as carbon dioxide) for each unit of energy produced

The Kaya identity provides us with a complete overview of how to determine the amount of carbon di-oxide which enters the atmosphere. Forget all the magic talk about carbon offsets. If it doesn’t end up in the Kaya identity then it doesn’t matter. If you want to reduce carbon dioxide then there are only 4 ways to do it:

  1. reduce population, which won’t conceivably happen to later this century
  2. reduce per capita GDP, which fits with some Green thinking that we all ought to live more frugally
  3. become more energy efficient, which tends to happen spontaneously with technological improvement (eg. compact fluorescent light bulbs are far more efficient than incandescent globes)
  4. switch to less carbon intensive sources of energy (eg. nuclear, solar or wind rather than coal, or, gas rather than coal)

From now until 2050 population is going to increase and GDP per person is going to increase.

France, the lowest level industrialised emitter, with its nuclear program, produces 6-7 metric tons of CO2 per person per year (2006 figures). We can use France as a low level CO2 emitter exemplar. By contrast China emits a little over 4, India 1.5 and Brazil 2 metric tons of CO2 per person. These developing countries have large populations and are going to emit more CO2 per person in the future, unless something else in the equation changes.

(Australia, with its large cheap coal supplies, is the largest per capita emitter in the world with over 20 metric tons of CO2 per person).

You can combine the last two terms of the Kaya identity to find the carbon intensity of the economy:

carbon intensity of the economy = energy intensity of the economy * carbon intensity of energy use


This modifies the Kaya identity to become:

carbon emissions = population * GDP per person * carbon intensity of the economy


carbon emissions = P * GDP/P * C/GDP

Decarbonisation is defined as reduction in the carbon intensity of the economy. Decarbonisation does not necessarily mean an absolute reduction of carbon emissions. If the product of population and GDP per person is increasing more than carbon intensity of the economy is decreasing, then overall carbon emissions will continue to increase. The increases in population and world wide living standards over the next 40 years will certainly be greater than the existing decarbonisation trend.

I was a little surprised to discover that decarbonisation has been happening spontaneously for over a century, without any real conscious effort to achieve it. More efficient energy usage through technological improvement saves money and the result has been decarbonisation.

In 1910, we produced 1.2 metric tons of CO2 per $1,000 GDP

In 2010, we produced 0.6 metric tons of CO2 per $1,000 GDP

So, decarbonisation of the economy is a long standing reality, not a new idea at all

However, the irony is that in the past decade the spontaneous rate of decarbonisation, whilst still declining, has levelled out, the decline is less steep. This is mainly because China has been using vastly more coal and coal has relatively high carbon intensity (higher than gas or petroleum). So, at a time when people are more concerned about the effects of CO2 in the atmosphere, the rate of decarbonisation is lower than the previous period when we didn’t see it as an issue to worry about.

Recently Chinese premier Wen Jiabao has pledged that the country will reduce the carbon intensity of its economy by 17 percent over the next five years. However,   political announcements such as these over the past decade have amounted to no real reductions at all. For example, decarbonisation in the EU occurred at an annual average rate of 1.35% per year in the nine years before the Kyoto Protocol and 1.36% in the nine years following. And the EU has a relatively stable population and low GDP growth compared with other economies

The target presented at the failed Copenhagen 2009 Climate conference was that we ought to reduce CO2 emissions from fossil fuels to 50% of 1990 levels by 2050. This is a big reduction and many of those who have done the maths are arguing that it can’t be done with our current technologies. (eg. Bjorn Lomborg, Roger Pielke jnr, Barry Brooks, Arthur Dent)

This can be presented as either a question of developing nation economics or a simple question of logistics.

Economics: With 1.5 billion people in the world without electricity and 1 billion people living on less than a dollar a day we can expect that China, India, Africa etc. will continue to develop using the cheapest fuel available

Logistics: To achieve the Copenhagen 2009 target with current technology would require at least 12,000 nuclear power stations by 2050 (roughly one per day). Currently we have 430 operational nuclear power stations in the world with another 474 under construction or planned. If you don’t like nuclear then scale up the numbers by a factor of  230 for solar thermal or  900 for wind turbines. Pielke jnr shows how to do the rest of the maths in his book, referenced below.

Both of these arguments are powerful although it ought to be acknowledged that logistics can be changed in a hurry if a real emergency is perceived. Either way, we need more R&D to improve our energy producing technologies and a realistic geoengineering backstop if the R&D is not successful in time.

Reference: The Climate Fix (2010) by Roger Pielke jnr

2 Responses to “decarbonisation of the economy”

  1. 1 patrickm Alex Epstein is worth a listen.
    and the alarmists are also talking to themselves Why renewables can’t save the planet | Michael Shellenberger

  2. 2 patrickm

    Maximizing human flourishing ought to be ‘our’ goal! Really a restatement of Julian Simon’s thinking.

    The debate from 2012 (Alex won it hands down!)

    and with Patrick More April 2021 very good but the covid ? from Patrick not sure what he was getting on about.

    Rosling in Singapore 2015 re Gapminder stuff

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