Guest Post by Willis Eschenbach
I was reading an interesting article, paywalled sadly, called “Detecting Novel Associations in Large Data Sets“, by David N. Reshef et al. It describes a subtle method for detecting relationships in datasets. Their method is called “MIC” for maximal information coefficient. The MIC coefficient measures the strength of the association of the two datasets. A value of 1 indicates a very close association, while a value of 0 means random noise. Their MIC coefficient outperforms traditional indicators for a range of complex non-linear types of relationships, including sinusoidal, circular, and multiple additive relationships. This is because it makes no assumptions about the shape or form of the association. It’s a fascinating method, one I want to learn more about.
One of their test cases involved looking for a relationship between a range of global indicators. Here is a list of their results, sorted by MIC.
Figure 1. Significant associations as indicated by the maximal information coefficient. Traditionally, the association would be measured by the Pearson coefficient.
The odd one out in this list is MIC rank 3, the association between oil consumption per person and income per person. The Pearson rank of this one was 207, while the MIC rank was 3. So I was motivated to take another look at the question of energy and development.
To do so, I used “Gapminder World”, an amazing online tool for visualizing data. Figure 2 shows an example. This is a comparison of average energy use and income, both on a per capita basis. Each country is represented by a “bubble” in the diagram.
Figure 2. Bubble plot, by country, of per capita energy use (vertical scale) versus income per person (horizontal scale). Note that both scales are logarithmic. Size of the individual bubbles shows total energy production by that country. Color of bubbles shows total oil production by that country. Units of energy use are tonnes of oil equivalent (TOE) per person per year. SOURCE
As you can see, there is a clear and quite tight linear relationship between energy use and income. This leads to an inexorable conclusion. You can’t get out of poverty without having access to affordable energy. Figure 3 below shows the same data, with larger energy producing nations identified.
Figure 3. Bubble plot, by country, of per capita energy use (vertical scale) versus income per person (horizontal scale). Note that both scales are logarithmic. Size of the individual bubbles shows total energy production by that country. Color of bubbles shows total oil production by that country. Units of energy use are tonnes of oil equivalent (TOE) per person per year. SOURCE
The bubble size shows that the US and China are about tied for top country regarding total energy production. Russia is third, the Saudis fourth, and surprising to me, India fifth. The colors show that for Russia and the Saudis most of the energy is produced from oil (red) while for China and the US coal is also a major source. India’s energy is mostly coal.
Figure 4 below shows the same basic energy vs. income chart, but in a different way. In Figure 4 the bubble size is energy production per capita, rather than total energy production. All of the bubbles are in the same location, but are changed in size.
Figure 4. Bubble plot by country of per capita energy use (vertical scale) versus income per person (horizontal scale). Note that both scales are logarithmic. Size of the individual bubbles shows total energy production per capita. Color of bubbles shows total oil production. Units of energy use are tonnes of oil equivalent (TOE) per person per year. SOURCE
We can draw some fresh conclusions from Figures 3 and 4. One is that you don’t have to produce a lot of energy, either per capita or in total, to have a modern industrial developed economy (lots of small bubbles at upper right). The Netherlands and Japan are examples. The second is that if you have high energy production per capita, it is easier to have high per capita income (preponderance of large bubbles at upper right).
The Gapminder website also allows us to look at the history of the various countries. Here is how some countries have evolved over time. Label lines show the start of each record.
Figures 5 and 6. Same as Figure 3, but showing the evolution of some countries 1971-2007. Size of the individual bubbles shows per capita energy production by that country. Color of bubbles shows total oil production by that country. “Trails” show the year by year values. Note that both scales are logarithmic. Fig. 4 SOURCE1 Fig. 5 SOURCE2:
Some comments on the historical figures. First, the direction you’d love for your country to be moving over time would be down and to the right. This would mean using less energy while making more money. Generally, almost nobody is moving in that direction overall.
The bad direction would be up and to the left. That would be using more energy to make less money. Ugly. The Saudis have moved that way in recent years.
Some countries took the worst quadrant, down and to the left. This is where you are using less energy, and you’re also making less money. Zimbabwe and the “Democratic” Republic of Congo did that. Bad sign. It’s de-development, and it generally involves suffering for both humans and the environment.
That leaves the fourth quadrant, moving up and to the right. Using more energy and making more money. Commonly called “development”, AKA getting out of poverty. Making enough money to be able to afford to protect the environment.
The game is to move to the right as much as you can (increased money) and upwards as little as you can (increased energy). So Bangladesh is not doing as well as India in that regard, since it is moving upwards more steeply. China was doing as well as India in the 70s and 80s, but has sloped upwards in the last decade of the record. Note that India is producing the majority of its energy from coal.
Russia went down and to the left in the early nineties, but has since recovered and nearly doubled its income without much increase in energy. Curiously, the income is now back to the 1990 level, but the energy use is less. The same is true of Uzbekistan and many other former members of the Soviet Empire. To their credit, they have fought back from the breakup of the Empire and returned in a more efficient form. Indeed, the Uzbeks have gone down and to the right in the last decade, and that’s the holy grail of development, doing more with less energy.
The poor Saudis, on the other hand, ended up going almost straight up (more energy used to provide the same income), and even lost a little ground. And Senegal has gone nowhere at all.
Japan, China, Mexico, and Australia have increased their per capita energy production over the period (bubble size), while the US and Russia have stayed about the same. The total oil production for the US has fallen (bubble color) while for China it has increased. Russian oil production fell and then has come back up.
The US and the UK have done a curious thing. Per capita energy use for each country in 2007 was about the same as in 1979. But income went up. Both countries nearly doubled their per capita income, with basically no increase in per capita energy use. Not sure what they are doing right, but we should figure it out and clone it …
Conclusions and final notes:
1. Development is energy, and energy is development. Although efficiency and conservation can help you, in general you must increase energy use in order to increase personal income enough to get out of poverty. If you make energy expensive, it is hugely regressive, as the poor countries and the poor people will simply not be able to afford it. Carbon taxes, “cap-and-trade”, or other energy taxes are a crime against the less favored inhabitants of our planet.
2. Large countries with higher transportation costs will use more energy per dollar of income than do small countries.
3. Within the limits of the “cloud” of countries shown in Figure 3, it is possible to increase energy efficiency, and to make more money using the same amount of energy.
4. Countries that produce lots of energy tend to waste it more than countries that produce little.
5. The preferable place for any given income level to be is on the lower edge of the “cloud” of countries with that income. This is where you get the most bucks for your bang. Many European countries are in this position. The US and Canada are about in the middle of the cloud. However, as noted they are much larger than the European countries.
6. China, India, and Bangladesh had about the same per capita income in 1971, ~ $700 per year. The differences in their current positions are large, with Bangladesh at $1,400, India at $2,600, and China at $6,000 per year.
7. Sadly, the datasets only go up to 2007 … it would be interesting to see the reduction in both energy use and income due to the global financial meltdown.
8. Finally, when someone says the word “technology”, many environmentalists think “bulldozers”. Instead, they should think “energy efficiency”. At the end of the day, technology is about doing more with less. Technology is what allows us to use less gasoline to go a mile. Through some combination of conservation and technological advances, the US and the UK were able to double their income on the same expenditure of energy. This technological advance is to the benefit of everyone including the environment.
Regards to all,
w.
PS—The source links below each chart goes to the corresponding live chart on the Gapminder website, where you can play with the variables or investigate the histories of countries other than the ones at which I looked.
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“Both countries [UK and US] nearly doubled their per capita income, with basically no increase in per capita energy use. Not sure what they are doing right, but we should figure it out and clone it ”
Both countries abandoned rust-belt heavy industry and went into high-tech and particularly services, which are much more energy-efficient than industry.
‘Russia went down and to the left in the early nineties, but has since recovered and nearly doubled its income without much increase in energy. Curiously, the income is now back to the 1990 level, but the energy use is less.’
It would seem to me, that (somewhat) reducing their military machine, not to mention, no longer having to try to control a score of ‘conquered’ nations, would reduce consumption a fair bit.
On 19 December, Willis Eschenbach writes:
…and much besides.
It is beyond doubt that the avowed purpose of all “Carbon taxes, ‘cap-and-trade,’ [and] other energy taxes” is to punish people for using energy, providing a disincentive for the victims to heat their homes in winter, to cool them in summer, to travel, and generally to experience a higher quality of life than otherwise.
The purpose of this hatefulness is to “reduce our carbon footprint.”
Yeah, and Santa Claus is ramping up like crazy this time of year, his elf-hiring program (on multi-megabuck Obamanoid “stimulus”) a big part of the favorable jobs numbers being touted by our Kenyan Keynesian’s Department of Labor.
It’s making up for the Easter Bunny’s unfortunate layoffs.
These extortionate suppressive measures have the same ostensible strategic purpose as have the unspeakably high federal and state taxes on cigarettes and other tobacco products, these latter hate crimes being a punch in the user’s nose to induce quitting (or, at least, reduction in consumption) and supposedly to fund collectively – socialistically? – the increased health care costs associated with tobacco use.
In actuality, of course, the taxes and other costs levied upon people’s energy use – precisely as is the case with regard to the revenues accruing from those sky-high tobacco taxes – goes into government coffers as “general revenue” excises, to be spent by the incumbent “Malevolent Jobholder” according to whatever expenditure is most politically advantageous for him.
Invariably, this will be in accord with the wishes of those who have bribed – er, “contributed to” – those popularity contest winners with the most clout in the legislative and executive branches.
Yet another persuasive a reason to get Ron Paul to the top of the Red Faction’s ticket next November and avoid a “Meet the new boss, same as the old boss” situation in which our current Fraudulence-in-Chief is replaced with yet another corporate socialist pleasing to the utterly corrupt Republican establishment.
Two people at least understood and stated this this year: Willis Eschenbach and FOIA. It was extraordinary in the UK to see how the news media struggled with FOIA’s brief statement of motive. He seemed to care for the poorest – but how come? Such people have imbibed the stupidity of the cartoon at the end of the Carbon Trust’s counter-arguments to Freeman Dyson’s email interview in The Independent in February, where he said:
In reply a delegate at a climate summit is depicted saying:
Dyson hadn’t said it was a big hoax in any case – but the underlying message, which I have seen repeated again and again, from seemingly intelligent people, is that there are no negative impacts to making energy more expensive through carbon controls or energy taxes. In fact, it will be a death sentence to many of the poorest. Thanks Willis and WUWT for continuing to bring to the attention of the world. In 2012 may it reach the hidden part we call conscience.
In the US, homes built today use about 30% of the energy of homes built just 15 years ago. Businesses use smart sensors to control lighting and heating and AC. And cars are much more fuel efficient.
As for development, what if you take out the coal plants the EPA wants to close?
>>
As you can see, there is a clear and quite tight linear relationship between energy use and income. This leads to an inexorable conclusion. You can’t get out of poverty without having access to affordable energy.
>>
Firstly it’s not linear, as you point out it’s log-log.
However your “inexorable conclusion” is totally exorable !
How about this interpretation: “richer people can afford more energy”
inexorable !!
An I do not need a bubble plot to prove it.
Here’s another inexorable conclusion for you. People with more money have bigger cars.
This clearly proves that you can’t get out of poverty without having a big car.
Inexorable !
Austin~ ‘As for development, what if you take out the coal plants the EPA wants to close?’
And replace the energy they deliver with… what?
Try to plot Income per person (Y) vs CO2 emissions per person (X) and colour by life expectancy. Definite eye opener!
Interesting idea, but what if having more income causes more energy use? That would agree with the results too.
Willis wrote, “Sadly, the datasets only go up to 2007 … it would be interesting to see the reduction in both energy use and income due to the global financial meltdown.”
The EIA has charts that show US primary energy consumption per dollar of GDP, 1949-2010 and US primary energy consumption per capita, 1949-2010.
No direct link but available here.
http://www.eia.gov/totalenergy/data/annual/perspectives.cfm
(list in right hand column)
Wealth redistribution. This is what’s it’s all about and all that it’s ever been about, save for Al Gore making his first $100 million on it.
P. Solar says:
December 19, 2011 at 4:04 am
“How about this interpretation: “richer people can afford more energy”
inexorable !!”
Rich people have not become rich by being wasteful but by investing their wealth carefully; so if I’m wealthier I might be able to afford better machinery, think tractors, for instance; this will result in higher total energy usage but also in vastly improved agricultural efficiency; creating a virtuous cycle. So I’m investing my wealth in energy to create more wealth. I see no contradiction between Willis’ and your argument.
>>First, the direction you’d love for your country to be moving over
>>time would be down and to the right. This would mean using less
>>energy while making more money.
Willis, you are thinking like a liberal, city-dwelling consumer here, not a nation that has to survive by its wits.
There is a minimum amount of energy required to smelt a tonne of steel or aluminium – so if you are a producer nation, you want your energy usage to continue rising. Increased energy consumption means more products exiting the factories, and more cash in the bank.
Thus one of the reasons the USA’s trend-line has flatlined, is a huge loss in production capacity, and that is not good for a nation. And the fact that the US’s per capita income has kept rising, in the face of reducing production, is due to Western politicians rediscovering the joys of slavery.
.
(A slave is someone who works all day for a meagre crust of bread, has no control over their lives, and produces goods for his rich overlords. Today we call slaves ‘The Chinese’. Thus the West has had ten years of growing fat by giving China worthless bit of paper in return for goods that were cheaper than we could even buy the raw materials. Unfortunately, the slaves are getting wise to the West’s empty promises about ‘payment’, and we face a ‘slave revolt’ in the next decade. Even more unfortunate is the fact that, having surrendered all our technological knowledge and production capability to the Chinese, the slaves are now in the dominant position. Previous civilisations used to jealously guard their technology from rivals, while we just gave it away for free – sometimes, I think the West is supremely dumb. We live in interesting times.)
.
The close association of transport fuel with economic growth is shown by Tad Patzek in
<a href=http://gaia.pge.utexas.edu/papers/PatzekManuscriptRevised.pdfExponential growth, energetic Hubbert cycles, and the advancement of technology 2010
His Figure 7 shows
Tad Patzek in Peaks Everwhere visualizes the severe challenges ahead in providing transport fuels.
JOE 2010/Joint Operating Environment
Why are climate scientists ignoring peak oil and coal?
I always love to read Willis for the great insights he offers.While I absolutely agree with him that development = energy, what he misses is the fact this renewable energy is intended to keep the poor poor. A new type of eco-imperialism. Here’s some extracts from my post:
“Oxfam observes : “But the Malthusian instinct to blame resource pressures on growing numbers of poor people misses the point, because people living in poverty contribute little to world demand.”
Actually Oxfam was being rather disingenuous. That was indeed the whole point. “People living in poverty contribute little to world demand.” The planet’s poorest 10 percent receives only 0.6 percent of the world’s income. And sub-Saharan Africa’s population accounts for about 2 percent of global carbon dioxide emissions.
What happens to prices and supply when developing countries start increasing their demand to ultimately seek parity to those of the West? There would be a substantial rise in need for energy and raw materials within rising economies, intensifying competition for that restricted resources globally. This is the West’s greatest nightmare. So it follows that by keeping more and more developing country people in a continuing state of abject poverty, ensures moderating global demand for food or energy which in turn moderates their global prices.
Omamo & Grebmer, 2005; Borlaugh, 2001; Shiva 2000 in their perceptive paper “Eco-Imperialism: The Global North’s Weapon of Mass intervention” exposed the real agenda of renewable energy when they observed:
“We are seeing a new type of imperialism emerge, an imperialism based not on the acquisition of territory, but on a radical environmentalist agenda, an agenda that seeks to reserve the earth and its resources for the wealthy and elite, to freeze energy use at current levels, and to restrict nation states from exploiting indigenous resources for the benefit of their people.”
Read more: http://devconsultancygroup.blogspot.com/2011/12/climate-smart-agriculture-new-eco.html
Richard Drake says:
December 19, 2011 at 3:48 am
Willis writes: “If you make energy expensive, it is hugely regressive, as the poor countries and the poor people will simply not be able to afford it. Carbon taxes, “cap-and-trade”, or other energy taxes are a crime against the less favored inhabitants of our planet.”
Drake responds: “Two people at least understood and stated this this year: Willis Eschenbach and FOIA.”
No, what you mean is two people don’t know the meaning of the word “regressive”. If the price of something, or the tax rate, is constant then the price or the tax is neither progressive or regressive. A regressive fuel price would be one that, for example, falls as the quantity purchased increases.
In point of fact in many places the retail cost of electricity rises with the amount purchased. Just ask anyone living in California!
What you mean to say is that a higher energy price has a greater adverse effect on the poor in comparison to the rich. This both Willis and FOIA and most other people with a pulse understand easily enough. For the rich person it means travelling coach instead of first class. For the poor person it means freezing to death because they can’t afford to buy fuel for the furnance. This is not, however, what the term “regressive” means.
It is for this reason that electricity in places like California is priced progressively. It’s to compensate for the fact that people who can afford to buy more electricity are less adversely effected by rising cost. To illustrate this when I lived in California the basic lowest-price allotment of electricity was called the “lifeline allowance” which communicated it was a basic amount needed by one modestly sized household for critical uses such as refrigeration, heating, and cooling.
So I would put forward that many many millions of people understand how higher energy costs has a greater adverse effect on the poor and not only do they understand this but they explicitely and tangibly deal with it through progressive energy pricing.
Patzek’s paper: Exponential growth, energetic Hubbert cycles, and the advancement of technology 2010
The US and UK have bought an increase in GDP by borrowing vast amounts of cash and spending it.
You cannot safely look at GDP figures without looking at debt at the same time.
darkobutina @ur momisugly 4.09 am
While stats seem only avail from 2004 try plotting the injury indicators (murder per 100,000 by gender). And make sure Sth Africa is selected.
And also look at the energy use per person across Sth Africa, Russia, Guatemala and Colombia etc. etc etc.
There’s an awful lot of human energy going into sub-economies there it appears.
Greens, deal with it: the more rich people are, the more goods they will buy. The only alternative is a giant concentration camp, where the authority would be assigning resources “per each needs”, well exactly as theory of communism says. The circle has met its end.
“Both countries [UK and US] nearly doubled their per capita income, with basically no increase in per capita energy use. Not sure what they are doing right, but we should figure it out and clone it ”
I can’t speak for the UK, but Much of our manufacturing base simply went overseas, particularly to China, lowering our energy use and raising theirs. That is not a good thing, though. It has resulted in a loss of well-paying jobs for millions, and pushed many from being comfortably middle-class to lower middle-class or even poverty level. The fact that per capita income has still risen only means that the income gap has grown both wider and broader.
All is not bleak, though. With labor costs spiking sharply upward in China in addition to higher shipping costs, manufacturing is starting to come back to the U.S., at least. If we can manage to keep the “green energy” idiocy at bay, that process can and will continue.
A prosperous economy definitely requires energy. However, this analysis seems to focus on energy production and completely ignores the efficiency of energy production, distribution, and consumption. Wasteful and inefficient energy production and use does nothing to support economic development.
Some “green” policies make enormous economic sense; for example insulating homes to reduce energy waste. Of course, such programs can go off the rails when governments meddle with subsidies and the like. But optimizing efficiency and reducing waste are vital elements of economic progress completely ignored by this analysis.
Therefore, it is hardly surprising that a number of countries have made progress while simultaneously reducing energy production as several posters have pointed out.
Sadly, governments aided and abetted by IPCC, have decided that CO2 is the holy grail. But focusing on CO2 reduction does NOT improve the efficiency with which we produce and use our energy. In most cases, CO2 reduction measures reduce efficiency.
Nick is right. You have to adjust the per capita income by the per capita debt (or maybe per capita deficit would be a better indicator). At some point you have to pay the piper.
I believe that Willis has a valid point. The amount of energy used can only fall to a certain lever per geographic region before the effects on the general population becomes adverse, at this point the effect on the poor becomes disastrous. This can be attested to by the efforts during the past150 years of warfare when the major efforts have been to deny the delivery and use of energy. When that happens poor people become disadvantaged to the point starvation. this becomes exacerbated when the middle class (shrinking) and the well to do begin to protect their ability to purchase energy in one form or another (fuel or products) by reducing the amount of services they purchase thus causing unemployment of the poor first and the middle class next. Energy availability represents wealth and wealth promotes employment creating a better standard of living for both the poor and the middle class.
Just thinking,
Bill Derryberry