Don't Tax Development, It Hurts The Poor

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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Rick Bradford

“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.

Otter

‘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:

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.

…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.

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.

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:

If it happens that I am wrong and the climate experts are right, it is still true that the remedies are far worse than the disease that they claim to cure.

In reply a delegate at a climate summit is depicted saying:

What if it’s a big hoax and we create a better world for nothing?

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.

Austin

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?

P. Solar

>>
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.

P. Solar

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 !

Otter

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?

darkobutina

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.

Speed

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)

drjohn

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.

DirkH

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.

Ralph

>>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

“Exponential rate of growth of world crude oil production was 6.6% per year between 1880 and 1970. Sources: lib.stat.cmu.edu/DASL/Datafiles/Oilproduction.html, US EIA.

Figure 11: Between 1880 and 1940, the annual production rate of oil and, initially, associated lease condensate, in the US was increasing 9% per year!

Figure 12: Between 1880 and 1960, the annual production rate of natural gas in the US was increasing 7.2% per year.

Tad Patzek in Peaks Everwhere visualizes the severe challenges ahead in providing transport fuels.
JOE 2010/Joint Operating Environment

By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD. . . .
Natural disease also has an impact on the world’s food supply. The Irish Potato Famine was not an exceptional historical event. As recently as 1954, 40% of America’s wheat crop failed as a result of black-stem disease. There are reports of a new aggressive strain of this disease (Ug99) spreading across Africa and possibly reaching Pakistan. Blights threatening basic food crops such as potatoes and corn would have destabilizing effects on nations close to the subsistence level. Food crises have led in the past to famine, internal and external conflicts, the collapse of governing authority, migrations, and social disorder. In such cases, many people in the crisis zone may be well-armed and dangerous, making the task of the Joint Force in providing relief that much more difficult. In a society confronted with starvation, food becomes a weapon every bit as important as ammunition.

Why are climate scientists ignoring peak oil and coal?

Uppsala University physics professor Kjell Aleklett also criticizes the level of economic awareness of Intergovernmental Panel on Climate Change (IPCC) scientists with respect to coal.
“Our conclusion is that the assumptions of coal use that the IPCC recommended that climate researchers refer to in calculating their future horror scenarios are completely unrealistic. The question is why at all these gigantic volumes of carbon dioxide emission are to be found among the possible scenarios. The IPCC bears a great responsibility for the fact that thousands of climate researchers around the world have dedicated years of research to calculating temperature increases for scenarios that are completely unrealistic.”

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

Dave Springer

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.

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.

Jessie

darkobutina @ 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.

Bruce Cobb

“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.

Mike Smith

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.

BarryW

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.

Bill in Vigo

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

It would be better to reverse your x and y to show that the efficient use of energy produces wealth. Thus, restricting it’s use should be expected to produce poverty. Just compare food productivity methods as a function of efficient energy use per person.

That is way cool. Thanks Willis.
Of course you do realize that you have confirmed what some of us were saying in your post about oil production. Price spikes in oil produce recessions.
Here you say, correctly “You can’t get out of poverty without having access to affordable energy” But that means the opposite is also true “You will go into poverty with unaffordable energy.”
Hence once oil prices spike, due to depletion, we will return to poverty. Countries like the US and the EU will trek to the top left.

Philip Peake

On the US and UK “getting it right”: I think these graphs probably take the total income and divide it by the population, assuming some sort of normal distribution of income. What has actually happened in the US and UK is that more money has been made in total, but actual individual income for the majority of the population has actually decreased in real terms. Income has shifted, and almost all new income has gone to a very small number of people and to large corporations, which are no longer required to re-distribute their income amongst shareholders.
The production required to create the increased income has come partly from lower energy industries, but also from moving production overseas, so increasing the energy use in those countries while reducing it for the US and UK.
I believe that a closer look at these countries would reveal that the real income/living standard for the majority of their populations has significantly decreased, and that once the energy use shifted overseas is re-apportioned the performance of the US and UK would look decidedly worse, while the reduced (re-assigned) energy use of some other countries would make their performance on these graphs look considerably better.
While I disagree that the US and UK “have got it right”, I do agree with the core hypothesis that income (a proxy for “living standards”) is directly related to energy use, and that we should be looking at cheaper methods of energy production rather than more expensive methods which produce less.

Bill in Vigo

Just a side note that the EPA in the US recently tried to tie dust production in the fly over area of the US to pollution and were going to fine (read as administrative tax) on agriculture. (read food production) This it seems would help to reduce the carbon use of agriculture. It would but how much would it cause death and starvation world wide. Especially if this were promoted in the grain growing countries of the world. I agree that there are good things coming from the green movement, but there should always be a cost evaluation before implementation. Investigate the ethanol production targets and actual production and what it is doing to the energy production and cost in the United States.
there I go just thinking again,
Bill Derryberry

BarryW

Philip Peake: Maybe the right parameter should be median income rather than average?

bacullen

Thanks again Willis!!!!
I’ve been waiting for someone to use Gapminder (5 yrs ago I would have been able to but my mind is failing me) to show that the quality of life for the vast majority of the worlds population is improving at a very significant rate, mostly due to the availability of relatively cheap energy. Your conclusions are right on target!
Hopefully Rosling and students will update their database to the present so we can continue to follow the (mostly) improving world condition and refute the cries of the doomsters.
BC

Beesaman

I think here in the UK we have become a lot more energy aware. Our houses are more energy efficient as are the products and services we buy. Not for some altruistic reason (though that may have a small part to play) but mainly because we wanted the best return for our money. Many folk just don’t get the idea that progress is built on such thinking and that aesthetics plays a part in it as well. In fact one could argue that it is in developed capatalist states where one sees the best environmental care not in left wing or theocratic dictatorships. Indeed I would love to see an example of a socialist state that is doing more for both the environment and its people than a comparable capatalist one.

More Soylent Green!

Somethings should be painfully obvious to anyone who has ever lived outside academia, the state capital or the Washington beltway.
_If you want less of something, tax it more.
_Free markets create wealth.
_Redistribution destroys wealth.
~More Soylent Green!

DirkH

jrwakefield says:
December 19, 2011 at 6:50 am
“Here you say, correctly “You can’t get out of poverty without having access to affordable energy” But that means the opposite is also true “You will go into poverty with unaffordable energy.”
Hence once oil prices spike, due to depletion, we will return to poverty. Countries like the US and the EU will trek to the top left.”
The price of coal is practically constant over the past two decades. Yes, rising oil costs will affect transportation, but not necessarily energy production .

Bob Shapiro

“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 …”
Yes, as a couple of commenters have said, “moving” production offshore uses less energy per wealth produced, but there are other reasons as well.
Checking on http://www.shadowstats.com, I find that, since 1980, the CPI has grossly understated price increases, which causes a grossly overstated GDP. How much? By my reckoning (eyeballing the graphs), the CPI as reported (which already shows a great loss of purchasing power), if calculated the way they used to do it in 1980 is 2 1/2 times larger than as reported. So, $250 today really is worth only $100 of 1980 purchasing power, meaning that US GDP really is worth not $15 Trillion, but only $6 Trillion! (Is that why Archie Bunker used to say that the US had the Grossest National Product?)
Assuming other countries’ governments also are less than truthful with their numbers, the whole distribution would be shifted somewhat more steeply to the left.
P.S. Love your work, Willis. Keep it up.

Hoser

P. Solar says:
December 19, 2011 at 4:04 am

Enough with the socialist nonsense already.
Moving to the right wtihout moving up is due to innovation. Innovation percolates downward through layers of poverty to improve the lives of most people.
Perhaps this is a little over the top, but it makes the point clearly: Just remember the image of well-fed Palestinians, many wearing glasses, jumping for joy in front of a minivan parked on a paved streed in front of a pharmacy in a city with piped clean water and supplied with electricity, waving plastic flags to celebrate the demise of the World Trade Center Sept 11, 2001. The point is, without technology developed by the filthy rich West, they would be (and based on their actions, arguably should be) herding goats.

“A rising tide lifts all boats.” – President John F. Kennedy
“America is the only place where people drive to the poor house in their car.” – Will Rogers
Your computer and the internet are examples of technology percolating downward. You have the power under your fingers only the largest corporations had 40 years ago.
How many people living in “poverty” in the West have electricity, indoor plumbing, refrigeration, television, a car, and access to life-saving medical care? (Aside: you don’t need medical insurance to be treated in a true emergency – by law doctors are are required to treat to save your life.) The goal should be to share basic technology with the poorest people in order to lift them out of poverty. Technology cannot be developed without a concentration of capital and without a high level of education. Poor nations are caught in a Catch 22 of poor education and poor resources. Education is the critical factor allowing innovation by developed nations, and allowing development by under-developed nations. Breaking the West and taking it down (redistribution of wealth) out of some twisted notion of “fairness” will not actually help anyone.
On the other hand, taking the twisted green logic further, if people are bad and nature is good, it makes sense to create conditions where as many people die as possible (to save the planet?!!). That sort of thinking is truly sick, and serves as a dark portion of the foundation of green policy. It’s not the believers in green approaches who are deranged; they are idealists and miguided. Instead, it is the formulators of that policy who are dangerous and must be removed from power, hopefully through the ballot box. Unfortunately, there is an allure to socialist ideology. It usually takes a minimum of two generations to break the spell and kick the parasites out after they gain power. The lessons are learned only after great suffering (socialism fails every time is tried – as western Europe is learning). Eastern Europeans formerly behind the Iron Curtain already know better.
Keep an eye on China. There is a disturbance in the force down south. Is socailism cracking over there? Could this be the beginning of the fall of the regime?
http://www.ft.com/intl/cms/s/0/60be1f9e-296c-11e1-a066-00144feabdc0.html#axzz1gx7ySTSn

ferdberple

Willis, how about a graph of CO2 production for the worlds climate elite? Hansen, Gore, Mann, Pachauri as compared to the average citizen of the world?
Are the climate elite truly doing as they say and producing zero carbon? If carbon is such a problem, have they shown leadership and reduced their carbon pollution to zero?

More Soylent Green!

Hoser says:
December 19, 2011 at 7:30 am
There are plenty of things happening in China that most people don’t know about, and the NY Times doesn’t want us to know.
As you say, the cracks are showing. The secret police have increased in size, dissidents are regularly harassed and jailed, the housing market is under strain and their are regular riots taking place.
However, the Chinese military is expanding.

Dave Springer

@willis
Try making the scales on those charts to linear instead of log. At the higher income range, say $35,000/capita, energy use per person varies by a factor of four.
How is it possible that where annual income per capita is constant at $35,000 the energy use (or production, same story) per person varies from 3 to 12 tons of oil per year?
Essentially those charts you produced confirm the alarmist notion that rich nations can vastly cut their energy consumption and not harm their economy. At least that’s what the data says if you do more than look at the pretty colors and actually read the scale values on the side.
Oops. Thanks for nothing, pal. This is meat for the opposition. This is also why amatuers shouldn’t do original research for science blogs – their ignorance trips them up somewhere almost every time.

“Both countries [UK and US] nearly doubled their per capita income, with basically no increase in per capita energy use.”
Both countries were/are living beyond their means based on an inflationary house price bubble. Both are heavily into financial services to replace lost manufacturing capacity. This is not a route “to prosperity” other nations should emulate. Both countries are heavily indebted both at the government and private level. NOT a success story IMHO.

Philip Peake

@BarryW: That would be a good start, but then you need to normalize over the time range — a $ in 2011 is not what a $ was worth in 1970 for example. This is important if we are using income as a proxy for standard of living, because if at some point in the past real income was double what it is now (I now have twice as many $, but can only buy the same food, and housing), but we have doubled out energy use, then we have really made negative progress
Then there is the question of energy consumption – Willis touches on this when he mentions that India uses coal — I think these graphs are just oil. Also need to (somehow) compensate for displaced energy use (burning oil/coal in India for goods and services delivered in the US).
I don’t want to distract from the central theme of what Willis is saying, I think its correct, energy is needed to improve income/standard of living, but where I do have a problem is calling out the US and UK as being models of “good” progress. I believe that a closer examination would show that they decidedly are not. Especially wrt improving the lot of their inhabitants.

David

“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.”
yet is is percisely what John Holdren wants. “de-development presents our economists with a major challenge. They must design a stable, low-consumption economy in which there is a much more equitable distribution of wealth … Redistribution of wealth both within and among nations is absolutely essential”” John Holdren, Obama’s Science Czar – Human Ecology: Problems and Solutions (1973)
Hoser, good post. Efficiency and energy is desirable. There is no energy bubble.
Willis can rate of population growth be added to such charts. Developed first world nations do not have population explosions.

Curiousgeorge

Apparently the EPA wants to decide what is Sustainable and what isn’t. I can hardly wait for that! 🙁
=======================================================
” EXCLUSIVE: EPA Ponders Expanded Regulatory Power In Name of ‘Sustainable Development’
Read more: http://www.foxnews.com/politics/2011/12/19/epa-ponders-expanded-regulatory-power-in-name-sustainable-development/?test=latestnews#ixzz1gzuT6GQY

Dave Springer

@willis
This might be a nitpick but the labels about income are all messed up. What is shown is GDP per capita but the label, which I assume you made up yourself, reads:
Income Per Person (GDP/capita, PPP$ inflation-adjusted)
The values plotted are GDP/capita which IS NOT the same thing as income per person. If it were income per person then the US, for instance, is shown as having over $40,000 income per person. That would mean that the average family of four has a household income somewhere north of $160,000. In fact it’s less than half that because gross domestic product is not the same as income per person.
This is what happens when pikers wander into areas of knowledge where they are grossly (pun intended) deficient and start yammering on like they know what they are talking about. I’m no expert in economics but I at least know the difference between income and GDP and recognized right away that the charts were displaying GDP/capita not income per capita. If I can spot flaws like that God only knows how laughable this must be to an actual economics expert.

Keith Battye

I have said this several times here and elsewhere . . .
Electrify rural Africa and you will stop deforestation in it’s tracks. At the same time people’s lives will improve immeasurably. Children will be able to do homework after the sun goes down, women will not have to waste hours every day collecting firewood, people will not have to rely on a hand pump for water, Threshing and grinding can be done at home if necessary, cell phone with internet coverage will be ubiquitous.
Everything in life that is not religious depends on energy. The more affordable energy the more prosperous the population and the better their environment.
Foreign aid and charitable contributions at present could pay for this both in capital terms and the initial operation level. Electrification is prosperity.

Ralph

>>>Beesaman says: December 19, 2011 at 7:19 am
>>>I think here in the UK we have become a lot more energy
>>>aware. Our houses are more energy efficient as are the
>>>products and services we buy.
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And I think that the UK is using less energy because it has lost all its means of production. Nearly all of our shipyards, car facories, train factories, smelters, rolling mills, potteries, white-goods manufacturers, shoe and clothing factories – all gone – and our last aliminuim smelter last month.
Manchester used to be called Cottonopoplis, but now has not one cotton factory. Stafford was ‘The Potteries’, but now only has one ceramics factory. Birmingham was the Tin Basher, but is now deathly quiet. The Tyne made more ships than anyone else in the world, but is subsidised by government made-work pen-pushing projects. Leicester made the world’s shoes, but now processes unemployment claims. Coventry made the entire world mobile, with cars and bikes, but is now famed only for its ghettos.
Less energy usage is not a sign of national advancement or health, it is a sign of demise and decay.
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randomengineer

I think poster P.Solar is missing the point. One of the hidden parts of the bubble plots is the notion of infrastructure. In a stable society such as the US roads are already paved, wiring is already where it needs to be, and so on. Once the basics are in place you’re not spending as much percentage of the energy building energy distribution. It should not be surprising that coups and corruption and otherwise poor political conditions either fail to address infrastructure *or* there’s no longer term planning due to a lack of stability. Politics (and ramifications thereof) plays a larger role than is being acknowledged here. This would be a contributing factor to the US moving rightward on the graph. You could argue that upward and leftward movement is almost a requirement to get infrastructure in place (cf. china and india) and once this is accomplished the movement will track up->right almost by definition.
Another “hidden” part of this is bang for the buck in terms we have yet to discuss. Despite the US not moving downward and right, this will happen, and what we can do with the units of energy are interesting. Compared to 1971 even the poorest citizens have access to volumes of information that would have required thousands of acres of libraries (and the heating bills, etc.) Diseases that would have been a death sentence in 1971 are survivble now (e.g. various cancers.) In other words, we are getting far more “work” from the same number of units of energy than we were getting in 1971.
These are two OBVIOUS items that stood out upon first cursory view of the charts. My conclusion is that P.Solar seems to be agenda driven and is incapable of much contribution here.

Dave Springer

I looked up the numbers in US census report. Mean income per person 25 years or older is $43,000. This is about the number plotted on the charts near as I can tell. I’m not at all sure what is actually being plotted. If it’s income per adult over the age of 25 that is going to badly skew comparisons between nations.
I tried clickong on the “Source” url below the graph but GapMinder is broken using FireFox 8, Win7, and latest Flash player. The data is only as trustworthy as GapMinder’s source.
Nevertheless here is the source description by gapminder which I was able to locate. It’s basically a hodgepodge with some undefined amount of pencil whipping by GapMinder. Not exactly confidence inspiring.

Income per person (fixed PPP$) (version 9)
Gapminder has compiled the data you see in this graph from several sources, such as official international statistics, various historical sources and our own estimates.
The link below takes you to Gapminder’s documentation page, which contains the details on how the compilation was done and the sources for each observation.
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Definition and explanations
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Definition of indicator Gross Domestic Product per capita by Purchasing Power Parities (in international dollars, fixed 2005 prices). The inflation and differences in the cost of living between countries has been taken into account.
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Main sources: Cross-country data for 2005 is mainly based on the 2005 round of the International Comparison Program. Estimates based on other sources were used for the other countries. Real growth rates were linked to the 2005 levels. Several sources are used for these growth rates, such as the data of Angus Maddison. Follow the link below to download the detailed documentation.
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Who has compiled the data and how was it done
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Compiled by: Mattias Lindgren, Gapminder
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Link to the full documentation of this indicator http://www.gapminder.org/downloads/documentation/gd001
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Version: 9
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Present version uploaded: 2010/07/12
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Updates
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2008/12/04 Data for Iraq & Zimbabwe added upto 2007
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2008/12/10 Data for many other countries added upto 2007
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2008/12/22 Complete revision of the whole data set. This new version is based on the PPPs from the 2005 round from ICP. Previous version of the data set is available as a separate indicator.
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2009/04/27 Version 5: updated Swedish data, revised Myanmar, raised lowest level, added data from Barro & Ursúa
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2009/10/01 Version 6: Congo Dem. Rep. revised
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2009/12/18 Version 7: data for 2008 added
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2010/04/26 Version 8: data from IMF for 2009 added + some revisions since 2005 + added a few missing observations that were mistakingly deleted in previous update
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2010/07/12 Version 9: revision of a large number of countries. The revisions has mainly been made for the period before 1950.
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2011 June 18 Extending series up to 2010, by using real GDP per capita growth from IMF World Economic Outlook. The following are not in the WEO data, and were estimated based on CIA World Factbook growth figures: Korea Dem Rep, Cuba, Kosovo, Macao, Taiwan, Bermuda, Macedonia, Puerto Rico, Somalia, Timor Lests, Trinidad and Tobago, West Bank & Gaza. Kosovos series was extended five years backwards from 2005. /Ola
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Gail Combs

P. Solar says:
December 19, 2011 at 4:08 am
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 !
_______________________________
Fine P. Solar, How about you living in the equivalent of the 1700’s. No Factories, No heating, No plumbing (no electric for water pumps) No refrigeration, not even FACTORY MADE farm equipment, because unless you are advocating thorium nuclear THAT is what you are talking about.
The amount of energy per capita is not the amount someone uses for his gas hog but is the amount the ENTIRE COUNTRY USES! This includes mining and smelting ores, and the factories that built the commuter rails and trains you use to commute into the city built of cement and high temp FIRED BRICK and STEEL BEAMS.
From Comment on: http://blogs.dailymail.com/donsurber/archives/45086
“If you want to talk risk/reward fine. The cost to reduce CO2 output by 80% has been calculated, and that’s the low end of numbers estimated to “remove” mankind’s footprint of warming.” The commenter cites Modelling a UK 80% Greenhouse Gas Emissions Reduction by 2050: http://www.newscientist.com/data/doc/article/mg20427373.400/ce_new_scientist_report.pdf
So he did not pull the reduction by 80% out of his hat. That is what these people are advocating.
So Let us look at what real facts tell us.
The average for the USA is 335.9 million BTUs per person. http://www.nuicc.info/?page_id=1467
(Total population: 246,081,000)
The U.S. in 1800 had a per-capita energy consumption of about 90 million Btu. http://www.bu.edu/pardee/files/2010/11/12-PP-Nov2010.pdf
(Total population: 5,308,483)
If the USA reduces its energy consumption by 80% it equals 45.18 million Btu. per person IF THE POPULATION WAS THE SAME.
For the USA to use HALF the energy per person that was used in 1800 we must abandon ALL factories and 90% of the population must return to subsistence farming using animals. (If the Warmistas will allow oxen and horses and the methane/CO2 they produce)
Remember in 1800 there was only 2% of the current population in the USA. Solar and Wind just are not going to produce enough power to keep us in anything but a few lights and if we are lucky a refrigerator per town for medicines. FACTORIES use a huge amount of power and that is why cotton mills and other primitive factories were built on rivers. (Again use of hydro is frowned upon by the econuts and has been legislated against in “Wild and Scenic River” laws)
Anyone who tries to tell you differently is talking baffle gab because at present less than 9% of the US labor force is in manufacturing. The USA got rid of most of its really energy intense industry like smelting the ores to make machines.
In 1970 the USA had 24% of the work force in manufacturing and that included high energy manufacturing in the “Rust Belt”
The long version of the analysis is here: http://blogs.dailymail.com/donsurber/archives/45086/comment-page-1#comment-380871

Dave Springer

FYI
Energy use per person comes from “The World Bank”. Now there’s a source of information everyone really trusts. Banks. /sarc
Are you KIDDING me?

Energy use, per capita (toe)
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Definition and explanations
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Indicator name Energy use, per capita (toe)
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Definition of indicator Energy use refers to use of primary energy before transformation to other end-use fuels, which is equal to indigenous production plus imports and stock changes, minus exports and fuels supplied to ships and aircraft engaged in international transport.
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Unit of measurement Tonnes of oil equivalent (toe)
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Data source
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Source organization(s) World Bank
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Link to source organization http://data.worldbank.org/indicator
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Complete reference World Development Indicators
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Link to complete reference http://data.worldbank.org/indicator/EG.USE.PCAP.KG.OE
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Specific information about this indicator
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Uploader Gapminder
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Time of uploading 12-Dec-10

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