Economic progress versus carbon footprints

Economic progress

versus versus CARBON FOOTPRINTS

COP27 has just wrapped up in Egypt with the final push being an argument over an economic consequence of global warming – in this case compensation for any negative consequences for vulnerable poor countries. Yet was that the right conversation to have? Below I make a case for the focus to be on economic growth instead.

By Garth Zietsman, statistician and writer for the Free Market Foundation

In 2001 Bjorn Lomborg published a book entitled The Skeptical Environmentalist. In the chapter on air pollution were two graphs that showed changes in particle and SO2 pollution in 48-49 cities increased (as average income in 1985 terms) – both in 1972 and 1986. Pollution first increased with rising incomes, reached a maximum at $3 000, and then declined as income increased further.

The peak pollution for both particles and SO2 was at the same average real income in both 1972 and 1986 – although the 1986 peak was lower in 1986 than 1972. For a given income, the lower levels of pollution in later years are due to increased efficiency over time. The fact that pollution peaks at a specific level of income means that when people earn enough to satisfy their material needs, they start to care about other things more – such as environmental quality.

Hope in greater technological efficiency

Now for those who are concerned about the state of the environment one obvious lesson is that there is hope in greater technological efficiency. Another lesson is that they shouldn’t expect improvements where people still have unmet material needs. I was motivated by this finding, and the Climate Summit in Egypt, to find out whether something like this phenomenon exists with carbon footprints across countries. It does.

Changes in per capita carbon footprints go from increasing to decreasing at a log GDP pc of about 3,26 – equivalent to a current GDP pc of $4 300 and somewhere between Ghana and Papua New Guinea. Clearly the same phenomenon which Lomborg reported.

We should expect each person’s carbon footprint to start decreasing after they earn above a certain amount. Note that the turning point is where peak carbon production occurs, so the further a country exceeds it the better. Most of the large, heavy CO2 producing countries already have higher incomes than the turning point figure but not enough to show big decreases in per capita carbon footprints.

How do we achieve growth and greater efficiency?

If the country isn’t already at that income level the only way to get there, and past it, is economic growth. Economic growth will enable vulnerable countries to build defences against any risks e.g., sea barriers for rising sea levels, better flood defences, improved fresh water supply and management, and stronger buildings to handle weather extremes; and it is both a better way than compensation and will make compensation easier.

Improved cognitive skills, open and free economies, and dependent on those, new technology, are the proven ways to achieve growth and greater efficiency. Farsighted green-energy advocates should promote these ways, including the free market bit. 