Top CO2 polluters and highest per capita

co2-emissions-per-capita

The biggest absolute emissions come from China and the United States. In terms of CO2 emissions per capita, China is ranked only ranked 47th, at 7.5 metric tonnes per capita. The US is ranked 11th at 16.5 per capita and amongst countries with sizeable populations, has the highest CO2 emissions per capita. India is the third highest country in terms of absolute emissions, but only 158th in terms of per capita output with 1.7 metric tonnes per capita.

Selected countries CO2 emissions per capita

co2-emissions-per-capitaSource: World Bank

What explains variation in CO2 emissions per capita?

  • Levels of GDP. Countries with higher real incomes can afford to use more petrol and industrial production which causes pollution. By comparison, the lowest income countries have very limited industrial production and consumption of oil. However, that is only one factor, for example, the Netherlands has double CO2 emissions than France with similar GDP per capita.
  • Focus of the economy. Economies based on oil  (like Qatar, Bahrain and United Arab Emirates) have the highest levels of CO2 per capita. Qatar has a rate of 45.4 (off the chart) – small population but production based on oil exploration and oil refining.
  • Transport policy. Levels of petrol tax and balance of transport modes can influence CO2 emissions. Countries with highest levels of car use lead to more CO2 emissions. (See: relative petrol prices around the world, e.g. compare US with western Europe)
  • Policies to reduce CO2 emissions. To meet global warming targets countries have adopted policies, such as carbon tax and regulation to reduce pollution.
  • Modes of Power generation. The burning of fossil fuels (e.g. coal-powered electricity stations) is one of biggest causes of CO2 emissions. Countries which gain energy from renewables have lower CO2 emissions per capita.

Changes in CO2 emissions per capita

change-co2-emissions-china-uk

China’s CO2 emissions per capita have more than tripled in past 15 years.

world-co2-emissions-per-capita

Highest Total CO2 emissions by country (kT)

The total level of CO2 emission by kilo Tonne.

1China10,291,926
2United States5,254,279
3India2,238,377
4Russia1,705,345
5Japan1,214,048
6Germany719,883
7Iran.649,480
8Saudi Arabia601,046
9Korea, Rep.587,156
10Canada537,193
11Brazil529,808
12South Africa489,771
13Mexico480,270
14Indonesia464,176
15United Kingdom419,820
16Australia361,261
17Turkey345,981
18Italy320,411

 

Source: World Bank

Lowest CO2 emissions per Capita

By comparison, some of the poorest countries produce practically zero CO2 emissions per capital

Madagascar0.096
Eritrea0.089
Niger0.089
Malawi0.083
Ethiopia0.075
Somalia0.063
Central African Republic0.061
Rwanda0.055
Congo, Dem. Rep.0.049
Mali0.045
Chad0.040
Burundi0.033
Lesotho0.009

 


Readers Question: Why don’t countries use the carbon tax?

  • Taxes are generally politically unpopular. A tax on carbon emissions will affect the living costs of many people. This can make the government reluctant to impose the tax.
  • There is also the free rider problem. A small country may think – what is the point in introducing carbon tax when their CO2 emissions are dwarfed by other countries like China and the US? Especially, when these bigger countries don’t seem inclined to do too much about the issue.
  • There are also differing opinions about the potential cost of CO2 emissions to the environment. In the US, there is a strong lobby which argues global warming is not scientifically proven. Therefore, there is a resistance to impeded CO2 emissions.
  • Another factor is that there are significant vested interests in the oil industry / other industries which pollute. They fear CO2 tax will reduce their profitability so they are willing to fight against moves to introduce taxes.
  • Another argument used is that a Carbon tax will harm jobs.

Co2 Emissions and global warming

CO2 emissions are widely considered to play a significant role in contributing to global warming.

Global CO2 source: wiki commons
  • Over the past few decades, the level of CO2 in the atmosphere have continued to rise. Scientists say this increase in CO2 has contributed to global warming.
  • Global warming has potentially damaging economic consequences with increased weather variability and loss of biodiversity.
  • At Kyoto, countries made commitments to target lower CO2 emissions, but these targets have rarely been met. At negotiations, countries collectively agreed to reduce their greenhouse gas emissions (which includes Carbon dioxide) by 5.2% on average for the period 2008-2012.

Read moreTop CO2 polluters and highest per capita

Environmental Kuznets curve

kuznets-environment

Definition: The environmental Kuznets curve suggests that economic development initially leads to a deterioration in the environment, but after a certain level of economic growth, a society begins to improve its relationship with the environment and levels of environmental degradation reduces. From a very simplistic viewpoint, it can suggest that economic growth is good for …

Read moreEnvironmental Kuznets curve

Policies to reduce pollution

What policies can a government use to reduce pollution?

Pollution is a negative externality – a cost to society. To reduce pollution, the government can use four main policies – tax to raise the price, subsidise alternatives, regulations to ban certain pollutants and pollution permits.

pollution-smog

Government policies to reduce pollution

  1. Tax. e.g. Carbon tax, which makes people pay the social cost of pollution.
  2. Subsidy. e.g. subsidy of alternative energy sources.
  3. Pollution permits, e.g. carbon trading schemes where firms are given the right to pollute a certain amount; these permits can be traded with other firms.
  4. Regulation. Limits on a number of pollutants that can be discarded into the atmosphere.
  5. Changing consumer behaviour – e.g. through advertising, nudges.

1. Tax

The idea of a tax is to make consumers and producers pay the full social cost of producing pollution. For example, petrol tax or a carbon tax.

tax-on-negative-externality

In this case, the social marginal cost (SMC) of producing the good is greater than the private marginal cost (PMC) The difference is the external cost of the pollution. The tax shifts the supply curve to S2 and therefore, consumers are forced to pay the full social marginal cost. This reduces the quantity consumed to Q2, which is the socially efficient outcome (because the SMC=SMB)

Evaluation

  • The advantage of this scheme is that the government raises substantial revenue, which could be used to finance other pollution reduction schemes (e.g. subsidising alternatives)
  • It provides a market incentive for firms to offer more efficient engines, which cause less pollution. Increased petrol tax has created an incentive for firms and consumers to switch to less fuel intensive engines.
  • One drawback of tax is that demand may be quite inelastic and that an increase in petrol tax may do little to reduce demand and only marginally reduce the amount of pollution. Though in the long term, demand may become more elastic as people switch to other forms of transport over time.
  • Another potential problem is that it can be difficult to implement green taxes due to administration costs or it is difficult to know how much to tax.
  • In practical terms (non-economic issue), the difficulty is often political resistance – people never like paying new taxes, even if there is a long-term goal of reducing pollution.
  • More detail on pros and cons of carbon tax

Read morePolicies to reduce pollution

Economics and the environment

Readers Question: Is it possible to construct the economic system so that does not rely on expanded growth which as we all know, is damaging the environment? causing pollution e.t.c.

Photo: Takver
Photo: Takver

Could we have a society without economic growth? or as economists might prefer to answer – Can we have environmentally sustainable economic growth?

To promote an economic system without economic growth isn’t necessary. It is possible to have economic growth (increased output and living standards) whilst at the same time improving the environment we live in. But, this requires a much more conscious decision to place the environment as a primary economic objective. If you leave economic growth to the free market, inevitably we will see economic growth leading to environmental problems.

One of the great challenges of modern economics is to protect the environment. Part of the motivation is a simple moral case for being good guardians of the earth. But (fortunately for economics) there is a strong case of intrinsic self-interest. Protecting the environment nearly always makes good economic sense – as long as we look at issues in the long-term and not just from a short-term / selfish perspective.

The environmental costs of economic growth

Rapid economic growth combined with a rapid population growth has placed great stress on the environment. If we are not careful – damage to the environment will threaten future living standards. For example:

  • Air/land/water pollution causes health problems and can damage the productivity of land and seas.
  • Global warming leads to rising sea levels,  volatile weather patterns and could cause significant economic costs
  • Deforestation damages soil and makes areas more prone to draught.
  • Economic growth leads to resource depletion and loss of biodiversity
  • Creation of waste and toxins.

world-co2-emissions-per-capita

The past 50 years has seen a 60% increase in CO2 emissions – a product of economic growth.

What economic system could help promote environment?

The first essential aspect is for society and governments to recognise all the external costs and external benefits of the environment.

External costs from pollution
External costs from pollution

If we leave it to a free market, consumers and firms will ignore the external costs of their actions and we will get overconsumption, environmental costs – and a decline in economic welfare.

negative-externality-id

We need to put a monetary value on the cost of pollution / environmental damage and make sure that is reflected in the price people pay (e.g. tax on negative externalities). This will mean the cost of burning fossil fuels will increase – reducing demand. The biggest problem is making sure that we actually include all environmental costs in the price of goods and services we use.

For example, if burning fossil fuels is causing global warming and sea levels to rise. The effect could be devastating to future generations. In this situation, we are underestimating the external cost of this pollution. We are not paying the full social cost, and in the long-term we are failing to correctly price goods.

The long-term view

A difficulty is that we are used to pricing the cost of a good in terms of present value. Many environmental problems are cumulative and the costs are to future generations and people elsewhere in the world. Because we ignore these future costs, we are underestimating the potential social cost of current actions.

Another difficulty in calculating future costs is that we don’t know for certain. There is an element of uncertainty. This means we have to deal with probabilities. However, if we are dealing with the environment, there is a good case for being risk-averse and not gambling on the hope that global warming will be less damaging than some scientists predict. Reducing CO2 emissions can be done with only marginal cost to current consumers. But, damaging the environment in the long-term could lead to a devastating high cost to future consumers.

Positive technology

On the other hand, we need to encourage the production and consumption of technologies which don’t damage the environment.

To give a simplistic example – we could increase tax on petrol (which causes pollution). Then use this tax revenue to subsidise solar powered/electric cars which don’t pollute.

This will ensure that our society seeks to reduce the consumption of goods which are damaging to the environment. We can enjoy the same level of transport, but it will be supported by a different energy source which doesn’t damage the environment.

People often ask how economic growth can help the environment. Technology is the key. If we develop technology which creates a more efficient source of energy, but without pollution – this would enable higher output, and reduce pollution levels.

e.g. a steam train caused high pollution levels. An electric train powered by solar powered energy plants can go much faster and doesn’t create pollution – that is economic growth and less pollution.

Limits of tax and subsidy

However, the use of tax and subsidy is not enough to deal with all environmental problems. For example, if we take the problem of deforestation of land in South America / Africa, a different response is needed.

For example, it may require governments to actually ban the process. It also requires a strong degree of international co-operation. Developing countries may feel a strong economic need to cut down forests or mine precious metals. However, it would be in the interest of the whole world to protect forests. Therefore, there may be a need for transfers to very poor countries in return for adopting less environmental damaging operations. Alternatively, it may just be a case of the need to educate about long-term sustainable practices.

As well as government action, there needs to be a change in consumer behaviour. A willingness to shift consumption patterns and be willing to pay higher prices and/or avoid consumption of certain products. e.g. only buy in season fruit, adopt a vegetarian diet. People want to protect the environment, but are we willing to pay an extra 10% increase in fuel bills?

Read moreEconomics and the environment

How can an economist save the Rain Forest?

Readers Question: Endangered rain forests, wild fish, elephants and more are examples of the tragedy of the commons. What would economists recommend to save, rain forests or fish stocks?

rainforest
Pic Rainforest – CC

 

Firstly, the tragedy of the commons  is a situation where there is overconsumption of a particular product / service because rational individual decisions lead to an outcome that is damaging to the overall social welfare.

The problem with rain forests is that people may feel an economic incentive to chop down trees in order to make a business, e.g. farming, wood for furniture. On their own – a decision to cut down a few trees don’t seem to make much difference. If you buy a table made with wood from a rainforest it doesn’t make that much difference. But, if everyone takes these decisions, we end up with overconsumption and eventually this precious resource is lost.

Economic policies to save the Rainforest

1. Laws and regulations by governments to make areas of rainforest protected.

This is the simplest and easiest. The Brazilian government can simply disallow firms from cutting down more trees, and legally protect rain forests. The problem is that governments may not want to do this because they see it as  viable economic resource they need to make use of.

2. Global co-operation. If we ban cutting down rain forests, some countries may lose economically – Brazil, Indonesia e.t.c. But, the world will benefit from reduced global warming and the benefits of saving rain forests. In an ideal world, all major economies could make a financial contribution to countries who promise to save their rain forests. Therefore countries like Brazil and Indonesia don’t feel like they are losing out. All countries are paying a small amount to gain the bigger long-term benefit of saving the rain forests.

For more ideas, I looked at this page: 10 things you can do to save the rainforest

Primarily these rely on trying to change consumer behaviour. But, how could an economist make the changes more widespread and not optional?

1. “Palm oil, found in half of all processed foods in the US, is a key contributor to rainforest deforestation”

In this case we could tax palm oil which is taken from land which used to be rainforest. Increasing the price of Palm Oil, would discourage consumption and encourage consumers to buy other oils.

The problem is that individual taxes on palm oil will have administration costs. It may also be difficult to know whether Palm oil has come from former areas of rainforest. but, in theory a tax will reduce demand. The money raised could be used to buy rainforest land to protect it.

Read moreHow can an economist save the Rain Forest?

Difficulty in switching from fossil fuels and oil

Question and answers on the difficulty of switching from non-renewable energy sources, such as fossil fuels. (from – finding alternatives to fossil fuels)

solar-power-houses
photo Dean

Readers Question: Why is it that on a global scale, alternative fuels are somewhat being ignored?

 

Firstly, fossil fuels are still cheaper. However, the gap is narrowing. For example, see how solar panels are coming down in costs.

solar-power
Cheaper solar power

There can be a reluctance to switch from one mode of production to another. Even if an alternative became cheaper, it requires significant investment to switch from one mode of power to another. For example, the UK kept steam trains running into the mid 1960s. Diesel was more efficient and cheaper many years previously, but it required a lot of investment in infrastructure to buy new diesel trains. Often it’s easier to keep going with old technology out of habit and merely because it is what has been used in the past. In some parts of the world, steam power is still used.

But, on the other hand, if we look back in history, we can see that a dominant technology can quite quickly lose its position. America quite quickly switched from steam trains to the petrol powered car. Once a tipping point is reached the momentum can swing to the new technology.

Also, a factor is that oil and petrol companies are very profitable and it is in their interests to keep oil based industries strong. If they can delay a switch to alternative fuels they might try. How much ability they have to delay an energy switch is open to question. But, there are powerful lobbyists to support the US coal and oil industries.

Readers Question: If it is not being ignored, Why is research and development is somewhat slow?

Alternatives to fossil fuels are generally not profitable in the short term. Therefore, private enterprise has limited incentives to research alternatives. This is an example of market failure, because the market ignores:

  1. The long term importance of developing alternatives to fossil fuels, which will one day run out.
  2. The external benefits of developing alternatives to fossil fuels, e.g. improvement in environment and reduced pollution.

Read moreDifficulty in switching from fossil fuels and oil

Global warming and tax cuts on petrol

The other day, I had a quick glance at the newspaper headlines, whilst in a service station.

  1. UN Report on global warming states global warming is a real threat to the future of the planet. To contain these changes will require “substantial and sustained reductions of greenhouse gas emissions”.
  2. Chancellor announces yet more freezes on fuel duty.

It seemed a paradox to have both headlines on the same day. At the very least, we could enable a small increase in tax on fossil fuels causing the problem.

sea-morecambe-bay
Rising sea levels will be more damaging that a few pence on the price of petrol

Costs of global warming

In the summary of the UN document on global warming.

  • The report states that for a doubling of CO2 in the atmosphere, the increase in the global temperature is forecast is to be 1.5C to 4.5C.
  • The scientists say that sea level rise will proceed at a faster rate than we have experienced over the past 40 years. Waters are expected to rise, the document says, by between 26cm (at the low end) and 82cm (at the high end), depending on the greenhouse emissions path this century. (BBC link)

Political benefits of tax cuts

The chancellor has announced more freezes on fuel duty because it believes it will be politically popular. He is probably guessing that concern over the cost of petrol is greater than concern over the future of the planet.

Tragedy of the Commons

This situation could be classed as a classic example of the tragedy of the commons. People pursuing their self-interest but ignoring the common shared resources – leads to a loss in economic welfare. The problem is that with many individuals maximising their short-term welfare, there is a high cost to the future sustainability of the common resource.

Read moreGlobal warming and tax cuts on petrol

Item added to cart.
0 items - £0.00