CO2 emission limits and economic development

LONDON: For policymakers in North America and Western Europe, energy policy is often viewed exclusively through the lens of climate change, which takes priority over everything else.

But for their counterparts in developing countries, where energy is still scarce and expensive, and other social problems are pressing, it is only one of a number of competing objectives.

“Taking action to combat climate change” is one of the 17 high-level sustainable development goals agreed by members of the United Nations in 2015, with a target delivery date of 2030.

Others include poverty reduction; improvements in healthcare and nutrition; access to clean energy, water and sanitation; creating better employment; and reducing inequality.

For policymakers in advanced economies, combating climate change tends to take lexical priority over all these other objectives, but their counterparts in the developing world must take a more balanced approach.

Lexical priority is just a fancy way of saying “dictionary order”. In the dictionary, all the words beginning with A come before all the entries starting with B.

For many Western policymakers, reducing carbon dioxide (CO2) emissions takes precedence over all other aspects of energy policy, but prioritisation is more complicated for policymakers from developing economies.

Differences in access to energy and energy consumption between the advanced and developing economies remain stark.

Per capita energy consumption in the Organisation for Economic Co-operation and Developmen (OECD) economies is more three times higher than in non-OECD countries according to BP.

Per capita consumption in the European Union is one-third higher than in China, five times higher than in India and almost nine times higher than in Africa.

Similarly, per capita consumption in the United States is three times higher than China, 11 times higher than India and 19 times higher than Africa.

Some differences can be attributed to geography; energy consumption tends to be greater in countries at high latitudes that need more heating. But much of the gap reflects differences in comfort and consumption.

Residents of advanced economies enjoy more heating, cooling and lighting services; travel further and more frequently, for pleasure as well as work; and consume more energy embedded in goods and services.

If they are to achieve the other 16 sustainable development goals and increase their incomes and living standards, residents of developing economies will also need to consume more energy.

In many ways, the economic development process has always been about capturing and employing increasing amounts of energy.

The process of economic and social development in the OECD economies during the 19th and 20th centuries was very energy intensive, and it is likely to be the same for non-OECD economies in the 21st century.

While the demand for energy has levelled off in the advanced economies recently, it is still increasing rapidly in developing economies as they catch up.

Per capita energy consumption in the OECD economies fell slightly by 0.2% per year between 2009 and 2019, but in non-OECD economies it rose at a compound annual rate of 1.8%. ─ Reuters

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