Sunday, January 22, 2017

Economy vs Environment

According to the Trump team, it's the greatest fight of the century ... but can't the two just get along? Certainly there are compelling positive examples. Iceland generates 99.98% of its energy from renewable sources and Norway is at 98.5%. Brazil and Colombia are over 80%, and a host of other notable countries (New Zealand, Canada, Venezuela, Switzerland, Sweden, Denmark) are above 50%. All told, 29 countries are over 75% and 28 more are over 50%.

List of countries by percent renewable energy generation.
List of countries by total GDP.
List of countries by GDP per capita.

But, picking a few notable countries does not make a convincing argument. It does, definitively, allow that a country can have a thriving economy while using lots of renewable resources. But what are the trends? Who should we compare ourselves to?

The list of countries with very high renewable use hydro almost exclusively. This is a consequence of their geographies; they have significant rivers, lakes, etc, that they can dam. Many of these countries are actually quite poor: using renewable energy did not spur a strong economy for them. This is not shocking or really even interesting for us. Our question is to what extent a reliance on renewable energy hinders a country's economy. We should look at the strongest performers and see if they were able to succeed while using renewable energy at higher rates than the USA does. Let's look at the top 20 by total and per capita GDP to paint a picture of scale and individual well-being and see where we fit in. 20 is somewhat arbitrary, yes, but it should be a reasonable proxy for "leading economy"; it'd be the top 10% of the world.

Total GDP vs percent renewable energy
There are multiple authorities on total economy. Their results are all listed. Small differences exist in the ordering but they are not material. I'll be using the IMF ordering.
PlaceCountryPercent
1United States14.3
2China24.4
3Japan15.5
4Germany32.7
5United Kingdom22.3
6France17.4
7India19.1
8Italy45.9
9Brazil84.0
10Canada64.5
11South Korea1.4
12Russia16.6
13Australia13.5
14Spain31.0
15Mexico15.7
16Indonesia12.0
17Netherlands12.7
18Turkey28.3
19Switzerland62.0
20Saudi Arabiano data

The USA ranks ahead of only 4 or 5 countries (depending on Saudi's standing), and all but one of those countries is essentially tied (12.0 vs 14.3% is not a huge difference). In the meantime, 8 of the top 20 countries are more than 10% ahead. What this tells me is that a large economy and large renewable energy generation are not at odds; in fact many of the other largest economies have managed to blow past us.


Per capita GDP vs percent renewable energy
Same here as before. Since there are a lot of tiny countries in the last that are basically rich-people havens, I'll extend the list to the top 30. This can be argued to be reasonable anyways since the USA is 13th: we should look above and below roughly equally.
PlaceCountryPercent
1Qatarno data
2Luxembourg15.4
3Macauno data
4Singaporeno data
5Bruneino data
6Kuwaitno data
7Ireland20.2
8Norway98.5
9UAEno data
10San Marinono data
11Switzerland62.0
12Hong Kongno data
13United States14.3
14Saudi Arabiano data
15Netherlands12.7
16Bahrainno data
17Sweden 60.2
18Australia13.5
19Germany32.7
20Iceland100.0
21Austria78.4
22Taiwanno data
23Denmark56.6
24Canada64.5
25Belgium13.8
26Omanno data
27United Kingdom22.3
28France17.4
29Finland41.8
30Japan15.5

This one is a little harder to look at. If we eliminate the no data entries, every country ahead of the USA in GDP per capita is also ahead in renewable energy generation. Trailing behind in the top 30 are many other countries who are clearly ahead of the USA in renewable energy use. On a per capita basis, it looks even more compelling that economic success and renewable energy generation are not at odds.

Naturally we can ask questions. Does investing in clean(er) energy create a drag on the economy and those other countries would be even better off if they didn't bother? I'm not expert enough to say. But, I would argue the evidence is clear that a comparable economy and lifestyle to ours can coexist with much higher levels of clean energy; thus it's clear that clean energy does not prevent a successful economy.


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