UN UNIVERSITY LECTURES: 6

The Most Important Chart
in the World

Part I: The Most Important Chart in the World1

As you know, environmental impact is a function of the size and affluence of the population, the resources used to achieve this affluence, and the technology used to harvest and use those resources. This is a generalized framework that can be made operational by looking at it in the context of energy use. Energy use gives a measure of the resources and technology applied in an economy. Therefore, energy use can be considered as a measure of potential environmental damage. As an indicator, energy is not perfect by any means, but does give some idea of what is happening.

Why do we think that energy is a good measure for environmental impact? Table 1 lists what has been called the human disruption index; how humanity has disrupted natural flows of some materials in the environment. We mobilize fifteen times more lead than is naturally mobilized, mainly through burning leaded gasoline, for example, which fortunately is decreasing around the world. We spill ten times more oil in the ocean than occurs naturally, and more cadmium, sulfur, mercury, etc. The atmospheric stock of some greenhouse gases has increased to more than two times the natural levels, and we have increased carbon dioxide levels by thirty percent. Although manufacturing, agriculture, and other sectors also have impacts, energy plays the largest role in adding to these and other global flows. It thus seems a reasonable indicator of potential global environmental damage.

Table 1: Human Disruption Index This shows the degree to which human activities disrupt natural cycles. Human-mobilized lead, for example, is 15 times greater than the natural flow of lead in the world. Source: Holdren, 1990.

	Flows

		Lead 				15
		Oil to Ocean			10
		Cadmium 			 8
		SO2				 1.4
		Mercury 			 0.7
		N2O 				 0.4
		Particles 			 0.3

	Atmospheric Stock

		Methane 			 1.1
		CO2 				 0.3

____________________________________________________________________________

Place		Period		Overall Energy		Percentage due to
				Annual Growth Rate	Population Growth
____________________________________________________________________________

World 		1890-1990 		2.6% 			49%
		1970-1990 		2.3% 			84%

OECD 		1965-1989 		2.2% 			35%

USA 		1890-1990 		2.5% 			55%
		1970-1990 		1.1% 			93%

Japan 		1965-1989 		4.7% 			25%

Australia 	1965-1989 		3.6% 			46%

Korea, Rep. 	1965-1989 		8.0% 			22%

China 		1985-1989 		4.4% 			44%

India 		1965-1989 		3.6% 			62%

This, of course, depends on the country. Between 1965 and 1989, only about 25% of Japan's increased energy use was due to population growth. In many countries, however, and for the world as a whole, population growth is still the major driving factor in increasing energy use, and therefore the potential for global environmental damage.

Now comes the most important chart in the world, Figure 1. It is complicated, but contains much important information that is worth spending some time to understand. The energy intensity of the econ-omy of a range of countries is followed during the last 140 years, which reveals some bad news, but also good news. The bad news is that during the economic development process, every country seems to go through an energy intensification period, e.g., for each unit of economic growth, they require more energy. Thus, to achieve 1% growth in the economy, they require more than 1% growth in energy use. This is bad news because each unit of energy requires that much more capital resources and has the potential for more environmental damage.

Another bit of good news is that the peak seems to be changing; the UK peaked at a higher level than the U.S., which peaked at a higher level than Germany, which peaked at a higher level than France, which peaked at a higher level than Japan, which peaked at a higher level than Italy. So we seem to be learning something over time, i.e., nobody builds energy-inefficient steel mills like the U.K. was building one hundred years ago. Japan has been a major steel producer, but it has built steel mills that were much more efficient than what was used in the past.

The reason that this is the most important chart in the world is because it is a visualization of what might happen to the developing countries, in which live three-quarters of the world population. Because of the potential regional and global impacts that may result, the energy intensity that their economies reach is important to all of us. Just as other nations feel threatened by U.S. gasoline use in terms of global energy supplies and environmental damage, the rest of the world is threatened by China's coal use.

A better way to put it is that we have a common goal of increasing energy efficiency in all parts of the world. Of course, there is great need for economic development because hundreds of millions of people are still living below anyone's definition of minimum basic needs. We all have a common need and desire to make sure that, while developing, the currently poor countries peak at even lower energy intensities than did the currently developed countries and that the developed countries, in turn, continue to reduce theirs. We must make sure that energy technology transfer occurs such that this is possible.

We know that it is possible to do much better with energy than has been done in the past. Notice in Figures 2A-2E how the lines of energy intensity in the developed countries have decreased, i.e., energy efficiency has increased, since the first oil shock around 1973. Residential space heating shows a tremendous decrease in energy intensity. The same heating occurs, but at much less energy use. Also shown are significant increases in energy efficiency for household appliances over the same period. The trend is similar for new auto-mobiles, for which the most impressive percentage improvement has occurred in the United States, although it still lags behind the other nations. The manufacturing energy intensity of these economies also increased over this period. The last figure in Figure 2 illustrates the great increase in seat-miles per gallon in commercial jet aircraft. The airplanes built today are much more energy efficient than those built twenty years ago. Even so, significant further improvements are expected in post-2000 aircraft.

Therefore, we know that it is possible, in an economically rational manner, to squeeze even more benefit out of energy than we have in the past. Unfortunately, however, many of the energy-efficient technologies have not yet been available in developing countries. It would be a benefit to everyone to have these technologies disseminated as widely as possible in the developing world.

Note in Figure 1 how much the former Soviet Union and Eastern Europe are out of line compared to the rest of the world. The reason is simple: energy prices were kept artificially low, i.e., the energy sector was subsidized. End users paid very little for coal, gas, electricity, and other fuels. This policy of the centrally planned economies meant that it did not pay any energy users to conserve, i.e., to develop energy-saving equipment or do simple things like insulate buildings. This is a major factor in the inefficient economies that resulted and are causing so much trouble now.

This cannot be changed over night. The whole economy is oriented toward cheap energy. There is a significant economic delay occurring in the former Soviet Union and Eastern Europe as they scramble to provide the whole infrastructure of energy efficiency in order to lower their energy intensity to levels commensurate with the rest of the world. China, too, has been a centrally planned economy. Although there have been price reforms, still half the coal in China is subsidized, that is, end users do not pay prices close to its actual cost of extraction and transport, let alone the international price. Consequently, it is used very inefficiently, a habit that adds much environmental burden as well. This is changing, but is one of the reasons that China looks so inefficient in international comparisons.

Normally, we lump India and China together in terms of GNP per capita, but those who have been to China and India, and thought about it, were probably very confused. Particularly in the rural areas, which hold the vast majority of people, life is not at all the same-China is much better off by whatever measure you choose: roads, water, bricks, electricity, schools, fuels, etc.; all things that are not available in most of rural India. Yet the gross national product per capita is the same and they are often treated this way in international discussions. As shown in Figure 3, however, the view from the stand-point of PPP is quite different.

As the centralized economies become more privatized, this ratio will come down, i.e., PPP will become closer to GNP. Because China is so large, this great difference between PPP and GDP has many implications for the world picture. Some are implications that are not easy for some Chinese to accept, for example, that China is actually much richer than much of the developing world, and therefore should not have such easy access to low interest international loans, grants, and other special treatment. It also implies that China is really further advanced in terms of providing human welfare and ought to be advancing on human rights more like a country such as Thailand, instead of a country on the level of Bangladesh or India. The United Nations is starting to use these purchasing power parities in many of their comparisons. As new global statistics come out, you will see significant changes, particularly with regard to China and other centrally planned economies.

One thing that is important at either end, however, is energy efficiency, because it gives the same benefits without the energy use.

Figure 4 is what has been called the household energy ladder. At the time humanity mastered fire, all of our ancestors began in the middle of the energy ladder with wood. Half of humanity has moved up the ladder to the modern fuels, but the other half of the world has either stayed with wood or been forced down the energy ladder to poor quality biomass fuels. Approximately half the households in the world today cook with wood or biomass residues, and half cook with improved fuels. Cooking is not the only energy need, of course, although it is the major need for that half of humanity on the lower part of the ladder. So the problem of using too much energy is more important on the top of the ladder, while the lower section of the ladder indicates potential problems related to having access to too little energy, or not enough high-quality energy.

Risk Transition

At the same time, however, many of the things that are done to bring economic welfare and lower traditional risks also entail modern risks.

One of the differences between modern and traditional risks is that there is a relatively short period between the imposition of most traditional risks and actual human damage. If people drink dirty water, they come down with diarrhea fairly soon. In the case of modern risks, however, a released chemical pollutant may make its way slowly through the environment to eventually enter someone's body and even much later cause cancer. It can take many years or even decades. So we are faced with trying to measure things that have not occurred yet, to make risk estimates in other words. In one case, the number of people dying of diarrhea is a good indicator of what is happening. In the other case, however, the number dying of cancer is not, because there may be chemicals in the environment that have not yet resulted in cancer, but will. The risk for these, although real, has not yet been expressed as damage.

A good illustration is cigarette smoking in those many countries where the number of cigarettes smoked per person rose rapidly in the 1950s, but the lung cancer rate did not start rising until the 1970s, 25-30 years later. Thus, waiting for lung cancer rates to rise before acting on a modern risk, was too late to save millions of people. This is true with a whole range of modern risks.

This risk transition does not happen by itself, it is quite possible to do it poorly, and the best example of that is Eastern Europe. There, traditional risks have mostly been squeezed out: people no longer die of parasitic or infectious diseases. While they were controlling these traditional risks, however, the authorities did not suppress the modern risks. Thereby, according to anecdotal accounts, life expectancy is actually lowering through modern diseases related to pollution and other chronic problems. This is just an illustration to show that the environmental risk transition, like the demographic transition, does not happen by itself, it requires management and needs to be directly addressed in developing countries.

An important part of the risk transition is the period when traditional risks are still high but falling rapidly and modern risks are rising, the risk overlap, i.e., when there is a significant amount of both amounts of risk occurring at the same time. This risk overlap can create several types of problems; it can create classes of risks that would not exist in either a modern or traditional world. In China, for example, about 40% of the people still use crop residues for cooking, creating a traditional risk as old as the use of fire, i.e., the smoke from biomass-burning stoves. But now some of those crop residues have pesticide residues on them, creating a class of indoor exposure to pesticides that would not exist in either a modern society or strictly traditional society.

The risk overlap is particularly important in rapidly growing devel-oping countries such as Thailand, Malaysia, and Indonesia, where people living in urban slums suffer the worst risks from both the modern and traditional sides.

As countries try to develop by bringing in modern technologies earlier and earlier into the development process, this time of the risk overlap increases. An example of this happened not long ago in Peru with the cholera epidemic in which about 3000 people died. Apparently, according to the studies that have been done, one of the main reasons was that the authorities in Lima stopped chlorinating the water supplies. This was partly in response to concerns in the developed countries like Japan and the United States, that chlori-nation in the water supplies creates small amounts of carcinogenic chemicals that may produce slight increases in cancer risk. Maybe in the United States and Japan this is of legitimate concern since sewage-contaminated water supplies are no longer common. In Peru, however, because traditional risks are still so important, the small risk of cancer would be well worth the large decrease in traditional risk from chlorination.

Most people tend to think of air pollution as a modern environmental hazard that comes from fossil fuel combustion in industries and automobiles, mainly in urban areas of industrialized countries. In fact, however, the largest air pollution exposures for many important pollutants seem to occur in the exact inverse situation: in rural areas of developing countries.

The best approach to understanding and controlling health-damaging pollution of any type, including airborne, is to look first where the people are. In other words, if concerned about health, then you should measure air pollution where people spend their time. This may seem obvious, but has apparently not been so in the past. Air pollution monitors are usually located on the tops of buildings inside cities. People, however, do not really spend a lot of their time on the tops of buildings, and where they do spend their time the air pollution is quite different.

Figure 6 shows where the world population spends its time. As a rough estimate, 77% is in developing countries and only 23% in developed countries. Most is indoors in both regions, and most in developing countries is rural. Approximately 2% of the total person-hours spent in the world are in the urban outdoors of developed countries. Yet, this is where most air pollution research, monitoring, and control has been conducted, leaving aside 98% of the person-hours that potentially could be a problem.

By itself, the large fraction of the world's person-hours spent indoors in rural areas of developing countries is not a problem unless there is air pollution there for people to breathe. Unfortunately, burning the biomass fuels low down on the household energy ladder, produces rather large amounts of health-damaging air pollution including carbon monoxide, respirable particulates, hydrocarbons, benzine, and hundreds of other chemicals. Considering both the amount of time and the degree of pollution in each place results in a striking global picture about some major air pollutants. For example, Figure 7 depicts the relative amounts of exposure to the most important single class of pollutants, particulates, in developing and developed coun-tries. Less than 1% of global health impact is occurring outdoors in urban areas of developed countries where almost all attention has been directed. Nearly all the rest of the attention has gone into urban areas of developing countries which account for only 3% of the total air pollution exposure.

World's Best Investment

1) one less death of women during childbirth,
2) 15-20 fewer infant deaths over the next decades,
3) 150-175 fewer births, and
4) 20% economic return on the investment.

Another study of all developing countries except China found that a 1% GNP increase spread throughout the economy would, on average, cause a two-week increase in life expectancy. In other words, if you have enough GNP growth (many one-percents), over a number of years there can be significant improvements in life expectancy. Instead of allowing this to be spread generally through the economies, however, if you took the same amount of money and placed it in the investment above, this same 1% would produce a five-year increase in life expectancy. This is obviously an investment with tremendous leverage.

What is this magical investment? It is women's education in poor areas of developing countries, which has a huge return in terms of health, economics, fertility control, and in improving the management of local environments. Figure 8 illustrates the percent of women's literacy in Asian countries as defined by a minimum number of school years. It ranges from about 10% in Afghanistan up to about 90% in Thailand. The percent literacy in China is not as large as one might think, about 60% for women. In India, it is shown to be 30%, which is probably exaggerated. It is a scandal that almost fifty years after independence, India still has less than 20% literacy among rural women. It is interesting that Vietnam and Laos, which are considered among the world's poorest countries, have well-educated female populations. This indicates that, given the chance, they could take off very rapidly in terms of economic growth and other development.

The bars in Figure 8 indicate the absolute number of women that are waiting to be educated. India has the largest group, but China has a large number as well, even though it has a higher literacy rate than some of the other poor countries.

Once you have educated all the women (actually the girls before they become women), you have not solved all the world's problems by any means. Nevertheless, the incremental benefit in this area is astonishing. There are, of course, political, social, religious, and cultural reasons women have not been educated in many of these countries. We all have a stake, however, in overcoming these obstacles to bring the women of poor areas of developing countries up to some sort of minimum educational standard. Unfortunately, however, a small percentage of international bilateral and multilateral aid is so targeted today, only about 0.5% (primary education) in the late 1980s.

In conclusion, the most important chart in the world gives us a general picture of what might happen in developing-country energy use and environmental impact. In our concern about too much energy use, we need to remember that half of humanity is still living with poor quality fuels with serious potential for environmental degradation.

Part II: Global Greenhouse Regime: Who Pays²

1. Will there be unacceptable damage if nothing is done?
2. If so, are there feasible interventions that will reduce this damage?
3. If so, are there rational and politically acceptable means of deciding on which interventions to undertake?
4. If so, are there rational and politically acceptable means of deciding on who should pay for these interventions?
5. If so, is there an efficient and flexible international institutional mechanism that can be created to manage these interventions (the "Regime")?

This new UNU book assumes that the answer to the first question is positive, i.e., there is a serious chance of unacceptable damage. It tries to provide some insight for dealing with the last question, the character of the Regime. It principally addresses, however, the middle three questions, i.e., what can be done, what should be done, and who should pay.

Here, I will focus mainly on the criteria by which to answer question 4, who should pay? The book seeks criteria that are flexible enough to take into account future changes that will occur in science, technology, and politics, as well as reflect physical reality and promote agreed upon social objectives, such as equity, while not having negative side effects, such as stimulating population growth. The book suggests that accountability might be considered as a function of two things:

1. Capability. Who has the wherewithal to pay?
2. Responsibility. Who actually caused this problem?

Criteria for determining capability have been developed over the years for a number of international endeavors. The most prominent are those that govern the United Nations' dues schedule, which has also been incorporated in many other international arrangements, and is based on national income per capita.

Although clearly an important factor, alone, capability to pay is not adequate, however, because it fails to give direct incentive to reduce greenhouse gas emissions. One good way to provide such an incentive is to apply the "polluter pays principle," in which each polluter's payment is in proportion to the amount of pollution released.

The most obvious greenhouse pollution indicators for determining responsibility are the current annual emissions of each nation. This does not, however, accord well with physical reality because present greenhouse gas warming is due to the accumulated greenhouse gases in the atmosphere, not just this year's emissions.

Essentially what we have been doing is borrowing the assimilative capacity of the environment. We have been borrowing from the future the ability of the environment to clean up after us. Pollution, released at a modest rate, can be handled by the environment, but at too fast a rate exceeds the assimilative capacity and starts building up in the environment. This is analogous to taking on a national debt, in which money is borrowed from the future in order to make our economy grow faster in the present. Instead of the national debt, this build-up of greenhouse gases is part of our Natural Debt (Smith, 1990a). Just as with the national debt, a small Natural Debt does little harm, but if too large, it can lead to serious problems.

The book uses the Natural Debt as an indicator of responsibility for each nation. With an average lifetime of more than 100 years, much of the carbon dioxide released this century still remains in the atmo-sphere as part of the Natural Debt. On an individual basis, each American was adding about 2.5 tons of carbon as carbon dioxide to the atmosphere in 1900. Today, each American's annual natural deficit is 5-6 tons per year while his or her total greenhouse Natural Debt since 1900 is now about 250-300 tons of carbon in the atmo-sphere. Just as with the national debt, the present welfare of every American is partly due to our Natural Debt. In the past, the U.S. did not have to pay for air pollution control and thus the economy could grow faster than it otherwise would. A little bit of Natural Debt is not a problem, but when it becomes too large, it threatens the world heat balance.

Because of data limitations and changing political boundaries it is difficult to calculate Natural Debt long in the past, and thus the book uses the year 1950 as a cut-off. Since 1950 the U.S. per capita Natural Debt from fossil fuel is about 160 tons. United Germany has about 120 tons compared to Japan's 60 tons. India and Indonesia have only about 3 tons, while Bangladesh has a mere 0.5 ton per capita. These developing countries, of course, release more now than in the past but, having only recently started emitting large amounts, still have only built up a very small Natural Debt. Only a small amount of the world's borrowed assimilative capacity (Natural Debt) is due to the activities of developing countries. Whatever is happening to the atmosphere today is not due to what Indonesia and India have done, but to the Natural Debts of Europe, the U.S., and Japan.

The best opportunities for emissions reductions, however, do not necessarily occur in the places with the largest Natural Debts. The United States has a high Natural Debt and should pay accordingly, but some of the best opportunities for increasing energy efficiency are, for example, in China and India. One major criterion for choosing reduction measures is economic efficiency, i.e., how much reduction of carbon dioxide can you achieve per $10,000 spent? An additional criterion may be achievement of social goals. such as providing minimum basic needs to the poorest groups, promoting women's education, and lowering population growth. These two criteria together dictate where the emissions-reduction projects are best undertaken.

In the book, we examined how much resources would actually need to be transferred over the next thirty years between developed and developing countries to achieve a major reduction in greenhouse gas emissions. The results show that it need not be such a major transfer as one might think, only a few percent or less of the gross national product of the countries involved.

Bibliography

Figure 8: Women's Literacy in Asia
Women's Literacy Rates (line, left axis) and absolute numbers of illiterate women in Asian countries (bars, right axis). Data from UNDP, 1993.

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