Monday, July 4, 2016

Equality and Sustainability: can we have both?



Guest post by Diego Mantilla


Recently, in this blog, Jacopo Simonetta raised a very important question: Would a fairer distribution of income worldwide diminish the damage humans are doing to the earth? His answer, that it would not and would actually make matters much worse, intrigued me. So, I decided to look at the best available data.

Simonetta specifically looked at the question of whether a fairer distribution of income would reduce global CO2 emissions. In 2015, Lucas Chancel and Thomas Piketty (henceforth C-P) wrote a paper and posted online a related dataset that dealt with the global distribution of household consumption and CO2e (carbon dioxide equivalent = CO2 and other greenhouse gases) emissions in 2013. The data are not perfect, but they are the best that exist. The C-P dataset captures the Household Final Consumption Expenditures (HFCE) values provided by the World Bank, using the distribution of income in Branko Milanovic's dataset (for the bottom 99 percent) and in the World Wealth and Income Database (for the top 1 percent). (Income is not the same as consumption, and C-P assume that the distribution of income is the same as that of consumption. Also, they assume that the same distribution of income that existed in 2008 also existed in 2013. Like I said, the dataset is not perfect).

The C-P dataset includes 94 countries, which cover 87.2 percent of the earth's population, about 6.2 billion people, who are responsible for 88.1 percent of global CO2e emissions. Generally speaking, C-P divide each country in “11 synthetic individual observations (one for each of the bottom nine deciles, one for fractile P90-99, and one for the top 1%).”

The following chart shows consumption per capita and CO2e emissions per capita in 2013 from the C-P dataset.

Figure 1. Consumption and CO2e emissions per capita by world consumption percentile in 2013. (Some percentiles are missing due to the fact that the country quantiles vary in size and sometimes extend beyond a given global percentile.) (Source: own elaboration from data of Chancel and Piketty (2015).)

The top 1 percent on the consumption scale spend an average $135,000 (2014 PPP dollars) and emit an average 72 tCO2e per person per year. The threshold for belonging to the top percentile is $54,000. Their consumption is equal to 18 percent of all the money spent by households around the world. Let's assume, for the sake of argument, that consumption equals income. If one were to take all the income of the top 1 percent and distribute it among the 99 percent, each person in the 99 percent would get about $1,400.

C-P assume a CO2e emissions to consumption spending elasticity of 0.9. A 10 percent increase in consumption means a 9 percent increase in CO2e emissions. This is a broad generalization, and C-P have a range of elasticities, but they chose that one because it is the median value of the estimates. Using that elasticity in the C-P dataset, if each person in the bottom 99 percent got $1,400 and those in the top 1 percent were left with nothing, global CO2e emissions would increase by 9 percent.

But, of course, the top 1 percent are only part of the problem. About 22 percent of the world's population lives with a consumption level above the global mean of about $8,000 per year. Let's assume that everyone had a level of consumption equal to the mean. Going back to the C-P dataset, if one averages the CO2e emissions of everyone within a consumption bracket ranging from $7,700 to $8,300, one gets an average emission of 6.15 tCO2e per person per year. If everyone had that kind of emission, global CO2e emissions would be practically the same they are today, but, needless to say, that would improve the lot of more than three-quarters of the world's population.

In short, a perfect distribution of income would have a negligible effect on global CO2e emissions.

There remains the question: At what level of consumption would CO2e emissions be reduced dramatically and would this level be compatible with a decent existence?

Cuba offers an interesting example. Moran et al. (2008) looked at the UN's Human Development Index (HDI) and the Ecological Footprint of 93 countries for 2003, and worked on the assumption “that an HDI of no less than 0.8 and a per capita Ecological Footprint less than the globally available biocapacity per person [one planet earth] represent minimum requirements for sustainable development that is globally replicable.” Their survey showed that only one country met both of those requirements, Cuba.

Cuba also has the second lowest fertility rate of the Americas, 1.61 births per woman. Only Canada's is lower. This means that a low-consumption society can be compatible with no population growth. The average Cuban eats 3,277 calories a day. Cubans have a life expectancy at birth of 79.4 years. This is above the United States and only 1.5 years below Germany. And Cuba's mean years of schooling are above Finland's. And only Monaco and Qatar have more doctors per capita than Cuba. Clearly, a level of consumption compatible with the finite planet that we have does not have to equal penury and destitution for everyone. I'm not saying life in Cuba is easy for everyone. It isn't, but at some point in the near future, those who live in the developed world and in the rich enclaves of the developing world are going to be faced with a choice between a Cuban lifestyle and, to quote Noam Chomsky, the destruction of “the prospects for decent existence, and much of life.”

I wanted to find out if the findings of Moran and colleagues were still true today, but I made one change. The HDI is built using three dimensions: life expectancy, education, and per capita income. This has always bothered me. A long, healthy life and an educated population are no doubt hallmarks of human development. But, is driving a Lexus a sign of human development? I think not. Therefore, I used the UN's data to build an index that looks only at life expectancy and education, which I'm calling the truncated human development index (THDI). (The calculation of the HDI is explained here. The THDI follows the same procedure used from 2010 onward, but it only takes the geometric mean of the first two variables.) In the following chart, I plot the THDI versus the Ecological Footprint, measured in the number of planet earths the inhabitants of a given country consume, using the most recent data.




Figure 2. THDI and Ecological Footprint of 176 countries. The red dot represents Cuba. (The THDI corresponds to 2014, the Ecological Footprint to 2012.) (Source: own elaboration from data of the UN and Global Footprint Network.)

There are only two countries in the vicinity of one earth that have a THDI higher than 0.8, Georgia and Cuba, the red dot. Of the two, Cuba has the highest THDI. It's interesting that Cuba has practically the same THDI as Chile, but Chile uses 2.5 earths. And it has practically the same THDI as Lithuania, but Lithuania uses 3.4 earths. Furthermore, Cuba uses as many earths as Papua New Guinea, but Papua New Guineans have an average of 4 years of schooling, Cubans 11.5. This is just to show the possibilities that exist for an egalitarian, sustainable society. As of late, inequality in Cuba has been on the rise. However, according to the World Bank, CO2 emissions per capita in Cuba are not substantially different today than they were in 1986, when Cuba's Gini coefficient was very low, 0.22 (Mesa-Lago 2005, page 184). In any case, I'm not advocating that we copy the Cuban model completely. I'm not defending Cuba's crackdown on individual liberties, freedom of speech among them. All I'm saying is Cuba is an interesting example of the possibilities that an egalitarian society offers. I, for one, would like to live in a society that is even more egalitarian than Cuba. It seems to me that there is no reason in principle why humans cannot build a society that is more egalitarian than Cuba and just as sustainable, especially when the alternatives are dire.

Cuba is not in the C-P dataset. It is hard to estimate the level of consumption of Cubans in dollars, because the statistics the Cuban government publishes are not comparable with those of the rest of the world, but last year the UN published a GNI per capita number for Cuba for 2014 that seems to be solid and comparable to other countries, 2011 PPP $7,301. That number is not directly comparable to the C-P data, because C-P looked at household consumption. Assuming that the share of GNI for household consumption published by Cuba's National Statistics Office is correct, one can estimate household consumption per capita in Cuba to be at around 2011 PPP $3,900. It's hard to translate that to 2014 dollars, because I don't trust the PPP conversion factor published by the World Bank, but let's assume that the consumption of the average Cuban is around 2014 PPP $4,000.

Going back to the C-P data, one can find that the average CO2e emission for a consumption bracket ranging from $3,700 to $4,300 is 3.14 tCO2e per person per year. If everyone in the world had that level of emissions, global CO2e emissions would be cut by half. And in a social system similar, but not identical, to Cuba's, no one would starve or be unschooled, and the lot of 61 percent of the world's population would improve.

To recap, an equal level of consumption for everyone around the world at the level of today's Cuba offers the possibility of substantially lowering human impact on the biosphere while at the same time maintaining a rather decent standard of living for all.

According to the Global Carbon Project, in 2014, “the ocean and land carbon sinks respectively removed 27% and 37% of total CO2 (fossil fuel and land use change), leaving 36% of emissions in the atmosphere.” If CO2 emissions were cut by half, all of them would be removed by the earth's sinks, and there would be no net addition of CO2 to the atmosphere.

It is worth pointing out that global mean consumption will reach the level of today's Cuba eventually. The question is will that happen before humans increase the global temperature to dangerous levels. Cubans today consume 6 barrels of oil equivalent per person per year of fossil fuels, which is what Laherrère (2015, page 20) forecasts humans will consume around 2075, after the peaks of oil, natural gas, and coal production. But, by that time, according to Laherrère's forecast (2015, page 22), humans would have emitted about 2,000 GtCO2 since 2015, 800 GtCO2 more than the maximum Rogelj et al. (2016) estimate we can emit to have a good chance of avoiding the 2 °C threshold. (Laherrère is skeptical about anthropogenic climate change, but I'm not endorsing his conclusions, just looking at his data.)



Diego Mantilla is an independent researcher interested in the collapse of complex societies and social inequality. He has a bachelor's degree in computer networking from Strayer University and a master's degree in journalism from the University of Maryland. He currently lives in Guayaquil, Ecuador.

25 comments:

  1. Isn't part, maybe a large part, of Cuba's low CO2 emissions because it's a warm climate and people don't have to burn fuel for heat?

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    2. In order to find the 3.14 tCO2e average emission, I used a consumption bracket in the C-P dataset (from $3,700 to $4,300) that included quantiles from several countries, including Mongolia, China, and Kyrgyzstan, among others. For example, Mongolia's seventh decile has a mean consumption of $3,770 per year and a mean emission of 7.13 tCO2e per person per year. But that is compensated by other country deciles in the bracket, like Peru's fifth or Nigeria's ninth, both of which have an average consumption of about $3,900 and a mean emission of less than 2 tCO2e per person.

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  2. Another question. You state:

    "According to the Global Carbon Project, in 2014, “the ocean and land carbon sinks respectively removed 27% and 37% of total CO2 (fossil fuel and land use change), leaving 36% of emissions in the atmosphere.” If CO2 emissions were cut by half, all of them would be removed by the earth's sinks, and there would be no net addition of CO2 to the atmosphere."

    That is the basis upon which this is predicated:

    "To recap, an equal level of consumption for everyone around the world at the level of today's Cuba offers the possibility of substantially lowering human impact on the biosphere while at the same time maintaining a rather decent standard of living for all."

    But note what Scripps says on this topic, especially the very last line in the second paragraph:

    "The ocean and land sinks for CO2 currently offset only about 50 percent of the emissions. So the equivalent of 50 percent of the emissions is still accumulating in the atmosphere, even with stable emissions. To stabilize CO2 levels would require roughly an immediate roughly 50 percent cut in emissions, at which point the remaining emissions would be fully offset by the sinks, at least for a while.

    Eventually, additional emissions cuts would be required because the sinks will slowly lose their efficiency as the land and ocean start to saturate. A permanent stabilization at current levels therefore requires both an immediate 50-percent cut as well as a slow tapering thereafter, eventually approaching zero emissions."

    ZERO EMISSIONS. So much for living sustainably at the level of Cuba?

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    1. Good point. It does not, however, invalidate the main point of the article, which is that a lifestyle similar to that of Cuba would substantially lower human impact on the biosphere. It seems to me one should not make the perfect the enemy of the good.

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  3. A very interesting and instructive post!
    The question brought up by Gail, that the warm climate might save emissions, is a complicated one. If the Cubans were richer, they would use a whole lot of air conditioners, the energetic effect of which everyone can imagine.
    OTOH, Cuba has nearly zero regenerative exergy production.
    I believe, that the ordinary Cubans, if they were let, would happily embark on a high consumption, high emissions path of development without thinking a minute about climate change. (I would love to be corrected in this provocative view.)
    That doesn't mean, that the proof of concept, that a low emissions, egalitarian society with high education and health indices, is worthless.

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    1. What you say is correct. Cubans did not willingly embark upon a sustainable lifestyle. It was forced upon them by circumstances. There's an excellent paper (in Spanish, http://revistaeconomiacritica.org/sites/default/files/revistas/n17/07_ESMuino_Cuba_en_el_periodo_especial.pdf) about Cuba's "special period" during the '90s. The author makes the point that a voluntary transition to a sustainable lifestyle cannot be a national project. It has to be a global project, since "while there exist examples in which a consumption society is a viable project, even in far away lands, self-control and a frugal lifestyle have few possibilities of winning over a large majority."

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    2. I just want to contribute a link to an article about current Cuban energy saving and renewable energy programmes.
      https://www.greenbiz.com/article/how-cubas-reopening-could-change-its-energy-future

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  4. The Power of Community - How Cuba Survived Peak Oil

    https://www.youtube.com/watch?v=Vs6xoKmnYq8

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  5. Interesting that you come to the opposite conclusion from that of Simonetta's analysis. I suppose it boils down to using different data sets? Intuitively I am of the opinion that reallocation of resources should not result in any net increase in GHG emissions (see my comment on his blog piece).

    Regarding the phenomenon of Cuba being high in HDI and THDI yet with low carbon footprint, I think one must bear in mind this high HDI was not achieved recently when they went through tough times, but slowly built up over the course of the nation's development, including during the days of massive Soviet assistance in the form of imported energy and materials. I wonder what was Cuba's footprint then? Next question is, will they be able to sustain this high HDI while continuing to lead a forcibly low energy lifestyle? Important points to ponder if we want to use this country as a model for others.

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    1. Simonetta's analysis had two problems. It looked at country averages for CO2 emissions, not country quantile averages, and it assumed that the top 1 percent took 50 percent of global income. While the top 1 percent of adults own 50 percent of global wealth, wealth is not the same as income, and income is not the same as consumption. In the C-P dataset, the share of global consumption for the top 1 percent is 18 percent. I nonetheless thank Simonetta for broaching a very important subject.

      In 1989, the last year before the "special period" crisis, Cuba's Ecological Footprint was higher than it is today. It was about 2.75 global hectares per capita, which divided by today's biocapacity is equivalent to about 1.6 earths.

      In 1995, during the depths of the crisis, Cuba's THDI was 0.727 (about the level of China today), compared to 0.838 in 2014, but it is worth pointing out that even during the crisis years life expectancy at birth continued to grow. It went from 74.6 years in 1990 to 76.7 years in 2000.

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  6. Diego concludes:

    “… there is no reason in principle why humans cannot build a society that is more egalitarian than Cuba and just as sustainable, especially when the alternatives are dire.”

    Agreed.

    Sustainable Land Development Initiative
    Promoting and enabling land development worldwide that balances the needs of people, planet & profit for today – and future generations. http://www.triplepundit.com/author/sldi/

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  7. Diego
    I value your calculations. They begin to define a sensible framework for detailed appraisal. It would be good to see our so-called advanced economies seriously to take on board the need to discuss world trends explicitly in these terms. Looking, however, at the crowd Ugo was trying to address in Brussels we have a way to go.

    Declining carbon emission rates perhaps before mid-century (Laherrere & Aleklett) and ongoing environmental sequestration will eventually result in ‘Peak CO2’ accumulation in the atmosphere. I very roughly calculated this to be around turn of the century at >560ppm. It presumably is centuries again though before CO2 comes back down below current 400ppm. That is one rapid and massive climate forcing pulse!

    A very early reduction of 50% in CO2 emissions along the lines you suggest seems a much better idea.

    I found the following thought experiment / model useful when trying to calculate a ‘Peak CO2’ and subsequent possible decline rates thereafter. I attempted tentatively to combine Gillett’s suggested profiles with Aleklett / Laherrere numbers for total carbon released by 2100.
    Gillett et al 2011; ‘Ongoing climate change following a complete cessation of carbon dioxide emissions’

    http://sos.noaa.gov/Docs/ngeo1047-aop.pdf
    I don’t pretend to offer anything other than an amateur back-of-envelope attempt myself.
    best
    Phil

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    1. Zeebe and Zachos' simulation results (Figure 1) are that, for a 1,500 GtC (5,500 GtCO2) pulse, the global average temperature will remain above 2 degrees C beyond the year 3000. Laherrère's 2015 forecast is for a carbon pulse of about 5,000 GtCO2.

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  8. maybe I'm missing something here, but I can't quite see how say, Finland, can enjoy a lifestyle on a par with with Cuba.
    Cuba is a semi tropical island, highly fertile.
    Finland freezes in the winter---i dont think the Finns could survive on the fuel consumption of Cuba. Though of course it is likely they may have to, with all the consequences that entails.
    Cuba is/was run as a dictatorship for 50 years or so, and socialist paradise or not, people seemed to want to escape from it on a regular basis.
    The Cubans are as desperate as anyone else to hang onto their fantasy of wheeled prosperity. As a result they have become geniuses at repair and maintenance.

    It seems to me that as the world slips into energy/economic terminal decline, the cuban model of dictatorship will become the norm in an attempt to avert anarchy in the face of privation.---until that too becomes unsustainable.

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    1. Norman, you don't need all that much energy for heating in places like Finland. You get by mainly by dressing for the weather. I bet I use less energy for heat in winter in Alaska than Ugo does in Florence Italy. My monthly NG bill is around $35 in the winter.

      Finland has a larger land mass than Cuba, a relatively low population and a large fisherie. The climate is also more likely to improve there than Cuba. Finland also has more land higher above sea level than Cuba.

      The only advantage I see that Cuba has is that as an island in the Caribbean, it is a whole lot harder to get to than Finland. A few Billion people could in theory WALK to Finland.

      RE

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    2. I did not assume everyone's lifestyle was identical to that of the average Cuban. I assumed everyone spent around PPP $4,000 a year, and then I found the average emission of a bracket from $3,700 to $4,300 in the C-P dataset. That's how I arrived at an average emission of 3.14 tCO2 per person per year. Cuba is not in the dataset. There are several quantiles from several countries in the bracket. For example, Ukraine's third decile has an average consumption of $3,951 and an average emission of 4.06 tCO2. Other quantiles in warmer climates emit less. For example, Guatemala's seventh decile consumes $3,970 and emits 1.45 tCO2.

      I'm not endorsing the Cuban dictatorial model. I don't think democracy and economic equality are mutually exclusive.

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  9. You could triple Cuba's oil consumption per capita if you cut the global population down to 2 Billion. This would also save a lot of water used for agriculture. It would also cut a lot of methane release from pig and cattle ranching.

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  10. I wonder who has really been in Cuba... Having been there, I think you can't possibly compare Finland's quality of life to Cuba's. Of course if you compare Cuba's quality of life to other countries in South America, it may turn out that it is not so bad. In any case, Cuba is moving fast in the direction of mainstream capitalism. Just give them a few more years, and you'll see no more the empty state supermarkets, or the desolate state restaurants offering only chicken and little more. Having said that, I agree that a good quality of life does not necessarily mean high consumption rates of material things, although the majority of people around the world tend to think this way (and that is a BIG problem). I am not convinced though by the assumption that income = consumption. I think that the higher the income, the higher the consumption of material things UP TO A CERTAIN POINT. After all, even if you earn 1 billion dollar per month, you can't possibly drive 100 cars at the same time or go to 100 restaurants every day. That's why I feel that a flat distribution of income would actually increase consumption, but that's only my guess. Have you tried to remove the assumption income = consumption? It would be interesting also to perform a sensitivity analysis with respect to the basic parameters of the model.

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    1. Having other meat then just chicken does not necessarily mean more consumption, only more diversified consumption.
      The consumption problem is not so much one of food, but of goods, that use up raw materials and energy. More cotton for clothing. More travel. More heating resp. cooling. More manufacturing in general. More transport. &c

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    3. (In the deleted comment, I made a calculation mistake, which I'm correcting in this one.)

      I'm not saying life in Cuba is the same as life in Finland. I'm just pointing out one fact, that according to the UN the average Cuban has 11.5 years of schooling, the average Finn 10.3.

      I agree that equating consumption with income is a problematic assumption. Let's look at wealth, where the numbers are clearer than in income. The best source for wealth distribution data is the Credit Suisse Global Wealth Databook. According to that source, the richest 1 percent of adults own half of the world's wealth.

      As a thought experiment, let's assume we took the wealth of the top 1 percent, added that money to the total consumption, and then distributed all the money equally among everyone. Further, let's assume that the windfall was spent in one year.

      (Here, we have to make the assumption that the adults in the top 1 percent of the population, children included, are the same as the top 1 percent of adults, since the wealth data deal only with adults and the consumption data with the population as a whole. Also, the consumption data are in PPP dollars, and the wealth data are not. But, let's put that aside.)

      (As an aside, today one needs to have a net worth of about $760,000 or higher to be in the top 1 percent on the wealth scale.)

      In that case, going back to the C-P dataset, each person would get $28,000 a year, the per capita CO2 emission would be about 21 tCO2, and global emissions would increase 240 percent above the current level.

      But that would be a one-time affair, not a yearly thing, since after the year of redistribution, the very rich would have nothing more we could take from them.

      The year after that, assuming everything returned to normal, we would have the same consumption as before, minus that of the former 1 percent, whose capital would have evaporated. Then, each person would get $6,600, the per capita emission would be 5.53 tCO2, and global CO2 emissions would decrease 8 percent below the current level.

      Of course, much of that wealth is illiquid or backed by financial assets that may soon be worth a lot less. Like I said, it's just a thought experiment.

      The main point of the article is that, regardless of the total wealth or income, PPP $4,000 per person per year seems to be a spending level commensurate with the finite planet we have. And that does not imply starvation for everyone. In fact, it would improve the lot of 61 percent of the world's population.

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  11. A good quality of life? Regardless of the level of development (corruption?)of society, I would suggest:

    Clothing and shelter appropriate to the environment, and a full stomach more or less every day (fasting is wise for health!). The ability to exert oneself to gain these goods. Not having all these things served up for one on a plate with no personal effort required. Without this, physical death. And moral death, ie a life with no exertion.

    No fear of arbitrary imprisonment, torture or execution. No need to jump through ideological hoops. No parasites on one's back. No need to pay lip service to obvious lies. Without these goods: spiritual death.

    Cuba, though not so bad as many places, does no score very highly. To forbid freedom of speech is to destroy human dignity, much as I let my dog bark whenever he pleases, it's his right!

    Thank you for a very thought-provoking article.

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    1. Like I said, I'm not suggesting we copy the Cuban model completely. That would be monstrous. I specifically said I do not support the Castros' crackdown on freedom of speech.

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Who

Ugo Bardi is a member of the Club of Rome and the author of "Extracted: how the quest for mineral resources is plundering the Planet" (Chelsea Green 2014)