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April 16, 2007

Environmental Math Test

An article on the front page of today’s Wall Street Journal contains the following paragraph:

“The result of these and other policies is that Denmark's energy consumption -- the amount of fuel it uses to heat its buildings, drive its cars and power its economy -- has held stable for more than 30 years, even as the country's gross domestic product has doubled, according to the International Energy Agency, a Paris group that tracks energy prices and policies. During the same period, energy consumption in the U.S. has risen 40%, while its GDP has quadrupled….”

OK, class.  Assuming that the facts cited above are correct, which of the following conclusions can we deduce from them:

  1. Danes are more energy efficient than Americans.
  2. Americans are more energy efficient than Danes.
  3. Over the last 30 years, Denmark has made more progress than the United States in making its economy energy efficient.
  4. Over the last 30 years, the United States has made more progress than Denmark is making its economy energy efficient.
  5. None of the above.

Answer:  I’d give full credit for either d or e; the statement has nothing to do with absolute energy efficiency so a and b are not supported. Although the general tenor of the article suggests c, this is clearly not the case. By doubling GDP and keeping energy consumption constant, Denmark has reduced the energy content of each unit of GDP by 50%. By quadrupling GDP and only increasing energy consumption by 40%, the United States has reduced the energy content of each unit of GDP by 65% (100 – 140/4)! Hmm…

So the Danes had only half as much increase in GDP as the United States (a reasonably good proxy for average standard of living) and also, despite draconian and expensive government actions, only had 75% as much decline in energy use per unit of GDP than the United States. Doesn’t sound like their program should be emulated here or anywhere else.

To complicate this analysis even more, Danes do use less energy per unit of GDP than the US and per person (according to the WSJ article) so they started from a smaller base. I don’t know where their GDP per capita was compared to the US 30 years ago but suspect that it was lower also. You could argue that they had less inefficiency to squeeze out than the US so that their progress is more noteworthy.

In fact, the whole argument is pretty silly if you try to compare whole economies.  Some economies make products which, on the average, have a higher energy content than others; that’s neither good nor evil; it’s just a fact. Energy itself is not fungible; domestic sources cost an economy less than imported ones; buying oil arguably contributes to global instability; burning hydrocarbons arguably contributes to climate change.

There are two major global problems which we should be trying to solve related to energy:

  1. pouring trillions of dollars into the unstable Middle East and being dependent on energy from this reason has already intensified the risk of and the scale of global conflict;
  2. pouring tons of greenhouse gasses (not just carbon dioxide) into the atmosphere has accelerated the existing “natural” trend of post-glacial warming and may already have tipped us into environmental change which is catastrophically rapid.

Conservation of the offending energy sources is one part – but only a part – of the solution.  We need to make hard and rational decisions about the cost of shifting energy sources and recognizing the actual costs of using various fuels.  It’s discouraging when even the WSJ, which usually does its math right, makes the wrong (although politically correct) inferences from the numbers it presents.

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