Elasticity of Carbon Dioxide and Economic Growth

Now for a second round of applying some basic economics to anthropogenic climate change.

Economists advocate figuring out how sensitive one thing is to another by calculating elasticity: a ratio of percentage changes.

Why do this? In short, because it prevents the sort of mistakes that alarmists make when pointing at data on climate change.

Data on real world GDP is easy to come by. From 1960 to 2000 there was about 500% growth.

Data on carbon dioxide concentration is also easy to come by. Over the past 50 years it has increased from about 315 to 370. That’s a change of about 17%.

Very roughly, the elasticity of atmospheric carbon dioxide concentration with respect to real GDP growth is the ratio of those two percentages: 17%/500% = 0.03.

This is close to zero. Economists call that inelastic.*

Really inelastic. Elasticities for cigarettes with respect to price 10 to 20 times higher.

That’s right: smokers will change their consumption in response to price increases far more readily than the planet will change its atmospheric carbon dioxide concentration in response to our economic growth.

So … if most of us know we can’t change smokers, why are some claiming that economic growth is the lever to be adjusted to change in atmospheric carbon dioxide concentration?

This is why it’s so important to invoke possible non-linearity or hysteresis in climate processes … along with the all important claim that there will be bigger effects mañana.

* There’s a lot of quibbles in the details and method, but none of them change the fact that we’re looking at nearly perfect inelasticity.

P.S. This post is motivated by an oldie but goodie from Bigwig at Silflay Hraka.

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Comments

[Dave Tufte]

Unfortunately, that last link now gets misdirected from the once great Silflay Hraka team blog to a site about ovarian cancer. Pity.