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One man's carbon is another man's bread: understanding differences in the structure of carbon emissions

By Lee Schipper, Scott Murtishaw and Fridtjof Unander - posted Friday, 21 July 2000


I. Introduction to Indicators

Energy indicators measure the performance of energy use or emissions in much the same way stock indices measure economic performance. The indicators relate energy or emissions – broken down by activity, end-use, or output – to a measure of that activity, end-use, or output. In this sense, the IEA energy indicators rely on two other indicators – monetary and physical – to measure two kinds of activity, economic and human. The two types of activity are distinct because the latter is not registered directly in national accounts or other economic statistics. This is important because an increasing share of emissions arises from household energy use and private transportation.

Indicators are not data. They are derived from basic data on the structure of economic and human activity, combined with measurements or estimates of the energy used for those activities. Using standard coefficients, quantities of final energy use are converted to quantities of carbon emissions. By relating energy use or emissions to activity, we normalise energy use and arrive at intensities or intensive quantities. Intensive quantities are more comparable over time or among countries than are extensive or un-normalised quantities. This is important, because in some contexts, total energy use or total carbon emissions are less interesting than either of those quantities normalised to a key parameter like population or GDP.

II. Motivation: A Closer Look Beyond Energy

The fundamental problem that motivates the IEA effort is that the most widespread indicator of energy use — the ratio of energy use to GDP — does not really measure anything.

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Since the denominator represents many diverse activities, the ratio cannot really measure efficiency. Since the numerator aggregates many fuels and stirs electricity into the mix as well, even the notion of "energy" is confused. Moreover, the mix of activities generally varies from country to country and over time. In response we have decided to disaggregate energy uses and activities and to calculate intensities where numerators and denominators match as closely as possible.

The most desirable level of disaggregation depends on the questions that have to be answered. For the energy technologist, the housing expert or the industrial engineer, dozens of different energy uses have to be separated out so each key technology and energy intensity can be identified. Many policy experts need to know how various energy technologies, or energy-saving programmes have affected energy use. Since these are almost invariably aimed at specific energy uses, energy uses must be disaggregated.

Energy Intensities

Measuring "efficiency" is far more difficult than it seems to be because we rarely observe the physical quantities that define an "efficiency" in the engineering sense and we rarely measure or estimate the economic inputs and outputs that define economic efficiency. To avoid this confusion we introduced energy intensities, defined as energy use per unit of activity or output for a large number of economic and human activities. These intensities can be aggregated under certain conditions, but should not be confused with the ratio of energy use to GDP, which unfortunately is still used widely to measure "efficiency".

Intensities reflect behaviour, choice, capacity or system utilisation and other factors besides just engineering ones. Observers can of course debate whether larger or smaller cars are "better" from the standpoint of emissions but we have learned that in this debate it is better to separate the normative "better/worse" from the objective "more/less", "higher/lower" or "rising/falling".

Data Availability in the IEA

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The IEA used many official data sources unofficially to produce its first book of energy and CO2 indicators, "Indicators of Energy Use and Efficiency". Since then, the IEA role has been to work with Member countries to assure comparability and compatibility of data, to deal with issues of data reliability and continuity and to help countries with less experience develop the more disaggregated views from available data. Gradually we hope to improve our efforts by working with the OECD and others to develop questionnaires to be sent to Member governments. This is already done for industrial statistics.

The Importance of the Structure of Economic and Human Activities

The IEA has not limited its efforts to measuring energy uses and energy intensities. Measuring the underlying structure of activities for which energy is used is equally as important. The evolution of this structure of the economy and human activities can itself cause changes in energy consumption that mimic or offset changes caused by changes in energy intensities. Governments need to know with some degree of accuracy how each component has affected energy use. Energy policy analysts want to know which changes in energy use are directly caused by, or related to, energy policies, energy prices, and energy technologies, and which are largely attributable to the other factors which we called "structural" components above. Thus energy policies may have affected how much energy is used to heat a square metre of an average home. Housing and fiscal policies, on the other hand, may explain why homes are of a given size. With some skill in indexing or other mathematical devices, we can produce measures of the structure of activities or output.

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This is an edited extract of a paper presented to the 23rd Annual IAEE International Conference: Energy Market and the New Millennium: Economic, Environment, Security of Supply, Hilton Sydney, Australia, 7-10 June 2000.



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About the Authors

Lee Schipper is Staff Senior Scientist and co-leader of the International Energy Studies group at the Lawrence Berkeley National Laboratory and is on leave to the International Energy Agency.

Scott Murtishaw is attached to the Energy Analysis Department, Lawrence Berkeley National Laboratory, Berkely, California.

Fridtjof Unander is attached to the International Energy Agency.

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