# Where our CO2 emissions are coming from

In the summer of 2019, I published the only chart we should be looking at, where I plotted global carbon emissions. Three years later I think it’s time to take another look at this data.

It turns out, not much progress has been made in terms of worldwide CO2 emissions (aside from a short COVID-19 decline in 2020). In fact, the estimated global CO2 emissions in 2022 reach 36.6 GT CO2/yr, a new all-time high, leaving less time to reach our target to limit warming to 1.5 degrees Celsius.

This is a very frustrating picture. How can it be that despite everything we’ve been doing, global CO2 emissions still reach new record-level highs?

In my previous blog post, I looked at how this number breaks down by region, but that didn’t help me understand why emissions keep increasing, and why it’s so hard to reduce them. In fact, just looking at country comparisons can be outright misleading.

The problem with CO2 emissions is that they are not just dependent on population. In fact, they are dependent on four major factors. The formula below describing this relationship is called the Kaya identity, named after the scientist who developed it in the early 1990s, Yoichi Kaya:

$CO2 = Population \cdot \frac{GDP}{Population} \cdot \frac{Energy}{GDP} \cdot \frac{CO2}{Energy}$

In plain English, it says that our CO2 emissions are a product of

• how many people we are (population),
• how wealthy we are (GDP per capita),
• how much energy we need for that wealth (energy intensity),
• and how much stuff we have to burn to get that energy (carbon intensity).

For instance, when comparing Germany and the United States, it can be hard to understand why Germany has managed to reduce its total CO2 emissions over the past 50 years while the U.S. has not.

Both countries have more than doubled their per-capita GDP (getting richer and richer), and both have seen similar developments in their energy intensity. Germany has been slightly better at getting its energy from more renewable sources, but the key difference is in population growth.

Germany has seen a modest population growth of 6%, which we have been able to “offset” through improvements in energy intensity and carbon intensity, while the United States has seen a population growth of 66%.

We can use this view in other countries as well. Looking at China, we see a country that has seen very similar developments to the United States in terms of population, carbon intensity, and energy intensity. But since its GDP per capita has grown by a factor of 36(!), China’s CO2 emissions have also skyrocketed.

What this shows us is that GDP per capita is a very significant influence on our CO2 emissions. This makes sense since it is mostly a measure of how much stuff we produce, ship around the world, and sell for profit.

That brings me back to Germany. Yes, we have been able to reduce our CO2 emissions over the past 30 years, to a degree where it may even look like we’re “on track” to reaching our set target of net zero by 2045.

But the obvious problem here is that we can’t reduce energy intensity and carbon intensity forever. Germany is already in the lower quadrant of countries by energy intensity and carbon intensity, meaning it has “less room” for improvement.

Reducing both requires investing in new technologies, re-shaping entire industry sectors, creating hundreds of thousands of new jobs, and training a generation of workers. In other words: it may take more time than we have!

So in the meantime, I think the only viable choice we (as rich countries) have for getting our emissions down fast is to shrink our economies! We have to produce less, import and export less, buy less stuff, work fewer hours, and instead take better care of ourselves and the things we own.

During the pandemic, we’ve seen what is possible if we all work towards a common goal. Now we must do it again.

Note: This is a cross-post of my article on our company blog. Thanks so much to Rose and Veronica for editing my writing.