The environmental consequences of carbon dioxide emissions are clear; it contributes to over three-quarters of global greenhouse gas emissions,1 exacerbating climate change and its innumerable consequences. Action needs to take place now, but truly taking action in an ever-expanding economy has proven and will continue to be a substantial hurdle. For this reason, moving forward, understanding the specific economic and environmental factors behind CO2 emissions is key. Enter the Kaya identity.
The Kaya Identity
The Kaya identity, developed by energy economist Yoichi Kaya in 1990, is a mathematical representation of what drives carbon dioxide emissions. Simplified, it looks something like this:
Emissions = Population × GDP Per Capita × Energy Intensity × Carbon Intensity
Each of these four factors describes an aspect that directly affects emissions. And understanding how this occurs allows us to better gauge the problem of CO2 at the broader, macro level.
Population
The first component is fairly straightforward; it is the population that contributes to the emissions that we want to assess. If we’re looking at global emissions, that’s going to be the world population.
It seems, at first glance, obvious that the larger the population, the bigger the economy and the more it will pollute. However, population is generally not a key factor in emissions because of the tremendous carbon footprint imbalance between people around the world, largely based on a country’s development. Despite decreasing birth rates, developed nations often pollute significantly more than less industrialized ones, with Canada, for instance, having some of the world’s highest per capita CO2 emission levels.2
Although the population is important, it makes much more sense to look at average income in regions than strict population sizes.
GDP Per Capita
Gross domestic product per capita, at its core, measures the average income of an individual as a contributor to the economy in a single year. In essence, this measures prosperity.
Prosperity is strongly correlated with CO2 emissions, making this factor particularly significant, since richer countries generally have higher levels of industry and manufacturing, energy consumption, and consumerism than poorer ones. Inevitably, through the processes of industrialization and high energy use to power cities, factories, and other infrastructure, society calls upon fossil fuels to meet this energy demand.
Conversely, if the economy shrinks and becomes less prosperous, even temporarily, decreasing GDP, carbon emissions similarly decrease. A few months ago, as governments worldwide shut down economies almost completely due to COVID-19, daily global CO2 emissions levels dropped by roughly 17%.3
Energy Intensity
Energy intensity measures how much energy we need for every unit (e.g., dollar) of GDP—in other words, how much energy is required to fuel each tiny slice of the economy. This is essentially measuring how much energy we’re using, relative to the size of our economy.
Unlike the first two factors, which are difficult to meaningfully influence, lowering energy intensity is a major focus for cutting emissions—we have to be more energy efficient in economic activities to decrease emissions. Generally, there are two ways to do this: one, being more energy efficient by using more efficient technologies in goods production and consumption; or two, transitioning economies away from industry and manufacturing, which are intensive on energy production, and toward a service economy, based in, for example, technology, retail, and professional services.
Carbon Intensity
Finally, the last factor is carbon intensity, measuring the amount of carbon dioxide emitted by every unit of energy we use. With more renewables and green energy, carbon intensity decreases, decreasing final CO2 emissions.
Though transitioning to green energy is and should be the primary method of decreasing carbon intensity, the way we produce and use current energy also plays a role. Right now, where a complete upheaval of the modern energy complex—which is reliant on fossil fuels—is difficult to achieve, improving technologies to ensure that we extract and burn fossil fuels as cleanly as possible will certainly help.
Therefore, overall, from the four total factors, carbon and energy intensity are the two most crucial elements in controlling emissions.
Where Do We Go From Here?
The Kaya Identity is not an accurate model; it’s just meant to be a guide to structure our thinking of carbon dioxide emissions. Numbers are generally not used in the formula to calculate the actual level of CO2 emissions, instead, this structure helps to frame the changes in technology with the changes in society and the economy.
As global populations continue to grow (increasing population) and as developing countries develop (increasing GDP per capita), we should ask ourselves, by how much do we need to decrease energy and carbon intensity to offset these increases and go beyond that to achieve zero emissions? Or perhaps more crucially, if we’re developing these technologies and capabilities, how do we implement them? How does the entire world implement them?
The goal of the Kaya Identity is not to transform what we already know about greenhouse gas emissions or climate change. Rather, it is to take a step back and see a different, perhaps broader, perspective of what we already know.
Sources: 1: Global Greenhouse Gas Emissions Data / 2: Canada CO2 Emissions Data / 3: Temporary reduction in daily global CO2 emissions during the COVID-19 forced confinement