Corporate Knights’ 2014 Sustainable Asia Scorecard, released yesterday, shows that the relationship between money and carbon emissions is not as simple as some people may think. While it is true that developed countries are historically responsible for most of the emissions that have led to climate change, comparing carbon emissions to GDP shows that the situation is more complicated than the rich versus the poor.
The data reveals four types of economies. The first is high-value, high-carbon economies, such as China and India that produce a large amount of carbon per dollar of GDP. The second is low-value, low-carbon economies, such as Brunei that produce relatively small amounts of carbon per dollar of GDP.
The third is the best-case scenario: economies, such as Japan and Hong Kong that have the magic balance between high-value and low-carbon industries. Mongolia, Turkmenistan and Uzbekistan are facing the worst-case scenario, which is the double burden of a low-value, high-carbon economy.
The graph below measures how many kilograms of greenhouse gases (GHGs) each country produced per dollar of gross domestic product (GDP) in 2011.
[highcharts chart='4018' performer='ALL' measurement='Kg of GHG per dollar of GDP' order_field='Kg of GHG per dollar of GDP' order='ASC']Note: this graph only represents 28 countries out of the 50 that the United Nations considers to be part of Asia because nearly half of the countries on the ranking do not have systems in place to track their carbon emissions.
Hong Kong had the lowest GHG emissions per dollar of GDP in 2011 but had the 14th largest economy in Asia that year. Uzbekistan, on the other hand, emitted the most kilograms of emissions per dollar of GDP, but scored 22nd place on its GDP.
What allows Hong Kong to make money without burning carbon?
The government’s website says it has been moving its economy toward “higher value-added services and more knowledge-based activities,” including professional, financial and personal services. World Bank data shows that Hong Kong has been successful in achieving its goal: It derived 93 per cent of its GDP from the service and value-added sector in 2011, making it the second most service-oriented country in the world. Even when public services were not considered, the service sector still made up 83 per cent of Hong Kong’s economy in 2012.
Uzbekistan on the other hand, relies on a mix of industry (32 per cent), service (48 per cent) and agriculture (19 per cent) to fuel its economy. The Uzbek government is the world’s sixth largest producer and fourth largest exporter of cotton. Combined with gold, oil and gas, these industries make up 60 per cent of its exports and a large share of its GDP. Even though coal and oil only made up a small fraction of its energy mix in 2012, it still emitted more carbon per dollar than any other Asian country that reported its GHG emissions.
In other words, Uzbekistan’s economy is more carbon-intensive compared to other countries in Asia that are producing more money from each ton of carbon burned, says Michael Yow, lead analyst at Corporate Knights Capital.
This means that countries that have mastered the high-value, low-carbon mix in their economies have a head start when it comes to meeting international climate change goals. It also means that they may not have to surrender as much of their prosperity in order to mitigate and adapt to climate change.
It could also be easier for countries with small GDPs and corresponding low emissions to adapt to climate change with funding from richer countries. But countries like Uzbekistan, which are caught in economic and emissions purgatory, could have a particularly hard time steering their economies toward a low-carbon future.
