Does more energy use increase the level of human development?

In 1990 the United Nations Development Programme published its first version of the Human Development Index (HDI) to provide a measure that distinguishes economic growth (GDP/year) and affluence (GDP per capita) from overall well-being. The HDI focuses on three important goals of development: access to health, education, and goods. Specifically, the HDI is a composite indicator consisting of (i) life expectancy, (ii) education (mean years of schooling completed and expected years of schooling upon entering the education system), and (iii) per capita income indicators. Each country is scored on a 0 to 1 scale reflecting a low to high level of development.


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As measured by the HDI there are enormous differences in the quality of life among countries and regions. Countries with very high human development ( HDI > 0.8 ) are concentrated in parts of Europe and North America, while countries with low human development (HDI < 0.55) are concentrated in parts of South Asia and sub-Saharan Africa. Countries with similar HDI scores exhibit very different results among the health, education, and income components. For example, the United States (0.921) and Japan (0.925) have very similar HDI ranks, but life expectancy in Japan (83.7 years) is notably higher than in the United States (77.2 years). In the HDI methodology, that difference is countered by the much higher per capita income in the United States ($64,765) compared to Japan ($42,274). At the other end of the development spectrum, Djibouti ($5025) has the highest per capita income among countries with low human development, but its HDI ranking (0.509) suffers from extremely low levels of educational attainment.


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Countries with low levels of human development (HDI < 0.5) use much less energy than countries with medium and high levels of development. Raising incomes and building robust education and healthcare systems requires energy. But note that at low levels of development, small increases in energy use per person produce dramatic increases in the HDI. Play the animation and watch the countries in the bottom left of the chart. Note that over time, their level of development generally increases with small increases in energy use. Also note the pronounced overall increase in the HDI since 1990 for many countries in the world. 


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A country can move from a very low stage of human development using 1 to 5 GJ per capita to a medium stage of development with an increase in energy use to just 10 GJ per capita. An increase to 20 to 40 GJ per capita generally moves the country into the category of high human development. Beyond that level of energy use, each additional unit of energy used per person produces smaller gains in the HDI. Economists call this diminishing returns to energy use.

At very high levels of human development (HDI) the relationship falls apart. Countries with nearly identical HDI scores use vastly different quantities of energy. Denmark (HDI = 0.94) uses 122 GJ per person while Iceland (HDI = 0.95) uses 672 GJ per capita. Here is a second example. Turkmenistan and Australia both use about 239 GJ per capita. But the HDI score for Turkmenistan ( 0.71 ) barely passes the threshold for a high human development country, while Australia’s HDI score (0.94) is among the highest in the world.


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Can high rates of energy use be reduced without sacrificing human development? There is ample evidence that in most countries improvements in energy efficiency are possible without reductions in quality of life. Policies, market incentives, and lifestyles require realignment to realize the potential of energy efficiency.

At high levels of energy use per capita (> 100 GJ per capita), exactly what purpose is served by increasing energy use if it does not improve quality of life as measured by the HDI?. The potential for energy efficiency improvements aside, we cannot avoid the obvious conclusion that lifestyles in many countries contribute to what can reasonably be described as extravagant use of energy to support high consumption lifestyles. 

High levels of energy use per capita correlate with the use of land, water, materials, the release of waste, and the emission of greenhouse gasses and other pollutants. Disparities in per capita energy use are one manifestation of inequity within and among countries. The reduction in energy use in high consumption lifestyles will create more environmental and quality of life space for people trying to climb the human development ladder.

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