Walter J. Hecq1
Energy is an important resource for several different reasons: the dissipation character associated with its use, the pollution associated with its consumption, and the fact that economies are highly dependent upon it. A few conventional indicators such as energy requirements, energy intensity, and CO2 emissions have been analysed in order to assess the position of Belgium in this field over time and in comparison with other countries (Hecq, de Villers, Fierens 1995; Hecq et al. 1994; Hecq 1991). The first results of this analyses point to a weakness involving the static character of most of the indicators used until now, i.e. the indicator values were only representative of a step towards the development of a country. They provided no information on trends showing whether or not the indicators were related to driving forces, state or response concerns. To address this problem, a consensus is emerging 'towards aggregated measures for specific issues' (The World Bank 1995).
Consequently, the idea of using dynamic indicators appears to be useful for the problem mentioned above. By dynamic, we mean an indicator which takes intrinsic account of a trend (e.g. environmental parameter progress in relation to an economic one). The notion of development is taken into consideration by using such indicators.
The goal of this short paper is to show some of the research results on such indicators. For this purpose, the case of inter-linkages between economic performance (growth rate) and energy resource requirements per annum and/or yearly emissions of a greenhouse gas (CO2) has been chosen.
METHODS AND RESULTS
The idea is to use dynamic indicators, such as elasticities, in order to go beyond the use of the indicators mentioned above. The use of dynamic indicators allows for the measurement of how energy consumption and CO2 emissions vary with the economic growth rate, thus giving a dynamic view of the performance trends of a country in the more efficient use of energy or the cutting of CO2 emissions.
Elasticity (e) is given by: e = DE / E / DY / Y
where D E is the difference in primary energy consumption over two consecutive years, E the energy consumption for a first reference year, D Y is the difference in domestic income over two consecutive years, and Y is the domestic income of the first reference year. Elasticity can also be expressed in other forms.
When time series are used for calculating these indicators, a problem arises concerning the primary energy requirement values. These values are sensitive to the yearly average outdoor temperature (building heating). This situation creates interference which makes the calculation difficult.
Consideration of outdoor temperature changes
In the tertiary sector, energy consumption for heating (e.g. household, commercial, etc.) represents 25% of the primary energy requirements of Belgium. This consumption varies from one year to another according to temperature changes (Figure 1) and constitutes an erratic component in the figures on domestic energy consumption. It also has an effect on the elasticities calculated. To remedy this problem, weighting must be introduced. One approach is to keep the number of degree days2 constant in order to reduce the temperature effects on energy consumption.
Consideration of other variations
The evolution of dynamic indicators, calculated from Eursostat (1980-1993) and OECD (1991, 1993), is shown in figure 2. As shown, the efficiency of energy requirements for economic growth (e.g. primary energy consumption to income elasticities) are again subject to strong variations during the whole period, especially at the beginning. Conjunctural and structural factors are mainly responsible for these movements. They were influenced at the beginning of the last decade by the effects of the oil crises which slowed down the growth rate, and led to energy savings and substitution due to the high prices of oil and the closing down of heavy industries.
The same configuration used for energy can be observed in figure 3 for the yearly CO2 emission -income elasticities. In this last case, the phenomena are enforced by the consequences of energy policies, particularly by the high rate of development of nuclear power plants which do not emit CO2.
To overcome the second problem of erratic changes, observed at the beginning of the 1980's, we used, among others, the procedures proposed by Ang (1991) to isolate trends.
CONCLUSION
In both cases, the results show a slow increase in elasticities followed by a decrease during the period. If we focus on the second part of the period analysed, it can be seen that the elasticity values are lower than the threshold limit of one, which suggests that the growth rate of energy consumption, or yearly CO2 emission is lower than the economic growth rate. This can be considered as a good value for a dynamic indicator of sustainable development.
To summarize, dynamic indicators seem to exhibit the potential for taking into account the efficient use of unrenewable resources and their residues as they relate to the economic growth rate (e.g. energy and greenhouse gases). Further investigations are required to assess the interest in this type of indicator for applications in other environmental fields.
NOTES
1 The author would like to thank J. de Villers, A. Fierens and S. Reeves for their contribution and advice.
2 The concept of degree day is based upon the fact that economic agents begin to heat below the threshold of 16.5 degrees Celsius minus the average daily temperature or equal to zero, in cases where the average daily temperature is above 16.5 degrees Celsius. There is a linear relation between energy consumption and the number of degree days as it is observed from the measurement relating to the distribution of natural gas for heating in buildings.
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