Lecture 6: The Emissions Equation

This lecture begins with the emissions equation, an arithmetic identity relating carbon emissions (C) to energy use (E), energy services (S), and aggregate output (G). The equation takes the form

To reduce emissions, it is necessary either to reduce one of the three ratios — C/E (carbon intensity of energy), E/S (inverse of energy efficiency), or S/G (energy service share of GDP) — or to reduce GDP. We discuss options for each of these in turn…