Full Study: Standard of Living Versus Energy

STANDARD OF LIVING IN RELATION TO ENERGY

SUMMARY

1. A study of 133 countries shows that a high standard of living is consistent with high energy usage. It makes no difference whether the energy is wasted or used efficiently. Presumably, the normal logic of avoiding waste is automatically effective.
            2. High energy producing countries, which have a surplus for export, are also among the highest in standard of living.
            3. Another factor for increasing standard of living is a high concentration of foreign bank accounts. However, the effect is limited by population, so that only small countries such as Luxembourg are appreciably affected.
            4. The study also implies that industrialization, with the export of manufactured goods, also develops a high standard of living.

INTRODUCTION

It was previously suspected that a high standard of living would require a high usage of energy, or conversely, high energy usage would give a high standard of living.

Gross Domestic Product is the value of goods and services produced within a country. Gross National Product is GDP plus net income received by residents from non-resident sources.

ENERGY CONSUMPTION

Data was collected on the Gross Domestic Product (GDP) per capita and Energy Consumption per capita for 133 countries. The countries were divided into three segments; Top GDP, Middle GDP, and Low GDP. For each segment, the average was determined, as well as the spread. The data are presented in the following table:

GDP VERSUS ENERGY CONSUMPTION

GDP Countries	Average GDP per Capita (in US $) (1)	GDP Per Capita Range (in US $)	Average Energy Consumption Per Capita (in US $) (2)	Energy Consumption Per Capita Range (in US $)
Top 10	73026	113500 to 50400	4301	7600 to 2200
Middle 10	6768	8500 to 5800	948	1700 to 300
Lowest 10	687	1230 to 220	37	67 to 6

           

References & Notes:

(1) http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita

(2) Calculated from: http://en.wikipedia.org/wiki/List_of_countries_by_energy_consumption_and_production;                                  Energy Consumption $/Capita = Trillions of BTUs consumed / population / 5.8 million BTUs per barrel x                                  $80 per barrel

It is apparent that average GDP's and Energy Consumptions for the three segments confirm the supposition.

ENERGY PRODUCTION

10 HIGH GDP COUNTRIES AND ENERGY PRODUCTION
	Gross Domestic Product per Capita (GDP in US $) (1)	Total Energy Production (in Trillions of BTUs) (2)	Population in Thousands (3)	Energy Production per Capita (in US $) (4)
Luxembourg	113533	3	512	81
Norway	97255	9941	5021	27309
Qatar	93700	4476	1699	36338
Switzerland	81161	640	7952	1110
United Arab Emirates	67008	7915	8264	13211
Denmark	59928	1114	5585	2751
Australia	59928	11881	22660	7232
Sweden	56956	1403	9495	2038
Canada	50436	19422	34846	7688
Netherlands	50355	2657	16736	2190

            Since GDP is related to Energy Consumption, Energy Production might also be a factor. For that, individual country data for the top 10 GDP countries seems appropriate.

References & Notes:

(1) http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita

(2) http://en.wikipedia.org/wiki/List_of_countries_by_energy_consumption_and_production

(3) http://en.wikipedia.org/wiki/List_of_countries_by_population

(4) Energy Production $/Capita = Trillions of BTUs produced / population / 5.8 million BTUs per barrel x $80 per barrel

In comparing Columns 2 and 5 (GDP per Capita and Energy Production per Capita, there is apparently little correlation. However, closer inspection shows that Norway, Qatar, and United Arab Emirates have significantly higher Energy Production than the other countries. It might then be appropriate to draw a comparison of these countries on the basis of Energy Surplus, which is the difference between Energy Production and Energy Usage.

ENERGY SURPLUS

10 HIGH GDP COUNTRIES AND ENERGY SURPLUS

	Gross Domestic Product per Capita (GDP in US $) (1)	Population in Thousands (2)	Energy Production per Capita (in US $) (3)	Energy Consumption per Capita (in US $) (4)	Energy Surplus per Capita (in US$) (5)
Qatar	93700	1699	36338	7574	28763
Norway	97255	5021	27309	5269	22040
United Arab Emirates	67008	8264	13211	4700	8511
Australia	59928	22660	7232	3728	3504
Canada	50436	34846	7688	5444	2244
Denmark	59928	5585	2751	2161	590
Switzerland	81161	7952	1110	2173	-1063
Netherlands	50355	16736	2190	3356	-1166
Sweden	56956	9495	2038	3271	-1233
Luxembourg	113533	512	81	5334	-5253

Reference:s & Notes

(1) http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita

(2) http://en.wikipedia.org/wiki/List_of_countries_by_population

(3) Energy Production $/Capita = Trillions of BTUs produced / population / 5.8 million BTUs per barrel x $80 per barrel

(4) Energy Consumption $/Capita = Trillions of BTUs consumed / population / 5.8 million BTUs per barrel x $80 per barrel

(5) Energy Surplus per Capita = Energy Production per Capita - Energy Consumption per Capita

            Sorting on the basis of Surplus Energy, clearly shows that Qatar, Norway, and United Arab Emirates have the highest Surplus Energy and also have high GDP. Luxembourg and Switzerland are out of line with Deficit Energy and still have high GDP. However, we can dispense with the three highest Surplus Energy countries, on the basis that they or their high GDP to energy exports.

FOREIGN DEPOSITS

Another obvious source of income for various countries is foreign bank accounts from individuals and corporations desiring to shelter their assets or defer income tax payments on profits generated from foreign operations. The advantages to countries receiving such deposits are fees and taxes.

Matador Network has a list of the 10 best countries for such foreign banking. Andorra, Barbados, Belize, and the Cayman Islands are among the 10, but are not included in our study of 133 countries. Therefore, we will dispense with those four. The remaining six countries are included for analysis.

BEST COUNTRIES FOR FOREIGN BANKING

http://matadornetwork.com/life/ten-best-countries-to-set-up-an-offshore-account/

	GDP per Capita (in US $)	Population In Thousands	Notes
Luxembourg	113533	512	Internet banking
Switzerland	81161	7952	EU pressure and high minimums
Denmark	59928	5585	Difficult but possible
Malta	21028	418	Excellent international service
Mexico	10153	112337	Many Mexican nationals in US
Panama	8514	3406	Canal

No data could be found on foreign banking deposits, but some suppositions can be made. Assume that each country increases its GDP by $1 billion from foreign deposits.

FICTITIOUS GDP WITH ADDED DEPOSITS

6 BEST COUNTRIES WITH ADDED DEPOSITS

https://www.cia.gov/library/publications/the-world-factbook/geos/da.html

	Gross Domestic Product per Capita (GDP in US $) (1)	Population In Thousands	Total GDP per Country (in Billions US $)	Total GDP with Added one Billion US $	Fictitious GDP per Capita with Added 1 Billion US $	Fictitious GDP (per Capita per Capita x 1000)	Foreign Account Notes
Luxembourg	113533	512	58.1	59.1	115430	225.4	Easy with Internet banking
Malta	21028	418	8.8	9.8	23445	56.1	Excellent international service
Denmark	59928	5585	334.7	335.7	60107	10.8	Difficult to establish foreign account
Switzerland	81161	7952	645.4	646.4	81288	10.2	Has EU pressure to conform and high min. deposits
Panama	8514	3406	29.0	30.0	8808	2.6	Has separate Canal revenue
Mexico	10153	112337	1140.6	1141.6	10162	0.1	Many Mexican nationals in US desiring foreign account

            For this analysis, the strong effect of country population was also considered by establishing another fictitious term; Fictitious GDP per Capita per Capita. This is the sixth column of the above table and is sorted in decreasing value.            Comparing the relative positions of Real Country GDP's with fictitious GDP's (Column 2 versus Column 6), Luxembourg clearly holds a first-place position.

Panama is out of sync, and this may be related to the fact that it has significant revenues from the Canal operation.

The Fictitious GNP of Mexico remains low, probably because of its high population.

Malta seems to be an anormally.

The Fictitious GDP's of Denmark and Switzerland did not change significantly with the addition of the $1 billion, because they have relatively high populations of this group. They also likely make it into this group of 10 Highest GDP's, because they are industrialized with significant exports.

CONCLUSIONS

            1. A standard of living in a country (GDP per Capita) is consistent with high energy consumption per capita. It follows that any energy increase per capita, leads to a higher standard of living.

            2. Since the study was on Standard of Living versus Total Energy Consumption, no consideration was given to the various forms of basic energy (coal, oil, gas, wind, solar, bio, etc.) nor to their relative costs. Energy Consumption also included wasted energy, as well as energy which was used efficiently.

            3. High Surplus Energy countries are also consistent with high GDP, presumably from export.

4. Foreign banking can also have a considerable effect on GDP, but large effects are limited to countries with small populations.

            5. Although not included in the study, industrialization with finished product exports implies a high standard of living.