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carbon-intensive fuels (e.g., coal) toward less carbon-intensive fuels
(e.g., natural gas) and to renewable and nonfossil sources (e.g., nuclear
and wind).
Figure 3 illustrates the declining carbon intensity of economic ac-
tivity for the United States, for which we have reasonably good data
going back over a century. It is a fascinating picture. The fi gure shows
that the carbon intensity of the U.S. economy increased until around
1910 (this period was the fi rst age of coal). Since 1930, the CO 2 -gross
domestic product (GDP) ratio has fallen at an average rate of 1.8 percent
per year.
While the carbon intensity of production is declining, it is not de-
clining fast enough to reduce total CO 2 emissions, either for the world
or for the United States. Over the last eight decades, real output in the
United States has grown at an average rate of 3.4 percent per year, while
carbon intensity has declined at 1.8 percent per year, which means that
CO 2 emissions have grown at 1.6 percent (3.4 − 1.8) per year. Although
high-quality data for the world as a whole are not available, the best
estimates indicate that, over the last half century, global output grew
at an average rate of 3.7 percent per year; the rate of decarbonization
was 1.1 percent per year; and CO 2 emissions grew at 2.6 percent per
year.
So here is the CO 2 problem in a nutshell: Countries around the
world are growing rapidly (aside from some chronically poor perform-
ers, and putting aside recessions as painful but temporary setbacks).
And they are using carbon-based resources such as coal and oil as the
main fuel for their economic growth. The effi ciency of energy use has
improved over time, but the rate of improvement is insuffi cient to bend
down the emissions curve. Hence, total CO 2 emissions continue to rise.
MODELS AS A TOOL FOR UNDERSTANDING
Let's step back a moment to review the terrain. We have seen that,
because of economic growth and increased use of fossil fuels, humans
are putting ever-larger quantities of CO 2 into the atmosphere. The growth
of CO 2 concentrations is confi rmed by scientifi c monitoring around the
 
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