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Energy Research & Social Science 42 (2018) 184–192 Contents lists available at ScienceDirect Energy Research

Contents lists available at ScienceDirect

Energy Research & Social Science

journal homepage: www.elsevier.com/locate/erss

Science journal homepage: www.elsevier.com/locate/erss Original research article Inequality and energy: Revisiting

Original research article

Inequality and energy: Revisiting the relationship between disparity of income distribution and energy use from a complex systems perspective

Fouad Khan a , b , , Paul Heinecker c

a Central European University, Nador utca 9, Budapest 1056, Hungary

b WWF Luc Homann Institute, Avenue du Mont-Blanc 27, 1196 Gland, Switzerland

c University of Applied Science, Weesperzijde 190, Amstelcampus, 1097 DZ Amsterdam, Netherlands

T
T

ARTICLE INFO

Keywords:

Disparity Inequality Energy consumption eciency Complex systems National economics Urban development

ABSTRACT

To consider the impacts of economic inequality on energy consumption e ciency we need indicators that take into account the complexity of the economic and energy systems. We also need decision support tools that help incorporate such indicators into policy analysis. Drawing inspiration from urban studies and ecology, in this paper we develop a scaling indicator for income disparity in national economies that is a measure of system complexity and does not presuppose any distribution as ideal. The scaling indicator is calculated for 2010 in- come distribution data for countries. We show that rising disparity measured using this indicator calculated; a) for distributions of incomes across consecutive twentieth percentiles of population in national economies and; b), for distributions of population density in census blocks in metropolitan statistical areas a ects energy con- sumption eciency in a diametrically di erent manner in cities and nation states leading to a higher urban carbon footprint while increasing energy e ciency nationally. The di erent nature of these two systems explains the results. We then modify tools for visualizing complexity from urban studies and ecology to explore the correlation between income disparity and energy eciency in national economies.

The adverse impacts of inequality in economic systems especially on human well-being have been extensively documented in literature going back more than three decades [1 ]. Recent social, neurological [2 ] and even evolutionary [3 ] evidence points toward the necessity for addressing the rising inequality in economic systems. Literature that presents evidence for rising inequality in economic systems especially in developed nations post World War II [4 ,5 ], has reinvigorated the debate on income inequality [ 6 9 ]. However, such studies are often criticized for use of mean or average measures that do not capture non-linearity in systems [10 ]. One way to study disparity or inequality in complex systems is to look at scaling within systems. Living organ- isms and many other dynamical systems have been shown to obey a power law in scaling of the sizes of their various elements [ 11 13 ]. The impact of scaling on sociopolitical con ict has been explored in detail in literature [14]. In US the relationship between income distribution and energy and environmental indicators has also been studied [ 15 ]. In growing economies such as China and India too income inequality has been shown to a ect energy consumption and CO 2 emissions [16 ] though in the long run in some instances the e ect was not found to be statistically signicant [ 17 ]. Part of the problem with exploring the correlation between inequality or disparity in systems and its e ects on

energy consumption is the dearth of indicator systems that can take into account the complexities that underlie such an interaction [18 ]. In- dicator systems in economics, environment or energy consumption by and large continue to be linear in that they measure change in parti- cular characteristics or parameters as not critically a ecting all other elements of the system in a systemic way and being a ected by the system, but respond to a limited, often no more than one or two stimuli. While complex integrated assessment models do take into account the density of networked interactions that underlie an economic system to a certain extent, the measurements or indicators themselves, almost by their very nature do not consider non-linearity in dynamics of the system [19 ]. This fact in itself makes it di cult to study the correlation between inequality and other system wide indicators because the impacts of inequality or disparity in the system largely often emerge in the form of non-linear responses. Between certain values any change in inequality may not have an e ect on system wide parameters but then minor changes may result in sudden large perturbations [ 20 ,21 ]. While mechanisms have been proposed in literature that show why response to income inequality is nonlinear, there is a dearth of indicators and quantitative assessments on the subject that bring empirical evidence to bear on the theoretical understanding of economy wide non-linearity

Corresponding author at: Central European University, Nador utca 9, Budapest 1056, Hungary. E-mail addresses: fouadmkhan@gmail.com , fouad.khan@us.nature.com (F. Khan).

Received 15 September 2016; Received in revised form 14 January 2018; Accepted 25 March 2018

2214-6296/ © 2018 Elsevier Ltd. All rights reserved.

F. Khan, P. Heinecker

[ 18 ]. the social dynamics of energy systems still need further in- vestigation from multiple perspectives [22 ] especially with incorpora- tion of the complexity of the systems into analysis. This work takes some steps towards addressing these shortcomings. Recently it has been demonstrated that system resilience is a func- tion of system heterogeneity among other factors [ 23 ]. This hetero- geneity has been shown to arise from the hierarchical structure of the system for ecological systems [24 ] and expresses itself structurally in the form of very specic scaling in distribution of sizes of elements. The classes of sizes of given parameter are distributed at various scales such that the number of elements p , at each scale x are related according to the equation px m = constant [25 ] where m is the exponent of the power law with values lying between 0.75 and 2.5, also sometimes called the fractal dimension. In other words, typically these systems do not have aberrantly sized elements and the number of component elements de- creases as the scale to which the element belongs increases in size; the bigger an element is, the lesser its population in the system [ 12 ,25 28 ]. In network terms the system exhibits scale free structuring [29 ]. Such structuring has been discovered in a number of anthropogenic dyna- mical systems especially cities [ 25 ,30 34 ]. It was recently shown that indicators based on the exponent of the power-law can be developed based on this scaling for cities that help explain energy consumption behavior in the urban system [ 35 ]. The exponent of power-law dis- tribution can thus serve as a scaling indicator which provides a much more comprehensive picture of disparity in systems. In this paper we develop just such an indicator for measuring comparative disparity in national economies. The indicator is for- mulated and calculated for income distribution across consecutive 20th percentiles. We then show that comparative disparity measured using this scaling indicators aects energy consumption e ciency positively in national economies in a manner dissimilar to the way it aects en- ergy consumption e ciency in cities. We then explore the systemic reasons for this di erence in results. Further we modify two tools for visualizing complexity from urban studies and ecology and apply them to the study of correlation between energy e ciency and income in- equality in national economies [ 35 ].

1. Methods and materials

Economies are complex adaptive systems and should also exhibit similar scaling properties as other complex systems. In order to see how scaling in economic systems a ect environmental indicators we looked at a fractal dimension based scaling indicator of distribution of income. The environmental or direct sustainability indicator studied was per capita energy usage. The data was obtained from the World Bank open data platform [36]. Data from the year 2010 was used as that provided us with the biggest set of countries for which income distribution data was available. In this case the primary limitation was income dis- tribution data which was available for only a small number of countries. The data is shown in Appendix A . Fractal dimension based scaling indicator of national income dis- tribution was calculated by plotting cumulative income share against the cumulative population percentage. Once plotted on log log scales the resulting slope of the line would be the fractal dimension based scaling indicator of the distribution of income within the country. To derive our exponent we rst start with the formula for the box- counting dimension, as expressed by Eq. (1) [25 ]. In box-counting method a grid of boxes is layered on a map of the city, that divides the spatial spread of the city into di erent populated areas, each with a di erent intensity of urban land use or in other words a dierent land use coverage.

log N

x

D =

log

Where,

( )

1

x

(1)

Energy Research & Social Science 42 (2018) 184–192

D = box counting dimension x = certain percentage (or range of percentages) of area of the box covered by land use N x = Number of boxes falling within range x Instead of a map we have an extensive data set of the distribution of income by percentage of population. So instead of overlaying a grid of boxes on a map, we will split the population into virtual boxes, each covering 20% of population. So in our methodology the box of the box- counting method is any given 20% population block. In box counting method for cities the next step is to count all the boxes that fall within a certain range of land use coverage; say 3 out of 40 boxes have between thirty to forty percent of their area covered by urban land use. This is designated by the term N x in Eq. (1) . For our methodology the congruent count will be the percentage of income points that fall within a certain population percentile block. Fig. 1 ex- plains how our method compares to the box counting method. So if, a i = percentage of income held by population block i and p = percentage of population in each block , then cumulative income a for j th , p percentile segment of population will be given by;

a

j

j

=

i = 1

a

i

Since for our scaling exponent, the no. of boxes N x falling within a certain range x, is simply the percentage of income share falling within the percentile j; a j , N x can be written simply as;

N

x

=

a

j

j

=

i = 1

a

i

Similarly x for any given percentile j will be given as the total po- pulation falling within percentile j. Therefore x = 1/(j × p) . The scaling indicator for our calculation, say D s can now be expressed as;

D =

s

log N

x

log

()

1

x

=

log a

j

log

()

1

x

(2)

Using Richardson-Mandelbrot slope [ 37 ] now the value of D s will be calculated by plotting a j and 1/x on log log scale and estimating the slope of the regression line as shown in Fig. 1 . As a j and x are measured in percentage, D s is a dimensionless quantity. The indicator is a measure of disparity within the system. The greater the value of the indicator the lesser the disparity. Compare the two countries in Fig. 2 for instance; United States has higher income share held by a lesser percentage of population compared to Denmark. Thus the starting point for income share for the US (income of 20% richest people) is higher than Denmark and slope of the trend line is lesser. This slope of the trend line thus captures the disparity in the system. The higher the slope or scaling indicator, the lesser the dis- parity. The scaling indicator values were calculated by plotting on log log scale the cumulative income distribution and cumulative population percentage and taking the slope of the regression line. The r-squared value was greater than 0.95 for all the linear ts for all countries, in- dicating strong power law distribution. The values are shown in the Appendix A . It should be noted here however that of the variables considered in this plotting the clustering of population or binning (into 20th percentiles) was constant and only the wealth distribution varied leaving only one degree of freedom. The high R values are only in- dicative of a power law distribution and not necessarily predictive ac- curacy. A similar indicator (though with opposing directionality) has been developed for cities in literature and has been shown to have a negative correlation with energy e ciency. For cities as the disparity measured using this indicator goes up, the energy e ciency decreases [35 ].

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Energy Research & Social Science 42 (2018) 184–192 Fig. 1. The ‘ box ’ in box

Fig. 1. The boxin box counting method is analogous to cumulative 20th percentile of income in proposed data based method and clustering is on the basis of income distribution instead of % age of area of box covered by land use.

2. Results

Energy use per capita data for countries was obtained from World Bank open data platform [36 ]. In Fig. 3 while the curves point in similar direction, they represent opposing tendencies. For national economies the scaling indicator is inversely correlated with disparity while for cities the scaling indicator represents disparity. In cities case thus the gasoline consumption and emissions go up with increasing disparity while for national economies the reverse is true. The best- t curves were obtained using least square regressions and are primarily intended to show the trend as discussed further. For cities, Los Angeles was an outlier because of its high population density and area and for national economies Iceland was the only outlier (in the 5th percentile). Re- moving these outliers from the estimation of best t curves did not decrease the objective function more than 10% in either case. The curves shown in Fig. 3 include outliers in the calculation. Since there appears to be some heteroscedasticity we ran the Breusch-Pagan test for the national economic numbers and found that the p-value was greater than 0.1 indicating that the heteroscedasticity may not be signi cant enough to aect the trend analysis.

3. Discussion

Before we proceed with a discussion of the results the relationship between the indicator of disparity proposed here and the GINI as an equity index needs to be clari ed. The relationship of the proposed indicator with Gini coe cient is shown in Fig. 4 . The proposed in- dicator is actually the convex expression of the concave Lorenz curve that forms the basis of the Gini coecient.

curve that forms the basis of the Gini coe ffi cient. Fig. 2. Scaling indicator as

Fig. 2. Scaling indicator as a measure of disparity of income distribution in national economies (2010).

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Energy Research & Social Science 42 (2018) 184–192

Energy Research & Social Science 42 (2018) 184–192 Fig. 3. Energy usage and carbon emissions increase

Fig. 3. Energy usage and carbon emissions increase in cities but decrease nationwide with increasing disparity in population density distribution and income distribution respectively.

3.1. Comparison with existing inequality indicators

There have been extensive discussions in literature about the im- pacts of income inequality on well-being, health and resilience of eco- nomic systems [1 9 ] while concerns continue to be raised about the indices we use to measure inequality [10 ]. However one of the con- straints towards widespread adoption of indicators like Gini as an ex- planatory variable is the lack of an identi able mechanism that can explain how Gini might inuence well-being, health or environment variables. Such a mechanism cannot be identi ed because Gini does not derive out of fundamental system properties and is arbitrarily con- structed through economy wide measurements. While correlations maybe established no theoretical mechanisms can be identi ed that may establish causation between income inequality measured through Gini and development and well-being outcomes. Fractal or scaling based indicators of disparity or heterogeneity however have been theorized to express and measure resilience and energy metabolism within the system [ 23 ,24 ]. As such they are re- ective of fundamental system properties such as the scale at which development happens in cities. This allows for theoretical mechanisms to be identi ed to explain any observed correlations between inequality indicators and other parameters of concern. In this paper we propose

such a mechanism to describe the correlation between our proposed inequality indicator and energy consumption e ciency in cities and at the national level. Because of this conceptual advantage our proposed indicator does not have to presupposes that 1:1 equality, i.e. 50% of income going to half the population is the ideal as Gini does. Instead it accepts the power-law distribution nature of wealth and incomes as a given and through measuring the exponent of the power-law, provides a way to assess how strong the middle is in the economic distribution. Since we are not identifying or proposing any value of this indicator as ideal, the indicator value can merely be used as a guide to orient policy without presuming one distribution over other as better. Say for instance we want country A to make its energy e ciency numbers look more like country B. Then, based on the correlation presented here as well as the mechanism identi ed for that correlation to emerge, country A, in ad- dition to practical segmented measures imitating country B s energy policy, can also de ne economic policy aims that will make its income distribution look similar to country B s in an attempt to meet its energy e ciency goal. Country A would not be aiming for some arbitrary ideal income distribution of say 1 Gini but would actually be aiming to imitate a distribution that has been empirically and theoretically shown to support its energy e ciency goals.

shown to support its energy e ffi ciency goals. Fig. 4. Unlike Gini the proposed indicator

Fig. 4. Unlike Gini the proposed indicator does not pre-suppose that inequality should be measured in reference to a linear income distribution.

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In this paper we looked at income inequality as a special case of disparity of distribution in anthropogenic complex systems and devel- oped a fractal dimension based scaling indicator for measuring this disparity. The indicator was derived and calculated for income dis- tribution in national economies and population density distribution in US cities [35 ]. Since energy consumption has relevance to a number of signi cant geo-political concerns from energy security to climate change adaptation and resilience, to study the relevance of the disparity indicator, the indicator was correlated to energy consumption per ca- pita and per unit area in nations and cities. One of the problems with inequality indicators currently is that such indicators do not capture the rapidly accumulating wealth at the top of the distribution. While our proposed indicator does not improve on Gini in capturing this increasing inequality it certainly does not do any worse. It should be noted however that documenting this extreme accumulation of wealth in a smaller population group at this would require development of new indicators to study and monitor as well as data collection at a gran- ularity that has not been standardized internationally. Consistent data from around the world simply is not available to document income share going to 0.1 or 0.01% of the population. Monitoring and measuring this accumulation could be instructive towards study of energy consumption in economies as our results demonstrate. If increasing wealth in the top 20th percentile changes energy consumption eciency it would be imperative to study the impacts of wealth accumulation within the hands of say top one percent or 0.1%.

3.2. Why disparity may a ect energy e ciency

In order to understand the policy implications, the two correlations that have been observed in this research which need to be analyzed for identication of the mechanism that may be resulting in the observed relationships. The relationship for national economies is easier to explain. With the exception of a few countries as the GDP goes up the income inequality or disparity seems to go down. This relationship has been ex- plored in literature in detail. Rising GDP of course translates into grater energy consumption and hence energy consumption eciency seems to go up with rising disparity. At a higher level analysis both gures represent divergent ndings for two anthropogenic complex systems. That primary nding is that energy usage (or some measure of it) in complex systems correlates with scaling within the complex system according to a power- law. While power law relationships indicate that there may be a minima beyond which the energy consumption might actually increase with atter scaling, the empirical data both for cities and economies does not show scaling indicator values approaching or lower than the supposed minima. It should also be noted that the power law correlations are weak with R values of less than 0.5 indicating that the only assertion that can be made with any certainty about this result concerns that trend of change in en- ergy consumption with changing scaling indicator value. Conclusions be- yond this may be indicative but not entirely supported by the data. To understand why the trend exists, we need to reconsider what scaling means. Greater the scaling indicator, greater the change in distribution of incomes across di erent population groups. While for cities, a higher fractal dimension would mean that greater urban area is occupied by lower density housing compared to a city with lower fractal dimension for a national economy, a lower scaling indicator (higher disparity) would mean that a greater percentage of the income has been concentrated in the richer percentiles of the population. It may be that lower scaling indicator corresponds to higher energy consumption because the richest 20% end up consuming a dis- proportionally large percentage of energy per capita. Though based on the results from cities we cannot generalize this mechanism to both systems studied (cities and national economies). However there is some direct [38] and other indirect evidence [15 , 38 45 ] in literature that may be the case; that the rise in energy consumption with lower dis- parity may be in part at least due to the inordinate increase in energy consumption by the higher income segments of the economy.

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From a systems perspective we can try to imagine what happens when the scaling of distribution of sizes within a system becomes more disparate (e.g., high income inequality in economies). As disparity in- creases, the segment of the system that is meant to act as a regulator, becomes less and less of an accurate model of the system, unless the regulator size (as percentage of system) and energy cost of regulation is increased proportionally [ 46 ,47 ]. The intuitive conjecture that can be drawn here is that a more disparate system needs higher energy to be e ectively regulated. In national economies system regulation would mean provision of energy to the citizens. Greater disparity in incomes would have two e ects. One, it would disproportionately increase the share of energy consumed by the higher percentiles. Secondly, it would make the task

of regulation, i.e. eciently providing energy in dierent forms to all

citizens that much more complicated. At a national level, the higher energy cost of regulating a more disparate system may also show up in the cost of political governance. It becomes more di cult to have a regulatory body that is also a good model of the system and has for instance representation from various economic strata, thereby in- creasing the energy cost of regulation. However outweighing some of these factors is the fact that with rising incomes, overall income dis- parity has been shown to go down. It should also be considered that if reducing land use inequality at the urban level increases energy eciency, this transforms inequality reduc- tion into a tool for eciency improvements just as bound to the laws of rebound eect or Jevons paradox as any other eciency enhancing tool.

The practical implementation of this would see an increasing number of more equal cities prop up which are more ecient individually but lead to

a higher per capita energy consumption at the national level. While

studying and documenting such a phenomenon would require further empirical research this is an area that should be explored in the debate for changing urban form to make cities more energy ecient.

3.3. Policy implications

The wide scale adoption of inequality and disparity indicators into policy development and analysis continues to be an uphill task. To that end we are proposing two tools here that will simplify consideration of any inequality or disparity indicator into policy analysis. We also describe how the theoretical implications of the work can help explain the connections between disparity and well-being and growth indicators (which policy makers nd more in- teresting) in a more rigorous basis building on rst principles. The ndings presented here have signicant policy implications in terms of designing systems that are ecient and resilient. The debate on equity in complex human systems and the role or impact of energy on equity as well as the vice versa have been a subject of debate and dis- cussion for a while. Gini coecients have been proposed in the past to look at distribution of energy resources [48]. Certainly the links between energy poverty and health and mortality have been well explored espe- cially in the context of winters in Europe [49]. Inequality in energy con- sumption across diere nt countries has been explored in terms of its im- pacts on GDP as well as its causes in diering GDP across the countries [50]. By providing a numeric resilience and sustainability based justi- cation for strategic planning, the fractal dimension based scaling indicator can evolve into an alternate paradigm for economic, infrastructural and urban development investment that complements the otherwise purely economic considerations that usually underpin such planning processes. The use of fractal dimension as an indicator of system structures can provide an objective higher-level matrix to assess the structural patterns that may be indicative of the overall system sustainability. Such higher level matrices can, through research, be linked to a number of direct measures (such as per capita energy consumption) to establish how the matrix; for instance fractal dimension, is an indicator of what s hap- pening at the level of individual variables within the system. Once such relationships are established the higher-level matrices can be used to provide guidance on policy decision-making. In this way the fractal

F. Khan, P. Heinecker

Energy Research & Social Science 42 (2018) 184–192

Energy Research & Social Science 42 (2018) 184–192 Fig. 5. ‘ Fractal Spectra ’ modi fi

Fig. 5. Fractal Spectra modi ed for national economies; a plotting of squares representing di erent income shares by consecutive twentieth percentile population segments on a y-axis representing the income share percentage.

dimension of the distribution of sizes of various parameters within complex systems can be a signi cant higher-level matrix guiding policy for sustainable development. Scaling based indicators can contribute to the science of indicator development for complex systems. Typically index development usually involves weighted summation of di erent indicators or parameters which are selected based on specic criteria and represent key dimensions of a complex system or phenomenon. If it can be shown that complexity based scaling indicators correlate with a wide range of parameters, then the scaling indicator can be used as an aggregate index (without the need for aggregation). The other im- plication is the consideration for scaling of certain parameters in ana- lysis besides just averages. Many planning processes are concerned primarily with indicator averages which do not provide any assessment of how the indicator changes in distribution over the population. This is of course not a comment on systems where design process considers some measure of peak parameter value for analysis (e.g. water treat- ment plant designs). Such scaling indicators can be calculated for any parameters which are averaged over a large population or sample and should be used in conjunction with average values to temper or put in context the ndings from average values. There is some potential for the use of scaling based indicators or indices in ex-post anthropological and historical studies to identify patterns of growth and development that lead to societal collapse. However application in such scenarios continues limited by the accu- racy and extent of data availability. Any such results would need to be seen in the context of the accuracy and extent of data available. In social dynamics the work is an attempt at pointing out and identi- fying tipping points where small changes can aect large outcomes. These outcomes can be both positive and negative and by considering non-line- arity the planning process could become cognizant of the potential for negative outcomes and be on-guard before such tipping points, while po- sitioning the system to benet from any positive tipping points. The un- derlying theme of this work is to identify ways in which quality of life can be improved without increasing the entropic footprint of our civilization. Although cognizant of the complex nature of urban systems, fractal dimension based indicator systems share most of the limitations of any other indicator systems. An indicator by nature is a compromise be- tween science-based understanding of complex phenomena and the need for distilling complex information into bite-size summary form that is necessary in most decision making processes. The important thing to realize is that the structural development that is necessary to conceive indicators is in essence a tiered compilation of assumptions, choices and informed decisions. Starting from the fundamental para- digm that dictates the creation of the indicator right down to an eventual number, the structures that inform decision making are held

together by the sca olding of conditionality and exceptions [51 ]. These must never be forgotten while putting an indicator to use in the service of decision making. While the data required for implementation of this indicator is usually available in most regions of the world, in case ad- ditional temporal resolution is needed than the usual census time step of a decade, this can become an expensive indicator to calculate. One of the necessary requirements for an e ective indicator is that it should be easy to understand so as to be able to create buy-inamongst a wide stakeholder base. While the fundamentals of this indicator system are not necessarily complicated, any wide scale adoption of the indicator would have to be coupled with informational media campaigns to communicate some of the ideas behind the indicator system within the public sphere. This is largely due to the fact that many of the concepts behind this indicator system would be new for the general public even in some of the cities with highest education rates in the world. Adoption of new indicators is often as much a politics and policy issue as it is an issue of scienti c debate and if the primary stakeholders don t have a general understanding and acceptance of the ideas behind important decision inuencing indicators, that can render their adoption un- certain and vulnerable to political criticisms and dismantling. Even while evolving our indicator systems to reect some of the complexity of systems, one must not forget that the primary lesson to be derived from complexity science is not one of additional trust in numbers, but less trust, no matter how rigorous the derivations of those numbers are. As we begin to understand the nature of complex adaptive systems, the calls for trying to avoid over-simplication in the study of such sys- tems, continue to pour in. In industrial risk assessments consideration of holistic, systemic risks has gained signicance since Three Mile Island [52]. The post-normal science literature has long been calling for new analysis techniques that take into account risks emerging from system complexity [53], and post 2008, even in the nancial world, the impact of Black Swans is studied and considered with interest [54]. It must be realized that even focusing more on indicators as com- pared to comprehensive models with assured predictabilities is a new way of scienti c decision making, one in which administrators and policy makers must see themselves as permaculture gardeners, tending to a complex system they must let evolve organically with as little in- terruption as possible. Even when interruption is necessary, it should be realized that the only way to handle decision making in the face of daunting complexity is to attempt to understand complex systems with humility and with due respect for all forms of knowledge, scienti c, meta-scienti c, numeric, fuzzy, narrative and expert. We now modify two visualization tools from urban studies and ecology for income inequality in national economies to explore the correlation between energy consumption e ciency and inequality.

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F. Khan, P. Heinecker Fig. 6. Planning plane with colour change showing how energy use per

Fig. 6. Planning plane with colour change showing how energy use per capita (kg of oil equivalent) changes with change in GDP per capita and scaling in- dicator of income distribution (44 countries from World Bank 2005 data).

3.3.1. Fractal spectra for income inequality

A visualization of how this scaling indicator captures income in- equality is shown in the fractal spectradeveloped for ve sample coun- tries in Fig. 5. A fractal spectrum is dened as a plotting of squares re-

presenting dierent income shares by consecutive twentieth percentile population segments on a y-axis representing the income share percentage [35]. The square size and the location of the square represents the income share for any given fth of the population represented by shading or colour. Rapid change in size across a thin income band is indicative of greater disparity and higher concentration of wealth.

3.3.2. Planning plane

The tool we adapt here from urban planning [ 35 ] to facilitate the use of disparity indicators of the kind we have proposed here, in policy making can be useful in any policy analysis scenarios where more than one variable needs to be considered. For instance an important focus of research in sustainable development goals (SDG) is the analysis of co- bene ts between SDGs. This requires consideration of more than one variable in planning. The planning plane is essentially a contoured

Appendix A

See Table A1 .

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Energy Research & Social Science 42 (2018) 184–192

plane that takes for input as x and y variables the two independent variables, say GDP growth rates and fractal dimension based scaling indicator proposed here. The colour or the third axes represents the dependent variable, in this case energy consumption e ciency. If we want to optimize for energy consumption e ciency we need to visua- lize in policy discussion scenarios not just how GDP growth a ects energy consumption but how income inequality aects energy con- sumption. The contours or colours in this example are calculated using ordinary kriging. The planning plane for how GDP and inequality scaling indicator a ects energy consumption is shown in Fig. 6 . Since this is just ordinary kriging the roughness captures non-linearity of the response of system to changes in inequality and GDP, as composed to conventional re- gression based modelling. To deploy the planning plane a policy maker would identify either the desired GDP and income inequality and see how that would a ect energy consumption on the plane, or would identify the energy consumption goals and based on that de ne what GDP or income inequality targets should be.

4. Conclusions

In summary it is theorized here that the increase in energy consumption with increasing disparity is owed to the increasing energy cost of good regulationin systems [46,47] as the system becomes more disparate and unequal. In cities this diculty in good regulation manifests itself as the increasing cost of building a transport modelof a system which provides good transportation services as a regulatory function in an increasingly disparate city. In national economies the energy cost of regulation may have to do with both the shrinking economy of scale in providing energy intensive services to an increasingly disparate populace, as well the dis- proportionately high energy consumption by population segments in higher income brackets. We believe there is sucient evidence here to suggest that disparity does indeed aect energy consumption eciency adversely in urban and national economic systems and consideration of scaling indicators of disparity in policy analysis as well as further research in the area, is merited. From a policy perspective the results presented here implore us to include sophisticated disparity measures in analysis for all complex anthropogenic systems, especially for energy eciency optimi- zation. There are multiple ways in which the work presented here can be used to include consideration of system disparity in the study of human well-being. First of all the methods suggested such as planning plane could be used to study the correlations between various well-being indicators such as say life expectancy and disparity or inequality in systems along with the typical economic indicators such as the GDP. The idea that GDP alone does not capture the non-linear relationship between wealth and well-being can be studied quantitatively through making sure that every time GDP is used as an independent variable, the disparity or inequality in GDP is also used as an independent variable and the eects of change are considered both from the perspective of growth in volume and disparity. Secondly the indicator presented here allows for development of credible mechanisms to theoretically explain some of the empirical correlations between inequality and well-being, economic and energy indicators. In energy social sciences and transition studies the discussion and results presented here will allow us to focus and explore in greater detail the non- linear relationship between energy consumption and societal change. The results also support the idea that inequality as a special case of disparity in systems- creates inherent ineciencies in systems which may lead to system collapse if not addressed adequately. The visual tools adopted from urban studies and ecology to economic analysis can help plan for energy eciency improvements while exploring new economic policy.

F. Khan, P. Heinecker

Table A1 Economic and Energy Use Data (circa 2010).

Energy Research & Social Science 42 (2018) 184–192

Country Name

Energy use per capita (kg oil equivalent)

% of Income share of highest 20% earners

% of Income share of the 2nd highest 20% earners

% of Income share of the middle 20% earners

% of Income share of the 2nd lowest 20% earners

% of Income share of the lowest 20% earners

Fractal dimension based scaling indicator for income distribution

Argentina

1909.73

49.38

22.42

14.54

9.3

4.36

0.44777

Armenia

837.93

40.31

21.38

16.58

12.79

8.94

0.57129

Australia

5648.7

42.16

22.79

16.14

11.83

7.09

0.54477

Austria

4079.86

38.4

22.89

17.47

13.21

8.04

0.60435

Bangladesh

200.647

41.35

21.24

16.01

12.5

8.89

0.55427

Belarus

2900.22

36.85

22.79

17.67

13.65

9.04

0.62864

Belgium

5598.31

37.23

22.56

17.81

13.95

8.45

0.6242

Bulgaria

2416.36

42.22

22.7

16.73

12.1

6.26

0.54696

Cambodia

368.936

42.72

21

15.59

12.25

8.44

0.53419

Canada

7391.73

40.97

22.75

16.79

12.39

7.1

0.56414

China

1845.74

47.09

23.2

15.31

9.74

4.67

0.47785

Colombia

679.53

60.03

18.72

11.16

6.9

3.19

0.32366

Costa Rica

1022.18

53.77

20.32

12.9

8.57

4.45

0.39263

Croatia

1938.54

36.9

22.42

17.54

13.77

9.37

0.62725

Cyprus

2213.09

40.45

21.76

16.42

12.77

8.6

0.56925

Czech Republic

4237.9

36.44

21.97

17.73

14.49

9.37

0.63639

Denmark

3510.8

37.2

22.66

17.89

14.27

7.98

0.62601

Dominican

739.887

52.8

20.8

13.19

8.55

4.67

0.40369

Republic

Ecuador

919.422

54.35

20.15

12.97

8.42

4.1

0.38668

El Salvador

698.287

50

21.6

14.22

9.44

4.74

0.43925

Estonia

4222.74

39.76

22.84

17.06

13.25

7.08

0.58388

Ethiopia

469.658

41.67

21.34

16.34

12.61

8.03

0.55193

Finland

6819.56

37

22.59

17.42

13.81

9.17

0.62559

France

4024.25

41.82

21.79

16.33

12.4

7.64

0.54995

Georgia

795.286

47.58

22.36

15.07

9.94

5.04

0.47076

Germany

3997.05

39.29

22.62

17.13

12.95

8.01

0.58945

Greece

2482.63

41.15

22.97

17.15

12.25

6.49

0.56315

Honduras

608.227

57.59

20.18

11.91

7.13

3.19

0.35008

Hungary

2568.38

37.73

22.89

17.71

13.4

8.26

0.61533

Iceland

17023.2

36.08

22.16

17.99

14.42

9.37

0.64299

Indonesia

866.827

43.65

21.83

15.56

11.33

7.63

0.52119

Ireland

3161.54

40.23

22.55

16.92

12.72

7.59

0.57516

Israel

3042.43

47.4

22.89

15.48

9.62

4.61

0.47423

Italy

2867.74

41.06

22.94

17.09

12.52

6.38

0.56473

Jordan

1174.87

42.41

21.45

15.84

12.11

8.19

0.53929

Kazakhstan

4234.93

38.25

22.05

16.89

13.36

9.46

0.60345

Kosovo

1405.04

41.5

22.37

16.21

12.14

7.78

0.55372

Kyrgyz Republic

505.402

39.07

21.96

16.89

13.27

8.81

0.59156

Latvia

2148.65

41.8

22.77

17.14

12.26

6.02

0.55438

Lithuania

2275.76

40.35

23.24

17.57

12.45

6.4

0.57628

Luxembourg

8329.43

38.9

22.93

17.36

12.92

7.89

0.59609

Mexico

1486.03

53.89

19.79

12.92

8.67

4.72

0.39093

Moldova

984.625

40.33

22.42

16.62

12.51

8.12

0.57181

Mongolia

1452.97

41.07

22.52

16.48

12.14

7.78

0.56054

Montenegro

1898.29

37.05

23.23

17.76

13.24

8.73

0.62548

Nepal

379.922

41.42

21.87

16.23

12.14

8.34

0.55413

Netherlands

5021

37.23

22.79

17.77

13.87

8.34

0.6241

Norway

6939.49

35.3

22.81

18.05

14.48

9.37

0.65616

Pakistan

496.342

39.52

21.25

16.47

13.18

9.59

0.58249

Panama

1024.6

56.38

20.07

12.52

7.75

3.3

0.36461

Paraguay

774.221

56.27

19.52

12.69

7.95

3.57

0.36583

Peru

654.019

51.04

21.59

14.15

8.97

4.24

0.427

Poland

2640.24

41.34

22.25

16.37

12.18

7.86

0.55637

Portugal

2222.62

43.37

21.88

15.93

11.79

7.03

0.52744

Romania

1730.09

36.88

23.17

17.76

13.56

8.65

0.62888

Russian

4827.81

47.44

21.85

14.68

10.19

5.84

0.47078

Federation

Serbia

2141.06

38.2

22.81

17.36

13.26

8.37

0.60674

Slovak Republic

3306.81

36.07

22.72

18.24

14.46

8.51

0.6449

Slovenia

3539.25

34.76

22.67

18.23

14.65

9.69

0.66564

Spain

2742.88

41.91

23.29

16.84

11.99

5.97

0.5518

Sweden

5427.93

36.04

22.78

17.83

14.37

8.98

0.64351

Switzerland

3346.62

40.43

22.66

16.8

12.46

7.65

0.57138

Thailand

1766.93

46.5

21.66

14.79

10.45

6.62

0.48219

Tunisia

974.84

42.92

22.62

16.14

11.6

6.73

0.53436

Turkey

1455.83

45.18

22.34

15.59

10.99

5.9

0.50287

Ukraine

2886.99

35.16

22.39

17.93

14.3

10.21

0.65671

United Kingdom

3224.86

41.98

22.54

16.49

11.91

7.08

0.54827

United States

7161.51

45.75

22.96

15.7

10.49

5.09

0.49615

Uruguay

1210.58

50.92

21.44

13.74

8.99

4.93

0.4266

Vietnam

677.674

49.39

20.71

14.01

9.97

5.92

0.44492

Zambia

590.88

61.05

17.89

10.49

6.76

3.81

0.31111

F. Khan, P. Heinecker

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