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Flat or Rising or Both

We’re adding a new category to Cafe Hayek, "Less Than Meets the Eye."  These posts will look at inaccurate or misleading charts, graphs or pictures.

Here’s a story from the front page of today’s Washington Post lauding Japan’s relentless efforts to conserve energy in contrast with the gluttonous United States:

Japanese Putting All Their Energy Into Saving Fuel

Washington Post Foreign Service
Thursday, February 16, 2006;  Page A01


KAMIITA, Japan — When the Japanese
government issued a national battle cry against soaring global energy
prices this winter, no one heeded the call to arms more than this
farming town in the misty mountains of western Japan.

To save on
energy, local officials shut off the heating system in the town hall,
leaving themselves and 100 workers no respite from near-freezing
temperatures. On a recent frosty morning, rows of desks were brimming
with employees bundled in coats and wool blankets while nursing
thermoses of hot tea. To cut back on gasoline use, officials say, most
of the town’s 13,000 citizens are strictly obeying a nationwide call to
turn off car engines while idling, particularly when stopped at traffic

I’m not so sure about the technique of turning off car engines at traffic lights as an energy saver, but there’s more:

Takao Iwase, Kamiita’s husky administrative director, joined other
locals in switching off the heat at home, too — leaving his family to
quickly hustle from steaming nighttime baths to the warm comforters on
their traditional futons. "We’re saving [$100] a day at city hall by
shutting off the heat," Iwase, wearing four layers of clothing and a
winter coat inside his office, said proudly. "But we no longer see this
as just an economic issue. Japan has no natural resources of its own,
so saving energy has become our national duty."

As President Bush
calls on Americans to break their addiction to oil and increase energy
efficiency in the face of soaring prices, perhaps no people serve as
better role models than the energy-miser Japanese.

The article continues with all kinds of examples of how the Japanese conserve on energy and how they’ve been doing it since the ’70s.  Here’s the chart accompanying the article:


According to the text at the top of the chart,  Japan’s consumption has "remained steady since 1975, while U.S. consumption has risen steadily."

And when you look at the graph, it appears to be the case.  The red line representing the U.S. seems to rise steadily and the yellow line representing Japan does look pretty flat.  Alas, the designer of the chart included the data.  When we actually do the math, matters are not quite as they appear.

It turns out that U.S. consumption between 1975 and 2004 has increased by 26% while the Japanese consumption has actually increased 21%.  Not exactly "rising steadily" vs. "steady."  I’d say both have risen pretty steadily.  In fact, the U.S. may have done a better job conserving if you correct for the relative size and growth rates of the two economies.  Either way, the chart misleads the eye.  A small increase by the Japanese is actually a large percentage increase.  That’s hard to notice and the thickness of the line makes it even harder to see.

On the economics of the issue, conservation in and of itself is not of value.  We are not addicted to oil.  We use a lot because it’s cheap.  When it gets more expensive, we try and find ways to use less.  The best policy for the United States is to get rid of any artificial subsidies to oil use or any other energy source and let prices encourage or discourage energy use.


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