Take care with percentages

Our sister blog Alloporus | ideas for healthy thinking posted on the false equity of giving everyone in a company a 10% pay raise. It sounds fair, but the reality is that 10% of the CEO’s salary might be the entire salary of the junior staff member — How to interpret a percentage change

The same issue happens when reporting on global numbers.

Here is an example.

Agriculture’s share of greenhouse gas emissions in China fell from 14.3% in 2000 to 5.6% in 2013. This is a substantial success, with nearly a 1% annual emission reduction over a decade. You can feel the breeze from the political spin on the other side of the world.

However, here are the numbers in absolute. 

Emissions in tCO₂e from agriculture in China increased from 652 million tCO₂e to 707 million tCO₂e from 2000 to 2013. 

Proportionately less, but physically 55 million tCO₂e more.

This 55 million tCO₂e is slightly fewer emissions than Austria and about the same as North Korea. 

Care with inflation

After three generations of modest inflation rates that have seen wealth accumulate slowly but steadily, COVID disruptions and the war in Ukraine have triggered a sharp upturn.

An annual inflation rate of 2% across all goods and services means a median house price of $500,000 grows to $610,600 in a decade, meaning a buyer needs to find another $110,600. 

Ramp up that inflation rate to 10% annually across ten years, and the future buyer needs to find $1,353,520.

Great for investors and a disaster for would-be buyers.

The same inflationary impact on a loaf of bread that retails today at $1.50, and we see $1.83 or $4.06 from 2% or 10% inflation. Three times more expensive is noticed, but for most people in mature economies not crippling and could be passed off as a nuisance.

If the same increase happens when food costs take up 20% or more of available income, the impact is crippling.

Here are some estimates from Our World in Data that show a lot of countries where food is a significant cost of living.

What sustainably FED suggests 

No doubt that percentages are a useful comparative tool. They tell us how much more or less things are than they were, but what can quickly happen is that the proportion becomes the message and not the absolute amount.

Whenever you see a percentage, remember that it is, by definition, relative to the amount it refers to. 

Always look for the raw numbers to see what is happening. 

Science Source

Wang, Y., Tao, F., Yin, L., & Chen, Y. (2022). Spatiotemporal changes in greenhouse gas emissions and soil organic carbon sequestration for major cropping systems across China and their drivers over the past two decades. Science of The Total Environment, 833, 155087.

Hero image from photo by Raul Gonzalez Escobar on Unsplash