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Scaling relations, such as the IPAT equation and the Kaya identity, areuseful for quickly gauging the scale of economic, technological, anddemographic changes required to reduce environmental impacts and pressures; inthe case of the Kaya identity, the environmental pressure is greenhouse gasemissions. However, when considering large-scale economic transformation, aswith a shift to a low-carbon economy, the IPAT and Kaya identities and theircousins fail to capture the legacy of existing capital, on the one hand, andthe need for new investment, on the other. While detailed models can capturethese factors, they do not allow for rapid exploration of widely differentalternatives, which is the appeal of the IPAT and Kaya identities. In thispaper we present an extended Kaya identity that includes investment and capitalstocks. The identity we propose is a sum of terms, rather than a simple scalingrelation. Nevertheless, it allows for quick analysis and rapid exploration of avariety of different possible paths toward a low-carbon economy.

Confronting the Kaya Identity with Investment and Capital Stocks