Consumption

Consumption

Also related to the Global Capital reservoir is a converter called Consumption. A central premise of most economic models is that consumption is good and more consumption is great. This sounds shallow, but it makes more sense if you realize that consumption can mean more than just using things it up; in this context, it can mean spending money on goods and services, and since services include things like education, health care, infrastructure development, and basic research, you can see how more consumption of this kind can be equated with a better quality of life. So, perhaps it helps to think of consumption, or better, consumption per capita, as being one way to measure quality of life in the economic model, which provides a measure for the total value of consumed goods and services (in trillions of dollars), which is defined as follows:

Consumption = Gross Output – Climate Damages – Abatement Costs – Investment

This is essentially what remains of the GDP after accounting for the damages related to climate change, abatement costs, and investment.

The model also calculates the per capita consumption by just dividing the Consumption by the Population, and it also includes a converter called relative per capita consumption, which is just the per capita consumption divided by the GDP. In the model, this is in thousands of dollars per person.