Energy Intensity of Final Consumption: the Richer, the Poorer the Efficiency

Abstract

To maintain perpetual economic growth, most energy transition scenarios bet on a break in the historical relationship between energy use and gross domestic product (GDP). Practical limits to energy efficiency are overlooked by such scenarios, in particular the fact that high-income individuals tend to buy goods and services that are more energy intensive. Detailed assessments of the energy embodied in regional final consumption are needed to better understand the relationship between energy and GDP. Here, we calculate the energy necessary to produce households and governments' final consumption in 49 world regions in 2017. We correct prices at the sector-level and account for the energy embodied in the whole value chain, including capital goods. We find that high-income regions use more energy per unit of final consumption than low-income ones. This result contradicts the common belief that a higher GDP is correlated with a better efficiency and questions the feasibility of mainstream energy transition scenarios based on universal GDP growth.

An instrumental value-based framework for assessing the damages of abiotic resources use in life cycle assessment

“…SSPs should be used with caution since important criticisms of overestimation of economic growth and CO2 emissions of SSP3 and SSP5 have been adressed (Burgess et al 2020;Pielke and Ritchie 2021;Pielke Jr et al 2022). Since long-term decoupling between energy consumption and economic growth seems impossible (Huang et al 2008;Haberl et al 2020;Hickel and Kallis 2020;Andrieu et al 2022) and the likeliness of all-oil liquids peak in the next 15 years (Delannoy et al 2021a;Laherrère et al 2022) and gas before 2050 (Delannoy et al 2021b), the plausibility of scenarios with continuous economic growth in the 21 st century seems low, as pointed out by Steckel et al (2013). Therefore, additional efforts are needed to have access to a wider range of post-growth scenarios (Hickel et al 2021;Keyßer and Lenzen 2021;Lenzen et al 2022), building upon the propositions of Nieto et al (2020) and Bodirsky et al (2022) which focus only on energy infrastructures and the food sector, respectively.…”

Emerging consensus on net energy paves the way for improved integrated assessment modeling

“…Overlooking these flows may lead to an overestimation of the potential for reducing energy intensity (thus assuming possibly unrealistic decoupling rates between GHG and energy/material use), a greater focus on supply-side solutions for mitigating climate change, 130 and underestimating the impact of rebound effects on energy demand. 41,122,131–133…”

“…Overlooking these flows may lead to an overestimation of the potential for reducing energy intensity (thus assuming possibly unrealistic decoupling rates between GHG and energy/material use), a greater focus on supply-side solutions for mitigating climate change, 130 and underestimating the impact of rebound effects on energy demand. 41,122,[131][132][133] Second, most IAMs -either energy system models coupled with macroeconomic growth models or multi-sectorial Computable General Equilibrium (CGE) models -still utilize optimal growth theory from neoclassical economics. However, in these models, increases in energy costs cannot significantly affect GDP growth, either because GDP or technological change are assumed to be exogenous, or because the cost share of energy (as a percentage of GDP) is assumed to have negligible feedback on GDP.…”

Exploring Empirical Correlations among Energy Efficiency, Energy Productivity, Energy Use and Economic Development in EU Countries

“…Most energy transition models depend on the well-documented correlation between energy consumption and gross domestic product (GDP) in order to sustain continuous economic growth (Baptiste et al, 2022;Hannesson, 2009). Ucan et al (2014) tested the cointegration of a long-term connection between real GDP, both classic and green energy usage, the release of greenhouse gases, and R&D using a heterogeneous panel.…”