March 30, 2012
Global Energy Intensity on the Rise
With global energy intensity on the rise, investing in a portfolio of clean energy technologies is the clearest path to a prosperous clean energy future.
New analysis from the WorldWatch Institute shows that energy intensity of the global economy has been on the rise for the past two years, reversing a decades-long trend of increasing energy efficiency. As computerized and digital services have paved the way towards technological innovations and the "knowledge economy," global economic energy intensity has declined an average of 0.8 percent per year since 1981. However, since the economic crisis of 2008, the energy inputs required to produce the same level of economic output has been increasing, by 1.35 percent in 2010 alone.
Basic arithmetic tells us that increasing energy intensity equates to rising carbon emissions as long as carbon intensity of energy remains static. Breakthrough Senior Fellow Roger Pielke Jr. emphasizes this in his recent book The Climate Fix, in which he employs the "Kaya Identity" to prove his point:
In order to reduce global emissions, at least one of these variables will have to fall substantially: GDP, population, energy intensity, or carbon intensity. With limits to economic growth and population controls unlikely, and with energy intensity making a sudden rise in recent years, we are left with the imperative to reduce carbon intensity by deploying more clean energy technology.
As the WorldWatch report states, the energy intensity of the global economy is projected to decline in the long-term but continue its upward trend over the next several years. With the majority of economic growth coming from the developing world, where rising energy consumption will likely exploit the cheapest technologies available, it is essential that we bring clean tech to price parity with fossil fuels by investing in innovation.
*The Kaya Identity, more precisely:
Carbon = [Population x GDP/Population] x [Total Energy Consumption/GDP] x [Carbon/Total Energy Consumption]