Science & Technology > Energy >
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Continued Growth in Energy Consumption |
| Paper ID: |
554 |
Last updated: 18/05/2011 14:33:22
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Criteria:  |
Impact:  |
Likelihood:  |
Controversy:  |
Where: Global |
When: 11-20yrs |
How Fast: Years |
0
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| Keywords: |
Energy - oil, alternative energy, coal, nuclear, natural gas, wind, biofuels, solar energy |
Summary  |
| The growth in global energy consumption is a ‘megatrend’ which shows no sign of reversing itself. This megatrend drives a number of interconnected issues such as climate change, global energy mix and technological progress. In short, growth in emerging economies will continue to drive up global energy consumption (and, thus, carbon emissions) unless one of two things happens: a global consensus on combating climate change or a technological breakthrough. |
Discussion |
Energy, the most basic requirement for human progress, is harnessed from various sources (for example, fossil fuels, biomass, other renewable energy sources) and in various forms (for example, grid electricity, transportation fuel, industrial process). In 2008, global energy consumption was derived mainly from fossil fuels: 35 per cent oil, 29 per cent coal, 24 per cent natural gas, with smaller contributions from nuclear (6 per cent) and renewable sources (6 per cent). Total consumption amounted to 426 Petajoules—which is equivalent to burning 11.3 billion tonnes of oil. [1] Global population and economic growth has seen a steady long-term increase in this statistic. This slowed in 2008 (to 1.4 per cent) due to the global economic downturn that set in mid-way through that year. Within the OECD, consumption actually fell by 1.3 per cent, but this was more than offset by continued growth in developing countries (especially in China, where consumption grew by 7.2 per cent). [1] Developing countries now account for more than half of global energy consumption. [1]
Amongst the different sources of energy, consumption of coal is growing fastest (by nearly 50 per cent in the decade to 2008), and this trend is expected to continue, with obvious consequences for atmospheric carbon dioxide levels. [1] [2] [3] This is unsurprising, given that coal is the cheapest and simplest source of electricity (as well as providing heat for steel and other industrial outputs) in emerging economies unconstrained by existing agreements on climate change. By contrast, consumption of oil—which remains the global economy’s essential source of liquid transportation fuel—has grown more slowly. This reflects not only supply-side inelasticity in global oil markets (due in part to long infrastructure lead times) but also geological constraints. As a result, many forecasts predict that global oil production (and, thus, consumption) will increase modestly (if at all) before plateauing or declining sometime between now and 2030. [4]
Future trends in energy consumption will be determined by myriad interrelated driving forces, the most important of which are continued global population and economic growth. These supply-side drivers are especially strong in emerging Asian economies such as China and, increasingly, India. [5] Most experts agree that global energy consumption will continue its long-term upward trend; [6] [7] however, some alternatives deserve consideration.
On the supply side, it is possible that energy consumption will slow down, or begin to decline, due to government policies seeking to combat climate change by promoting more expensive ‘green’ sources of energy. These policies may include government subsidies for green technology, taxation of carbon emissions, emissions trading schemes, etc. The European Union and its member states are at the forefront of such measures. Yet, as the 2009 United Nations Climate Change Conference in Copenhagen showed, there are immense political obstacles to the agreement of binding measures at the global level. Although many agreed to lodge non-binding targets, developing countries have been unwilling to commit to targets liable to curtail their economic growth. Accordingly, a significant ‘self-imposed’ global reduction in energy consumption is unlikely. On the other hand, it is possible that technological progress (perhaps encouraged by global action on climate change) will lead to economically competitive, large scale generation of ‘green’ electricity. Should this be the case there will no longer be an environmental imperative to reduce consumption. Candidate technologies in this regard include carbon sequestration as an adjunct to fossil fuels [see Sigma Scan issue paper 86], solar power [see Sigma Scan issue paper 446] or, more radically, controlled nuclear fusion reactors [see Sigma Scan issue paper 481]. For various reasons, others such as wind [see Sigma Scan issue paper 509] and biofuels [see Sigma Scan issue paper 442] lack large-scale promise.
On the demand side, one cannot rule out the reversal of global economic growth—and, hence, a collapse in energy consumption—due to an extraordinary event, such as war, disease, global financial crisis or failure to transition to a post-oil economy following the onset of global peak oil [see Sigma Scan issue paper 433]. |
Implications |
Absent a binding global agreement, countries will be reluctant to retard their own economic growth to combat climate change. Several implications include:
• Many countries will promote natural gas over oil and coal where convenient, since it is less polluting.
• Some countries may follow France’s lead and ‘go nuclear’.
• Still others will promote more expensive sources of renewable energy unilaterally or in blocs.
However, barring a technological breakthrough, the global energy mix would not vary dramatically. The contribution of fossil fuels would decline in relative terms whilst increasing in absolute terms. In turn, this would necessarily accelerate climate change. Also, there would be a growing imperative to combat climate change without denying economic growth to the developing world. This could be expected to focus attention upon nascent technologies with the potential to offer a breakthrough. |
Early indicators |
Long-term upward trend in global energy consumption.
Mounting evidence of human-induced climate change met with failure of the 2009 Copenhagen summit to achieve binding carbon emissions targets.
Nascent predictions of ‘global peak oil’ suggest an imperative to rebase transportation.
Increasing government funding of research and development for ‘green’ energy sources and for ‘green’ technologies which reduce demand.
Temporary drop in energy consumption during 2008/09 global financial crisis. |
Drivers & Inhibitors |
Drivers:
Growth in energy consumption will be driven by global economic growth (especially due to population growth and rising living standards in Asia).
Inhibitors:
Extraction costs: trending upwards for oil and (to a lesser extent) gas but not for coal, which is relatively abundant.
Relatively high cost of renewable electricity from hydro, wind, solar, etc.
Imperative to combat climate change.
Imperative to move to a post-oil economy.
Potential energy security risks, which encourage importers to reduce consumption. |
Parallels & Precedents |
| Long-term upward trend in global energy consumption, despite a changing global energy mix and myriad geopolitical shifts. |
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| The contents of this paper were supplied by the Institute for the Future, and have been reviewed by the Outsights-Ipsos MORI Partnership. Any views expressed are independent of government and do not constitute government policy. |
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