Energy, Efficiency Gains and Economic Development: When Will Global Energy Demand Saturate?

By Christian Bogmans, Lama Kiyasseh, Akito Matsumoto, Andrea Pescatori

November 20, 2020

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Christian Bogmans, Lama Kiyasseh, Akito Matsumoto, and Andrea Pescatori. Energy, Efficiency Gains and Economic Development: When Will Global Energy Demand Saturate?, (USA: International Monetary Fund, 2020) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Not anytime soon. Using a novel dataset covering 127 countries and spanning two centuries, we find evidence for an energy Kuznets curve, with an initial decline of energy demand at low levels of per capita income followed by stages of acceleration and then saturation at high-income levels. Historical trends in energy efficiency have reduced energy demand, globally, by about 1.2 percent per year and have, thus, helped bring forward a plateau in energy demand for high income countries. At middle incomes energy and income move in lockstep. The decline in the manufacturing share of value added, globally, accounted for about 0.2 percentage points of the energy efficiency gains. At the country level, the decline (rise) of the manufacturing sector has reduced (increased) US (China) energy demand by 4.1 (10.7) percent between 1990 and 2017.

Subject: Consumption, Economic sectors, Energy prices, Energy pricing, Expenditure, Manufacturing, National accounts, Oil prices, Personal income, Prices

Keywords: Climate change, Consumption, Economic growth, Energy consumption, Energy demand, Energy pricing, Global, Income elasticity, Income growth, Income level, Manufacturing, Manufacturing share, Oil prices, Per capita income, Personal income, WP

Publication Details

Pages:

43
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2020/253
Stock No:

WPIEA2020253
ISBN:

9781513561240
ISSN:

1018-5941

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