In a previous post we have outlined the discussion about green growth, which revolves around the possibility of decoupling economic growth from emissions, energy and materials consumption. In our last post we have seen that absolute decoupling of CO2 emissions and economic growth has not been achieved, and we will see now the very similar case of energy.
There is a strong correlation between energy demand and economic growth. Although energy intensity has been declining in the developed countries during the last decades, we can barely see signs of absolute decoupling, because economic growth has offset the gains in energy efficiency. The only sign of absolute decoupling in Figure 1 is given by the last couple of years in the United States. While the economy has grown, energy demand has slightly declined.
Figure 1. Total primary energy demand and GDP in selected countries, 1971-2012
Source: IEA World Energy Outlook 2014
Whether this is the beginning of a new paradigm or just a historic anecdote will only be known in the future. However, it is likely that, similarly to what we have seen for the case of CO2 emissions, the cause of energy decoupling in developed countries is just that energy intensive products are being imported from developing economies, rather than produced domestically. That would explain both the strong increase of energy demand in China and the apparent energy decoupling in the US and the EU.
In our last post we had seen a map showing the emissions embedded in international trade. A similar but more detailed picture can be seen in Figure 2, where the contributions to bilateral emission transfers are disaggregated into its main drivers: trade balance, energy intensity of GDP, specialization in energy/emissions intensive products, and the emissions intensity of energy production.
Figure 2. Contributions to bilateral emission transfers
Source: Jakob & Marschinski (2013)
As we had already seen for the case of emissions, both the US and the EU are net importers of energy embedded in their international trade. This partially explains the decoupling shown in figure 1, and entails that although the direct energy used in production is stabilizing, the energy required for sustaining our level of consumption is likely to be still increasing.
In conclusion, although relative decoupling is clear in developed countries (energy demand grows slower than GDP), absolute decoupling (economic growth and energy demand drop) is unlikely when the energy embedded in international trade is also considered.
References
Jakob, M., Marschinski, R., 2013. Interpreting trade-related CO2 emission transfers. Nature Climate Change 3(1), 19-23.
Climate Footnotes 