Skip to main content

Growth and energy use - a surprising relationship

One assumption that is often made in public discourse is that the size of the economy and the consumption of energy are firmly and linearly linked; the growth of one inevitably requires the growth of the other. But are things really that simple? I’m not so sure.

A great place to start when considering a question like this is the excellent dataset maintained by the World Bank.  Let’s start in the UK: how does GDP relate to the usage and production of energy? These are plotted in Figure 1. The economy has grown steadily since 1960, but the same can’t be said of energy use or production; indeed, production can be seen to be in steep decline since 2000.

Figure 1

To get a clearer picture, let’s consider the relationship between UK energy use and GDP in Figure 2. Clearly, the trajectory is far from linear. In fact, since 2000 the UK economy has both expanded and contracted, whilst energy use has been in rapid decline in the same period. It’s likely that advances in energy efficiency and the decline of heavy industry in the UK may be responsible for this effect, but the fact remains that there is little evidence that a growing UK economy will always need more energy to sustain it. It may even be possible that a larger, ‘greener’ economy may need even less energy in years to come.

Figure 2

So, does that mean that humanity has finally broken free of its addiction to energy? Can the world economy grow without draining the Earth’s energy resources? I’d say no.

Before the industrial revolutions of the 19th century, the basis of a country’s economy was predominantly agrarian, and the engine of agricultural production was muscle power. This was replaced by mechanical fuel-driven devices as countries industrialised, and led to the strong correlation between growth and energy use. This effect is still very visible in the fast growing economies of recently industrialised nations. An excellent example is that of China, visible in Figure 3 and Figure 4.

Figure 3

Figure 4
While the UK does appear to have reversed the trend of energy usage, this is due to a large extent to globalisation. Today, we in the UK import a much larger selection of goods from overseas than we did before the industrial revolution. Industrial economies are often still shackled by the old linear relationship between energy use and economic output, and by purchasing goods from these countries we are simply ‘outsourcing’ our energy needs elsewhere. Perhaps nations that are in the process of industrialisation will eventually adopt more energy-efficient means than they currently use. But until then, my conclusion is that it is possible to grow the UK economy without increasing our energy use. However, we do so at a cost to world energy use, and perhaps that should be the statistic that we pay more attention to.

This blog is written by Neeraj Oak, Cabot Institute.



Neeraj Oak

Popular posts from this blog

Converting probabilities between time-intervals

This is the first in an irregular sequence of snippets about some of the slightly more technical aspects of uncertainty and risk assessment.  If you have a slightly more technical question, then please email me and I will try to answer it with a snippet. Suppose that an event has a probability of 0.015 (or 1.5%) of happening at least once in the next five years. Then the probability of the event happening at least once in the next year is 0.015 / 5 = 0.003 (or 0.3%), and the probability of it happening at least once in the next 20 years is 0.015 * 4 = 0.06 (or 6%). Here is the rule for scaling probabilities to different time intervals: if both probabilities (the original one and the new one) are no larger than 0.1 (or 10%), then simply multiply the original probability by the ratio of the new time-interval to the original time-interval, to find the new probability. This rule is an approximation which breaks down if either of the probabilities is greater than 0.1. For example

1-in-200 year events

You often read or hear references to the ‘1-in-200 year event’, or ‘200-year event’, or ‘event with a return period of 200 years’. Other popular horizons are 1-in-30 years and 1-in-10,000 years. This term applies to hazards which can occur over a range of magnitudes, like volcanic eruptions, earthquakes, tsunamis, space weather, and various hydro-meteorological hazards like floods, storms, hot or cold spells, and droughts. ‘1-in-200 years’ refers to a particular magnitude. In floods this might be represented as a contour on a map, showing an area that is inundated. If this contour is labelled as ‘1-in-200 years’ this means that the current rate of floods at least as large as this is 1/200 /yr, or 0.005 /yr. So if your house is inside the contour, there is currently a 0.005 (0.5%) chance of being flooded in the next year, and a 0.025 (2.5%) chance of being flooded in the next five years. The general definition is this: ‘1-in-200 year magnitude is x’ = ‘the current rate for eve

Coconuts and climate change

Before pursuing an MSc in Climate Change Science and Policy at the University of Bristol, I completed my undergraduate studies in Environmental Science at the University of Colombo, Sri Lanka. During my final year I carried out a research project that explored the impact of extreme weather events on coconut productivity across the three climatic zones of Sri Lanka. A few months ago, I managed to get a paper published and I thought it would be a good idea to share my findings on this platform. Climate change and crop productivity  There has been a growing concern about the impact of extreme weather events on crop production across the globe, Sri Lanka being no exception. Coconut is becoming a rare commodity in the country, due to several reasons including the changing climate. The price hike in coconuts over the last few years is a good indication of how climate change is affecting coconut productivity across the country. Most coconut trees are no longer bearing fruits and thos