Good News: Global Energy Intensity Continues to Decline

Energy demand projected to increase by nearly 50 percent by 2040


Feng Yu/Dreamstime

The Energy Information Administration has just released its new data on energy intensity trends. Basically, the agency finds that humanity overall is using ever less energy to create more value. How much less? About a third less energy is being used to produce a dollar's worth of goods and services than was being consumed in 1990. In the meantime, world GDP nearly doubled and world population increased by 40 percent. This does not, however, mean that humanity is using less oil, coal, natural gas, nuclear, and renewable energy. In fact, the amount of energy being consumed globally increased by 60 percent between 1990 and 2015. On the other hand, U.S. primary energy consumption has been essentially flat since 2000 while the economy grew by more than 30 percent and U.S. population expanded by around 14 percent.


Is it possible that energy efficiency gains could become so great that that the absolute amount of energy consumed by humanity will begin to fall sometime in future? All things being equal—especially the price—this is not likely because energy freed up through efficiency would be used to fuel other new activities. The plain fact is that the only way to reduce energy consumption (like the consumption of any other normal good) is to increase its price relative to other goods. Ultimately, the EIA projects that world energy demand will increase by nearly 50 percent by 2040.