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Economic Activity = Energy Use? Think Twice

Increased economic activity doesn’t necessarily have to lead to greater energy consumption. Photo by bitzcelt.

Energy use in the transport sector follows economic activity, but the relationship is not necessarily in direct proportion. Energy efficiency plays an important role in changing what used to be an unquestionable truth. A recent report by Dr. Peg Young, “A Time Series Analysis of Transportation Energy Use Per Dollar of Gross Domestic Product” from the Bureau of Transport Statistics, shows a 15% decline in the ratio of energy consumption in the U.S. transport sector to the nation’s gross domestic product (GDP), from January 2000 to October 2008.

What does this mean for us? It is a clear indication that energy consumption is gradually de-coupling from economic growth, with the main culprit being increased energy efficiency. With greater efficiency the economic growth has less-than-proportional impacts on energy security and greenhouse gas emissions.

What can be done to continue this positive trend? There is still a wide opportunity to increase energy efficiency by adopting sustainable development and transport policies. In 2005 the United States used 58,000 megajoules per person per year while Germany used 18,000, less than one third! (see “Sustainable Transport that Works: Lessons from Germany”). This greater efficiency is a result of deliberate policies that balance high levels of car ownership with safe and convenient public transport, cycling, and walking alternatives, as well as the promotion of higher densities and mixed use in urban areas.

Does this have any importance for developing countries? Yes, a lot. Developing countries can follow a trajectory of greater efficiency by adopting policies similar to those in Europe, without jeopardizing their economic and social development goals. Even the evidence in the United States is valuable, showing that economic growth does not necessarily mean a proportional increase in energy use.

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