Let me set the stage. If you consider energy consumption and economic productivity, it seems reasonable to assert that as productivity rises, so does consumption. This has been studied, and here’s a summary from Energy Consulting Associates, with a useful tidbit quoted here:
Access to modern forms of energy, even though it is not by itself a panacea to economic development, is believed to be a pre- requisite for alleviating poverty, increasing employment and, in general, promoting better living standards (IIASA 2012).
While there is no Millennium Development Goal (MDG) on energy, the access to modern and reliable energy services is an essential input to achieving most of the MDGs, including poverty alleviation, productivity, health, education, communication services and gender equality governance (UNIDO 2011; Modi 2006). According to DFID (2002), increased energy access directly contributes to freeing up women’s time that was previously wasted in gathering fuelwood and cooking with inefficient stoves and alleviates adverse health impacts related to burning of wood and dung. The extra time created as a result of higher energy availability provides the opportunity for women to get involved with income generating activities and ultimately leads to higher gender equality (Kanagawa 2005). Figure 3 , below, illustrates the relationship between energy access and the MDGs. [figures omitted]
Another study published on the Social Science Research Network in the context of Africa:
Abstract:
It has been suggested that Africa’s growth is principally driven by natural resource rents. This is at variance with the growth in countries such as Korea and Taiwan where productivity has been identified as the main driver. In this study, the effect of energy consumption, investment, productivity on per capita growth in oil producing African countries is examined by employing a dynamic simultaneous panel data model. The simultaneous panel data model is able to examine the three-way causal relationship between energy consumption, productivity and economic growth. The results confirm the importance of income, productivity, price and investment influence the demand for renewable end non-renewable energy. The study recommends that there should be investment in productivity to enhance economic growth and minimize energy consumption.
Another from the Journal of Economics and International Finance in an African context:
This article investigates the relationship between energy consumption and the Nigerian economy from the period of 1970 to 2005. The energy sources used to test for this relationship were crude oil, electricity and coal. By applying the co-integration technique, the results derived infer that there exists a positive relationship between current period energy consumption and economic growth.
So my point? NewScientist (12 March 2016) caught my attention with this simple statement:
“This is a big shift in how China is thinking about its economy,” says Kate Gordon of the Paulson Institute, a think-tank in Chicago. “It’s an attempt to decouple economic growth from energy consumption.”
That’s rather huge on the face of it, even if it’s characterizable as simply better energy efficiency. But Jeff Spross, back in 2014, writing for ThinkProgress, pointed out that the United States has been moving towards breaking that link for years now:
That’s arguably been a critical part of a remarkable trend the Natural Resources Defense Council noted last year. Up until the late 1970s, energy consumption grew in tandem with the economy. But after that, the two trends split, with economic growth continuing to go up and energy use increasing at a far lower rate.
At this point, America’s energy consumption is well below where it was predicted to be in the 1970s. The Coalition quoted Duke Energy CEO Lynn Good that “improvements in energy efficiency for buildings and appliances appear to have broken the traditional connection between electricity demand and economic growth.”
I am curious about the details, though. There’s a difference, for example, between temperature control for your house, and the energy required to run a semi-conductor plant. What consumes more energy? Where should the focus be for energy reduction?
