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Plausible energy demand patterns in a growing global economy with climate policy

Abstract

Reducing the energy demand has become a key mechanism for limiting climate change, but there are practical limitations associated with large energy savings in a growing global economy and, importantly, its lower-income parts. Using new data on energy and GDP, we show that adopting the same near-term low-energy growth trajectory in all regions in IPCC scenarios limiting global warming to 1.5 °C presents an unresolved policy challenge. We discuss this challenge of combining energy demand reductions with robust income growth for the 6.4 billion people in middle- and low-income countries in light of the reliance of economic development on industrialization. Our results highlight the importance of addressing limits to energy demand reduction in integrated assessment modelling when regional economic development is powered by industrialization and of instead exploring faster energy supply decarbonization. Insights from development economics and other disciplines could help generate plausible assumptions given the financial, investment and stability issues involved.

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Fig. 1: Historical output and energy per capita relation.
Fig. 2: Projections of output and FE per capita relation until 2050.
Fig. 3: Baseline and policy scenario growth rate deviations from historical rates.

Data availability

The data that support the national and regional historical energy series are from the UN and the IEA, but restrictions apply to the availability of these data, which were used under licence for the current study and so are not publicly available. The national historical data are, however, deposited with the UK Data Service67, with access conditional on case-by-case permission by the IEA: https://www.ukdataservice.ac.uk/get-data.aspx. All other historical data are publicly available from the Penn World Table, the Maddison Project, the World Bank and the PFU database. The data that support the future scenarios are derived exclusively from the IAMC 1.5 °C Scenario Explorer and Data and are available for free at https://data.ene.iiasa.ac.at/iamc-1.5c-explorer/.

Code availability

The code for curating the future scenario data (once downloaded) and for generating all the figures in the paper is available from the authors on reasonable request. It is coded in R.

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Acknowledgements

L.T. and D.F. acknowledge support from the Institute for New Economic Thinking.

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Affiliations

Authors

Contributions

L.T. conceived of and designed the experiments. G.S. performed the experiments. All authors analysed the data and contributed to the policy analysis and paper writing.

Corresponding author

Correspondence to Gregor Semieniuk.

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Competing interests

The authors declare no competing interests.

Additional information

Peer review information Nature Climate Change thanks Mariësse van Sluisveld, Charlie Wilson and the other, anonymous, reviewer(s) for their contribution to the peer review of this work.

Publisher’s note Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Extended data

Extended Data Fig. 1 Output per capita and primary energy per capita country time series for varying data definitions.

(a) National accounts GDP (rgdpna in the Penn World Table), (b) terms-of-trade adjusted PPP GDP (rgdpo in the Penn World Table), (c) employment instead of population and (d) only G20 member states. Sources: see Methods.

Extended Data Fig. 2 Difference of the annual global final minus primary energy demand growth rate.

Disks represent annual global observations connected by lines. Source: see Methods.

Extended Data Fig. 3 Levels and growth rate projections for primary energy and 2 °C scenarios.

(a) Global income per capita and primary energy per capita projections of 1.5 °C scenarios to 2050 in grey. Archetype scenarios are in blue. Scenario values have been normalised to start at the same historical level in 2010. Markers indicate decades. The historical trajectory is in black and the red lines extrapolate 1950–73 (Gold), 1973–2000 (Slow) and 2000–18 (Millennium) growth rates. The Gold extrapolation is truncated after 2030 to avoid extending the y-axis. (b) Same as a but for Middle East & Africa region. (c) Same as a but with final energy and 2 °C scenarios. The LED scenario does not exist for 2 °C mitigation. (d) Same as b but with final energy and 2 °C scenarios. Sources: see Methods.

Extended Data Fig. 4 Final energy levels projections for other regions.

Income per capita and final energy per capita projections of 1.5 °C scenarios to 2050 in grey for regions not shown in main text Fig. 2. Archetype scenarios are in blue. Scenario values have been normalised to start at the same historical level in 2010. Markers indicate decades. Black is the historical trajectory and the red lines extrapolate 1950–73 (Gold), 1973–2000 (Slow) and 2000–18 (Millennium) growth rates. Some extrapolations are truncated to avoid extending the y-axis. (a) Asia, (b) Latin America, (c) Transition Economies, (d) OECD. Sources: see Methods.

Extended Data Fig. 5 Scenario growth rate deviations from historical rates by region and scenario type.

(a) Annual growth rate deviation in percentage points in scenarios for 2020–30 relative to the 1970–2015 historical average for the World and five regions in baselines (disks), 1.5 °C (squares, upper panel) and 2 °C (triangles, lower panel). GDP/capita deviation is on the x-axis, FE/capita is on the yaxis. The aspect ratio is one. (b) As a for 2030–40. (c) As a for 2040–2100. Sources: see Methods.

Extended Data Fig. 6 Policy scenario growth rate deviations from baseline scenario by model type.

(a) Deviations in percentage points from BAU growth rates in scenarios mitigating to 1.5 °C conditional on whether GDP growth is endogenous (left three columns) or exogenous (right three columns). Boxes encompass the interquartile range and have no whiskers. The horizontal line in the box shows the median scenario. (b) Same as a but with 2 °C scenarios (y-scale the same in a and b).

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Supplementary Information

Supplementary Fig. 1, Table 1, Notes 1–5 and methods.

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Semieniuk, G., Taylor, L., Rezai, A. et al. Plausible energy demand patterns in a growing global economy with climate policy. Nat. Clim. Chang. 11, 313–318 (2021). https://doi.org/10.1038/s41558-020-00975-7

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