China and India Energy Predictions From the Iea

Lynne Kiesling

Every year the U.S. Department of Energy and the International Energy Agency publish forecasts of world energy production and consumption, and the economic and environmental consequences thereof. Typically these forecasts use elaborate computer models to extrapolate various scenarios to generate a sense of where we might be headed, based on different use patterns, economic growth, technological change, etc.

The IEA World Energy Outlook 2007 is now available. This forecast, not surprisingly, focuses on China and India, and the effects of their demand growth globally, but it also encompasses the rest of the world:

But the consequences of unfettered growth in global energy demand are alarming for all countries. If governments around the world stick with existing policies – the underlying premise of the WEO Reference Scenario – the world’s energy needs would be well over 50% higher in 2030 than today. China and India together account for 45% of the increase in global primary energy demand in this scenario. Both countries’ energy use is set to more than double between 2005 and 2030. Worldwide, fossil fuels – oil, gas and coal – continue to dominate the fuel mix. Among them, coal is set to grow most rapidly, driven largely by power-sector demand in China and India. These trends lead to continued growth in global energy-related emissions of carbon-dioxide (CO2), from 27 Gt in 2005 to 42 Gt in 2030 – a rise of 57%. China is expected to overtake the United States to become the world’s biggest emitter in 2007, while India becomes the third-biggest emitter by around 2015. China’s per-capita emissions almost reach those of OECD Europe by 2030.

The other scenarios estimated include an Alternative Policy Scenario, in which governments implement carbon policies to control the emissions of greenhouse gases:

Government action can alter appreciably these trends. If governments around the world implement policies they are considering today, as assumed in an Alternative Policy Scenario, global energy-related CO2 emissions would level off in the 2020s and reach 34 Gt in 2030 – almost a fifth less than in the Reference Scenario. Global oil demand would be 14 mb/d lower – a saving equal to the entire current output of the United States, Canada and Mexico combined. Measures to improve energy efficiency are the cheapest and fastest way to curb demand and emissions growth in the near term. The savings are particularly large in China and India. For example, tougher efficiency standards for air conditioners and refrigerators alone would, by 2020, save the amount of power produced by the Three Gorges dam. Emissions of local pollutants in both countries, including sulphur-dioxide and nitrous oxides, would also be reduced sharply.

Forecasting exercises like these fall under the dictum of “all models are wrong, but some are useful”. Certainly none of these scenarios will obtain, and the relationships among the included variables will change within the timeframe covered by the analysis. Yet they provide useful information and, in the case of the low-cost energy efficiency measures mentioned above, they provide some suggestions for low-cost actions we can take to reduce our energy use while still achieving economic growth and high living standards.

The full report is available here, at a high price (150 Euros, yikes!).