Thursday, January 7, 2010

Convergence of Energy Efficiency

I've been making more progress in my Environmental Economics Research Hub Project. I still don't have final results, but I am close. The above chart shows the estimated underlying energy efficiency, controlling for the structure of the economy etc. for five countries. I don't quite believe that the US is more efficient than Switzerland but at least the two developing economies are less efficient than the developed ones. However, it appears there has been convergence over time, particularly between China and the others. It's, therefore, not reasonable to suppose that gains in energy efficiency in China will be as fast in the future as in the 1979-2007 period under business as usual. Perhaps the 2000-2007 period will be more representative? This makes China's carbon intensity target a lot harder to achieve than many people think. It's not unachievable though given China's goals for renewable energy. This is what we are going to look at in our AARES paper.

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