Friday, November 4, 2011

3. Energy Intensity is not Correlated with GDP per Capita

As you can see from the chart this claim is only partially true. Energy intensity (energy per dollar of GDP) does seem somewhat higher in the less developed countries. But energy intensity does not seem to vary across middle and high income countries. As GDP per capita is very closely related to output per worker, otherwise known as labor productivity (the productivity number the media is often talking about) it's curious that there is no relationship. This suggests that energy intensity is not a good proxy for energy efficiency in an underlying technological sense. My main environmental economics research hub paper discusses this issue at length. I find that underlying energy efficiency varies much more with GDP per capita than does energy intensity but a bunch of other factors including climate and economic structure also affect energy intensity. Countries like China that use a lot of coal are going to be more energy intensive, for example, because coal is a lower quality - a less productive - fuel than oil or natural gas.

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