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Energy intensity convergence and its long-run minimum

Author

Listed:
  • Johannes Emmerling
  • Enrica De Cian
  • Maurizio Malpede

Abstract

Projections of energy intensity are important for the assessment of future energy demand, future emission pathways, and the costs of climate policies. We estimate and simulate energy intensity based on a conditional convergence approach, and show how based on the results the long-run minimum of energy intensity attainable can be estimated. We consider education, urbanization, and institutional factors and find them to positively impact energy intensity improvements. We link the estimated econometric models to an iterative projection model, resulting in a finite long-term lower limit of energy intensity of GDP to be around 0.35MJ/$ at the global level in most SSPs. Yet, by 2100, we estimated that energy intensity below one is hard to achieve based on historical patterns. By 2100, the projected energy intensities are in the range of 1MJ/$ at the global level. These results show that scenarios such as the ones used in the SR15 can be rationalized based on empirically founded projections, and that in particular the very low energy demand scenarios can be considered feasible on empirical grounds. The speed at which such ow values are achievable is however the big question and achieving them will require substantially going beyond historical technical change patterns.

Suggested Citation

  • Johannes Emmerling & Enrica De Cian & Maurizio Malpede, 2021. "Energy intensity convergence and its long-run minimum," GREEN Working Papers 13, GREEN, Centre for Research on Geography, Resources, Environment, Energy & Networks, Universita' Bocconi, Milano, Italy.
  • Handle: RePEc:bcu:greewp:greenwp13
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    More about this item

    Keywords

    Energy Intensity; Energy Demand; Convergence;
    All these keywords.

    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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