A key reason explaining the increase in energy demand is simply the massive energy needs of China and India. They accounted for 40% of the 2017 energy growth, whereas developed countries only accounted for 20% of this growth. Developing countries are catching up economically and this of course requires large volumes of energy, and not only for their industrial activities. In addition, the gap remains so wide that it is very difficult to imagine that this trend could or should structurally reverse.
But another interesting fact revealed by the latest data on energy and CO2 emissions is the still massive reliance on fossil fuels despite the development of renewables. 72% of the 2017 increase in energy demand was based on fossil fuels, which is not far from their share of total primary energy use (c.80%), a figure that has been stable in recent decades and cannot be expected to change considerably in the short or medium term based on current trends. Here again, the issue tends to be structural. Renewables are of course growing (they met 25% of the energy use growth as renewables-based power grew by 6.3% in 2017), but fossil fuels also remain clearly on the rise with growth rates of 1.6% for oil (twice as much as the average of the past 10 years), 3% for gas and 1% for coal.
2017 increase of energy demand by source
In this context it is no surprise that the world’s energy consumption is on the rise, fuelling the global economic growth and the development of emerging countries. And it is, thus, very logically that we observe a 1.4% growth in energy-related CO2 emissions, in particular as annual energy efficiency gains remain insufficient to counter the impacts of GDP growth. GDP grew by 3.7% in 2017 but its energy intensity improved by only 1.7%, which was even significantly lower than in the past 3 years (2.3% average).
Energy efficiency gains were notable in China where GDP increased by 7% but CO2 emissions grew by only 1.7%. This did not only reflect the development of renewables in the country and the “make China’s skies blue again” policy, but also a change in the structure of the country’s economy, trying to limit its exposure to the most energy-intensive industrial sectors. Potential good news given the country’s health problems or in terms of diversification.
A surprise came from the USA where CO2 emissions decreased by 0.5%. This is not new as a decrease had already been observed in the past two years, but it was interesting to note that this evolution was less related to coal-to-gas switching than in previous years, and much more to the development of renewables. Signs of change? It should however be noted that not all the indicators are in the green. The USA is one of the most emblematic examples of a current trend towards more and more SUVs on the road. There are now almost as many SUVs and light trucks in the country’s passenger car fleet as other vehicles, and SUVs and light trucks represented 60% of sales in 2017 compared with 47% in 2011.
These current trends are not completely new as they reflect structural factors. It is however good to stay up to date on them (as some shifts can also be observed, as in the USA and China). The question that remains is nonetheless that of how climate targets can be achieved in the face of such structural trends and given the limited changes observed in terms of energy intensity of GDP and carbon intensity of energy. A quote by Einstein summarizes one part of our current issues: “Problems cannot be solved with the same mindset that created them.”
Guillaume Emin, Project Manager