New Study Shows Reducing Energy Intensity is Critical in Curbing CO2 Emissions

Reducing the amount of energy required to produce a unit of gross domestic product (GDP), particularly in the service sector, has been by far the greatest contributor to curbing emissions growth, according to a new World Bank study on changes in CO2 emissions.

Entitled Changes in CO2 Emissions from Energy Use: a Multi-country Decomposition Analysis,the study looks at data from more than 100 countries covering the period 1994–2006. It was co-authored by Masami Kojima and Robert Bacon, both of the World Bank’s Oil, Gas and Mining Policy Division.

The study looks at several factors to explain why the level of emissions goes up or down:

· the carbon intensity of the mix of fossil fuels,

· the share of fossil fuels in total energy consumed,

· the energy required to produce a unit of GDP (energy intensity),

· GDP per capita, and

· population.

These factors are all brought together in a framework that shows how changes in each factor are related to changes in total emissions.

The report shows that there were widely varied performances among countries, including those at similar income levels. The study also finds that the growth of GDP per capita and growth in population contributed the most to the net increase in emissions. Similarly, reducing energy intensity contributed the most to the net decrease in emissions.

“These results suggest that both developed and developing countries have much room to improve their energy intensity,” said Katherine Sierra, World Bank Vice-President for Sustainable Development. “High-income countries particularly could have performed much better in reducing their energy intensity, and this would be an important step in reducing emissions.”

The study also shows that the decrease in the energy intensity of the global service sector reduced CO2 emissions growth by 2.6 billion tons during the study period. In the industrial sector, reduced energy intensity led to a reduction in emissions of 0.7 billion tons. Without these reductions CO2 emissions would have been significantly higher.

Offsetting Emissions

Everything else being equal, income growth typically leads to higher CO2 emissions. This growth of emissions, however, can be offset by reducing the carbon intensity of the mix of fossil fuels, by reducing the fossil fuel intensity of energy (by diversifying to renewable energy, for example), and by reducing the overall energy intensity of the economy.

Countries in the early stages of development tended to show less offsetting. But the study cautions this finding must be taken in the context of the already very low per capita emissions today in many developing countries. Extremely poor countries, in particular, would not be expected to follow a development path in which total emissions from energy use would decline or even stabilize in the near to medium term.

“This analysis provides insights about the extent to which different countries have or have not managed to curb the growth of CO2 emissions relative to their economic growth,” says Warren Evans, World Bank Director of the Environment Department. “It would be helpful to policy makers in Copenhagen to pay attention to these results, particularly to lessons learned in countries that have been successful in reducing energy intensity.”(EOM)