Energy, Efficiency Gains and Economic Development: When Will Global Energy Demand Saturate?
IMF Working Papers, November 20, 2020
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- Energy, Efficiency Gains and Economic Development: When Will Global Energy Demand Saturate?
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Bibliographic details
- Authors: Christian Bogmans, Lama Kiyasseh, Akito Matsumoto, Andrea Pescatori
- Published: November 20, 2020
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513561240.001
Summary
- Using a novel dataset covering 127 countries and spanning two centuries, the authors find evidence for an energy Kuznets curve:
- Initial decline of energy demand at low levels of per capita income.
- Stages of acceleration in energy demand as income rises.
- Saturation (a plateau) of energy demand at high-income levels.
- Historical trends in energy efficiency have reduced energy demand, globally, by about 1.2 percent per year and have helped bring forward a plateau in energy demand for high income countries.
- At middle incomes energy and income move in lockstep.
- The decline in the manufacturing share of value added, globally, accounted for about 0.2 percentage points of the energy efficiency gains.
- At the country level, the decline (rise) of the manufacturing sector has reduced (increased) US (China) energy demand by 4.1 (10.7) percent between 1990 and 2017.
Key quantitative findings
- Dataset coverage: 127 countries.
- Time span: two centuries.
- Global historical energy efficiency trend: about 1.2 percent per year reduction in energy demand.
- Contribution of manufacturing share decline to energy efficiency gains: about 0.2 percentage points.
- Country-level manufacturing-driven changes in energy demand (1990–2017):
- United States: reduced energy demand by 4.1 percent.
- China: increased energy demand by 10.7 percent.
Interpretations and implications
- The energy Kuznets curve suggests non-linear dynamics between per capita income and energy demand, with distinct phases (decline → acceleration → saturation).
- Energy efficiency improvements have materially lowered global energy demand growth and accelerated the timing of demand plateaus in high-income countries.
- Structural change in the economy, specifically the manufacturing share of value added, plays a measurable role in long-run energy demand trends but explains only a fraction (about 0.2 percentage points) of historical efficiency gains.
- Middle-income countries may experience proportional increases in energy demand as incomes rise ("lockstep" movement), implying that global energy demand could continue to grow as more countries pass through middle-income stages unless offset by stronger efficiency gains or structural change.
Christian Bogmans, Lama Kiyasseh, Akito Matsumoto, and Andrea Pescatori. "Energy, Efficiency Gains and Economic Development: When Will Global Energy Demand Saturate?", IMF Working Papers 2020, 253 (2020), accessed 9/16/2026, https://doi.org/10.5089/9781513561240.001
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