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How Accurate are Energy Intensity Projections?

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  • David I. Stern

    (Crawford School of Public Policy, The Australian National University)

Abstract

Recent projections of energy intensity predict a more rapid decline in intensity than has occurred in the recent past. To assess how well such projections have performed in the past, I assess the accuracy of the business as usual energy intensity projections embedded in the annual World Energy Outlook (WEO) produced by the International Energy Agency since 1994. Changes in energy intensity depend on economic growth and historical errors in projecting energy intensity can partly be explained by errors in projecting the rate of economic growth. However, recent projections of the elasticity of energy intensity with respect to economic growth probably overstate the likely future reduction in energy intensity even if economic growth is projected accurately. This could be because energy efficiency policies are not implemented as effectively as expected or because the economy-wide rebound effect is larger than modeling assumes.

Suggested Citation

  • David I. Stern, 2017. "How Accurate are Energy Intensity Projections?," CCEP Working Papers 1706, Centre for Climate & Energy Policy, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:ccepwp:1706
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    References listed on IDEAS

    as
    1. Stern, David I., 2012. "Modeling international trends in energy efficiency," Energy Economics, Elsevier, vol. 34(6), pages 2200-2208.
    2. Zsuzsanna Csereklyei, M. d. Mar Rubio-Varas, and David I. Stern, 2016. "Energy and Economic Growth: The Stylized Facts," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    3. Karen Turner, 2013. ""Rebound" Effects from Increased Energy Efficiency: A Time to Pause and Reflect," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    4. Pretis, Felix & Roser, Max, 2017. "Carbon dioxide emission-intensity in climate projections: Comparing the observational record to socio-economic scenarios," Energy, Elsevier, vol. 135(C), pages 718-725.
    5. Turner, Karen, 2009. "Negative rebound and disinvestment effects in response to an improvement in energy efficiency in the UK economy," Energy Economics, Elsevier, vol. 31(5), pages 648-666, September.
    6. Aleklett, Kjell & Höök, Mikael & Jakobsson, Kristofer & Lardelli, Michael & Snowden, Simon & Söderbergh, Bengt, 2010. "The Peak of the Oil Age - Analyzing the world oil production Reference Scenario in World Energy Outlook 2008," Energy Policy, Elsevier, vol. 38(3), pages 1398-1414, March.
    7. David I. Stern and Astrid Kander, 2012. "The Role of Energy in the Industrial Revolution and Modern Economic Growth," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    8. Frank Jotzo & Paul J. Burke & Peter J. Wood & Andrew Macintosh & David I. Stern, 2012. "Decomposing the 2010 global carbon dioxide emissions rebound," Nature Climate Change, Nature, vol. 2(4), pages 213-214, April.
    9. Saunders, Harry D., 2013. "Historical evidence for energy efficiency rebound in 30 US sectors and a toolkit for rebound analysts," Technological Forecasting and Social Change, Elsevier, vol. 80(7), pages 1317-1330.
    10. Csereklyei, Zsuzsanna & Stern, David I., 2015. "Global energy use: Decoupling or convergence?," Energy Economics, Elsevier, vol. 51(C), pages 633-641.
    11. Saunders, Harry D., 2008. "Fuel conserving (and using) production functions," Energy Economics, Elsevier, vol. 30(5), pages 2184-2235, September.
    12. Harry D. Saunders, 2015. "Recent Evidence for Large Rebound: Elucidating the Drivers and their Implications for Climate Change Models," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    13. Arthur A. van Benthem, 2015. "Energy Leapfrogging," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 2(1), pages 93-132.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. How Accurate are Projections of Energy Intensity?
      by noreply@blogger.com (David Stern) in Stochastic Trend on 2017-04-27 02:17:00
    2. Annual Review 2017
      by noreply@blogger.com (David Stern) in Stochastic Trend on 2017-12-28 02:26:00

    Citations

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    Cited by:

    1. Bruns, Stephan B. & Moneta, Alessio & Stern, David I., 2021. "Estimating the economy-wide rebound effect using empirically identified structural vector autoregressions," Energy Economics, Elsevier, vol. 97(C).
    2. Leonard Goke & Jens Weibezahn & Christian von Hirschhausen, 2021. "A collective blueprint, not a crystal ball: How expectations and participation shape long-term energy scenarios," Papers 2112.04821, arXiv.org, revised Dec 2022.
    3. Nicolas Schneider & Avik Sinha, 2023. "Better clean or efficient? Panel regressions," Climatic Change, Springer, vol. 176(8), pages 1-24, August.
    4. Marco Amendola & Francesco Lamperti & Andrea Roventini & Alessandro Sapio, 2023. "Energy efficiency policies in an agent-based macroeconomic model," LEM Papers Series 2023/20, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    5. Pretis, Felix & Roser, Max, 2017. "Carbon dioxide emission-intensity in climate projections: Comparing the observational record to socio-economic scenarios," Energy, Elsevier, vol. 135(C), pages 718-725.
    6. Saunders, Harry D. & Roy, Joyashree & Azevedo, Inês M.L. & Chakravarty, Debalina & Dasgupta, Shyamasree & De La Rue Du Can, Stephane & Druckman, Angela & Fouquet, Roger & Grubb, Michael & Lin, Boqiang, 2021. "Energy efficiency: what has research delivered in the last 40 years?," LSE Research Online Documents on Economics 114344, London School of Economics and Political Science, LSE Library.
    7. Cotterman, Turner, 2019. "Why Rapid and Deep Decarbonization isn’t Simple: Linking Bottom-up Socio-technical Decision-making Insights with Top-down Macroeconomic Analyses," Conference papers 333088, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Jafari, Mahboubeh & Stern, David I. & Bruns, Stephan B., 2022. "How large is the economy-wide rebound effect in middle income countries? Evidence from Iran," Ecological Economics, Elsevier, vol. 193(C).
    9. Brockway, Paul E. & Sorrell, Steve & Semieniuk, Gregor & Heun, Matthew Kuperus & Court, Victor, 2021. "Energy efficiency and economy-wide rebound effects: A review of the evidence and its implications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 141(C).
    10. Stern, David I., 2020. "How large is the economy-wide rebound effect?," Energy Policy, Elsevier, vol. 147(C).
    11. Eka Sudarmaji & Sri Ambarwati & Mira Munira, 2022. "Measurement of the Rebound Effect on Urban Household Energy Consumption Savings," International Journal of Energy Economics and Policy, Econjournals, vol. 12(5), pages 88-100, September.
    12. Syeda Tayyaba Ijaz & Sumayya Chughtai, 2022. "The Impact of Financial, Economic and Environmental Factors on Energy Efficiency, Intensity, and Dependence: The Moderating Role of Governance and Institutional Quality," International Journal of Energy Economics and Policy, Econjournals, vol. 12(4), pages 15-31, July.

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    More about this item

    Keywords

    Integrated Assessment Models; Business as Usual; Projections;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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