Energy Leapfrogging

Today's less developed countries (LDCs) have access to energy technologies that did not exist when today's richer countries were at similar stages of development. Do LDCs therefore consume less energy per capita than rich countries in the past? And is their economic growth associated with a lower growth in energy consumption? Can they "leapfrog" to a lower-carbon economy? I use data on energy consumption, prices, and gross domestic product for 76 countries to estimate the energy intensity of income growth for both current LDCs and industrialized countries in the past. I find that, despite dramatic improvements in energy efficiency, economic growth in LDCs is not less energy-intensive than past growth in industrialized countries. Energy savings from access to more efficient technologies have been offset by other trends, including a shift toward more energy-intensive consumption bundles and compositional changes in industry such as outsourcing. This can have serious implications for energy consumption projections.