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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 Economics & Policy, Crawford School of Public Policy, The Australian National University.
  • Handle: RePEc:een:ccepwp:1706
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    File URL: https://ccep.crawford.anu.edu.au/files/uploads/ccep_crawford_anu_edu_au/2017-11/stern_how_accurate_are_energy_intensity_projections_ccepwp1706.pdf
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    References listed on IDEAS

    as
    1. 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).
    2. 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.
    3. Stern, David I., 2012. "Modeling international trends in energy efficiency," Energy Economics, Elsevier, vol. 34(6), pages 2200-2208.
    4. 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).
    5. 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).
    6. Csereklyei, Zsuzsanna & Stern, David I., 2015. "Global energy use: Decoupling or convergence?," Energy Economics, Elsevier, vol. 51(C), pages 633-641.
    7. Saunders, Harry D., 2008. "Fuel conserving (and using) production functions," Energy Economics, Elsevier, vol. 30(5), pages 2184-2235, September.
    8. 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.
    9. Jotzo, Frank & Burke, Paul J. & Wood, Peter J. & Macintosh, Andrew & Stern, David I., 2012. "Decomposing the 2010 global carbon dioxide emissions rebound," Working Papers 249400, Australian National University, Centre for Climate Economics & Policy.
    10. 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).
    11. 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.
    12. 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.
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    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

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    Cited by:

    1. 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.

    More about this item

    Keywords

    Integrated Assessment Models; Business as Usual; Projections;

    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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