![]()
1
Introduction
Energy affects nearly every aspect of our lives. We need energy to heat, cool, and light our homes as well as to cook and refrigerate our food. Energy fuels our cars, trucks, and other means of transport. Energy powers our industries, farms, offices, and other workplaces. In the United States and other industrialized nations, nearly all of this energy is derived from fossil fuels (oil, coal, and natural gas) and electricity.
Fossil fuels and electricity appear to be plentiful, inexpensive, and readily available. Ignoring taxes, a gallon of gasoline costs about as much as a gallon of bottled water. We turn on our appliances and lights with the flip of a switch, giving little thought to how the electricity is generated, or the consequences of its generation. We fill our gasoline tanks with little thought about where the fuel comes from, or the consequences of our fossil fuelâintensive culture.
Energy reaches into our lives in other less direct ways as well. Energy producers such as the major oil companies are among the largest and most profitable corporations in the world. The actions of these companies affect governments and the world economy, as witnessed by the spectacular collapse of Enron. The distribution and pursuit of energy resources worldwide affect relations among nations, as witnessed by the periodic conflicts over oil in the Persian Gulf region or the struggles between the Organization of Petroleum Exporting Countries (OPEC) and oil-importing nations (Yergin 1991).
The first theme of this book is that current energy sources and patterns of energy use are unsustainable. Continuing to consume ever greater amounts of fossil fuels will cause too much damage to the environment, risk unprecedented climate change, and rapidly deplete petroleum resources. Current trends in energy supply and demand will also exacerbate inequity and tensions among nations, tensions that fuel regional conflict and outbursts reminiscent of the attacks on the World Trade Center and Pentagon. In short, continuing on a business-as-usual energy path will put the well-being of future generations at risk.
The second theme is that an âenergy revolutionâ is possible and desirable. By emphasizing much greater energy efficiency and growing reliance on renewable energy sources such as solar energy, wind power, and bioenergy, all of the problems associated with current energy patterns and trends can be mitigated. However, a formidable set of barriers is limiting the rate of energy efficiency improvement and the transition to renewable energy sources in most parts of the world.
The third and primary theme of this book is that it is possible to overcome these barriers through enlightened public policies. Experience with policies for increasing energy efficiency and renewable energy use is growing, providing many successful models and lessons that can guide further action. Expanding the adoption of successful policies as well as increasing and focusing international efforts could accelerate the energy revolution and result in a more sustainable energy future.
Before considering future energy policies and scenarios, it is useful to review global energy use over the past century or two. Worldwide energy use has increased 20-fold since 1850, 10-fold since 1900, and more than 4-fold since 1950 (Fig. 1-1). This dramatic increase in energy use enabled economic growth and higher standards of living for a sizable fraction, but not all, of the worldâs growing population. Most of the growth in energy use during the past 100 years occurred in the industrialized world, home to about 20 percent of the worldâs population.
Our sources and uses of energy have changed a great deal over the past 150 years. Most energy consumed in the nineteenth century was in the form of biomassâfuelwood, charcoal, and agricultural residuesâalso known as traditional energy sources. Coal production expanded rapidly in the latter half of the nineteenth century, making coal the dominant energy source worldwide for about 75 years starting around 1890. Use of coal in steam engines and as a fuel for electricity generation transformed industries and life, at least in more developed countries. Petroleum production rapidly accelerated following World War II, making petroleum the dominant energy source over the past 35 to 40 years. Use of petroleum products in cars, buses, trucks, aircraft, and other types of vehicles transformed mobility. In addition, use of natural gas and nuclear power both grew rapidly during the past 30 years. Thus, the world has experienced energy transitions before, and these transitions coincided with and literally fueled economic and social transitions (Grubler 1998).
FIGURE 1-1: World energy supply since 1850.
Fossil fuels provide about 80 percent of the global energy supply today. Among fossil fuels, petroleum provides the largest share and accounts for about 35 percent of the total global energy supply. Coal provides about 23 percent and natural gas about 21 percent of the total. Renewable energy sources account for about 14 percent of the global energy supply, but most of this is in the form of traditional energy sources.1 Modern renewable energy sources, including hydropower, wind power, and modern forms of bioenergy, account for only about one-third of the renewable energy total. Nuclear energy provides the remaining 6 percent of the global energy supply (UNDP 2000).
About one-third of the worldâs populationâ2 billion peopleâstill rely almost entirely on firewood and other traditional energy sources for their energy needs. These households do not consume electricity, petroleum products, or natural gasâa major factor contributing to their impoverishment. Meanwhile, wealthier citizens of the world consume increasing amounts of fossil fuels, hydropower, and nuclear energy to power ever-larger vehicles, buildings, and appliances.
Current Energy Trends and Their Implications
Business-as-usual forecasts project that global energy use will increase around 2 percent per year in the coming decades. For example, the 2000 World Energy Outlook produced by the International Energy Agency projects in its Reference Scenario that world energy demand will increase by 54 percent between 1997 and 2020 (Fig. 1-2) (IEA 2000a). Oil use would increase by 56 percent, natural gas use by 86 percent, and coal use by 49 percent in this forecast. Fossil fuels would account for nearly 84 percent of total primary energy supply in 2020, up from their 80 percent share in 1997. Use of traditional fuels in developing nations would continue to increase, but more slowly than the projected growth in fossil fuel use.
Other forecasts indicate that if current energy policies and trends continue, global energy use could double from the level in 1990 by about 2025, triple by 2050, and further rise in the latter half of the twenty-first century (Nakicenovic, Grubler, and McDonald 1998). The majority of this growth is expected to take place in developing countries given their high population growth and low levels of energy consumption at the present time. Developing countries could pass industrialized countries in terms of total energy use by around 2025. But per capita energy use in industrialized nations still would increase and would remain far higher than in developing countries in these business-as-usual forecasts.
FIGURE 1-2: Reference scenario of world primary energy consumption.
A high-growth, fossil fuelâintensive energy future presents a variety of problems and challenges for humanity. These problems and challenges include high costs, air pollution, global warming, security risks, resource depletion, and inequity.
High Costs
Building power plants, oil and gas pipelines, and other energy supply facilities is very capital-intensive. Analyses show that if worldwide energy use continues to rise on the order of 2 percent per year, energy supply investments of $11 to $13 trillion will be needed during the period from 2000 to 2020 and an additional $26 to $35 trillion will be needed from 2020 to 2050 (in 1998 dollars).2 This level of investmentâ$500 billion to $1 trillion per yearâis two to four times the level of investment in energy production and conversion worldwide during the 1990s. Investment in energy supply could grow to 7 to 9 percent of the gross domestic product (GDP) in the transition economies over the next 20 years, for example (Nakicenovic 2000).
Expanding investment in energy supply and conversion is feasible in some countries, but will be difficult in transition and developing nations. These countries need to invest in a broad range of priorities including education, sanitation, health care, and rural development. Many developing and transition countries are strapped with high debts and have a difficult time attracting investment from the private sector. These factors limit investment in energy supply in Asia and Africa, for example, which in turn inhibits social and economic development there (Rogner and Popescu 2000).
Energy costs are also felt on the individual level in developing and transition countries. Households in developing countries often pay a sizable portion of their income for energy, including kerosene, batteries, and other fuels, and often use these energy sources very inefficiently. In former communist nations, households face very high energy bills relative to their diminished income because of inefficiency and energy waste, along with the phasing out of energy price subsidies. In Ukraine, for example, energy costs account for as much as 40 percent of household expenditures (IEA 2001g).
Likewise, energy expenditures can âeat upâ a sizable fraction of the income of poorer families in industrialized countries, due in large part to poorer families living in inefficient homes. In the United States, for example, energy costs equal 12 to 26 percent of the income of poorer households compared to just a few percent of income for middle-income and wealthier households (NCLC 1995). A significant fraction of the worldâs population will continue to waste energy and face high energy costs under a business-as-usual energy future.
Local and Regional Air Pollution
Burning fossil fuels causes air pollution that is harming public health and disrupting ecosystems. Energy activities account for 85 percent of humanmade emissions of sulfur dioxide (SO2), 45 percent of particulate emissions, 41 percent of lead emissions, 40 percent of hydrocarbon emissions, and 20 percent of nitrous oxide emissions to the atmosphere (Holdren and Smith 2000). These air pollutants in turn result in acid rain, urban smog, and hazardous soot. Burning fossil fuels is also a major source of toxic chemicals that are known to cause cancer (EPA 2002a).
It is estimated that 1.4 billion people are exposed to dangerous levels of outdoor pollution (Watson et al. 1998). Due to poor combustion efficiencies and lack of pollution controls, levels of particulate matter are two to five times higher than World Health Organization (WHO) limits in Southeast Asian cities and even higher in some cities in China and India (Li 1999). Over 80 percent of major cities in China exceed WHO limits for SO2, some by up to a factor of three (Li 1999). Levels of lead, carbon monoxide, nitrogen oxides, and volatile organic compounds also often exceed safe levels.
The impacts of this air pollution are stark. Outdoor air pollution is especially high in urban areas, causing on the order of 500,000 deaths globally and up to 5 percent of deaths in urban areas in some developing countries (WHO 1997). It is estimated that urban air pollution causes 170,000 to 290,000 premature deaths annually in China and 90,000 to 200,000 in India (Holdren and Smith 2000). The human health effects of air pollution in Chinese cities, when translated into economic terms, exceed 20 percent of the average income of Chinese workers and are approaching $50 billion (7 percent of GDP) for the nation as a ...
