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86025_4

86025_4. Energy Systems Determinants 1: Demand. Energy (services) are one of the fundamental requirements for social and economic develop- ment and not just their consequence. Former US DOE chair. Energy Services for:. Survival and security (basic needs)

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86025_4

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  1. 86025_4 Energy Systems Determinants 1: Demand Arnulf Grubler

  2. Energy (services) are one of the fundamental requirements for social and economic develop-ment and not just their consequence Former US DOE chair Arnulf Grubler

  3. Energy Services for: • Survival and security (basic needs) • Building and maintaining material environment • Comfort (in using material env.) • Social interactions (communication, self-actualization) Arnulf Grubler

  4. Energy Services • Demand quantities: income, price, lifestyles, infrastructure,.. • Demand qualities: availability, income, price, comfort, “(in-)convenience”,… • Quantities and qualities interact! • “Modernization” indicator: quantity/quality of energy, e.g. non-commercial, traditional biomass use (cow-dung, residues, wood) Arnulf Grubler

  5. Traditional Fuel Use and Demographic Indicators 140 7 infant mortality, deaths per 120 6 1000 life births 100 5 female life-expectancy, years 80 4 3 60 male-female life expectancy gap, years 40 2 total fertility rate, 20 1 children/woman 0 0 Source: WEA, 2000, p. 53 <20 20-40 40-60 60-80 >80 Source: WEA 2001 percent non-commercial in total energy use Arnulf Grubler

  6. (Primary) Energy Use per Capita Source: Modified from V. Smil, 1991.

  7. Mapping Energy AccessFinal Energy per Capita vs Population Density AD 2000 Source: Chirkov&Grubler, IIASA, 2007. Arnulf Grubler

  8. Energy Use Distribution of Indian Households 1998-99 Source: S. Pachauri, IIASA, 2006.

  9. India – Per Capita HH (Direct) Energy Use vs. Income: Useful, Final and Hypothetical (with non-commercial fuel efficiencies)Σ: Efficiency is biggest contributor to human welfare gains Hypothetical final if used with non-commercial fuel efficiencies Final energy Useful energy Data: TERI, 1995. Arnulf Grubler

  10. India - Primary Direct and Indirect Household Energy Use Per Capita (1) Source: S. Pachauri, IIASA, 2006.

  11. India - Primary Direct and Indirect Household Energy Use Per Capita (2) Source: S. Pachauri, IIASA, 2006.

  12. India – Fuel Use Structure of Urban and Rural Households vs. Income Arnulf Grubler

  13. Western Europe (average) 13,000 $ PPP income ~ 2.5 toe final energy Floorspace: 40 m2 Residential energy: .8 toe Industry energy: 1 toe Transport energy: .7 toe Passenger-km (cars #):10,700 (.74) Ton-km (trucks #):3,400 (.24) Latin America (average) ~5,000 $ PPP income ~ 1 toe final energy Floorspace: 10 m2 Residential energy: .5 toe Industry energy: .3 toe Transport energy: .2 toe Passenger-km (cars #): 4,700 (.21) Ton-km (trucks #): 2,000 (.09) Per Capita Energy & Services Data characteristic for 1990s Arnulf Grubler

  14. Primary Energy Use and Income: Path Dependence 10 1800 9 1850 USA 1900 1800-1998 8 1925 1950 7 1975 6 1995 UK Austria toe per capita 1800-1998 5 1922-1995 4 Japan 1900-1998 3 2 Data: Butschek, 1997; Fouquet & Pearson, 1998; Grubler, 1998; Martin, 1988 & JStO, 1998. 1 0 0 5000 10000 15000 20000 25000 30000 GDP (1990 US$) per capita Arnulf Grubler

  15. Energy Use & Wealth: OECD Past and IIASA-WEC and IPCC Scenarios for DCs 10 1800 9 1850 USA 1900 1800-1998 8 1925 1950 7 1975 6 1995 UK Austria 1800-1998 toe per capita 5 1922-1995 4 Japan 3 1900-1998 2 1 0 0 5000 10000 15000 20000 25000 30000 GDP (1990 US$) per capita Arnulf Grubler

  16. Energy Demand: The Economist’s Perspective • Income growth, e.g. US real-term per capita income: +2%/yr (AFTER inflation) since 1900 = a Factor >7! • Elasticity of demand with respect to:-- income-- energy prices (incl. taxes!)-- different for different income groups, fuel types, etc. • Biggest impacts: Income growth, cost reductions, quality improvements • Rate of time preference: consumption ”impatience” (discounting) • Tradeoffs, e.g. transportation: income – price – time (air vs. car travel) Reminder: elasticity: >0 = % change of A per % change of B, 0><1 called “inelastic”;>1 called “elastic” e.g. income elasticity:  = +0.7 = 1% income growth  +0.7% demand e.g. price elasticity:  = -0.3 = 1% price growth  –0.3% demand

  17. Household Ownership (% of HH with) 1978 to 1985 (78-85 growth = colored) TV Refrigerator Washer Vaccum cl. Arnulf Grubler

  18. Cost Declines in Refrigerator Costs in US Source: OTA, 1991. On example of cost declines + quality improvements (efficiency) see Bill Nordhaus example. of Light https://classesv2.yale.edu/access/content/group/fes83026_f06/readings/nordhaus_lighting_1998.pdf

  19. Consumption Impatience: Discounting • Preference to consume nowrather than later • Incentive to save (consumption deferral): interest rate • A bet: I give you 1 $ today, or will put 2.3 Million $ in a trust fund to be paid out to your descendents in 300 years (a Yale story). What would you prefer?* • Different discount rates:social < entrepreneurial (ROI) < < individual consumption * If you prefer 1$ today then your rate of time preference >5% (often too high for climate cost benefit assessments)

  20. Denmark – Distribution of Discount Rates Source: Harrison, Lou& Williams AmEconRev., 2002 Arnulf Grubler

  21. Implict Discount Rates vs. Income: Purchase of Air Conditioners in US Source: Hausmann, 1979. Arnulf Grubler

  22. Energy Demand: The Industrial Ecologist’s Perspective • Product/service orientation • “Cradle-to-grave” accounting: Net energy analysis (direct+indirect energy requirements) • How to deal with structural change? • How to deal with multi-factor productivity? Arnulf Grubler

  23. US- Energy per $ Value Added(TJ per Million $, energy embodiment, 1992 I-O data)Source: Carnegie Mellon Univ. www.eiolca.net Direct energy Indirect energy Note product and value orientation: Energy embodied in car vs. total energy use over lifetime of car Energy $ per VA $: industry vs. services (energy price differences) Arnulf Grubler

  24. Carbon Intensity of Products/Services (2 digit SIC level) Source: Marland&Pippin, 1990. Arnulf Grubler

  25. US - Time and Energy Use * Excluding sleeping time #Passenger travel only, rest of transportation accounted for “at work” Arnulf Grubler

  26. US – Time –Energy-Diagram(cumulative percentage distribution) Arnulf Grubler

  27. Energy – Time – Information: Intensity of Products/Activities Energy Chemical products Asphalt Iron & steel Plastics Paper Working time = 0 Real estate Communication Paints Drugs Radio/ TV broad casting Eng ines / turbines Metal products Constru ction Food Textiles Enter tainment Shoes Information = 0 Primary Energy = 0 Restaurants Agricultural services Source: D. Spreng, 1993.

  28. Economic Structural Change(based on Kuznets, 1971) Arnulf Grubler

  29. Energy Demand: Social Science Perspectives on Value and Lifestyle Changes • Given: Hierarchy of needs (Maslow)economists (actionrevealed preferences?) • Constructed: Preferences “discovered” in process of establishing social relations (Mary Douglas)cultural theory (perceptionspreferencesactions?) • Generational change: Succession of cohorts (e.g. Nathan Keyfitz)demographers, “cross-over” scientists Arnulf Grubler

  30. Consumer Expenditures Structure in US (based on: Lebergott, 1993) Arnulf Grubler

  31. Typology of “Value-ists”Along 2 Dimensions of Social Relations & Associated Myths of NatureSource: M. Thompson based on M. Douglas and P. Timmerman Arnulf Grubler

  32. Keyfitz quote N. Keyfitz, 1992.

  33. N. Keyfitz, 1992.

  34. Germany: Car Ownership by Gender and Age Cohorts Source: Buttner&Grubler, 1995. Arnulf Grubler

  35. Germany: Car Ownership of Female Age CohortsSource: Buttner&Grubler, 1995. Arnulf Grubler

  36. Scenarios of Car Diffusion for a United Germany: Greens are Outnumbered by Greys!! 3 Scenarios: Constant 1990 Rates, Trend,Green Generation 1990: 79 Million Germans 35 Million Cars (26% female owners) 2030: 77 Million Germans (70 by 2050) 30 Million cars (24% female owners) 38 Million cars (36% female owners) 33 Million cars (41% female) Arnulf Grubler

  37. “Take-back” Effects Arnulf Grubler

  38. Percent Change since 1970 in US Automobile CO2 Emissions and Driving Forces Arnulf Grubler

  39. IPAT • Impacts = Population x Affluence x Technology • Widely used decompositional technique* • Component growth rates additive:e.g. POP 1%/yr, GDP 3%/yr, E/GDP -1%/yr= GDP/POP 2%/yr, Energy 2%/yr • See previous car emissions exampleC (emissions) = gallons fuel usegal = gal/miles x miles/vehicle x vehicle/people (“empty seats”) x people xε (adjustment for increasing SUV share), canceling out all elements: gal=gal = identity • Assumes variables are independent!Beware of fallacy of spatial aggregation (POP growth in India, Car growth in US lumped together in global IPAT)! *See e.g. Ausubel&Waggoner, 2002; and review of Chertow, JIE, 2001. Arnulf Grubler

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