Global Energy and Carbon Intensity Continue to Decline

Although a growing economy generally correlates with growing absolute energy use, energy intensity may well decline. In the 1990s, industrial economies started to turn to a new growth paradigm that relied heavily on service sectors. This "knowledge-based economy" is much less energy-intensive than the economic model that most nations adopted during industrialization. As a result, global energy intensity decreased 13.72 percent during the 1990s-the largest drop in the past 50 years.

The situation has been vastly different in the new millennium, however. While the first decade saw great volatility, with two upward surges during 2002-04 and 2008-10, the period between 2004 and 2008, saw a decrease in intensity of 3.50 percent. In the early years of the decade, large emerging economies like China started investing heavily in energy-intensive sectors, and after the onset of the global financial crisis in 2008, many countries implemented massive stimulus packages focused on energy-intensive sectors like manufacturing, construction, and infrastructure. But as the world economy began to recover after 2010, the previous pattern of global energy intensity reductions resumed.

Carbon intensity-defined as total emissions of carbon dioxide (CO₂) divided by gross world product-is another important environmental indicator. Global carbon intensity has followed the same general pattern of energy intensity, dropping 36.62 percent overall between 1990 and 2013, but rising between 2002 and 2004. After 2008, probably because of the impact of the economic recession, the decline in global carbon intensity generally slowed, although 2013 brought a slightly more rapid pace than in previous years. Advanced economies show a steadier decline in carbon intensity than newly industrialized and transitional countries do.

In 2006, China surpassed the United States as the world's largest CO₂ emitter. Realizing the risk, the Chinese government has been taking aggressive efforts to slow its CO₂ emissions. In its climate action annual report released in November 2014, China claims that its carbon intensity decreased 4.3 percent between 2012 and 2013 and dropped 28.56 percent from the 2005 level. World Bank data show lower drops of 3.61 percent and 24.97 percent, respectively.

At a meeting in Beijing in November 2014, President Obama and President Xi issued a joint announcement in which China proposed to peak its carbon emissions by 2030. The critical question is at what number this peak will be achieved. Further reducing the economy's carbon intensity will help to achieve a lower peak than otherwise possible.

Global energy intensity and carbon intensity are essentially measuring the efficiency with which human economic activities interact with nature. To ensure a sustainable development path globally, these two indicators need to be watched closely.