Is investing in energy efficiency cost-prohibitive for developing countries?
The US and other developed countries have made huge strides in using energy more efficiently. But the bulk of energy demand growth over the next few decades is projected to come from the developing world, where per capita energy intensity is expected to rise dramatically before plateauing and declining.
Countries like China and India are undergoing massive population shifts from rural to urban areas, which will lead to substantial increases in per-person energy consumption. According to ExxonMobil’s Outlook for Energy: A View to 2040, China and India will transition from being 35% urban to 75% urban by the end of the period. “Urbanization means increased energy use,” said ExxonMobil vice-president of public and government affairs Ken Cohen at the Columbia University Energy Symposium on Friday. “You have air-conditioning, heating, refrigeration, transportation, etc.”
Encouraging developing countries to invest in efficiency now could help to rein in the rate at which global energy consumption rises. But Cohen suggested that the cost of that sort of investment may prove too high for developing countries.
“The affluent and developed parts of he world are becoming very efficient in the use of energy,” said Cohen. “It makes sense that a wealthier society can afford the environmental controls and the efficiency technologies that are available and can be deployed.”
Developing countries will need to reach a certain level of affluence before they will see similar trends in energy use, Cohen said. “In the developing part of the world, what you’ll see is a rapid slope up during most of the outlook period, but then notice the slope around the year 2025 as developing China actually becomes developed, and the technologies and the wealth of society allows energy use to be more efficient in terms of choices and control technologies.”
Source: ExxonMobil 2013 Outlook for Energy
But Natural Resources Defense Council Clean Energy Counsel Katherine Kennedy argued that failure to invest in efficiency now place a much heavier cost burden on developing countries over the longer term.
“The concept that the developing world can’t afford efficiency really has it backward,” Kennedy said. “Developing countries need energy efficiency more than the developed world, of course, because otherwise they are paying too much for the energy services that they have, and when they get them, they’ll be paying too much.”
“We call [energy efficiency] the low-hanging fruit that keeps growing back. It is always the cheapest, fastest, cleanest solution to energy and climate challenges,” Kennedy said.
