AS changes in global climate wreaks havoc from coast to coast, the need to transition from fossil fuel as a source of energy to more sustainable renewable energy is now more urgent. However, this can be quickly achieved if the world invests more in new technologies to achieve energy efficiency, according to an IMF study, whose findings were discussed at the ongoing annual meetings.
The study, which looked at historical data covering 150 years and about 100 countries, shows that economic growth contributes increased consumption of energy as a growing middle class snap up energy-hungry durable products such as cars, fridges and air conditioners. However, the good news is that there is a decoupling of energy consumption growth and income growth at higher income threshold.
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“Richer economies consume more energy than poorer ones. But only to a point because as countries get richer they move from biomass to more efficient sources of energy,” says Christian Bogmass of the IMF Research Department and one of the study authors.
The chokepoint of energy consumption, the study finds, is at $12,000 per capita income with an estimated energy peak at $120,000. Although, this means that energy consumption is increasing in emerging market economies such as China and India, it is levelling off in developed countries just as energy efficiency has reduced the energy consumption peak to $55,000 per capita which many rich countries have achieved.
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To curb greenhouses gases, the world, according to Lama Kiyasseh, one of the study authors, must reduce its consumption of fossil fuel which could be achieved by an acceleration of the energy transition from fossil fuel to low carbon energy sources or a peak and decline in global energy consumption.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.