Energy intensity decline implications for stabilization of atmospheric CO2 content. by H. Douglas Lightfoot*, Mechanical Engineer (retired) and Christopher Green*, Dept. of Economics, McGill University *McGill Centre for Climate and Global Change Research (C2GCR) Report No. 2001-7, October 2001 (10 January 2002)i Abstract We estimate the appropriate rate of world average annual energy intensity decline to be used in calculating the amount of carbon-free energy required to stabilize the level of CO2 in the atmosphere at some level, such as 550 ppmv in 2100. We distinguish between the roles played by energy efficiency and long term sectoral changes, i.e., shifts in economic activity from high energy intensity sectors or industries to low energy intensity sectors or industries, such as the service industries. Improvements in energy efficiency comprise both those that arise from advances in technology and improved procedures and those that arise from wider adoption of the most efficient technologies available. Our procedure is to estimate the potential energy efficiency increase for the 110 years between 1990 and 2100 for world electricity generation (38% of world energy consumption in 1995), transportation (19%) and for residential, industrial and commercial uses (43%). Our result shows an overall average decline in energy intensity in 2100 to 40.1% of what it was in 1990. This is equivalent to an average annual rate of energy intensity decline of 0.83% for 110 years. Sensitivity analysis shows that the impact of sectoral changes on the average annual rate of decline in energy intensity could add between 0.16% and 0.30% to the 0.83% attributable to improvements in energy efficiency. Together, energy efficiency improvements and sectoral changes are estimated to allow an average annual rate of decline in energy intensity of 1% to 1.1% for the 110 year period 1990 to 2100.ii Table of Contents Abstract ................................................................................................................................i Table of Contents ................................................................................................................ii List of Tables......................................................................................................................iii List of Figures ....................................................................................................................iii Acknowledgements............................................................................................................iv Introduction.........................................................................................................................v Outline of the general problem............................................................................................1 Electricity ............................................................................................................................3 Transportation .....................................................................................................................6 Residential, Industrial and Commercial..............................................................................8 Residential.....................................................................................................................8 Industrial......................................................................................................................10 Commercial.................................................................................................................10 Summary of results for residential, industrial and commercial ........................................11 Average annual world energy intensity decline................................................................11 Sectoral share changes in energy using activities .............................................................12 Summary and Conclusions................................................................................................14 References and Notes:.......................................................................................................16 About the authors:.............................................................................................................21iii List of Tables Table 1. Percent energy efficiency increase vs percent energy intensity decline..............2 Table 2A. World electricity production in 1995(7).............................................................3 Table 2B. World electricity production by fuel in 1995, estimated for 2100 ....................4 Table 3. US transportation energy by method of transportation........................................7 Table 4. Residential energy consumption for the US and the world..................................9 Table 5. US and world industrial energy consumption....................................................10 Table 6. Summary of results for residential, industrial and commercial sectors .............11 Table 7. Summary table showing calculated average energy intensity per unit of output in 2100 as a percentage of what it was in 1990................................................11 Table 8. The effect of increasing the Gross Domestic Product (GDP) contribution of low energy intensive industries in the Industrial Sector..........................................13 Table 9. Sensitivity to the ratio of high to low intensity industries in 1990 and 2100. ...13 List of Figures Figure 1. Carbon-free power vs. rate of energy intensity decline…………………..…….15iv Acknowledgements The authors wish to thank the many people who have made encouraging comments about the value of removing much of the uncertainty about the contribution of attainable energy to efficiency to reducing the amount of carbon-free energy required to stabilize the level of CO2 in the atmosphere. We wish to especially acknowledge Dr. Martin Hoffert, of New York University, and Dr. Kenneth Caldiera, of Lawrence Livermore National Laboratory, for their encouragement and comments on the drafts. We wish to thank Hugh Banfill, who read and made comments on several drafts of this report. The authors especially wish to thank Dr. Nigel Roulet, Director, McGill University Centre for Climate and Global Change Research, for his numerous helpful comments on an earlier draft of the report and for encouraging us to pursue this