Energy intensities will improve significantly

As individual technologies improve, conversion processes and end-use devices progress along their learning curves, and as inefficient technologies are retired in favor of more efficient ones, the amount of primary energy needed per unit of economic output - the energy intensity - decreases. Other things being equal, the faster the economic growth, the shorter the obsolescence time, the higher the turnover of capital, and the greater the energy intensity improvements. In the six scenarios of this study, improvements in individual technologies are varied across a range derived from historical trends. Combined with the economic growth patterns of the different scenarios, the average global reductions in energy intensity range between 0.8% per year and 1.4% per year. These bracket the historical rate of approximately 1% per year and cumulatively lead to substantial energy intensity decreases. Some regions improve faster, especially where current intensities are high and economic growth and capital turnover are rapid. The regional reviews endorsed the overall conclusions on energy intensity improvements, although there was a large difference of opinion across the regions on the rate of future improvements. The general pattern was that regions with large domestic resources and less auspicious economic growth over the past decade (MEA, LAM, and NAM) tended to be more conservative regarding future energy intensity improvements. In contrast, regions with more limited domestic resources that have recently experienced rapid economic growth and energy intensity improvements (CPA and SAS) considered further rapid improvements to be not only possible but necessary to sustain rapid growth.

This pattern is consistent with the basic historical relationship between economic growth and energy intensity improvements incorporated in the scenarios - namely, other things being equal, economic growth rates depend on the distance to the productivity frontier and on capital turnover rates, and energy intensities improve more quickly with faster economic growth and more rapid turnover of capital stock. Thus, growth is faster in regions with low per capita income and low labor productivity than in regions with high incomes and productivity. Similarly energy intensity improvements are faster in regions with high energy intensities than in regions closer to the energy productivity frontier.