Energy Transition : illusive progress

Macro Highlights - 3/27/2019

Energy Transition : illusive progress

Improved energy efficiency over the last 30 years, but a stagnant energy mix

  • To limit global warming to 1.5°C will require a 45% reduction in CO2 emissions by 2030 according to the Intergovernmental Panel on Climate Change
  • Two driving forces will be essential to achieving this goal: an increase in the share of renewable energies in the energy mix and an improvement in energy efficiency
  • Since 1990, there has been visible progress in efficiency, which has increased 48% worldwide and 167% in China ...
  • ...but progress in the global energy mix is nonetheless disappointing. In 1990, 86.7% of energy consumption came from fossil fuels. In 2017, it was still at 85.1%
  • 2017 was a disappointing year in terms of the energy transition. The growth in worldwide energy and coal consumption accelerated and CO2 emissions increased ...
  • ... mainly due to the acceleration of global economic growth from 3.3% to 3.7% in 2017, fueled in large part by industrial activity

Which countries are the most advanced in relation to the energy transition?

    • We have developed an energy transition index that is based on four main components: energy consumption per person, CO2 emissions per person, the share of fossil energy in total energy consumption, and energy efficiency
    • According to our index, the most advanced countries in 2017 were Switzerland, Colombia and Sweden
    • Switzerland: Despite high primary energy consumption per capita, Switzerland's consumption of fossil fuels is only 50.5% and the country’s energy efficiency (GDP per unit of energy) is among the highest in the world
    • Colombia: Colombia owes its second place to a per-capita primary energy consumption well below the world average and a significant role played by hydroelectricity, accounting for 30.4% of its energy mix
    • Sweden: Sweden has been a pioneer in the energy transition. In 2017, fossil fuels accounted for only 32.6% of primary energy consumption. These results were achieved through innovative and inclusive regulations

To receive the entire publication and to subscribe to our weekly economic insights, please ask your contact at Edmond de Rothschild.