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86025 Energy Systems AnalysisArnulf Grubler 86025_4 Energy Systems Determinants 1: Demand.

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Presentation on theme: "86025 Energy Systems AnalysisArnulf Grubler 86025_4 Energy Systems Determinants 1: Demand."— Presentation transcript:

1 86025 Energy Systems AnalysisArnulf Grubler 86025_4 Energy Systems Determinants 1: Demand

2 86025 Energy Systems AnalysisArnulf Grubler Energy (services) are one of the fundamental requirements for social and economic develop- ment and not just their consequence Former US DOE chair

3 86025 Energy Systems AnalysisArnulf Grubler Energy Services for: Survival and security (basic needs) Building and maintaining material environment Comfort (in using material env.) Social interactions (communication, self-actualization)

4 86025 Energy Systems AnalysisArnulf Grubler Energy Services Demand quantities: income, price, lifestyles, infrastructure,.. Demand qualities: availability, income, price, comfort, “(in-)convenience”,… Quantities and qualities interact! “Modernization” indicator: quantity/quality of energy, e.g. non- commercial, traditional biomass use (cow-dung, residues, wood)

5 86025 Energy Systems AnalysisArnulf Grubler Traditional Fuel Use and Demographic Indicators

6 (Primary) Energy Use per Capita Source: Modified from V. Smil, 1991.

7 86025 Energy Systems AnalysisArnulf Grubler Mapping Energy Access Final Energy per Capita vs Population Density AD 2000 Source: Chirkov&Grubler, IIASA, 2007.

8 Energy Use Distribution of Indian Households Source: S. Pachauri, IIASA, 2006.

9 86025 Energy Systems AnalysisArnulf Grubler India – Per Capita HH (Direct) Energy Use vs. Income: Useful, Final and Hypothetical (with non-commercial fuel efficiencies) Σ: Efficiency is biggest contributor to human welfare gains Useful energy Final energy Hypothetical final if used with non-commercial fuel efficiencies Data: TERI, 1995.

10 India - Primary Direct and Indirect Household Energy Use Per Capita (1) Source: S. Pachauri, IIASA, 2006.

11 India - Primary Direct and Indirect Household Energy Use Per Capita (2) Source: S. Pachauri, IIASA, 2006.

12 86025 Energy Systems AnalysisArnulf Grubler India – Fuel Use Structure of Urban and Rural Households vs. Income

13 86025 Energy Systems AnalysisArnulf Grubler Per Capita Energy & Services Western Europe (average) 13,000 $ PPP income ~ 2.5 toe final energy Floorspace: 40 m 2 Residential energy:.8 toe Industry energy: 1 toe Transport energy:.7 toe Passenger-km (cars #): 10,700 (.74) Ton-km (trucks #): 3,400 (.24) Latin America (average) ~5,000 $ PPP income ~ 1 toe final energy Floorspace: 10 m 2 Residential energy:.5 toe Industry energy:.3 toe Transport energy:.2 toe Passenger-km (cars #): 4,700 (.21) Ton-km (trucks #): 2,000 (.09) Data characteristic for 1990s

14 86025 Energy Systems AnalysisArnulf Grubler Primary Energy Use and Income: Path Dependence toe per capita USA Japan Austria UK GDP (1990 US$) per capita Data: Butschek, 1997; Fouquet & Pearson, 1998; Grubler, 1998; Martin, 1988 & JStO, 1998.

15 86025 Energy Systems AnalysisArnulf Grubler Energy Use & Wealth: OECD Past and IIASA-WEC and IPCC Scenarios for DCs toe per capita USA Austria UK GDP (1990 US$) per capita Japan

16 Energy Demand: The Economist’s Perspective Income growth, e.g. US real-term per capita income: +2%/yr (AFTER inflation) since 1900 = a Factor >7! Elasticity of demand with respect to: -- income -- energy prices (incl. taxes!) -- different for different income groups, fuel types, etc. Biggest impacts: Income growth, cost reductions, quality improvements Rate of time preference: consumption ”impatience” (discounting) Tradeoffs, e.g. transportation: income – price – time (air vs. car travel) Reminder: elasticity:  >0 = % change of A per % change of B, 0>  1 called “elastic” e.g. income elasticity:  = +0.7 = 1% income growth  +0.7% demand e.g. price elasticity:  = -0.3 = 1% price growth  –0.3% demand

17 86025 Energy Systems AnalysisArnulf Grubler Household Ownership (% of HH with) 1978 to 1985 (78-85 growth = colored) TV Refrigerator Washer Vaccum cl.

18 Cost Declines in Refrigerator Costs in US Source: OTA, On example of cost declines + quality improvements (efficiency) see Bill Nordhaus example. of Light https://classesv2.yale.edu/access/content/group/fes83026_f06/readings/nordhaus_lighting_1998.pdf

19 Consumption Impatience: Discounting Preference to consume now rather than later Incentive to save (consumption deferral): interest rate A bet: I give you 1 $ today, or will put 2.3 Million $ in a trust fund to be paid out to your descendents in 300 years (a Yale story). What would you prefer?* Different discount rates: social < entrepreneurial (ROI) < < individual consumption * If you prefer 1$ today then your rate of time preference >5% (often too high for climate cost benefit assessments)

20 86025 Energy Systems AnalysisArnulf Grubler Denmark – Distribution of Discount Rates Source: Harrison, Lou& Williams AmEconRev., 2002

21 86025 Energy Systems AnalysisArnulf Grubler Implict Discount Rates vs. Income: Purchase of Air Conditioners in US Source: Hausmann, HH income, US$(1994)/yr Implicit discount rate, %/yr 12,000 20,000 30,000 50,000 70, ,

22 86025 Energy Systems AnalysisArnulf Grubler Energy Demand: The Industrial Ecologist’s Perspective Product/service orientation “Cradle-to-grave” accounting: Net energy analysis (direct+indirect energy requirements) How to deal with structural change? How to deal with multi-factor productivity?

23 86025 Energy Systems AnalysisArnulf Grubler US- Energy per $ Value Added (TJ per Million $, energy embodiment, 1992 I-O data) Source: Carnegie Mellon Univ. Direct energyIndirect energy Note product and value orientation: Energy embodied in car vs. total energy use over lifetime of car Energy $ per VA $: industry vs. services (energy price differences)

24 86025 Energy Systems AnalysisArnulf Grubler Carbon Intensity of Products/Services (2 digit SIC level) Source: Marland&Pippin, 1990.

25 86025 Energy Systems AnalysisArnulf Grubler US - Time and Energy Use Time 10 9 hrs Energy ( final) 10 9 kgoekgoe/hr At home 835.5* At work Services Travel # 2.59 Total * Excluding sleeping time #Passenger travel only, rest of transportation accounted for “at work”

26 86025 Energy Systems AnalysisArnulf Grubler US – Time –Energy-Diagram (cumulative percentage distribution)

27 Paints Textiles Shoes Restaurants Real estate Communication Drugs Engines / turbines Food Construction Entertainment Agricultural services Primary Energy = 0 Working time = 0 Information = 0 Metal products broadcasting Radio/TV Energy – Time – Information: Intensity of Products/Activities Source: D. Spreng, 1993.

28 86025 Energy Systems AnalysisArnulf Grubler Economic Structural Change (based on Kuznets, 1971)

29 86025 Energy Systems AnalysisArnulf Grubler Energy Demand: Social Science Perspectives on Value and Lifestyle Changes Given: Hierarchy of needs (Maslow) economists (action  revealed preferences?) Constructed: Preferences “discovered” in process of establishing social relations (Mary Douglas) cultural theory (perceptions  preferences  actions?) Generational change: Succession of cohorts (e.g. Nathan Keyfitz) demographers, “cross-over” scientists

30 86025 Energy Systems AnalysisArnulf Grubler Consumer Expenditures Structure in US (based on: Lebergott, 1993)

31 86025 Energy Systems AnalysisArnulf Grubler Typology of “Value- ists ” Along 2 Dimensions of Social Relations & Associated Myths of Nature Source: M. Thompson based on M. Douglas and P. Timmerman

32 Keyfitz quote N. Keyfitz, 1992.

33

34 86025 Energy Systems AnalysisArnulf Grubler Germany: Car Ownership by Gender and Age Cohorts Source: Buttner&Grubler, 1995.

35 86025 Energy Systems AnalysisArnulf Grubler Germany: Car Ownership of Female Age Cohorts Source: Buttner&Grubler, 1995.

36 86025 Energy Systems AnalysisArnulf Grubler Scenarios of Car Diffusion for a United Germany: Greens are Outnumbered by Greys!! 3 Scenarios: Constant 1990 Rates, Trend, Green Generation 1990: 79 Million Germans 35 Million Cars (26% female owners) 2030: 77 Million Germans (70 by 2050) 30 Million cars (24% female owners) 38 Million cars (36% female owners) 33 Million cars (41% female)

37 86025 Energy Systems AnalysisArnulf Grubler “Take-back” Effects

38 86025 Energy Systems AnalysisArnulf Grubler Percent Change since 1970 in US Automobile CO 2 Emissions and Driving Forces

39 86025 Energy Systems AnalysisArnulf Grubler IPAT Impacts = Population x Affluence x Technology Widely used decompositional technique* Component growth rates additive: e.g. POP 1%/yr, GDP 3%/yr, E/GDP -1%/yr = GDP/POP 2%/yr, Energy 2%/yr See previous car emissions example C (emissions) = gallons fuel use gal = gal/miles x miles/vehicle x vehicle/people (“empty seats”) x people x ε (adjustment for increasing SUV share), canceling out all elements: gal=gal = identity Assumes variables are independent! Beware of fallacy of spatial aggregation (POP growth in India, Car growth in US lumped together in global IPAT)! *See e.g. Ausubel&Waggoner, 2002; and review of Chertow, JIE, 2001.


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