Energy and Economic GrowthRögnvaldur Hannesson

Norwegian School of EconomicsBergen

Does energy use grow faster or more slowly than GDP?

Does it grow faster in poor than in rich countries?

Does it grow more slowly as countries get richer?

Has energy use been influenced by higher oil prices?

Data 1965-2012

GDP growth calculated from World Bank data (2005 US$)

Growth in energy use calculated from BP Statistical Review ofWorld Energy

43 countries, after excluding countries that have merged orbroken up, 48 years, 12 missing values for 3 countries.

0 1 2 3e gdpG a a G a GDPCAP a P

GDP growth GDP/capita Price Constant R2

.5932005***(.0280706)

-8.52e-07***(8.49e-08)

-.0001989***(.0000376)

.0368004***(.002718)

0.28

 

GDP growth GDP/capita Price Constant R2

United States

.7605614***(.1281457)

-2.17e-07(3.41e-07)

-.0003268**(.0000971)

.0121393(.0118123)

0.65

Canada .60892***(.1572832)

-1.35e-06*(5.61e-07)

-.0000802(.0001179)

.0434096**(.0161671)

0.47

1965

1968

1971

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007

2010

-0.06

-0.04

-0.02

0.00

0.02

0.04

0.06

0.08

EnergyGDP

Gro

wth

rate

Graph for the US

Countries with coefficients significantly different from 0 a1 (GDP growth) a2 (GDPCAP) a3 (Oil price)<1 ~1 < 0 > 0 < 0 > 017 12 10 2 10 3

Did energy use grow faster or slower than GDP 1965-2012?Rich: > 20,000 2005US$/capitaFaster SlowerRich Poor/medium rich Rich Poor/medium rich3 19 15 6

Two important exceptions: China and India

GDP grew faster than use of energy

Energy use tends to grow faster than GDP in poor and mediumrich countries.

Growth in these countries will require formidable increase in theuse of energy.

Where is it going to come from?

Unrealistic to expect much reduced role of fossil fuels, unless weall sink back into poverty.