Here's Why Developing Countries Will Consume 65% of the World's Energy by 2040

China and India hold the world's fate in their hands as energy use skyrockets in poorer countries. 


The Energy Shift now under way is as much geographical as it is technological. Case in point: By 2040, the developing world will account for 65 percent of the world’s energy consumption, according to a report released today by the United States Energy Information Administration.

That’s up from 54 percent in 2010, and over the next three decades energy consumption is predicted to grow at a 2.2 percent annual clip in non-OCED (Organization for Economic Cooperation and Development) countries. OCED nations – including Europe, the US, Canada and Australia – in contrast, will see their energy use increase by just 0.5 percent a year, roughly in line with population growth.

Those numbers foreshadow a climate change catastrophe. Most of the growth in energy consumption will occur in countries like China and India that rely on carbon-polluting coal and other fossil fuels to generate electricity.

Greenhouse gas emissions grew a record 2.1 percent in 2012, according to the Global Carbon Project, a non-profit research institute, and now stand 58 percent higher than in 1990. About 57 percent of global greenhouse gas emissions originated in developing countries, with China and India accounting for a third of the worldwide carbon spew.

Much of the increase in the developing world’s energy use comes from population growth. India, for instance, is expected to add twice the number of people than will be born in the 34 OCED nations between 2010 and 2040.

But compounding the problem is that energy consumption per person is predicted to rise as well in the developing countries as they grow richer and their citizens covet cars, better climate control, and power-hogging devices like the one you’re probably reading this story on. In the EIA forecasts, energy use per capita remains flat in OCED countries over the next 30 years but jumps 46 percent in the developing world.

“As the economies in the non-OECD countries continue to experience relatively fast growth, those countries will also be able to spend more for energy-consuming services,” the report states.

One bit of good news: Energy consumption per gross domestic product is expected to decline worldwide in the coming decade, with developed and developing nations reaching parity by 2040.

The great unknown in this energy shift is how successful nations like China and India will be in replacing fossil fuels with renewable sources of power like solar and wind.  The growth of renewable energy has been explosive in China over the past two years and the country has announced ambitious goals – it aims to have 49,000 megawatts of new wind solar and hydroelectric power installed by year’s end.

Critics see those targets as a giant jobs-creation program to bail out China’s troubled solar panel manufacturers, which have accumulated billions of dollars in debt from state banks.

But in a sign that the country is serious about cutting its dependence on coal-fired electricity and not just supporting its domestic solar industry, the Bank of Beijing yesterday issued a $574 million credit line to a South Korean solar panel maker, Hanwha SolarOne, to finance the construction of big photovoltaic power plants in China.