The scale of the sustainable energy challenge is illustrated by a quick review of current consumption patterns and of the historic linkages between energy use, population, and economic growth. Human development to the end of the 18th century was marked by only modest rates of growth in population, per capita income, and energy use. As the Industrial Revolution gathered pace, this began to change. Over the last century alone, world population grew 3.8 times, from 1.6 to 6.1 billion people; worldwide average per capita income increased nine-fold (to around US$8,000 per person in 2000) ; annual primary energy use rose by a similar amount (ten-fold) to 430 exajoules (EJ); and fossil-fuel use alone increased twenty-fold.

Throughout this period, energy use in many countries followed a common pattern. As societies began to modernize and shift from traditional forms of energy (such as wood, crop residues, and dung) to commercial forms of energy (liquid or gaseous fuels and electricity), their energy consumption per capita and per unit of economic output (gross domestic product) often grew rapidly. At a later stage of development, however, further growth in energy consumption typically slowed as the market for energy-using devices reached a point of saturation and as wealthier economies shifted away from more energy-intensive manufacturing and toward a greater role for the less energy-intensive service sector. The rate of growth in energy consumption also diminished in some industrialized countries as a result of concerted energy efficiency and conservation programs that were launched in the wake of sharp oil price increases in the early 1970s. Figure 1.1 shows declining energy intensity trends for OECD and non-OECD countries over the last 18 years.

In recent years, the energy intensity of the world’s industrialized economies has been declining at an average annual rate of 1.1 percent per year, while the energy intensity of the non-OECD economies has been declining, on average, even faster (presumably because these economies start from a base of higher intensity and lower efficiency). Because the rate of decline in energy intensity has generally not been sufficient to offset GDP growth, total energy consumption has continued to grow in industrialized countries and is growing even faster in many developing countries.

^{Figure 1.1 Energy intensity versus time, 1985-2005
Note: TPES is total primary energy supply; GDP is gross domestic product; PPP is purchasing power parity; toe is ton oil equivalent.
Source: IEA, 2005}

Looking ahead, current projections suggest that the world’s population will grow by another 50 percent over the first half of this century (to approximately 9 billion by 2050), world income will roughly quadruple, and energy consumption will either double or triple, depending on the pace of future reductions in energy intensity. But projections are notoriously unreliable: patterns of development, structural economic shifts, population growth, and lifestyle choices will all have a profound impact on future trends. As discussed later in this report, even small changes in average year-to-year growth or in the rate of intensity reductions can produce very different energy and emissions outcomes over the course of several decades. Simply boosting the historical rate of decline in energy intensity from 1 percent per year to 2 percent per year on a global average basis, for example, would reduce energy demand in 2030 by 26 percent below the business-as-usual base case. Numerous engineering analyses suggest that intensity reductions of this magnitude could be achieved by concerted investments in energy efficiency over the next half century, but even seemingly modest changes in annual average rates of improvement can be difficult to sustain in practice, especially over long periods of time, and may require significant policy commitments.

Confronted with the near certainty of continued growth in overall energy demand, even with concerted efforts to further improve efficiency, reduce energy intensity, and promote a more equitable distribution of resources, the scale of the sustainability challenge becomes more daunting still when one considers the current mix of resources used to meet human energy needs. Figure 1.2 shows total primary energy consumption for the OECD countries, developing countries, and transition economies (where the latter category chiefly includes Eastern European countries and the former Soviet Union), while Figures 1.3 and 1.4 show global primary energy consumption and global electricity production, broken down by fuel source.

Non-renewable, carbon-emitting fossil fuels (coal, oil, and natural gas) account for approximately 80 percent of world primary energy consumption (Figure 1.3). Traditional biomass comprises the next largest share (10 percent) while nuclear, hydropower, and other renewable resources (including modern biomass, wind, and solar power), respectively, account for 6, 2, and 1 percent of the total. Figure 1.4 shows the mix of fuels used to generate electricity worldwide. Again, fossil fuels—primarily coal and

^{Figure 1.2 Regional shares in world primary energy demand, including business-as-usual projections
Note: 1 megaton oil equivalent(Mtoe) equals 41.9 petajoules.
Source: IEA, 2006}

natural gas—dominate the resource mix, accounting for two-thirds of global electricity production. The nuclear and hydropower contributions are roughly equal at 16 percent of the total, while non-hydro renewables account for approximately 2 percent of global production.

Most projections indicate that fossil fuels will continue to dominate the world’s energy mix for decades to come, with overall demand for these fuels and resulting carbon emissions rising accordingly.

Table 1.1 shows a reference case projection for future energy demand developed by the International Energy Agency (IEA) based largely on business-as-usual assumptions. It must be emphasized that these projections

Figure 1.3 World primary energy consumption by fuel, 2004
^{Note: Total world primary energy consumption in 2004 was 11,204 megatons oil equivalent (or 448 exajoules).
Source: IEA, 2006}

^{Figure 1.4 World electricity production by energy source, 2004
Note: Total world electricity production in 2004 was 17,408 terawatt-hours (or 63 exajoules).
Source: IEA, 2006.}

Note^{: 1 million ton oil equivalent equals 41.9 petajoules.
Source: IEA 2006}

do not incorporate sustainability constraints (such as mitigation measures that might be necessary to manage climate risks)—as such, they are not intended to portray an inevitable future, much less a desirable one. Rather the usefulness of such projections lies in their ability to illuminate the consequences of allowing current trends to continue. For example, IEA’s reference case projections assume moderate growth in the use of renewable energy technologies. But since non-hydro renewables accounted for only 2 percent of world electricity production in 2004, fossil-fuel consumption and global carbon emissions continue to grow strongly by 2030. Indeed current forecasts suggest that a continuation of business-as-usual trends will produce a roughly 55 percent increase in carbon dioxide emissions over the next two decades.

The implications of these projections, from a climate perspective alone, are sobering. If the trends projected by IEA for the next quarter century continue beyond 2030, the concentration of carbon dioxide in the atmosphere would be on track to reach 540–970 parts per million by 2100—anywhere from two to three times the pre-industrial concentration of 280 parts per million. By contrast, it is increasingly evident that the responsible mitigation of climate-change risks will require significant reductions in global greenhouse gas emissions by mid-century. As part of its Fourth Assessment Report, the IPCC has identified numerous adverse impacts on water supplies, ecosystems, agriculture, coasts, and public health that would be predicted (with ‘high’ or ‘very high’ confidence) to accompany continued warming. Moreover, the current IPCC assessment places the onset for several of these ‘key impacts’ at a global mean temperature change of 2–3 degrees Celsius (IPCC, 2007a: p 13). The IPCC further estimates that limiting global warming to a 2–3 degrees Celsius change will require stabilizing atmospheric concentrations of greenhouse gases somewhere in the range of 450–550 parts per million in carbon dioxide equivalent terms. Based on numerous IPCC-developed scenarios, achieving stabilization within this range could require absolute reductions in global emissions of as much as 30–85 percent compared to 2000 levels by mid-century (IPCC 2007b: p 23-5). Hence, a major goal of this report is to offer recommendations for shifting the world’s current energy trajectory through the accelerated deployment of more efficient technologies and sustainable, low-carbon energy sources.

The consequences of current trends are also troubling, however, from an energy security perspective given the longer-term outlook for conventional oil supplies and given the energy expenditures and environmental impacts it implies, for countries struggling to meet basic social and economic-development needs. Recent forecasts suggest that a continuation of business-as-usual trends will produce a nearly 40 percent increase in world oil consumption by 2030, at a time when many experts predict that production of readily accessible, relatively cheap conventional oil will be rapidly approaching (or may have already reached) its peak. Moreover, IEA reference case projections, though they anticipate a substantial increase in energy consumption by developing countries, assume only modest progress over the next several decades toward reducing the large energy inequities that now characterize different parts of the world. This is perhaps not surprising insofar as the IEA projections are based on extrapolating past trends into the future; as such they do not account for the possibility that developing countries might follow a different trajectory than industrialized countries.