-Appeared in the Ottawa Sun, August 23, 2023
By Jock Finlayson
Senior Fellow, Fraser Institute
We’re living through a remarkable period in the evolution of international energy markets. Amid the turmoil and trade disruptions caused by Russia’s invasion of Ukraine last year, concerns about energy reliability and security suddenly reappeared. For many months, the higher energy costs linked to the war hammered consumers and businesses across the globe. The situation has stabilized somewhat in 2023, but the war’s impacts on energy markets remain.
Despite widespread concerns about climate change and a growing collective commitment to reduce greenhouse gas (GHG) emissions, in 2022 four-fifths of global energy demand was still met by a combination of coal, oil and natural gas, according to the latest edition of BP’s Annual Statistical Review of World Energy.
Total world energy consumption and related GHG emissions fell in the early stages of the pandemic in 2020. However, as economic activity revived, so too did the need for all forms of energy. In 2021, as economies rebounded, energy consumption and GHG emissions rose, soon surpassing 2019 levels. Last year saw a further jump in energy demand. And while renewable energy is gaining market share in many jurisdictions, fossil fuels have supplied most of the added energy required to grease the wheels of the post-2020 worldwide recovery of industrial production, transport, trade and travel.
So how much energy does the world consume? The answer is roughly 600 exajoules (EJ) annually, equivalent to more than 100 billion barrels of oil. This is more than in 2019, before the pandemic hit. Since 2015, when the international Paris Agreement on climate change was inked, global energy consumption has climbed by roughly 10 per cent.
As for energy demand across different fuel types, the good news is that renewable energy has made headway. From 2015 to 2022, there was approximately a 5 per cent shift towards non-nuclear and non-hydroelectric renewables within the global energy mix. However, these carbon-free energy sources still satisfy under 10 per cent of the world’s total primary energy demand. And the march of renewables is happening mainly in the electricity sector, which itself accounts for only one-fifth of the energy used globally. The rest of energy is for transportation, the heating of buildings, agricultural production and various industrial uses. In all of these areas, fossil fuels still dominate.
A realistic timetable for reducing fossil fuel use and GHG emissions should be aligned with the data and trends in energy production and use. That isn’t the case today, certainly not in Canada. Here, the Trudeau government is fond of conjuring a quick, largely painless transition to a low-carbon future. But the evidence suggests that won’t happen, even with the growing focus on the consequences of climate change.
When the data are tallied, global energy consumption in 2023 will be higher than the year before. Renewable energy sources continue to advance, but not at a pace that supports an expectation of a rapid low-carbon transition. To cite an example: recent news reports confirm that China—by the far largest emitter of GHG—is still boosting investments in coal-fired power both at home and abroad. And across most emerging markets, we observe continued growth in the demand for fossil fuel energy.
One thing that both history and scholarship teach is that energy transitions are a long-term affair and largely depend on technology. This insight doesn’t fit well with the timelines proposed by politicians in a hurry to solve the climate change problem.
Share This:
