Link loosens between increased energy use, GDP growth in some countries

by Talk Business & Politics staff ( 84 views 

As the United States, United Kingdom and Japan, have shifted to service economies, from manufacturing economies, they have been using less electricity than China, India, Egypt and Brazil, according to the U.S. Energy Information Administration. Energy use in the previous countries, which are members of the Organization for Economic Cooperation and Development, has remained flat in recent years, while energy use in the latter non-OECD member countries surpassed OECD members in 2011.

Historically, economic growth was tied to increases in electricity use, but this has started to change in many countries, depending on their development, electrification, economic makeup and income levels, according to the EIA. OECD member countries still have large manufacturing sectors, but they are becoming more advanced and use more technology, which tends to require less energy. “As more economic activity shifts from lower-skilled manufacturing to services and higher-skilled advanced manufacturing, additional economic activity can be generated without requiring as much electricity use.”

Energy use in the non-OECD countries is expected to continue to rise, while energy use of OECD members “is projected to grow modestly,” according to the EIA. At the same time, gross domestic (GDP) product among both groups is expected to increase at a higher rate than energy use. In OECD member countries, GDP is projected to rise 1.7% annually, and electricity use will increase 0.9% per year, between 2015 and 2040. In non-OECD member countries, GDP is expected to increase 3.8% annually, and electricity use should rise 2% each year, over the same period.

Some non-OECD member countries “have rapidly growing economies, often generated by a larger or growing manufacturing sector,” according to the EIA. “However, these economies use technologies that are less efficient and have lower-skilled labor relative to OECD countries, which requires more energy and more electricity usage to generate goods and services.”