A Microeconomic Perspective
Author: McKinsey Global Institute, The
Source: The McKinsey Global Institute
To date, the global debate about energy has focused too narrowly on curbing demand. Instead, the best way to meet the challenge of growing global energy demand may be to focus on energy productivity, which reconciles both demand abatement and energy-efficiency. Global energy demand will grow more quickly over the next 15 years than it has in the last 15. Demand could grow at a rate of 2.2 percent per year, boosted by developing countries and consumer-driven segments of developed economies. This acceleration will take place despite global energy productivity continuing to improve by 1.0 percent a year. MGI's case studies indicate that there are plenty of viable opportunities to boost energy productivity that could translate into a deceleration of global energy-demand growth to less than 1 percent a year. But shifting this demand will require new policies that target various large end-user segments and encourage higher energy productivity.