Download Sustainable Globalization and Energy

Sustainable globalization and energy
Simone Borghesi
(University of Siena, Dept. of Political Economy;
University of Pescara, Dept. of Quantitative Methods and Economic Theory)
Alessandro Vercelli
(University of Siena, Dept. of Political Economy)
Daniele Verdesca
(University of Siena, Dept. of Political Economy)
February 2005
Preliminary version
Abstract
This paper discusses whether and to what extent the recent developments in energy
consumption are compatible with the requirements of sustainable globalization. For this
purpose, we first critically discuss the conventional position on the market capacity to
resolve spontaneously the problems of energy scarcity and pollution, pointing out some
important shortcomings that may affect this optimistic approach. Then, using a simple
identity applied to the energy sector, we derive the condition for long-term energy
sustainability and examine whether and where such condition is satisfied on the basis of
the currently available data.
Address for correspondence:
Simone Borghesi
D.M.Q.T.E. (Dipartimento Metodi Quantitativi e Teoria Economica)
Facoltà di Scienze Manageriali
Università di Pescara
Viale Pindaro, 42; I-65127 Pescara, Italia
e-mail: [email protected]; tel: (+39) 339-4448220
JEL Classification: F02, O13, Q32, Q42, Q43
Keywords: globalization, sustainable development, energy, environment,
environmental Kuznets curve.
1. Introduction
In this paper, we will discuss the extent to which recent developments in energy
consumption are compatible with the requirements of sustainable globalization. The
current pattern of energy production, distribution and consumption is very vulnerable.
This is because it is based almost exclusively on the use of fossil fuels (coal, natural gas
and, above all, oil) whose reserves are strictly limited, although public opinion is
divided on the nature and the size of these limits. There is however unanimous
agreement on the fact that the age of fossil fuels is bound to decline during this century,
progressively giving way to renewable energy sources such as wind power and
photovoltaic energy, hydrogen, and, according to someone, nuclear energy.
Nevertheless, opinion is divided on what the characteristics of the new model should be,
as regards the timing and the ways of making changes and therefore as regards also the
best economic, energy and environmental policies to guide and set the pace for the
transition process.
Today’s energy model is vulnerable not only because fossil fuels are scarce, but also
because their reserves are remarkably concentrated in terms of location and ownership.
This exposes energy production and distribution to considerable geopolitical dangers
which clearly emerged in the 1970s when the two oil shocks of 1973 and 1979
provoked a serious crisis in the world economy due to cost inflation and, at the same
time, increased unemployment caused by economic stagnation (stagflation).
Furthermore, the territorial concentration of the reserves favored the consolidation of
centralized and hierarchical energy infrastructures (Rifkin, 2002, p.9) which accentuated
the vulnerability of the energy model. World energy supplies depend on a network of oil
and gas pipelines and petrol tankers – a network which has its head and “pumping
heart” in the Middle East. Any problem occurring at the heart of the fossil fuel
circulatory system which animates the “body” of the world economy, would have
devastating repercussions for the entire circulation of the lymph of vital energy. This
has contributed to the dangerous conflicts for economic and political leadership over the
area of the Middle East with serious consequences for this “circulation of energy”,
consequences which could be even more serious in the future.
Lastly, the very high costs linked to prospecting, extracting, refining and distributing
oil and other fossil fuels require colossal investments which only mega-enterprises can
manage. This has created an oligopolistic market dominated by eight multinational
energy giants on whose strategies depend the world energy supply and the oil price
which in turn strongly conditions the performance of the world economy.
For all these reasons, the current energy model is extremely vulnerable and risks
endangering not only the sustainability of development but also the progress of world
economic development.
In this paper we will limit ourselves to considering whether the transition process
under way is compatible with sustainable development. This analysis will provide some
useful indications on the optimum characteristics that the energy model should have and
on the most opportune policies to make the transition process consistent with the
sustainability requirements.
For this reason, after having illustrated the conventional position on energy
production and consumption (section 2), we will examine it more carefully from a
critical viewpoint (section 3). The analysis of the available data and the resulting
projections for the future raises questions about the compatibility of current trends with
sustainable development (section 4). The conclusions, summarized in section 5, stress
the need for a new decentralized model of energy production and consumption based on
energy-saving and on the systematic use of renewable energy sources combined with
the use of hydrogen.
2. The conventional position
First of all, we will briefly summarize and then make a critical examination of the
dominant position held today concerning the production and consumption of energy
sources – a position held by the main energy producers and most government energy
agencies, even if with different nuances. For ease of reference, we will call this the
“conventional position”, widely disseminated and publicized by the mass media.
The “conventional position” is characterized by a marked optimism about the
capacity of the market and market-oriented technical progress to resolve any energy
problems quickly. The basic premise of this position is the conviction that the sure
economic scarcity of energy sources does not depend on an unavoidable physical
scarcity, not even as regards fossil fuel which represents the pillar of today’s energy
production and consumption model. This position is often corroborated by tables and
figures illustrating the paradox whereby known usable reserves and proven reserves of
single sources of fossil fuels, including oil, are supposed to have gradually increased in
the last few decades (see figs. 1 and 2).1 This can help to explain why, over the years, T,
representing expected lifespan, has been upwardly revised for many depletable
resources, including fossil fuels (table 5), in this way contradicting the initial forecasts
of the Rome Club (Meadows et al., 1972) according to which, for example, oil supplies
would already have run out by the early 1990s.
Fossil fuels
T1970
(Source:
Meadows et al., 1972)
T1994
(Source:
British Petroleum 1995)
T2002
(Source:
British Petroleum 2003)
Coal
Natural gas
Oil
111
22
20
139
42
35
204
60.7
40.6
Table 5: expected lifespan of fossil fuel reserves measured in number of
years (T) starting from different base years (1970, 1994 and 2002)2
The paradox of an increase over time of these depletable resources is normally
explained in terms of technical progress whereby more and more reserves are found as a
result of increasingly sophisticated methods of prospecting. Furthermore, technical
progress should allow the exploitation - at competitive prices - of reserves that are
increasingly difficult to use, for reasons of location (e.g. under the sea), depth, and
quality of the raw material. The observed increase over time of fossil fuels reserves and
the underlying explanation have generated the widespread conviction that the age of
fossil fuels will not exhaust its leading role for another few decades, that the transition
towards an alternative energy model could be just as gradual and that it could be
managed by the “spontaneous” forces of the market and technical progress. Sheikh
Yamani, the powerful OPEC leader, used to say that the Stone Age did not come to an
end because there were no more stones and the Age of Oil would not come to an end
because there was no more oil. From this standpoint, the transition will come about
spontaneously when the cost of one kWh produced from fossil fuels exceeds the cost of
1
Using the terminology adopted by British Petroleum (2003), the term “proven
reserves” indicates those quantities that, on the basis of the geological and engineering
information available, can be recuperated in the future with reasonable certainty from
the known reserves under existing economic and operating conditions.
2
The expected lifespan T is calculated by British Petroleum as the relationship between
the remaining proven reserves at year end and that year’s output, assuming that output
will continue at the same level in the future.
one kWh produced by renewable energy.3 This transition towards an alternative
technology (the so-called “backstop technology”) should not happen much before 2050.
The conventional position described before does not obviously deny the economic
scarcity of fossil fuels, which generates from time to time a tendency for demand to
exceed supply. However, the dominant viewpoint is that these situations are to be
interpreted as essentially episodic instances (such as during the widespread blackouts of
recent years). These instances can be defined as “cyclical” when demand exceeds
planned supply following a cyclical boom in national income, or as “extra-economic” in
cases such as the two oil shocks of the 1970s. It is therefore a case of a temporary, local
or sectoral scarcity which will in any case be limited in time and space; a scarcity to
which the market will respond spontaneously with the consequent increase in the price
of the scarce fuel.
From this standpoint, the increase in price of the scarce fuel stimulates technological
progress to find alternative solutions that allow lower consumption. Such stimulation
will be stronger, the more chronic the economic scarcity of a particular energy source
becomes. An increase in the fuel price also shifts the demand towards suppliers or
reserves which, following such a price increase, become economically worthwhile. So,
for example, the rapid increase in the price of oil provoked by the two shocks in the
1970s, made it worthwhile to extract oil in other geographical areas, such as the North
Sea, the USA, Russia and Mexico, where average production costs were considerably
higher than in the OPEC countries.4 This determined a reduction over time in OPEC’s
share of world oil production which led the member countries to reduce the price they
had established in order to gain back the share they had lost.5
3
Since fossil fuels are by nature depletable resources the correspondent cost is bound to
rise in the long term.
4
It has been estimated, for example, that the average production cost in the Arab
countries is between 1 and 2 dollars a barrel, while in the North Sea it ranges between 7
and 10 dollars a barrel.
5
In a similar way, the observation that the productive capacity of the North Sea could
have reached its upper limit led OPEC to cut its own production by about 1.7 million
barrels a day in the period 1999-2000. Together with the embargo on Iraq, this increased
the price from 15 to over 34 dollars a barrel. The relationship between the OPEC cartel
and the non-OPEC countries (the so-called “cartel-fringe” relationship) is at the centre
of numerous theoretical models analyzing variations over time in OPEC’s production
decisions in relation to those of its competitors and the consequent changes in the
leadership of the productive market (cf. for example Ulph and Folie, 1980; Geroski et
al., 1987).
Also as regards pollution, the conventional position maintained a rather optimistic
attitude in the 1990s, one which it still holds today. On the basis of a reduction in
energy intensity observed in those years (fig. 3) and in the carbon content per unit of
consumption (fig. 4), the conviction grew that the pollution generated by energy
consumption had started to stabilize. In this spirit, some even applied the Environmental
Kuznets Curve to energy consumption, drawing the hurried conclusion that in order to
resolve the environmental problems raised by energy consumption, it would suffice to
promote economic growth.6 For example, figure 5 suggests that, in all countries, energy
intensity increases first of all when the industrialization process gets under way, due to
the development of heavy industry and higher consumption linked to urbanization; later
it falls following the development of light industry and services and as a result of the
pressure of public opinion and the electorate who have become more aware of
environmental quality issues.
The conventional position is basically the dominant one in all the industrialized
countries but opinion is divided on the best environment and energy policy to make the
transition to a new model of energy consumption as painless as possible. In some
countries, among which many European ones, it is thought that command and control
instruments and environment taxation are inevitable in order to accelerate the transition
to a new model of energy consumption, while in other countries, and notably in the
USA, it is considered preferable to negotiate permits and voluntary agreements between
enterprises and the environment and energy authorities to reduce the pollution and the
wasting of resources that characterize the current energy model.
3. Limits to the conventional position
The conventional position is reassuring but not very convincing. Above all, it risks
underestimating the physical scarcity of fossil fuels. The latest data at our disposal do
not support the paradox of their growing availability. For example, as regards oil, its
estimated availability seems to have reached its peak in the mid-1990s after which it
began to fall. Moreover, there are many indications that the above-mentioned paradox
6
Various empirical studies have recently analyzed the hypothesis of the Environmental
Kuznets Curve in the case of energy. Amongst these, Cole et al. (1997), Suri and
Chapman (1998), Sun (1999), Galeotti and Lanza (1999), and Focacci (2003). See also
Cleveland et al. (2000) and Soytas and Sari (2003) for an analysis of the causality links
was furthered by “creative” economic-geological accounting based on estimates, for the
most part discretionary, which were rather over-optimistic.
Of course, the proponents of these estimates may have an interest in inflating them.
The producer countries do so in order to obtain higher production quotas and better
conditions for the large loans they contract with the banks and international
organizations. In the same way, the oil multinationals who participate in the datagathering process and in the estimates of the residual reserves, have an interest in overestimating the reserves under their control in order to improve the performance of their
shares on the stock exchange and to increase their political and financial bargaining
power.
In any case, leaving aside any skirmishes regarding the data on residual reserves,
there is general agreement on the fact that the age of fossil fuel must come to an end
before very long. However, opinion is quite strongly divided on the energy production
and consumption model to adopt and also on when and how to change over to the new
model. The speed and the nature of the transition depends crucially on the evolution of
the cost of production per kWh for the single energy sources (fig. 6). All agree that in
the new energy model, the sources of renewable energy must have a predominant role.
As we have seen, according to the conventional position, this cannot happen before
2050. Nevertheless, this assessment, which is crucial for steering energy choices from
now on, is not only a question of fairly accurate forecasting but is also, and above all, a
question of energy and environment policy. If the large state subsidies granted to the
production and distribution of energy from fossil fuel were abolished, this could
considerably accelerate the transition to the use of renewable energy sources. Further
acceleration could be achieved by channeling the above-mentioned subsidies to the
renewable energies sector to encourage the immediate utilization of the potential
economies of scale which would considerably hasten the process. If these measures, like
those favoring fossil fuels, were considered distortive, it would still be possible to divert
towards the renewable energies sector those subsidies and incentives for technical
progress which today go almost exclusively to the fossil fuel sector. Nevertheless, there
are some very powerful economic, financial and political interests that are trying to slow
down the transition. All states and enterprises with big interests in the fossil fuel sector
would like to exploit the economic opportunities it offers for as long as possible.
between energy consumption and income growth, and Borghesi (2001) for a general
survey of the literature on the environmental Kuznets curve.
Paradoxically, the physical scarcity of fossil fuel sources means that all those who have
an interest in the sector are trying to make maximum profits from their use before they
run out or before they become too costly to exploit and, in any case, before the already
fragile political stability of the producer countries comes to an end.7 If we interpret the
available resources as a relatively illiquid financial asset, it seems clear that an owner
will try to liquidate this asset as rapidly as possible before its value is undermined by
the lower price per kWh of renewable energy. Alternatively, to maintain their own
position in the energy market, the owners of fossil energy sources could try and invest
in backstop technology, getting ahead of any other competitors in research terms, so as
to keep on meeting the demand for energy when the price of fossil fuel exceeds that of
renewable resources. This could help to explain why some large oil companies (e.g.
Shell) have, in recent years, invested in renewable energy sources such as, for example,
solar energy. Furthermore, even the States who import most of the available fossil fuels
are reluctant to take direct steps to reduce their consumption because of the sizeable tax
revenues they earn from fossil fuel consumption.
As to the market optimism characterizing the conventional position, it could be
claimed that in the energy field the myth of the invisible hand in the competitive market
is particularly groundless. The allocation of resources and the prices for their use are
moved by hands that are both visible and easy to identify: multinational oil companies,
OPEC, and the energy policies of the great powers.
4 The transition in course and sustainable development
Current trends seem to be incompatible with sustainable development. To explain
this point, let us now apply to the energy sector the well-known IPAT identity originally
proposed by Holdren and Ehrlich (1974). That identity was recently reformulated by
Borghesi and Vercelli (2003) to examine whether the globalization process can be
considered sustainable and can be applied to the energy sector in the following way:
7
In this regard, Boyce (1994) advances the hypothesis that in countries with high levels
of inequality (such as the oil-producing countries) the richest individuals and enterprises
tend to apply a higher discount rate because of the risk of political instability generated
by this inequality. For this reason, they would prefer to exploit their own resources as
fast as possible in order to invest the resulting profits abroad where political instability
and the consequent investment risks are lower.
(1)
E* = y* + P* + e*
where E* is the rate of growth of global demand for primary energy, P* is the rate of
growth of the population, y = Y/P is per capita income and y* is its rate of growth, e =
E/Y is energy intensity and e* is its rate of growth. The following modified identity
derives from (1):
(2)
D* = y* + P* + e* + d*
where d = D/E represents the intensity of energy degradation (i.e. energy degradation
D per unit of energy consumption E), d* is the rate of growth of the intensity of energy
degradation and D* is the rate of growth of energy degradation. The latter variable is
measured, as a first approximation, with the rate of growth of CO2 emissions in that
they are considered to be the main cause of the greenhouse effect among the gases
produced by fossil fuels (IPCC, 2001) and a reference parameter for the aggregation of
the other greenhouse gases (often measured in terms of tons of CO2 emissions
equivalent). Furthermore, given that emissions of carbon dioxide specifically
characterize the use of fossil fuels, their measurement can be considered as a proxy,
even if only a rough one, for the increasing scarcity of these fuels.
To ensure the sustainability of the planet, global energy degradation should not
increase with time but be reduced or at least remain constant. If it increases, we will
move further away from sustainability, while if it decreases, we will move closer
towards it.
Global energy degradation tends to increase, other things being equal, with an
increase in per capita income, unless the sum of the rates of growth of the population
(P*), energy intensity (e*) and energy degradation intensity (d*) is negative and greater
in absolute terms than the growth rate of per capita income (y*). Therefore, to reduce
global energy degradation (and thus achieve sustainability) it is not sufficient that
energy intensity follow an Environmental Kuznets Curve as some representatives of the
conventional position have suggested (see section 2 above). This can only ensure that e*
(but not D*) would eventually become negative. Environmental degradation in the
energy sector also depends on the trends of income, population and polluting emissions
intensity, as explained by identity (2).
Therefore, the condition for long-term energy sustainability is as follows:
(3)
y* ≤ - (e*+ P* + d*)
which can also be expressed in the following way:
(4)
Y* ≤ -(e* + d*)
On the basis of these identities, it is possible to analyze what has happened in the
world over the last 30 years (divided into three decades) and the IEA forecasts for the
next 30 years (IEA, 2002). The basic data are summarized in table 6.
World
1971-1980
Y*
4,1
P*
1,9
y*
2,2
E*
3,0
e*
-1,1
D*
2,8
d*
-0,2
1981-1990
3,2
1,9
1,3
2,1
-1,1
1,6
-0,5
1991-2000
3,4
1,6
1,8
1,6
-1,8
1,4
-0,2
1971-2000
3,3
1,7
1,6
2,1
-1,2
1,8
-0,3
2000-2030
3,0
1,0
2,0
1,7
-1,3
1,8
0,1
Table 6: IEA scenario.
Source: Borghesi-Vercelli-Verdesca (2004)
According to the IEA’s forecasts, global energy demand is destined to increase until
2030 at an average rate of 1.7%, while in the same period, fossil fuels will increase their
share of demand and international trade. Global energy intensity is destined to fall by
1.3% as a result of technical progress but this is not enough to reduce CO2 emissions
which will increase on average by 1.8%, partly because in the meantime the intensity of
polluting emissions will have increased, even if only at a very low rate – 0.1% (IEA,
2002) (figs. 7 and 8). The minimum requirement to stabilize pollution seems, therefore,
to have been clearly denied. Even the social requirement of sustainability seems to have
been strongly denied. The IEA forecasts say that in 2030 there will still be 1.4 billion
people without electricity the effects of which will progressively feed into the vicious
circle of poverty and inequality. Furthermore 2/5 of energy consumption will still be
based on traditional biomass which is a particularly inefficient and polluting source of
energy. Lastly, inequality in terms of per capita energy distribution will also remain
very marked which will strongly influence access to economic opportunities on the part
of the most disadvantaged populations, further increasing inequality and poverty.
These pessimistic forecasts, which are based on the today’s economic, energy and
environmental policies, are worsened by comparisons with the trends in the key
variables over the last three decades. Indeed, the trend in energy consumption has been
incompatible with sustainable development over the last thirty years and will continue
to be so for the next thirty. Nevertheless, as can be seen clearly in table 6, the situation
has been gradually improving over the last three decades of the 20th century, while it
seems destined to worsen over the next three. In particular, energy intensity e has fallen
more and more rapidly from 1.1% in the 1970s and 1980s to 1.7% in the 1990s. This is
the result of greater attention being paid to energy-saving following the oil shocks of the
1970s which was then consolidated by increasingly rigorous energy policies in the ‘80s
and ‘90s. Above all in the 1990s, a significant contribution to this virtuous trend was
provided by the systematic introduction of information and communication technologies
(see Vercelli, 2002). There are however some signs of an inversion of this virtuous
trend, linked to a lower tendency towards energy-saving on the part of the industrialized
countries’ energy policies and to the more rapid growth of the developing economies
such as India and China. These economies are generally characterized by a high energy
intensity which brings them high rates of growth of polluting emissions as their GDP
grows. Table 7 and the related histogram (fig. 9) show the rate of growth of CO2
emissions in the period 1980-1997 at the world level and by groups of countries
belonging to different income bands, demonstrating specifically the rapid growth of
these emissions in India and China.
Macro areas
World
Low income countries
Middle income countries
Middle/low-income countries
High-income countries
China
India
growth rates CO2 emissions
0,7
2,17
1,32
1,45
0,27
1,36
1,99
Table 7: growth rates of total CO2 emissions in the period 1980-1997.
Source: authors’ elaboration on World Bank data (World Bank, 2001).
In the same way, the energy intensity of polluting emissions d, which had fallen
significantly in the 1980s and ‘90s, is expected to grow in the next thirty years. This
suggests a worsening of the sustainable development scenario despite the expected
reduction in the rate of economic and demographic growth. The deterioration of energy
sustainability is caused by a slight increase in the rate of growth of demand for energy
and, above all, by a significant inversion of the trend in the rate of the reduction of
energy intensity per unit of income and in the pollution intensity per unit of energy
consumption. This deterioration of development sustainability can be made more
precise by defining a sustainable energy gap g based on the identity (4):
(5)
g = y* - y*max = Y* - Y*max = Y* + e* + d*
where y*max and Y*max define the maximum growth rate respectively of per capita
income and total income that are compatible with sustainable development (i.e. the
growth rates corresponding to zero environmental deterioration).
With this definition, we can see that the sustainable energy gap falls from 2.8% in the
1970s to 1.6% in the ‘80s and to 1.4% in the ‘90s, but the IEA forecasts that the value
will rise in the next thirty years to 1.8%. Behind these negative trends is an overly slow
transition process towards an alternative model based on the massive use of renewable
energies: the IEA forecasts say that the percentage of energy produced with renewable
sources should increase between 2002 and 2030 from today’s 1.7% to 4.4%. The
explanation set forth for such a slow transition process is generally that energy produced
from fossil fuels costs less and will continue to do so for the whole period. This
explanation, however, seems only partly valid. Indeed, this affirmation is based on a
very unsatisfactory way of calculating the cost per kWh. First of all, no account is taken
of external costs which, in the case of fossil fuels are particularly high. The increase in
carbon dioxide is destined considerably to worsen global warming with all its dire
consequences for the climate, the melting of glaciers, and atmospheric variability. In the
second place, the production of fossil fuels can be just as dangerous in itself. It has been
calculated, for example, that coal-mining alone accounts for some 10,000 deaths a year.
Finally, there are also high political and economic risks connected with the predominant
use of fossil fuels in that their availability is very concentrated geographically-speaking,
thus creating strong tensions for the economic and political control of these areas (the
Middle East in the first place).8 Given that the forecasts for the costs of each energy
source are crucially dependent on the hypotheses made about economic, energy, and
8
More than 60% of the world’s oil production is concentrated in only five countries
(Saudi Arabia, the United Arab Emirates, Iraq, Kuwait and Iran). If we exclude the
North Sea and the USA, the remaining percentage is mainly concentrated in areas of
high tension and political instability such as, for example, the west coast of Africa,
Libya, Algeria, Russia and the post-Soviet republics of the Caspian.
environment policies, these tensions could lead in the future to a much higher cost of
energy production with fossil fuels than that being forecast today.
4 Conclusions
In this paper we have seen how the conventional position on the impact of the energy
sector on sustainable development seems excessively optimistic. This position affects
the energy and environmental policies that are directed towards an overly slow
transition process towards a new way of producing, distributing and consuming energy
based on the use of renewable sources and of hydrogen. This stance is destined further
to widen the sustainability gap which has characterized the last thirty years even if at
decreasing rates.
This seems to be confirmed by the recent IEA estimates that forecast an inversion in
the future of the decreasing trend in energy and emission intensity observed over the
last three decades.
In recent years, the growing optimism about the market capacity to resolve
spontaneously the problems of energy scarcity and pollution produced by energy
consumption, has manifestly weakened policies aimed at promoting energy-saving and
renewable sources. The estimates proposed in this paper indicate the urgency of
strengthening the above-mentioned policies in order to accelerate the convergence
towards compatibility between energy consumption and sustainable development. To
this end, the choices that will be taken regarding the production and distribution of
hydrogen are likely be decisive. There is already general agreement on the crucial role
that this energy source will play in the future energy model, but there are profound
differences of opinion between the supporters of the conventional position and its
critics. The former think it best to use fossil fuels to produce hydrogen thereby risking
to push the problem aside and to mitigate rather than completely resolve it. The critics
of the traditional position think that oil must be produced mainly through renewable
energy sources. They stress that only in this way will it be possible for hydrogen to
resolve the problems of environmental degradation caused by the systematic use of
fossil fuels. The use of hydrogen, in fact, should be complementary and integrated with
the use of fossil fuels, in order to build up a stock of available energy from the extra
energy generated in an unavoidably discontinuous way by renewable energy sources
such as wind and solar power.
In particular, the priority is to make provisions to accelerate the transition towards an
alternative model for the production, distribution and consumption of energy. In our
opinion, this model should be based on energy-saving, on incentives to the adoption of
renewable sources in proportion to their external economies and on the integration of
renewable energies with the hydrogen used to stock the energy produced with
renewable energies.
References
Borghesi, S., 2001, The environmental Kuznets curve: a survey of the literature, in
Franzini M., Nicita A. (eds.), “Economic Institutions and Environmental Policy”,
pp.201-224, Ashgate. Previosuly published as Nota di Lavoro n.85.99, 1999,
Fondazione ENI Enrico Mattei, Milano.
Borghesi, S., Vercelli, A., 2003, Sustainable globalisation, Ecological Economics,
vol.44, n.1, pp.77-89, Elsevier Science Ltd.
Borghesi, S., Vercelli, A, Verdesca, D., 2004, Il divario di sostenibilità energetico,
mimeo.
Boyce J.K., 1994, Inequality as a cause of environmental degradation, Ecological
Economics, vol.11, p.169-178.
British Petroleum, 1995, BP Statistical Review of World Energy, BP p.l.c., London, UK
British Petroleum, 2003, BP Statistical Review of World Energy, BP p.l.c., London, UK
Byrne, J., Y.D. Wang, H.Lee, J-D Kim, 1998, An equi- and sustainability-based policy
response to global climate change, Energy Policy, 26, 4, pp.335-343.
Cleveland, C.J., Kaufman, R.K., Stern, D.I., 2000, Aggregation and the role of energy in
the economy, Ecological Economics, vol.32, pp.301-317.
Cole, M.A., Rayner, A.J., and Bates, J.M., 1997, The environmental Kuznets curve: an
empirical analysis, Environment and Development Economics, Vol.2, pp. 401-416,
Cambridge University Press.
Colombo, U., 1992, Sustainable energy development, in IIASA, 1992, pp.95-119.
Focacci, A., 2003, Empirical evidence in the analysis of the environmental and energy
policies of a series of industrialised nations, during the period 1960-1997, using widely
employed macroeconomic indicators, Energy Policy, vol.31, pp.333-352.
Galeotti M., Lanza A., 1999, Desperately seeking (environmental) Kuznets, Fondazione
ENI Enrico Mattei, Nota di lavoro n.2.99, Milan.
Geroski, P., Ulph, A., Ulph, D., 1987, A model of the crude oil market in which conduct
varies, Economic Journal.
IIASA, 1992, Science and sustainability, Novographic, Vienna.
IEA, 2002, World Energy Outlook, OECD/IEA, Paris.
IPCC (Intergovernmental Panel on Climate Change), 2001, Third Assessment Report –
Climate Change, Geneva, Switzerland.
Meadows, D.H., Meadows, D.L., Randers J., and Behrens, W., 1972, The limits to
growth, Universe Books, New York, USA
Rifkin, J., 2002, The Hydrogen Economy, Tarcher/Putnam.
Soytas, U., Sari, R., 2003, Energy consumption and GDP: causality relationship in G-7
countries and emerging markets, Energy Economics, vol.25, pp.33-37.
Sun, J.W., 1999, The nature of CO2 emission Kuznets curve, Energy Policy, vol.27,
pp.691-694.
Suri V., Chapman, D., 1998, Economic growth, trade and energy: implications for the
environmental Kuznets curve, Ecological Economics, v.25, iss.2 (May), pp.195-208.
Ulph, A., Folie, M., 1980, Exhaustible resources and cartels: an intertemporal NashCournot model, Canadian Journal of Economics.
World Bank, 2001, World Development Indicators, Washington D.C., USA.
Figure 1: Annual production and known reserves of oil
Figure 2: Proven reserves of oil and natural gas
Source:authors’ elaboration on British Petroleum data (British Petroleum, 2003)
Oil (pink) and natural gas (blue) proven reserves
1200.0
180.00
160.00
oil: billions barrrels
140.00
800.0
120.00
100.00
600.0
80.00
400.0
60.00
40.00
200.0
20.00
0.0
0.00
1980
1985
1990
period: 1980-2002
1995
2000
natural gas: trillions m^3
1000.0
Figure 3: Primary energy intensity by region over time
Figure 4: Carbon intensity by region over time
Figure 5: Energy intensity in selected countries over time
Source: Colombo (1992)
Figure 6:
Figure 7: Energy-related CO2 emissions by region over time
Figure 8: average growth rates in energy demand and CO2 emissions
Figure 9: CO2 total emissions at world level and by income groups
CO2 total emissions by income
25000
20000
15000
1980
1997
10000
5000
0
WORLD
LOW
INCOME
MIDDLE
INCOME
HIGH
INCOME
Source: authors’ elaboration on World Bank data (World Bank, 2001).