OECD Energy Productivities in 2009
$ PPP (US, year 2000)/GJ
Advertisement
Iceland
|
48
|
Norway
|
160
|
Canada
|
96
|
Netherlands
|
161
|
Estonia
|
96
|
Chile
|
163
|
Finland
|
111
|
Germany
|
168
|
CzechRepublic
|
117
|
Japan
|
172
|
Korea
|
119
|
Luxembourg
|
185
|
United States
|
125
|
Portugal
|
190
|
Australia
|
128
|
Turkey
|
193
|
SlovakRepublic
|
130
|
Austria
|
199
|
Belgium
|
133
|
Spain
|
199
|
New Zealand
|
141
|
Denmark
|
207
|
Hungary
|
142
|
United Kingdom
|
212
|
Poland
|
145
|
Israel
|
213
|
Sweden
|
151
|
Italy
|
214
|
Mexico
|
154
|
Greece
|
216
|
Slovenia
|
154
|
Switzerland
|
231
|
France
|
159
|
Ireland
|
235
|
The intent in using these units is to see how actual physical production levels are related to primary energy. Economists are generally reluctant to make such international comparisons because of the uncertainties in the assumptions. And there are some decidedly odd results in the table, though the numbers really ought to have error bars attached to underline their inherent lack of precision.
But in my view the data show clearly enough that most OECD countries have energy productivities falling within a surprisingly narrow range. That is, a given amount of energy creates around the same amount of wealth, in terms of goods and services. The average (and median) figure is around $160/GJ. At least some of the more extreme numbers can be rationalised on the basis of individual country characteristics.
My conclusion is that the physical connection between energy and living standards, as represented by GDP, constrains any reduction in energy usage unless there is a corresponding productivity rise.
Advertisement
The good news from these numbers is that Australia's $128/GJ, contrary to frequent claims that its energy performance is inferior to that of other economies, puts it roughly where one would expect for its geographic size and the strength of its mining and agricultural sectors, which are big energy consumers. The bad news is that this good news extinguishes any 'easy' catch-up energy savings, and productivity rise, that would go with the nation's supposed poor energy performance.
Energy productivity goes up as technical energy efficiency improves (as happens for example with modern power stations) and energy wastage declines. Both mechanisms, stimulated by rising energy prices, have probably been occurring. The question is, what ultimate productivity increase and energy savings can be expected? In Australia productivity improvement has been around 1% to 2% per annum. The official position seems to be that this will go on forever and even rise. This seems very optimistic. The OECD numbers might encourage an eventual target perhaps 20% higher than now but this is speculation. The prudent course is eventually to expect diminishing returns over time rather than the raised efficiency target that, for example, our latest government report on energy efficiency recommends. This topic could do with a lot more research.
In short, the official position on the workings of a carbon price is heavily biased towards optimism in respect of both energy technology and conservation. In my view, when the national wellbeing is at stake policy should be set with prudence and caution, not optimism. After all, every economic modelling exercise, from Stern to Garnaut, tells us that higher energy prices will permeate the whole fabric of our society and impact on our GDP.
Government should act responsibly by encouraging understanding and debate on the costs and benefits of all options, including adapting to climate change rather than abandoning present energy sources. On the balance of probabilities, relying on the carbon tax to achieve major emission reductions will likely turn out to be a mistake.
Discuss in our Forums
See what other readers are saying about this article!
Click here to read & post comments.
47 posts so far.