How Will Energy Demand Develop in the Developing World?
Most of the medium-run growth in energy demand is forecast to come from the developing world, which consumed more total units of energy than the developed world in 2007. We argue that the main driver of the growth is likely to be increased incomes among the poor and near-poor. We document that as households come out of poverty and join the middle class, they acquire appliances, such as refrigerators, and vehicles for the first time. These new goods require energy to use and energy to manufacture. The current forecasts for energy demand in the developing world may be understated because they do not accurately capture the dramatic increase in demand associated with poverty reduction.
The authors are grateful to Moshe Barach and Walter Graf for superb research assistance, to Hunt Allcott, Max Auffhammer, Randy Chugh, Lucas Davis, Taryn Dinkelman, Michael McNeil, Shaun McRae, Mushfiq Mobarak, Tim Taylor and Omar Romero-Hernandez for useful comments and suggestions and to Anjini Kochar, Alex Rodriguez, Jean Roth and Terry Sicular for assistance accessing data. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Catherine Wolfram & Orie Shelef & Paul Gertler, 2012. "How Will Energy Demand Develop in the Developing World?," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 119-38, Winter. citation courtesy of