The global economy and energy system are interdependent strands where changes in one will often cause fluctuations in the other. This relationship was highlighted by the recent economic crisis which saw cumulative effects in other spheres including world energy demand.

Since energy consumption first requires demand, looking at consumption changes offers a partial glimpse into the energy demand pattern. Prior to the beginning of the global economic recession, energy consumption had been on the increase, particularly in developing countries. Between 1990 and 2005, total energy consumption in developed countries had increased by 6.5% compared to an increase of over 82% in developing nations where total consumption had grown from 2.7 Giga tonnes of oil equivalent (Gtoe) to 4.9 Gtoe. This trend is shown in Figure 1.

As demand and consumption are interrelated, a similar trend describing energy demand within developed and developing countries is likely.

However, a recent study conducted in March 2009 by McKinsey Global Institute noted a decrease in energy demand since the global economic downturn. The results from this report can be accessed through the link below, in Figure 2.

Furthermore, the financial state has prompted a slump in crude oil prices since 2006. Yet, McKinsey Global Institute predicts that during a moderate, severe or extreme financial downturn, energy demand in developed countries will fall to or below 2006 values while demand in developing countries will continue to increase. A graphical display of this expectation is given in Figure 3.

A number of drivers will influence short term variance in energy demand. McKiney Global Institute’s estimated look at energy demand considers limited fluctuations in GDP, vehicle fuel efficiency and energy productivity regulations, and sales of fuel alternative vehicles. These criteria provide sufficient information for describing short term energy demand in specific economic conditions. Yet, to bring the conversation of the differences in energy demand between developed and developing countries out of the economic discussion and into climate change arena, it is critical to also consider more long term variables, like population growth, as well as GDP per capita.

Part two or this post will consider long term factors that drive energy demand and the use and availability of carbon capture and storage to offset potential resulting emissions.