On the other hand if we a have a firm with a few substitution opportunities, the firm should consume more energy as they expand production. So if the opportunity to substitute labour or capital for energy is limited, then energy must grow as the economy expands.
Energy is one of the most basic of human needs, not as an end in itself but as a means to numerous ends. We need energy to heat and air-condition our living spaces, to cook food and forge steel, to power engines and for transportation, and most of all to generate electricity for myriad purposes from boiling a kettle to running computer systems.
During the past 50 years, global consumption of commercial energy has risen more than fourfold, far outpacing the rise in population. One way or another, all this energy comes from natural resources – whether fossil fuels such as coal and oil, living resources such as timber and biomass, nuclear fuel such as uranium, or “renewable” resources such as flowing water and wind and the power of the sun.
A generation ago, there was concern that fossil fuels would run out, plunging the world into an energy crisis. Today the fear is that their continued use might be wrecking the global climate by emitting carbon dioxide (CO2) as we burn carbon-containing fuels. This anxiety is substantially increased in view of the considerable unmet demand for energy in the developing world.
Energy use is closely tied to health and well-being – low energy users have high infant mortality rates, low literacy rates and low life expectancies. Worldwide, 2 billion people do not have access to electricity and use fuelwood or dung for cooking and heating – often destroying their local environments in the process. The challenge for the 21st century is to develop methods of generating and using energy that meet the needs of the poor while protecting the planet.
There are three global energy trends in relation to demographics. First and most obviously, as populations grow, energy use increases. Secondly, as wealth grows, energy use per capita also increases. In the early stages of industrialization, this is typically accompanied by a decline in the efficiency with which energy supplies are used, resulting in more pollution per dollar of output. India’s emissions of CO2 per dollar of GDP rose by 29 percent between 1980 and 1995; Malaysia’s rose by 58 percent.
But the third stage is more optimistic Beyond a certain threshold of wealth, which may vary widely between countries, energy efficiency begins to improve. Thereafter, countries with expanding economies and growing personal wealth can, with sensible energy policies, dramatically reduce growth in energy use. They may begin to show sharp reductions in emissions of polluting gases, including greenhouse gases, particularly by shifting to cleaner sources of energy, such as natural gas and renewables.
The fast-growing demand for energy in developing countries offers the opportunity for them to avoid the high-energy and pollution-intensive development paths of already industrialized countries and “leapfrog” to sustainable energy sources. There are many examples of moves around the world to more sustainable energy policies. Solar power is making inroads in many parts of rural Africa where urban electricity grids are unlikely to reach. Wind turbines are whirring on the plains of India, the steppes of Mongolia, the shores of the North Sea and among the sheep of Patagonia. Brazil fuels half its vehicles on ethanol made from fermented sugarcane juice, reducing the country’s CO2 emissions by 18 percent.
Many leading figures in the oil business believe that by the middle of the century the world’s vehicle fleet will run on hydrogen fuel cells, probably extracted from water using electricity generated from renewable sources. Iceland has plans to complete the task of creating the first “hydrogen economy” within its own shores by 2020, using its domestic geothermal and hydroelectric energy sources to convert its small self-contained vehicle fleet.
Most analysts still anticipate fast global rises in the use of oil and natural gas, and expect CO2 emissions to continue to rise for many decades yet, as developing countries’ economies grow. But the increases may be much less than once feared. In 1997 and 1998, the global economy grew by 6.8 percent, but CO2 emissions held steady. The explanation appeared to lie in a combination of reduced coal use and the rise of economic growth based on new information technologies, which have lower energy requirements than traditional industries
The energy deadlock is now better understood but waste of energy is increasing and energy intensity has also started to go up in industrialized countries, many of which have failed to honor their commitments for reduction of greenhouse gases.
Subsidies to energy production and consumption, especially to fossil fuels and nuclear energy constitute a serious barrier to sustainable energy paths. Serious obstacles persist in attracting private investment to sustainable energy. Energy has to be dealt within the framework of a market economy but recent negative trends are often due to the globalization and deregulation that impede or completely block sustainable energy initiatives, investments and policies.
The future of Climate Change negotiations for a legally-binding protocol at the end of 1997 are threatened by energy-connected national or regional interest. Moreover, the institutional vacuum regarding energy within the United Nations system impedes existing dispersed initiatives on energy to adopt a global strategy which would really pave the path for sustainable energy.
Sustainable energy scenarios build on three assets: technologies are already sufficiently developed to increase efficiency, to mitigate the impacts of fossil fuel combustion on the environment and to promote renewable energy sources; energy consumption trends can be differentiated from economic growth; the end-use efficiency of energy is the key-factor.
So the solution of not waste any more money and energy, not destroy country s natural resources and keep the level of CO2 stable in the atmosphere is to conserve the energy. Conservation can be defined in three ways. First it can mean the substitution of cheaper fuels for more expensive ones, a reduction in factor costs. More important as a nation we can conserve by substituting scarce finite resources with more abundant or renewable ones. Finally, the word conservation may means just using less. This could imply a lower standard of living or it could mean a simplest life-style.
