Energy Demand and Supply in the Developing World, 1990–2020 Three Decades of Explosive Growth

Many recent scenarios of future world energy demand and supply assume a lower growth of energy demand in the developing world than has been the case in recent decades. Such scenarios are based on experience with declining energy intensities in the industrial world. This paper suggests a more plausible scenario in which energy demands in the developing world continue to double every decade. New technologies and improvements in efficiency will continue to lower the real cost of energy services, driving an expansion of these services to new consumers whose consumption has been limited by high prices, low incomes, and administrative induced constraints. Given initial low consumption levels and the income-elastic nature of most energy services, particularly transport, even modest rates of economic growth will induce large increases in demand. The availability of energy supplies will not constrain this surge. Rapid growth will create trade, environmental, and financial issues, but over the long run these can be managed through appropriate policies and technological progress.