Trading Off Global Fuel Supply, CO2 Emissions and Sustainable Development

Posted: 28 Nov 2016

See all articles by Liam Wagner

Liam Wagner

Griffith University - Griffith Business School

Ian Ross

Independent

John Foster

University of Queensland - School of Economics

Ben Hankamer

University of Queensland

Date Written: March 9, 2016

Abstract

The United Nations Conference on Climate Change (Paris 2015) reached an international agreement to keep the rise in global average temperature ‘well below 2°C’ and to ‘aim to limit the increase to 1.5°C’. These reductions will have to be made in the face of rising global energy demand. Here a thoroughly validated dynamic econometric model (Eq 1) is used to forecast global energy demand growth (International Energy Agency and BP), which is driven by an increase of the global population (UN), energy use per person and real GDP (World Bank and Maddison). Even relatively conservative assumptions put a severe upward pressure on forecast global energy demand and highlight three areas of concern. First, is the potential for an exponential increase of fossil fuel consumption, if renewable energy systems are not rapidly scaled up. Second, implementation of internationally mandated CO2 emission controls are forecast to place serious constraints on fossil fuel use from ~2030 onward, raising energy security implications. Third is the challenge of maintaining the international ‘pro-growth’ strategy being used to meet poverty alleviation targets, while reducing CO2 emissions. Our findings place global economists and environmentalists on the same side as they indicate that the scale up of CO2 neutral renewable energy systems is not only important to protect against climate change, but to enhance global energy security by reducing our dependence of fossil fuels and to provide a sustainable basis for economic development and poverty alleviation. Very hard choices will have to be made to achieve ‘sustainable development’ goals.

Keywords: Energy Economics, Environmental Economics, Development Economics, Climate Change, Carbon Emissions, Coal, Natural Gas, Oil, Wind, Solar, Economic History, Energy Policy

JEL Classification: E17, Q35, Q40, Q41, Q42, Q43, Q47, Q48, Q54, Q56, Q57

Suggested Citation

Wagner, Liam and Ross, Ian and Foster, John and Hankamer, Ben, Trading Off Global Fuel Supply, CO2 Emissions and Sustainable Development (March 9, 2016). Available at SSRN: https://ssrn.com/abstract=2875592

Liam Wagner (Contact Author)

Griffith University - Griffith Business School ( email )

Brisbane, Queensland 4111
Australia

Ian Ross

Independent ( email )

John Foster

University of Queensland - School of Economics ( email )

Brisbane, QLD 4072
Australia
61 7 3365 6780 (Phone)
61 7 3365 7299 (Fax)

Ben Hankamer

University of Queensland ( email )

Australia

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