Capital, energy and carbon in the United States economy

Abstract

Energy in economies is required both to build the stock of capital assets, and to produce goods and services from use of the stock. Decarbonization involves: changing the capital assets for producing energy; building and using capital with greater energy efficiency; and changing the distribution and characteristics of asset types in the capital stock. From 2004 to 2019, US capital assets grew by 24%, while primary energy consumption remained relatively unchanged. Here we examine the relationship between capital and energy in the US economy to understand how this growth occurred without increased energy use. The method involves mapping of energy use and greenhouse emissions onto four broad categories of capital stock, employing environmentally-extended input–output analysis and time-series data from a variety of sources. Result show that intellectual property products, with an energy intensity of 2.9 TJ / $million of investment, grew as a proportion of the capital stock relative to structures (7.0 TJ / $million) and equipment (6.9 TJ / $million). Meanwhile the energy intensity of using capital decreased in the residential sector and in all nineteen manufacturing sectors. The study connects strategies for decarbonization of the US economy in a concise and consistent framework, with turnover of the capital stock providing opportunities for both energy efficiency and decarbonization.