The unexpected challenges of using energy intensity as a policy objective: Examining the debate over the APEC energy intensity goal

Abstract

AimsEnergy intensity (energy demand per unit of economic output) is one of the most widely used indicators of energy efficiency in energy policy discussions. Yet its application in real-world policymaking can be surprisingly problematical. This paper aims to provide guidance to governments and organizations considering using energy intensity as a policy objective. ScopeIn 2007 the APEC community adopted, then in 2011 revised, an APEC region-wide energy intensity improvement goal. This paper presents a case study of that experience, focusing on three key ‘lessons learned’. These lessons are not original findings. However, none of them have received the recognition they deserve, and consequently, they came as a surprise to many of those involved in APEC's policy discussions. ConclusionsThe three lessons are as follows: (1) Energy intensity improvement is happening surprisingly quickly, but not quickly enough to meet the world's energy challenges. (2) It is difficult to find a definition of energy intensity that can make it suitable for use as an indicator of regional energy efficiency. (3) Whether the GDP's of individual economies are converted to common currency using market exchange rates or purchasing power parity (PPP) can dramatically change regional energy intensity improvement calculations.