National-level energy use, rebound and economic growth: Insights from useful work and exergy analysis

The global climate challenge is keeping below a 2⁰C global temperature rise (versus pre-industrial levels) to avoid runaway climate change. Urgent policy-based action is required to reduce global fossil fuel use and CO2 emissions, without breaking the economy. This policy conflict highlights the fact that energy-CO2 and energy-economy interactions are at opposite ends of the energy conversion chain: at one end fossil fuels are extracted, at the other it is exchanged (via monetary transaction) for energy services. The study of the whole energy conversion chain seems desirable, to provide a broad evidence base for policies aimed at meeting both energy and economic priorities. Such study requires an exergy analysis approach, examining exergy as ‘usable energy’ from extraction (primary exergy) to ‘useful work’ (when it is lost in exchange for energy services). However, such national-level exergy analysis is currently an underused approach. In response, I use a useful work accounting and exergy analysis approach to study energy use, rebound and economic growth for the UK, US and China. Several key findings and insights emerge. First, gains in national-level energy (exergy) efficiencies for the UK and US have slowed or stalled, due to efficiency dilution: the increasing use of lower efficiency processes. Second, the asymptotic national exergy efficiency limit is around 15%, suggesting current energy efficiency policies may not work effectively at the economy-wide scale. Third, my primary energy forecast in 2030 for China - the world’s largest energy consumer (and CO2 emitter) - was 20% higher than mainstream projections. Fourth, using an exergy-based approach, the UK and US exhibit partial energy rebound, but China’s energy rebound was higher (close to, or above backfire). If rebound is significant, this weakens the effect of current energy efficiency policies, and has implications for our understanding the role of energy efficiency in economic growth.