Productivity of Growing Global Energy Demand: A Microeconomic Perspective

This report, by the McKinsey Global Institute, a think tank within the venerable McKinsey & Co. consulting empire, makes the case that “there are sufficient economically viable opportunities for energy-productivity improvements that could keep global energy-demand growth at less than 1 percent per annum” — less than half of the 2.2 percent average growth anticipated through 2020 in a business-as-usual scenario. Energy productivity — which measures the output and quality of goods and services per unit of energy input — can come from either reducing the amount of energy required to produce something, or from increasing the quantity or quality of goods and services from the same amount of energy.

The report is the result of a year-long effort “to understand the microeconomic underpinnings of global energy demand” with a focus on “how the growing demand for energy can be met most productively.” Energy productivity, McKinsey points out, is critical to economic growth and well-being, “and should therefore be a much higher priority in national policy agendas.”