Will history repeat itself? Economic convergence and convergence in energy use patterns

In this paper, a difference-in-differences estimator on panel data for 30 developing and 21 industrialized countries is employed over the period 1971-2005 to examine how patterns of energy use (characterized by the consumption of primary energy carriers, sectoral energy use and carbon emissions) are changing in the process of economic development. For the average developing country in our sample, the results indicate that economic catch-up has been accompanied by above-average growth of the use of most primary energy carriers, the consumption of final energy in most sectors and total CO2 emissions. For industrialized countries, we find that economic growth is partially decoupled from energy consumption and that above average rates of economic growth were accompanied by larger improvements in energy efficiency. These results emphasize the need to identify the relevant engines of economic growth, their implications for energy use and possibilities to achieve low-carbon growth centered on productivity and efficiency improvements rather than on capital accumulation.

► For developing countries, the hypothesis of 'leap-frogging' is rejected. ► For OECD countries, economic growth is partially decoupled from energy use. ► For OECD countries, higher rates of growth are related to energy efficiency improvements. ► Low-carbon growth requires productivity and efficiency improvements.