The global energy system is in the throes of a generational shift.
Population and economic growth spell a demand for much more energy. Climate pressures spell an imperative for a different mix. And new technologies mean new opportunities for both.
Looking out a decade, to the mid-2030s, can that changing world of nearly 9 billion people power itself into a new age of sustainable growth? And where can Canada, a global leader in all forms of energy, create the most value in a Net Zero economy?
To map out the expected courses for both energy demand and supply in the 2030s, RBC Economics & Thought Leadership and RBC Capital Markets, including Global Research, developed global and national datasets, and new projections. The estimates are based on current assumptions of population growth, economic growth and distribution, technology adoption and government regulation.
The highlights of that research are laid out in this report, and its six major conclusions which are designed to help inform policy discussions at COP28, the UN Climate Conference in Dubai, and subsequent energy policy conversations.
We know energy is fundamental to every part of our economy, while our management of energy emissions is also fundamental to progress on climate change. Balancing those needs will require an informed public discussion, which this research is meant to contribute to.
1. The world will need to supply another United States worth of demand
Global population growth may be slowing, but the world still needs to generate more exajoules in the next few decades to power emerging economies’ growing needs. Global population is set to rise by 1.7 billion to 9.7 billion by 2050, adding the equivalent of another China and United States in one generation. More imminently, world population will rise by around 834 million by 2035, which is the equivalent of another Europe. That will require another 93 Quad BTU of energy, or close to what the United States consumes now.
When it comes to energy-intensity growth, the world appears to be on a two-track trajectory. In advanced economies, efficiency gains are lowering per capita consumption, which has contracted 13% over the past 20 years in Europe and North America, or about 0.7% per year. Population growth is also easing, but not declining outright in most advanced economies. Still, efficiency gains on a per-capita basis aren’t yet large enough for total energy demand to decline outright, even among advanced economies, especially in Canada.
Emerging markets are on a faster track and still in the early stages of adopting passenger vehicles, home appliances and advanced manufacturing. In India, the world’s most populous country, energy consumption rates are still relatively low. A slowing population growth rate will help contain emissions growth but not sufficiently enough to offset a growing demand for intensive energy sources, including coal. Indeed, India’s population growth remains concentrated in the north where coal-dependency remains significant for industrial and urban demands.