Good for You, Bad for Us: The Financial Disincentive for Net Demand Reduction

Energy policy debates often focus on increasing the supply of renewable energy, but energy demand merits equal attention. Low- carbon energy sources will not be able to displace fossil fuels at the levels necessary to achieve climate goals if global demand continues to grow at projected rates. To meet the widely endorsed goal of 50% global carbon emissions reductions by 2050, including 80% reductions from developed countries, global emissions from fossil fuel use will need to decline by more than seven billion tons from projected levels by 2050. Major new sources of low-carbon energy will become available, but it is unrealistic to assume that new low-carbon sources will expand quickly enough to displace existing fossil fuel sources if global demand doubles as projected.

In fact, although the percentage of global electricity generation from fossil fuels has decreased in recent years, the total amount of fossil fuels consumed has increased. The same analysis holds true for energy supply and demand in the United States: the supply of low-carbon energy is projected to grow, but without a substantial reduction from projected levels of demand, it is difficult to imagine how low-carbon sources can supply enough energy to enable the United States to achieve its share of global carbon emissions reductions.