Embodied Energy An International Perspective

4.2.1 A comparison of direct and industrial energy use

Most of the world's energy is consumed in OECD North America, followed by East Asia and OECD Europe (Fig. 4.1a' . Most of this energy is fossil energy (80%), followed by renewables (hydro, solar, and combustibles, 13%) and nuclear energy (7%) (International Energy Agency 2007). Residential energy constitutes between 20% and 60% of total energy

Table 4.1. Per capita world energy consumption (GJ) by region (International Energy Agency 2007).

Region World South Africa

East Asia Former

Non-OECD

Latin

Middle

OECD

OECD

OECD

Asia

USSR

Europe

America

East

Europe

Pacific

North

America

Energy use 47 15 20

30 88

49

35

56

98

107

171

(GJ/cap)

4000

3000

2000

1000

4000

3000

2000

1000

Il II

1975 1980 1985 1990 1995 2000

Fig. 4.2. Energy consumption in Australia 1975-2000 (Australian Bureau of Agricultural and Resource Economics 2006). Areas represent energy consumed minus derived fuels produced. Brown curve: Australian population; red curve: per capita energy consumption (both indexed to 2000 = 1). ADO = Automotive Diesel Oil. [Plate 4]

Il II

1975 1980 1985 1990 1995 2000

| RESIDENTIAL, coal wood natural gas electricity

electricity

petrol aviation turbine fuel other petroleum products | | ELECTRICITY, mostly coal

■ MANUFACTURING, coal wood and bagasse I I petroleum products I I natural gas I | electricity

I I electricity

■ AGRICULTURE, ADO

Fig. 4.2. Energy consumption in Australia 1975-2000 (Australian Bureau of Agricultural and Resource Economics 2006). Areas represent energy consumed minus derived fuels produced. Brown curve: Australian population; red curve: per capita energy consumption (both indexed to 2000 = 1). ADO = Automotive Diesel Oil. [Plate 4]

consumption (Fig. 4.1b), but this portion is mainly correlated with the level of per capita income. In Asia and Africa, residential energy is mainly supplied by combustibles such as wood, and animal and crop waste, and represents around half of national energy consumption. In contrast, residential energy is mainly supplied by commercial fuels such as gas or fossil-fuelled electricity in higher income regions, and its portion has shrunk to about 20% of national energy consumption (International Energy Agency 2007; Leach 1998).

In per capita terms, OECD countries are the top energy consumers, followed by the former Soviet Union and non-OECD Europe as well as the Middle East. Below world average are Latin America, Asia and Africa (Table 4.1).

The transport sector in Fig. 4.1 contains an unknown amount of petrol used for private vehicles. Examining more detailed Australian data (Fig. 4.2 [Plate 4]) reveals that in

"—^

-Brazil

Australia - - USA - Germany

■ •»•» _

Japan

1980 1985 1990 1995 2000 Year (a)

1980 1985 1990 1995 2000 Year (a)

- Russia

- Nigeria

— Romania South Africa

1980 1985 1990 1995 2000 Year (b)

Fig. 4.3. World energy intensity trends (MJ/US$) for selected countries (World Resources Institute 2006): (a) energy-efficient economies, (b) energy-intensive economies. [Plate 5]

Australia petrol consumption (about 600 PJ/year) actually exceeds energy use in the house (about 400 PJ/year),3 and that together they represent about 20% of Australian energy consumption. Urban consumers consume more energy per capita than rural consumers (Lenzen 1998).

Similarly, in China in 2002, direct energy amounted to about 30% of total energy consumption (Wei et al. 2007). Even though rural residents still outnumbered city dwellers by a factor of 1.7, the latter collectively used 2-2.5 times more energy than the former.

Non-residential energy is traditionally reported as energy used in industry (Australian Bureau of Agricultural and Resource Economics 2006). However, if we follow Adam Smith (1776) in arguing that 'the sole end and purpose of production is consumption', industrial energy is ultimately expended for the sake of producing commodities that someone will finally consume. In fact, the entire philosophy of life-cycle assessment builds on the notion that energy (and other resources and pollutants) is passed on by being embodied in the intermediate products and materials that are then passed on between producers, until they reach the final consumer.

Accordingly, looking at overall energy use from a consumer's perspective, it becomes clear that in high income countries, the energy embodied in consumer items significantly exceeds direct energy. Hence, if the debate concluded that attention must be devoted to those aspects of our lives that consume most of our energy, then these aspects are clearly related to embodied and not direct energy (Bin and Dowlatabadi 2005).

This does not mean that we should ignore direct energy; there are certainly savings that are easily implemented without undue loss of comfort. Especially in low income countries, where the proportion of residential energy is high, energy intensities are generally high as well, leaving ample scope for reductions (Fig. 4.3b [Plate 5]). However in high income countries with a highly urbanized population, where direct energy makes up only about 25%, many technologies have been efficient for some time, and further reductions

3 With respect to electricity use we follow accounting conventions and allocate electricity to residential energy, while the primary fuels (coal etc) used in the power plant net of electricity produced are counted as embodied energy.

are likely to be less effective (Fig. 4.3a [Plate 5]). This means that rather than focusing on reductions of energy use in urban households of high income countries, through technological options that may be costly and/or difficult to implement, there may be ' low hanging fruit' elsewhere.4 There are options for changes of consumption habits involving substantial reductions in the form of embodied energy (Lenzen and Murray 20011 Melasniemi-Uutela 1999; Schipper 1993), for example simply the reduction of food intakes to recommended dietary levels, or switching to alternative items fulfilling the same need (Lenzen and Dey 2002). In the literature, they are generally referred to as lifestyle changes.

4.2.2 Lifestyles and energy

In the 1970s researchers started to appraise the connection of lifestyles and energy mostly because of concerns about the stability of oil supply (Mazur and Rose 1974) . Two decades later the concerns started to be about climate change (Wolven 1991). Many of the more quantitative investigations exploit data on household expenditure in order to characterize different lifestyles, as well as input/output analysis in order to calculate their embodied energy requirement (Bin and Dowlatabadi 2005i Weber and Perrels 2000). The latter is achieved by multiplying every expenditure item of the household by an energy intensity (Bullard and Herendeen 1975; Herendeen 1974). The most comprehensive survey of such studies to date is contained in a five-country analysis by Lenzen and co-workers (Lenzen et al. 2006).

The overarching finding of this kind of research is that energy requirements increase with overall household expenditure, which in turn depends on household income. The relationship is, however, not a proportional one, but per capita energy requirements show some saturation towards higher per capita expenditures ( Fig. 4.4) . This is because as societies become more affluent, their consumer baskets change to incorporate a higher proportion of services, which require less energy compared to food and other manufactured items.

In fact, the saturating expenditure/energy relationship can be explained by an expenditure elasticity of energy, which in the case of Fig. 4.4 is about 0.9. This means that if expenditure increases by 10%, energy requirements will increase by only 9%. Interestingly, this elasticity is higher for low income economies than for high income economies (Lenzen et al. 2006). In transitional economies with a large part of the population in the process of rapid building-up of appliance and car stocks, this elasticity is even higher than 1, such as measured for transport energy in Brazil (Cohen et al. 2005) and all direct energy in 1970s Hong Kong (Newcombe 1979). We will return to this topic in section 4.3.1 below.

While in low income and transiting economies, direct energy consumption is increasing with urbanization, electrification, and increasing work opportunities and incomes (Leach 1998; Cohen et al. 2005; Newcombe 1979; Kulkarni et al. 1994; Qiu et al. 1994), in wealthy economies such as Australia, direct energy is practically independent of income, which - together with the consumer basket effect - determines the 1 saturating 1 shape of the overall household energy requirement (Fig. 4.5). This effect was measured as a time trend in Hong Kong: while in the 1970s direct energy use was heavily skewed towards rich households (Newcombe 1979)i by the end of the 1980s this effect had largely levelled out (Hills 1994). At high incomes, direct energy is an economic necessity, and not consumed in

4 Many decision-makers have taken advantage of this basic idea, for example in emissions trading, or the Clean Development Mechanism and Activities Implemented Jointly initiatives under the Kyoto Protocol: if a company or a country found it too costly and/or difficult to reduce emissions on-site/ domestically, it should be encouraged to reduce emissions elsewhere if those reductions are more cost-effective.

W'

S*

/ o o

AUS 98

AUS 93

+

DK 95

¡a

N 73

o

BR 95

o

IND 94

o

JP 99

-

NL 92

A

NZ 80

X

US 61

X

US 72

UK 68

regr

1 10 Expenditure ('000$PPP/cap)

Fig. 4.4. Country comparison of energy requirements as a function of household expenditure ('000$PPP/cap).5 Results from (Lenzen et al. 2006) (large symbols): Australia (AUS 98), Brazil (BR 95), Denmark (DK 95), India (IND 94), and Japan (JP 99). Results from other studies (grey small symbols): US 1961 (Herendeen and Tanaka 1976), UK 1968 (Roberts 1975), US 1972 (Herendeen et al. 1981), Norway 1973 (Herendeen 1978), New Zealand 1980 (Peet et al, 1985), Netherlands 1992 (Vringer and Blok 1995), Australia 1993 (Lenzen 1998) 'regr' denotes a curve fit. Data points lying below the fitted curve indicate national fuel mixes with subaverage energy intensity, and vice versa.

larger amounts when incomes increase. Figure 4.5 confirms the conclusions of section 4.0 in that embodied energy significantly exceeds direct energy.6

It has been proposed that as societies develop and become wealthier, energy use and associated environmental impact may initially increase, but then decrease again once these

5 The World Bank (http://www.worldbank.org/depweb/english/modules/glossary.htm#ppp) defines purchasing power parities (PPP) as 'a method of measuring the relative purchasing power of different countries' currencies over the same types of goods and services. Because goods and services may cost more in one country than in another, PPP allows us to make more accurate comparisons of standards of living across countries.'

6 One note of caution is due here: one and the same country-specific energy multiplier is applied to certain commodities, no matter whether they are bought by low or high income households. It is, however, likely that when high income households buy the same commodity as a low income household, they choose one of higher quality at a higher price. It may hence be that, even though the more pricey item in reality embodies the same amount of energy (or maybe even less, because it was made using more hand-labour), it will be charged with more embodied energy than the cheaper item, because input/output analysis assumes a proportionality between money and energy flows. What this means for Figs 4.4 and 4.5 is that the 'dips' in the curves towards higher incomes should probably be more pronounced than shown.

Fig. 4.5. Direct and embodied energy of Australian households. Compiled using household expenditure data (Australian Bureau of Statistics 2000), energy statistics (Australian Bureau of Agricultural and Resource Economics 2006), and input/output tables (Australian Bureau of Statistics 2004) for 1999.

societies have attained a level of prosperity that allows them to improve resource efficiency and environmental conditions (the so-called 'environmental Kuznets hypothesis').7 This is true, for example, for SO2 emissions because there are clean technologies, which producers in wealthy countries can afford to install, and hence governments can afford to legislate. However, without exception, energy requirements analyses find that while a weak saturation exists, there appears to be no wealth threshold above which energy requirements will actually start to decrease. This is because there exists today no renewable energy technology that, once economical and affordable, provides for unrestrained energy needs.8

4.2.3 Driving forces of energy consumption over time

Energy requirement studies provide insights about cross-sections of countries at a particular point in time, but do not necessarily allow extrapolating these trends over time. A number of factors have influenced energy consumption in the past, and will continue to do so in the future. An obvious 'upwards' driving force is population - the more people there are the more energy is needed. Similarly, affluence potentially drives up energy use, since wealthier people demand more commodities. On the other hand, these upwards trends can in principle be offset by improvements in energy efficiency, structural changes in the economy, and compositional changes in final demand, for example by shifting consumptive emphasis from goods to services. In the following we examine trends in both direct and embodied energy consumption. While direct energy is often investigated using detailed bottom-up analyses (Schipper and Ketoff 1985) or index decomposition approaches (Ang 2000), Structural Decomposition Analysis (SDA (Dietzenbacher and Los 1997;

7For further reading see (Pearson 1994( Selden and Song 1994( Shafik 1994( Grossman and Krueger 1995; Stern et al. 1996; Cole et al. 1997; Ekins 1997; Ehrhardt-Martinez et al. 2002; Stern 2003).

8 The same holds for CO2 and other emissions for which there is no cost-effective end-of-pipe retention technology.

Hoekstra and van den Bergh 2002)) is often applied to unravel embodied energy trends over time.9

4.2.3.1 Residential energy

In high income countries, the per capita requirement of residential energy has changed remarkably little during the past 25 years. Unander et al. (2004) show that in the USA, Canada, France, the UK, Denmark and Sweden, people used as much energy in their homes in 1973 as they did in 1998.10 This is due to equal but opposing trends, such as the simultaneous increase in floor space of houses and efficiency of space heating devices and other building and equipment stock (Schipper and Ketoff 1985) . 11 Between 1973 and 1990, space heating was the energy demand category growing fastest (Schipper and Ketoff 1985). however, between 1990 and 1998 it was overtaken by appliance energy (Unander et al. 2004). It seems that while the need for space heat was able to saturate at some stage, rising incomes provided time-poor consumers with continuing opportunities to purchase new types of appliances that did automatically what previously had to be done manually (Schipper and Ketoff 1985, pp. 393ff).12 Over time, these appliances penetrate successive household cohorts as they climb up the income ladder (Newcombe 1979).

Between 1976 and 1995 US energy consumption for miscellaneous items such as microwave ovens, bed heaters, swimming pool pumps, air cleaners, video equipment, coffee makers and computers has grown more than 4% per year, which is twice as fast as the growth of energy used in traditional appliances (Sanchez et al. 1998). In 1995, miscellaneous electricity uses by the top 50 products amounted to 235 TWh of electricity per year, which converts to roughly 25 GJ of primary fossil energy per household per year.13 The energy embodied in those products is probably in the order of 250 GJ per household.14 In Japan, a similar long-term trend is observed, involving increasing penetration of rice cookers, electric blankets (kotatsu) and carpets, bath heaters, air conditioners, and microwave ovens (Nakagami 1996). Hong Kong underwent a similar trend for air conditioners, heaters, stoves and washing machines (Newcombe 1979; Hills 1994), and India for refrigerators, fans, television sets (Kulkarni et al. 1994) . While energy-intensive uses may vary among cultures (for example, lighting and heating in Norway versus bathing in Japan (Wilhite et al. 1996)), the growth of appliance stock and/or living space is common to households of all provenances.

While in most OECD countries, the growth in appliance ownership and residential energy use has been relatively slow, Germany, Italy and Japan have experienced higher growth rates because of their post-war recovery (Schipper and Ketoff 1985; Nakagami

9 Many decomposition case studies are couched in CO2 rather than energy terms; however, since the majority of CO2 emissions stem from energy use, we regard CO2 decompositions as relevant for the purpose of this chapter.

10 Exceptions are Norway, where high incomes combined with cheap and abundant hydro-electricity have led to about 65% of homes being electrically heated (Unander et al. 2004) .

11 Such rebound effects are well known in energy research: money saved on energy bills through energy-efficient devices is spent on new appliances and other goods, the embodied energy of which often exceeds the previous energy savings (Lenzen and Dey 2002).

12 Newcombe (1979) refers to these appliances as 'energy slaves' employed by upper income groups.

13Assuming 100 million households, and a power generation efficiency of 33%.

14Assuming each household buys one product of 50 types each at $500, and that the energy intensity of equipment manufacturing is about 10 MJ/$.

1996; Schipper et al. 1997; 1989). Even higher growth rates are perhaps experienced in economies in transition, where traditional biofuels are rapidly replaced by commercial fuels15 as newly urbanized aspiring households acquire appliances for convenience, comfort and status (Leach 1998; Garcia et al. 1994; Pongsapich and Wongsekiarttirat 1994), often leading to shortages and blackouts (Tyler 1994).

4.2.3.2 Transport energy

In absolute terms, passenger transport by private car represents the majority of transport energy use, which in turn has been one of the fastest growing sectors of OECD economies (Lenzen et al. 2003; Schipper and Fulton 2003). Linked principally to income, both car ownership and mileage per vehicle have increased, although the latter only slightly (Schipper et al. 1997; Scholletal. 1996).

The energy efficiency of private mobility (MJ/passenger-km) has stayed about constant (Schipper et al. 1997), which is due to the combination of more fuel-efficient engines on the one hand, but larger engines and increases in travel activity on the other (Scholl et al. 1996). Whether this trend can be reversed in the future depends on many factors. Further future reductions of fuel intake per vehicle-km of 25% by 2020 are technically possible (Schipper and Fulton 2003). The effect of fuel taxes may be diminished by relatively price-inelastic demand for mobility.16 Alternative renewable transport fuels are still fraught with problems such as efficient storage of hydrogen (Johansson 2003), or the negative impact of large-scale biofuel cropping on biodiversity (UN-Energy 2007). While these factors can all contribute to reducing the effect of personal transport on energy resource depletion, they may have to be complemented with more long-term structural measures such as public transport systems and urban planning (Smith and Raemaekers 1998) which are aimed at the main driving force - demand for travel.

Especially in Asia's rapidly growing large metropolises, increased mobility is expressed by income-driven increased car ownership. By 2020, car ownership in China could increase by a factor of 20 compared to 2000 levels (Schipper et al. 2001) . Further growth may only be curbed by untenable congestion and/or air pollution (Sathaye et al. 1994).

4.2.3.3 Embodied energy

There is one outstanding phenomenon that can explain why efficiency improvements have not led to a proportional improvement in overall environmental and resource pressure. Better technology will often save the consumer not only time, effort and energy, but also money. These savings are invariably spent on other (new) purposes, leading to what is called a rebound effect. At the very least, the impacts of the rebound consumption will partly cancel the efficiency improvements achieved, such as when people will drive more and heat more after switching to more energy-efficient vehicles and appliances. But often rebounds occur in patterns that actually undo and overturn any efficiency gains (Lenzen and Dey 2002; Heyes and Liston-Heyes 1993).

15 The 'energy ladder'(Smith et al. 1994), or 'transition ladder' (Leach 1998). Since this fuel transition is driven by urbanization, Leach (1998) refers to this process as the 'urban energy transition'. which interestingly coincides with the title of this book.

16 Scholl etal. (1996) find that despite significant differences in petrol prices, Europeans and Americans spend roughly the same percentage of their incomes on car travel.

Decomposing time series spanning three decades, Wood and Wachsmann (2003; 2005) both come to the conclusion that the growth of final consumption, of which households form the largest component, represents the strongest upward driving force for overall national energy consumption in economies as different as Australia and Brazil. These recent findings confirm results from previous studies on energy and CO2 emissions by Wier (1998) for Denmark, Proops and co-workers (1993) for Germany and the UK, and Common (1992) for Australia. Melanie and co-workers (1994) decompose overall final consumption into population growth and per capita affluence components. They present graphs for Australia, Canada, France, the UK, the USA, and China, showing that in all of these countries, personal affluence growth outstrips all other positive and negative drivers of CO2 emissions, including population growth and improvements in energy intensity. Similarly, Hamilton and Turton (1999) show convincingly that without exception affluence is the dominant driving force of greenhouse gas emissions in the USA, Japan, the EC, Australia, New Zealand, and Canada.

In the world' s most populous nations, India (Mukhopadhyay and Chakraborty 1999) and China (Lin and Polenske), increases in final demand levels in the 1980s outstripped technological improvements by a factor of seven and three, respectively. In the Chinese case, capital investment proved to be the strongest driving force, with household consumption and exports following close behind. Similarly, in Chung' s analysis of Korea (Chung and Rhee 2001), the effect of the growth of the economy in accelerating CO2 emissions is four times stronger than all retarding impacts combined. In Taiwan ( Chen and Rose 1990), only strong exports orientation and rapid increase of material inputs between 1971 and 1984 exceeded final demand as positive drivers for energy use. A decade later (Chang and Lin 1998), this trend was continuing unabated, and domestic final demand had overtaken exports as the main driving force.

Interestingly, in Brazil, Germany and the UK, overall energy consumption increased because of final consumption even though direct energy use decreased over some subpe-riods (Wachsmann 2005, Proops et al, 1993). This clearly demonstrates how the desire for increased material wealth can negate reductions achieved for the direct energy needs more obvious to the householder.

I f the past and present are in any way indicative for the foreseeable future, energy requirements and resource depletion will increase as people strive towards the affluent lifestyles of the high income world. In order for energy transitions to be truly effective, they will have to address embodied energy before direct energy. In the absence of readily available technological fixes, this means that energy transitions must involve radical lifestyle transitions.

4.2.4 Embodied energy trade

In our globalized world, there are very few people left whose consumption habits have no or very little impact on the rest of the world. Life in modern urban centres of the affluent part of the world is underpinned by a complex trade network that funnels resources in to cities and wastes out (Folke et al. 1997; Rees and Wackernagel 1996). While the notion of a 'resource hinterland' seems to suggest that the area supplying these resources borders the outskirts of the city, in reality this hinterland is scattered all over the world.

As the commodities consumed by city dwellers are imported from foreign countries, so is the energy embodied in them ' foreign energy' . Translating financial trade balances of countries into embodied energy trade balances allows identifying net suppliers and net demanders of embodied energy. In analogy to the National Accounting Identity

Gross Domestic Product (GDP) + Imports — Exports = Gross National Expenditure (GNE), where GDP in an embodied energy account represents the energy that a national production system embodies into commodities, no matter where these are consumed, while GNE represents the energy that is embodied in what is consumed nationally, no matter where it is produced (compare with (Bourque 1981)). The trade balance is the difference between imports and exports. There exists a large number of studies that present energy and other resource and environmental balances for single countries; they are probably most comprehensively reviewed by Wiedmann et al. (2007).

It appears that resource-rich energy-intensive economies top the list of net energy exporters, while population-dense, service-oriented economies top the list of net energy importers (Table 4.2). Through occupying markets for value-added commodities, the latter countries have successfully displaced energy- and resource-intensive production processes abroad, along with the environmental pressure these processes involved (Muradian et al. 2002) . This phenomenon is widely known as pollution leakage. The net import of

Table 4.2. National Embodied Energy Accounts (PJ, 1015 joules) of the world's top ten producers, importers, exporters and consumers of embodied energy. Compiled using a multi-region input/output model of the world economy (World Resources Institute 2006; United Nations Statistics Division 2007).

Rank

GDP

Imports

Exports

1

United States of

96 197

United States of

13 732

United States of

6319

America

America

America

2

China

51 600

Germany

6003

China

5738

3

Russian

25949

China

5760

Russian

5144

Federation

Federation

4

India

22 609

Japan

4549

Germany

4673

5

Japan

21711

United Kingdom

4064

Saudi Arabia

4127

6

Germany

14 547

France

3789

Japan

3240

7

France

11167

Italy

3197

Canada

2812

8

Canada

10 501

Netherlands

2856

Korea, Republic of

2203

9

United Kingdom

9513

Canada

2512

France

2194

10

Korea, Republic of

8547

Belgium

2231

United Kingdom

1551

Rank

GNE

Trade balance, top 10

Trade balance, bottom 10

1

United States of

103 610

Russian

4069

United States of -

-7413

America

Federation

America

2

China

51 623

Saudi Arabia

3675

United Kingdom -

2512

3

India

23 543

Venezuela

899

Hong Kong -

2201

4

Japan

23 020

Nigeria

841

Italy

1872

5

Russian Federation

21 880

Qatar

608

France -

1596

6

Germany

15 877

Kuwait

443

Spain -

1450

7

France

12 763

Iran

417

Netherlands -

1367

8

United Kingdom

12 026

Canada

299

Germany -

1331

9

Canada

10 202

Libya

279

Japan -

1309

10

Italy

9127

Kazakhstan

271

Singapore -

1179

Table 4.3. Structural Path Analysis of the world's embodied energy trade (PJ, 1015 joules), calculated using a multi-region input/output model of the world economy (World Resources Institute 2006; United Nations Statistics Division 2007). Paths are interpreted, for example, as 'the commodity trade from Japan to China embodies 427 PJ of energy'. 'nes' = not elsewhere specified .

Table 4.3. Structural Path Analysis of the world's embodied energy trade (PJ, 1015 joules), calculated using a multi-region input/output model of the world economy (World Resources Institute 2006; United Nations Statistics Division 2007). Paths are interpreted, for example, as 'the commodity trade from Japan to China embodies 427 PJ of energy'. 'nes' = not elsewhere specified .

Rank

Energy (PJ)

Path

1

2123

Canada > United States of America

2

1286

China > United States of America

3

993

United States of America > Canada

4

865

Mexico > United States of America

5

635

United States of America > Mexico

6

635

Japan > United States of America

7

491

Nigeria > United States of America

8

489

China > Japan

9

471

Korea, Republic of > China

10

467

Venezuela > United States of America

11

427

Japan > China

12

401

Saudi Arabia > Other Asia, nes > China

13

380

Germany > United States of America

14

370

Germany > France

15

357

United States of America > Japan

16

335

Saudi Arabia > United States of America

17

318

Russian Federation > Areas, nes > India

18

315

China > Hong Kong

19

302

Saudi Arabia > Japan

20

300

Russian Federation > Germany

embodied energy into the USA is of the order of the total energy consumption of an entire medium-sized economy such as Australia.

At one end on a continuum, countries with either resource abundance or cheap labour will deliver raw energy or embodied energy in basic goods at historically low prices. At the other end of the continuum, countries that import low cost direct or embodied energy generally exchange in return sophisticated goods and services costing much more than their physical inputs. Historically, exactly this exchange of embodied energy has provided cities their success, and with the ability to retain and cement power, affluence and influence for its citizens.

Each of the countries in Table 4.2 will in general have a large number of trading partners that either supply or receive the energy embodied in the traded commodities. Structural Path Analysis (Treloar 1997) is a method for extracting single paths that link the original source of energy use with the location of final consumption. Based on an input/output analysis of a one-sector world economy, the most important structural paths stretch only one node, that is they involve two countries (Table 4.3' . The USA dominates the list of embodied energy 'sinks', which is fed by Canada and China, among others. Ranks 12 and 17 show paths stretching two nodes, where China and India are the recipients of embodied energy originating in Saudi Arabia and Russia, respectively, but traded via other countries.17

17 If only two-node and higher order paths were analysed, city-territories such as Hong Kong are often situated as intermediaries (compare Newcombe 1975). Prominent paths are China > Hong Kong > China (158 PJ), China > Hong Kong > USA (59 PJ), Japan > Hong Kong > China (38 PJ), Korea > Hong Kong > China (24 PJ), USA > Hong Kong > China (23 PJ), China > Hong Kong > Japan (18 PJ), and Singapore > Hong Kong > China (17 PJ).

Taking into account that global trade exacerbates even further the discrepancy between direct and embodied energy use, residences in modern societies such as the USA, Europe and Japan may be equipped with efficient technology, but in addition to domestic embodied energy, their inhabitants consume a substantial amount of energy embodied in goods produced at high energy intensities, often in low income countries such as Mexico, China, Nigeria, and Venezuela. This once more underlines the need for taking embodied energy and lifestyle changes into account.

To account for the energy realities of globalized trade would require revamping the System of National Accounts in that energy and greenhouse gas accounts be attributed to the country of consumption rather than the country of production (Munksgaard and Pedersen 2001, Lenzen et al, 2004( . Attributing responsibility for energy and emissions alongside trade flows would overturn many core assumptions in the economic and political settings of the globe. Implemented, it would lead to substantial transformation, because any country seeking to reduce its national energy consumption or greenhouse gas emissions would need to limit imports of goods from production chains with high energy/greenhouse gas content, and perhaps advantage local production chains.

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