Energy+intensity

Energy intensity, or the energy ratio, is a measure of the amount of energy a nation consumes to produce a unit of gross domestic product (GDP). In theory, by determining the Energy/Gross Domestic Product (E/GDP) ratio, the energy efficiency of a nation’s economy can be measured. Higher intensity results indicate a higher cost of converting energy into a nation’s GDP, and thus a lower efficiency rating. Lower intensity results suggest lower costs, and thus higher efficiency.

For example, the [|European Environment Agency] reports that total energy consumption in the EU-25 grew at an annual rate of just over 0.8% between 1990 to 2004, while GDP grew at an average annual rate of 2.1% during the same period. As a result, total energy intensity in the EU-25 fell at an average rate of -1.2% per year with a total decrease of -16 % between 1990 and 2004.

Trends in the E/GDP ratio demonstrate the general relationship of economic development and energy consumption. This can provide policy makers with a rough basis for projecting energy consumption of a nation and the environmental impacts of its economic growth. Many factors may influence these results, however, as they are dependent on climate, general standard of living, technological efficacy, energy subsidies, and population density, among others. Therefore, its utility in energy policy-making may be limited to sectoral or sub-sectoral energy intensities.

Higher energy consumption rates, when reliant on fossil fuels, can increase a country’s climate change impact and contribute to resource depletion. Because economic and social development currently depends on energy input, improving energy efficiency and encouraging economic development that does not rely on energy consumption is essential to sustainable development. Therefore, the measure of a nation’s energy intensity has become influential in global policy-making.

Currently, the [|Conference Board of Canada] rates Canada 6th out of 17 peer countries.