NCPA - National Center for Policy Analysis


July 21, 2010

News that China consumed more energy than the United States last year will be taken by many as another sign that a new epoch is upon us.  Indeed, that's how the International Energy Agency, source of the data, described its findings Monday. 

But the headline numbers only tell half the story.  The underlying data say a lot about the challenges facing both economies, says the Wall Street Journal: 

  • China consumed half as much energy as the United States in 2000; last year, it burned through slightly more.
  • Yet the energy mix for each country couldn't be more different; coal accounts for 22 percent of U.S. energy consumption, but a full two-thirds of China's, up from 57 percent in 2000. 

That says much about the nature of China's economic expansion, which has become over reliant on fixed-asset investment in, for example, export-oriented factories.  The Chinese services sector's relative smallness shows up in the economy's energy intensity which is, dollar for dollar of gross domestic product, still three times that of the United States.  Little wonder Beijing has been reluctant to embrace efforts to curb carbon dioxide emissions, says the Journal. 

  • The U.S. energy mix is more balanced; oil remains pre-eminent at 37 percent of consumption.
  • Like China, the United States must find ways of being more energy efficient.
  • In the United States, each person used energy equivalent to 7.1 tons of oil last year.
  • That is down from eight in 2000, but still much higher than China's 1.7 tons per person. 

Unlike China, America's task doesn't involve altering the entire structure of the economy but instead changing consumption habits, such as driving more efficient vehicles.  That is tough enough.  For China, despite its new leadership position, balancing its energy requirements looks even harder, says the Journal. 

Source: Liam Denning, "China's Dubious Energy Accolade," Wall Street Journal, July 20, 2010.


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