Environmental Engineering Reference
In-Depth Information
12.2 Long-term trends of energy intensities in Canada, the
United States, Britain, Japan, and China. From Smil (2003;
2004a).
shares of energy-intensive industries (e.g., Canada's large
metallurgical sector) will boost national EI even if those
operations are highly efficient (Smil 2003). Kaufmann
(1992) found that most of the post-1950 decline of EIs
in affluent economies was not due to technical change
but was associated with shifts in the kind of energies
used and the type of goods and services produced and
consumed.
In contrast, secular declines, or at least remarkable
constancy, of energy prices illustrate the combined power
of technical innovation, economies of scale, and compet-
itive markets. U.S. electricity has become a particularly
great bargain: its average price fell by nearly 98% between
1900 and 2000 (fig. 12.3). With average per capita dis-
posable incomes about five times as large, and conversion
efficiencies up to 1 OM higher, a unit of service provided
by electricity in the United States was 200-600 times
more affordable in 2000 than in 1900. Similarly, the
affordability of lighting services in Britain was about 160
times higher in 2000 than in 1900 (Fouquet and Pearson
2006). Inflation-adjusted prices of coal and oil fluctuated
a great deal but have remained remarkably constant in
the long run. The average (constant dollar) price of U.S.
bituminous coal in 2000 was almost exactly the same as
in 1950 or in 1920, and the price of imported Middle
Eastern crude oil was as cheap as the average price of
U.S.-produced crude oil during the first years of the
twentieth century. Only natural gas has shown a gradual
increase in inflation-adjusted prices (fig. 12.3).
But it would be naive to see these or any other energy
prices either as outcomes of free market competition or
as values closely reflecting the real cost of energy. A long
history of price-distorting practices has brought not only
unnecessarily higher but also patently lower prices due to
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