A recent study from the Centre for Integrated Energy Research at the University of Leeds concluded that within 30 years the world could reduce its energy consumption by 40% and still provide a decent living standard for the world’s population.
Forgive me for not always accepting the suggested conclusion, but I decided to read the actual report, paying particular attention to the definition of “decent standard of living.” Deep in the report was the answer: all basic human needs such as mobility, food and hygiene are met, while also having access to healthcare, education and technology.
I’m sure some will call me a selfish carbon producer, but I’m not ready to blindly sign up for that nebulous definition of decent living standard.
Just as I assume smart people will continue to create more efficient sources of energy, I am just as convinced that other smart people will continue to produce more ways to consume that energy. Indeed, the history of energy production and consumption is also the history of worldwide living standards. It is no accident that the shift from burning wood to coal as the world’s primary fuel source coincides with the Industrial Revolution. The more efficiently burning coal was the energy source for massive increases in living standards, so much so that climate change expert Roger Fouquet calls the wood-to-coal shift as “the most momentous in the history of energy.”
Americans burned very little coal until the early 1800s. Timber was plentiful and cheap, but it burns so quickly that it is impractical for industrial uses. Coal fueled new industries across the young country, essentially converting carbonized rock into improved living standards.
For the first 200,000 years of man’s existence, most people lived in extreme poverty. That only began to significantly change in the early 1800s. According to the World Bank, in 1820, 89% of the people on earth lived in “extreme poverty, defined as living on less than $3 a day. In 1800, not even the wealthiest person on earth had electricity, air conditioning, incandescent light, refrigeration, or Snapchat. These items are now considered the most basic necessities, making clear that the quality of your life generally mirrors the amount of energy at your disposal.
Today, only 8% of the world lives in extreme poverty – a staggering achievement within a span of less than 200 out of the past 200,000 years.
Are there more efficient and affordable energy sources than oil and gas? Probably. Can the world decrease its energy consumption without decreasing overall living standards and increasing poverty? I don’t know. But in all of recorded history, energy consumption and living standards have been almost perfectly correlated.
David Moon is president of Moon Capital Management. A version of this piece originally appeared in the USA TODAY NETWORK.