consumption following an inverted U-shape pattern. 1 For the average country, the estimated level of income per capita at which energy consumption is expected to saturate is about $144,000 (2011 US dollars)—still far into the future. An economy with a $45,000 per capita income today (for example, Germany) growing at 2 percent a year would take almost 60 years to reach this income level. Energy-saving technologies, however, can push the energy saturation point forward by shifting the energy-income curve down, since provision of the same energy services requires less
. Energy saving technologies, in fact, can anticipate actual saturation by shifting down the energy-income curve because the same economic activities (such as heating, cooling, transports, …) require less energy while economies with a higher manufacturing share require relatively more energy. 10 Energy efficiency gains can come about through various mechanisms, including increased thermal efficiency of fossil fuel power plants and improved fuel economy of internal combustion engines. The next sections will offer a quantification of the Kuznets curve. III
income elasticity is close to one. At higher income levels, the elasticity starts to decline. Ultimately, as income keeps growing, the economy would reach a saturation point for energy demand; however, at an estimated $180,000 per capita (in 2011 US dollars) the saturation point looks, at current technology, to still be very far into the future. 5 Energy-saving technologies, however, can lead to faster actual saturation by shifting the energy-income curve downward because the same economic activities (such as heating, cooling, and transport) require less energy. In