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Energy Efficiency: an Economic Term on Energy and Welfare relation

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An economist will say that “Energy is an important factor for Nation Welfare”, economist will strengthen this relation of energy and welfare with for example correlation between HDI and Electricity Consumption per capita. Moreover economist will use the Energy Elasticity and Energy Intensity to described this relation.

  • Energy Elasticity mean, relation of Energy Growth and Economic Growth. The smaller energy growth than economic growth, it means that energy used more efficiently
  • Energy Intensity mean, relation of energy production (TPES/Consumption) and economic production (GDP). The smaller energy production than economic production, it means that energy used more efficiently.

In my opinion (note: it should avoid the use of opinion), there is argument that energy Intensity is not the right metric, for develop country can lower the intensity by outsourcing, or for developing country that depend on energy as source of income.

Here is some illustration on how Economist, Engineer and Environmentalist vs Scientist and Politician might provide a very different opinion on energy.

  • Engineer would think how they could improve energy (efficiency) by develop new photovoltaic material, or a new wind turbine blade design. They only care about tools (tech)
  • Economist would think how they could improve energy by attracting investor (give tax subsidy, remove administration), change the budget allocation (remove fuel subsidy, develop new power plant). They only care about money
  • Environmentalist would think how they could improve energy by develop new environment model (air pollution in atmosphere). They only care about plane

So engineer, economist and environmentalist can be a good guy or can be a bad guy. However in my argument, ‘scientist’ is a good guy and ‘politician’ is a bad guy. Scientist will argue based on fact, while politician will argue based on people opinion (which rely on so many psychological/behavior) factors. Useful reference that I used today is from Indarti, 2011, Energy Efficiency Indicators in Indonesia and Indonesia Energy Conservation

Written by Anjar Priandoyo

November 30, 2015 pada 10:51 am

Ditulis dalam Science

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