Decompose worldwide energy demand and its decoupling from global economic growth

Decomposition Analysis is widely applied to break down the total energy demand into components linked to factors, describing how energy changes occur and how the energy consumption mechanism works. The study analyzes worldwide energy trends and driving factors over the years 1990 to 2014. In Index Decomposition Analysis on a regional scale, we examine the factors of energy intensity, GDP per Capita, and population size, while on a global scale, we examine energy intensity, global distribution of GDP to regions, and GDP as a total. A Decomposed Decoupling Index is estimated from global data. According to our empirical findings, the unprecedented energy demand from 1990 to 2014 was due to uneven economic and demographic changes between historic developed and emerging economies that led to dramatic regional changes in the distribution of GDP and energy use. Overall, we conclude that despite recent technological advances in energy intensity the global economy is set to a weak decoupling suggesting that energy needs should be satisfied with the alternative of renewable energy resources.