Energy efficiency advocates have long known this to be false. Liberals understand that it’s possible to produce more goods and services without using more energy. And the evidence that this is true continues to grow. Reuters is reporting that “Global oil intensity—oil demand growth divided by economic growth—has fallen by about 2 percent a year over the last decade and the decline is now accelerating.” I’ll quote the article at length:
The world may soon achieve something long dreamed of by governments and policymakers: higher economic growth without using more oil.
Rising efficiency, conservation and substitution are steadily reducing the amount of oil needed to fuel an increase in the goods and services produced around the world.
Oil demand in the rich, industrialized countries of the West already appears to have peaked and the trend in developing economies is towards an ever-smaller increase in the amount of oil consumed for every extra unit of economic growth.
Global oil intensity—oil demand growth divided by economic growth—has fallen by about 2 percent a year over the last decade and the decline is now accelerating, spurred by high oil prices, moves to alternative fuels and measures to curb global warming.
This does not yet mean that absolute oil consumption is falling because population growth and rising wealth in poorer parts of the world will push up oil consumption for some time.
But it does mean global oil use will eventually peak and start declining—and "oil-less growth" may not be far away.
"The rate of decline of oil intensity will accelerate," said Eduardo Lopez, oil demand analyst at the International Energy Agency (IEA) in Paris, which advises industrialized countries.
"There is a structural change—difficult to measure admittedly, but clear—that demand for burning fuels is no longer what it used to be."
This is great news for cap-and-trade. Or rather, it would be if politicians actually cared about economic growth instead of simply protecting influential industries' share of economic growth. Everyone with the most cursory understanding of the issue has known for years that energy is becoming less critical to the production of goods and services—and not just oil. Energy Information Administration (EIA) data shows that energy intensity for the economy has declined by about 1.5% per year from 1980-2006:
U.S. Energy Intensity (1980-2006)
In other words, the Republican argument that pricing energy properly would hurt economic growth has never had a leg to stand on, and now even the bloody stumps are being trodden into the dirt. That reducing energy use does not hurt economic growth has always been true—it’s at least refreshing to see one media outlet report it.
(Note: what I’m not saying is that putting a price on carbon pollution would not have short-term costs as businesses pay more for energy. However, those costs will quickly disappear as clever innovators figure out ways to produce goods using less energy—unless you doubt the American entrepreneur’s ability to respond to market forces.)