« Back to Home Page

Car Sales & Ownership: The Key to Oil, Energy Demand, CO2 Emissions Reduction and Environmental Degradation

| Saturday February 2nd, 2008 | 0 Comments

beijing_traffic_250.jpg
An initial, cursory look at energy demand forecasts contained in OPEC’s World Oil Outlook 2007 suggest that currently envisaged global CO2 emissions reduction targets and efforts will fall woefully short and turn out to be so much “hot air” – pardon the pun.
OPEC’s base case forecast and reference scenario sees world energy demand growing an average 1.7% per annum between 2005 and 2030. The cartel expects oil to remain the leading source of energy worldwide during this 25-year period with oil’s share of total world energy demand declining slightly, from a current 39% to 36.5%. Oil demand is forecast to rise 34 millions barrels per day (mb/d) to 118 mb/d. This implies global CO2 emissions will increase 50% by 2030, according to the report.


Oil, OPEC and Autos: Populating the World
traffic01h.jpg
Transportation will be the pivotal industry sector and the main source of increasing oil demand during the period, with developing countries offering the greatest potential for increasing vehicle ownership, the report authors’ note. Technological innovations and incentives that will help move them into the mainstream, along with domestic and international policy initiatives, such as the EU’s February 2007 Energy Policy for Europe, are not incorporated in the three scenarios. Nonetheless, they suggest that there is little – if any – chance of realizing any significant amount of CO2 emissions reductions.
Moreover, the chances of avoiding large CO2 emissions increases appears to be equally slight unless developed and developing, particularly Asian, country governments and auto makers get on their horses and launch aggressive, massive campaigns to build, market and sell affordable hybrid and other clean fuel passenger and commercial vehicles that don’t pump CO2 into the atmosphere.
Over the 2005-2030 period OPEC’s World Oil Outlook forecasts that passenger vehicle ownership will account for 14.5 mb/d of the total 34 mb/d increase in oil demand. More than 75% of that increase is expected to take place in developing countries. Unsurprisingly, China and South Asia are forecast to lead the way, with 4.2% and 5.8% growth rates, respectively, and Asia as a whole making up two-thirds of the total developing country increase.
OPEC posits a link between auto ownership and development in the World Oil Outlook 2007, drawing attention to the “vast discrepancy in ownership levels” between developed and developing countries, as well as global population. (While I wouldn’t dispute this historical linkage, I also don’t see any particular reason that owning a gasoline or diesel powered vehicle should automatically equate to progress or development or higher quality living standards but there you go.)
Luxembourg, New Zealand and the U.S. top the passenger vehicle ownership per capita ranking with all three being close to the 600 cars owned per 1,000 people mark. In countries like Ethiopia, Mozambique and Somalia – surprise, surprise – that figure is less than one. Just over 1 billion people live in countries – essentially OECD members – where vehicle ownership per thousand head reaches 200 or more. Two-thirds of world population, or 4.3 billion people, live in countries where vehicle ownership on average falls short of 50 per 1,000.
Though OPEC forecasts that growing OECD passenger vehicle ownership will result in a small, 0.1 mb/d average annual increase in oil demand from 2005 to 2030, aggregate OECD oil demand from road transportation will maintain its position as the largest consumer of oil during the period. OECD countries’ share of global oil demand from road transportation will decline from 67% in 2005 to 52% by 2030, according to the World Oil Outlook 2007’s base case reference scenario.


▼▼▼      0 Comments     ▼▼▼

Newsletter Signup