Chart of the day: In 2014, the US economy was more than twice as energy efficient (‘green’) as in 1970 when Earth Day started

From Mark Perry

" 


The EIA released new energy data recently showing that the US had the most energy-efficient economy in history last year, based on the amount of energy expended to produce each real dollar of Gross Domestic Product (GDP). In 2014, it required only 6,110 BTUs of energy (petroleum, natural gas, coal, nuclear and renewables) to produce each real dollar of GDP, which was the least amount of energy required to produce a dollar of real GDP in US history (see chart above).

Here’s another way to understand America’s most energy-efficient economy in history: The US produced $16.1 trillion of real GDP last year (in 2009 dollars), which was a 2.4% increase over 2013 and the largest annual amount of GDP in US history. Compared to 2000 when real GDP was only $12.6 trillion (in 2009 dollars), the US economy was 28% larger last year than 14 years ago, even though slightly less total energy was required in 2014 than in 2000 (98.324 vs. 98.819 quadrillion BTUs) to produce $3.5 trillion more real output. That would be like adding an economy about the size of Germany’s to the US, but without requiring any additional energy to produce 28% more output!  


Looking over longer time periods (see chart above), the increases in energy efficiency of the US economy have been consistent and impressive. For example, since 1949 the size of the US economy has grown by a factor of 8 times, from $2.0 trillion in real GDP to $16.1 trillion in 2014. But over that time period, the annual amount of energy consumed in the US has increased by a factor of only 3 times, from 32 quadrillion BTUs in 1949 to 99.32 quadrillion BTUs in 2014, and that’s led to a 62% decline in the amount of energy required to produce a dollar of real output from 15,930 BTUs in 1949 to 6,110 BTUs last year.

Compared to 1970 when the first Earth Day was celebrated and 14,400 BTUs of energy were required for every dollar of output, the energy efficiency of the US economy has more than doubled – we use less than half that amount of energy today (6,110 BTUs) for every dollar of output (see chart). Thanks to innovation, increases in energy efficiency, and advances in technology, the US is able to produce ever-increasing amounts of real output with continually decreasing amounts of energy usage per dollar of real GDP.

The new EIA data showing the ongoing improvements in the energy efficiency of the US economy rarely gets much media attention (especially compared to an event like Earth Day), even though it’s a remarkable story of environmentally-friendly, green achievement. As Steven F. Hayward commented in 2008, “The consistent improvement in America’s energy efficiency is an untold and under-appreciated long-term story.”

Bottom Line: On Earth Day, let’s celebrate the most energy-efficient, and therefore most green economy in US history, as a remarkable achievement of energy-saving technologies and innovation."