Global Energy Trends

The first part of this study assesses the global implications of energy developments in China and India. This year 3 scenarios are used: a Reference Scenario, an Alternative Policy Scenario, and a High Growth Scenario. Updated energy projections are provided, by scenario, for the world and for China and India. WEO 2007 then considers the role of the two giants in international trade and economic growth, the impact of their rising energy use on the world’s energy security and the environmental repercussions, including a study of what we call a 450 Stabilisation Case. A final section looks at what this means for policy-makers. The IEA’s World Energy Model (WEM) – a large-scale mathematical construct designed to replicate how energy markets function – is the principal tool used to generate detailed sector-by-sector and region-by-region projections for all the scenarios in WEO 2007. It has been updated using the latest historical data. In addition, more detailed models were developed for China and India to allow more in-depth analysis of energy trends in those countries. The other main improvements include a more detailed sectoral representation of end-use sectors, notably the road-transport sector, as well as field-by-field analysis of oil and gas production prospects in both China and India, including the potential impact of enhanced oil recovery. In addition, the WEM has been integrated into a general equilibrium model for the purposes of analysing the interlinkages between energy use and economic activity in China, India and other WEO regions. The results have been used to assess the global impact of structural economic changes in China and India in the High Growth Scenario.