The fundamental role of energy in the economy

Energy is omnipresent in the economy and plays a fundamental role in all fields of activity, whether it is in industry, the residential and tertiary sectors or transport .

The development of coal accompanied the discovery of the steam engine, leading to the first industrial revolution in the eighteenth century. The use of coal, followed by other fossil energies (oil, natural gas) to drive machines, allowed the incredible development of industry, up to the present time.

The industrial revolution was also marked by the spectacular development of transport. The use of the steam engine to drive trains and ships resulted, from the start of the industrial era, in the creation of rail and sea networks across the globe. At the start of the twentieth century, plentiful supplies of oil, easy to store in liquid form and relatively cheap, sparked the rapid growth of road and air transport.

Energy also caters for heating and air-conditioning requirements. It is essential to operate all household, office (computers) and communication (media, telephone, internet) equipment. Industry is totally reliant on it.

Without this continuous supply of energy, society would grind to a standstill and, in this respect, our modern economies are particularly vulnerable.

The world economy demands increasing quantities of fossil fuels to meet its energy requirements. The development of road and air transport, directly related to oil consumption, is the most flagrant illustration. The

1 Some notes concerning the units used and the physics involved are provided in Appendix 1.

Energy and Climate: How to achieve a successful energy transition Alexandre Rojey © 2009 Society of Chemical Industry ISBN: 978-0-470-74427-7

distribution of relatively inexpensive means of transport on a worldwide scale has encouraged globalisation of the economy which, in return, increases energy consumption.

The alternative energies, which have developed more recently, are still far from being on an equal footing. Nuclear energy is largely considered throughout the world as presenting a number of risks: risks of diversion for military purposes, accidents, and waste storage. The renewable energies, supposed to eliminate these various constraints, are developing only slowly and their actual ability to replace the current energies is sometimes questioned.

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