Energy: The Fundamental Driver of Wealth Creation

While many readers might find the Four Challenges singled out in previous postings alarming, they may find it also challenging to relate analyses of the global energy situation in EROI terms to more familiar indicators of economic performance such as the GDP (Gross Domestic Product). Before examining the three Energy Challenges in greater detail, in the next few postings we will first illustrate the driving role of thermodynamics in matters of economic development and wealth creation by considering the evolution of the GDP per head expressed in energy terms. We will consider first some of the world’s largest economies and then consider the global situation: the USA, as the largest older industrialised country, France as a mid range older industrialised country, Australia as a younger industrialised country whose economy relies on abundant mineral resources that are in great demand globally, Japan, as the first and only non-western country to have fully industrialised, and China, as the largest of the emergent countries currently attempting to fully industrialise.

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