Regional Distribution of Renewable Energy and the Abundance of Fossil Fuels

Abstract

This paper discusses the extent to which technologies developed for the exploitation of renewable energy sources (RES) can be expected to substitute for fossil fuels, toward the goal of reducing usage of fossil fuels. We compare the changes in fuel mix for primary energy consumption and for electricity generation over the past decade between regions with large and small domestic fossil fuel resources. We conclude that for newly industrialized countries rich in domestic fossil fuels, there is only a moderate or no increase in primary energy from RES, coupled with significant increases in primary energy consumption from fossil fuels although recent but preliminary data show these trends to weaken. We use the notion of a “fossil fuel curse,” which implies that it is not obvious that countries with large domestic fossil fuel resources will allow these assets to remain unexploited. This obviously imposes a tremendous threat to climate change mitigation leaving only two choices for fossil-rich economies: leave the fossil fuels in the ground and apply carbon capture technologies, both options calling for a sufficiently high cost to emit CO₂ or other policy intervention in order to take place.