Annual percent change of gross domestic product (GDP) or gross national product (GNP) represents economy growth in general which refers to growth of potential output and national income, e.g. how rich countries can advance their economies and how poor countries can catch up with rich ones.
There is currently a good correlation between a society’s wealth and its consumption pattern. As countries industrialize they require more energy, which increases their GNP and the wealth of the population who in turn use more energy, e.g. cars, air-conditioning etc.
Fossil fuels like coal, oil and gas, together with uranium are the main primary energy sources consumed to produce electricity and consumed for transportation.
Fossil fuels are not evenly distributed among countries but as commodities most can be easily shipped and are traded globally. Crude oil is one of the most important commodities as to date it remains the only bulk cost effective source of energy for transportation. It could be argued that from the 20th century onwards our whole world’s economic order has been based on the trading relationships of oil which have resulted from the concentration of oil in some countries.
In 1973 the Organization of Petroleum Exporting Countries (OPEC) quadrupled the oil price and in 1979 they doubled it because of political reasons and the speed of these rises had a major impact on the global economy. These oil shocks had multiple effects not only on developed countries but also on developing countries. The oil price can have a major impact on local countries’ inflation rates. Energy has affected the global economy and it is also increasingly recognized as having a big part by impacting global ecology. Global warming, greenhouse effect are thought to be the consequences of rising levels of carbon dioxide, methane and chlorofluorocarbons, caused by man-made activities, principally from energy generation. The present acceleration rate is rising. Predictions on the earth’s ecology as a result of global warming abound. Rising sea levels, monsoonal disturbance and increased cyclone and stormy activities are some of these; but it is difficult to attribute a single weather event solely to man-made global warming.
Thus today’s growing economy is not only facing tremendous pressure to meet growing demand but also facing environmental challenges. Energy sector is the basis of today’s growing economy and hence it is facing tremendous pressure to meet growing demand and also environmental challenge of controlling environmental damage and preserving nature. This is driving strict government regulations, and research and investment in alternative energy sources such as solar, wind, ocean and geothermal etc. in order to preserve nature.
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