Energy consumption and human development in India: an update

Background

According to the medium variant scenario of the UN World Population Prospectus 2024, the world’s population is expected to continue growing over the next 50-60 years, reaching a peak of around 10.3 billion people in the mid-2080s, up from 8.2 billion in 2024. After peaking, the global population is projected to start declining gradually, falling to 10.2 billion people by the end of the century. The probability of the world population peaking by 2100 is estimated to be about 80 percent.

Of all the people currently being added to the world, 95 percent live in the Global South. At the beginning of this century, 70 percent of the world population resided in the South. That figure is expected to rise to 90 percent by 2050. The demographic and energy transitions in the Global South, and in India in particular, are not only much larger, but it is quicker, and most importantly, occurring at much lower income levels than the transitions in the Global North. This may compromise prospects for energy consumption and, consequently human development in India even by 2070.

India: Energy consumption and HDI

The population of India is projected to remain the world’s largest through 2100 and reach a peak in the early 2060s at about 1.7 billion, under the medium variant scenario. India is projected to contribute most to the urban increment, with the addition of 416 million urban dwellers, nearly doubling the size of its urban population by 2050. India has committed to achieve net zero by 2070. During this period, the World population is likely to increase by 25 percent, while the population of the Global North is likely to fall by 4 percent (medium variant scenario). The population of the Global South is projected to increase by 30 percent, and the population of India is expected to increase by 17 percent. By 2070, India’s population is projected to touch 1.69 billion, with the addition of 250 million people. Life expectancy at birth for Indians is projected to increase from about 72 years in 2024 (world average 73) to about 81 years in 2070 (world average: 79). The average fertility rate (live births per woman) is expected to fall from about 1.98 (world average: 2.25) in 2024 to 1.72 (word average: 1.97) in 2070.  Population density is expected to increase from about 488 persons per square kilometre (persons/km²) in 2024 (world average: 63 persons/km²) to over 568 persons/km² in 2070 (world average: 78 persons/km²). The median age of the population in India is expected to increase from 24.4 years in 2024 (world average: 30.6 years) to 43.6 years in 2070 (world average: 39 years). For India, most of the demographic features improve in the next four decades, favouring higher levels of human development.

India is projected to contribute most to the urban increment, with the addition of 416 million urban dwellers, nearly doubling the size of its urban population by 2050.

If commercial (not including biomass) energy consumption per person increases by 3.2 percent per year in India (rate of increase in 2013-23), by 2070 per person commercial energy consumption will increase from 27.3 gigajoules (GJ) to about 116 GJ, just short of China’s per person energy consumption in 2023.  This would mean that total primary energy consumption will increase 5 times from the current consumption of 39.2 exajoules (EJ). However, a recent study supported by Government institutions observes that a high Human Development Index (HDI) can be achieved by increasing India’s annual per person energy consumption from 27.3 GJ in 2023 to 29 GJ, and achieving a very high HDI at an annual per person energy consumption of 37 GJ. Specifically, the study concludes that achieving high HDI of 0.7 would require annual per person energy consumption of 31 GJ, while achieving a HDI of 0.8 would require annual per person energy consumption of 39 GJ, and achievement of an HDI of 0.9 (highest so far) would require annual per person energy consumption of 56 GJ. This means that even if total primary energy consumption (TPEC) grows at just 1.2 percent annually, HDI can be increased to 0.7 by 2047. If TPEC grows at an annual average of about 2.2 percent, a high HDI of 0.8 can be achieved by 2047, and if it grows by an annual average of about 3.9 percent, very high HDI of 0.9 can be achieved by 2047, much earlier than the net-zero commitment year of 2070. The co-relation between energy consumption and HDI is ambiguous. India, Bangladesh, and Morocco were all in the medium HDI category in 2022. Morocco had roughly the same per person energy consumption as India but a higher HDI . Bangladesh, whose per person energy consumption was only half that of India, also had higher HDI  than India. Venezuela’s per person energy consumption was more than 3.5 times that of Morocco, but both countries have the same HDI.

Given that in 2013-2023, TPEC grew by 4.2 percent annually, it appears that the TPCE growth required for achieving a very high HDI by 2047 is well within reach.  However, the above-cited study appears to have set the bar of per person energy consumption level required for high HDI very low.  The global average per person energy consumption in 2023 was much higher at 77 GJ, and the per person energy consumption of most countries with very high HDI was above 100 GJ in 2023.

The increasing share of urbanisation, along with the rise in population density in India, will facilitate electrification of energy consumption by 2070. The cost of providing electricity supply to dense urban households will be lower than that in the case of dispersed rural households.  In a scenario where most households have autonomous energy supply from solar panels, dense urban households will enable electricity trade between households and other buildings. However, the increase in the median age of the population may reduce energy affordability. Energy demand from an ageing population may grow faster than demand from a younger population, especially on account of energy required for space heating and cooling at the household level. But, the ability to pay for energy may decline as the dependency ratio, dependents per worker, may increase. Climate change may aggravate the extent of the challenge.

Issues for thought

According to detailed analysis, the Global North has experienced slow and steady demographic change since the 1700s. In the initial stage, both birth and death rates were high, causing only slow and steady population growth. Death rates began to decline due to three factors, all of which concerned greater levels of production and consumption. The first was the trade revolution, which introduced potatoes and maize from the Americas to Europe.  The second was the agricultural revolution, which led higher yields of food production through a variety of agricultural practices. The third was the Industrial Revolution, which increased goods available for consumption.  The introduction of fossil fuels reduced transportation costs and substantially increased the productivity of human labour, capital and agricultural land which facilitated growth of population in the Global North. Major medical breakthroughs reduced death rates, while birth rates continued to be high, resulting in faster population growth. The demographic transition that is currently occurring in the Global South is following a similar course but from a much larger base—more than two-thirds of the world population—resulting in unprecedented growth rates in population. Between 1960 and 2023, it only took 12-15 years for the world’s total population to increase by 1 billion, while it took over 120 years for the population to increase by 1 billion between 1800 and 1920.

The demographic transition that is currently occurring in the Global South is following a similar course but from a much larger base—more than two-thirds of the world population—resulting in unprecedented growth rates in population.

The rapid expansion of trade in the second phase of the Industrial Revolution played a significant role in the timing of demographic transitions across countries and thereby been a major determinant of the distribution of World population and a prime cause of the great divergence in income per person across countries in the last two centuries. The underlying theory suggests that international trade affected the evolution of economies asymmetrically. The gains from trade were channelled towards population growth in the Global South, while in the North they were directed towards investment in education and growth in output per person. The demographic transition in the South was therefore delayed, increasing further the abundance of unskilled labour in these economies and enhancing their comparative disadvantage in production and trade. This historic asymmetry is often ignored, and delayed demographic transition and the resultant consumption of resources by the Global South, particularly the consumption of energy is subject to negative interpretations. In the early 2000s, when energy consumption increased by unprecedented rates in the South (notably by China), it was portrayed as a “threat” to the energy security of the Global North. Now, energy consumption by the South is framed as “irresponsible”, as it causes a runaway increase in greenhouse gas (GHG) emission, levels that is behind climate change. This framing allows the Global North to sustain its luxury energy consumption rather than reduce consumption to make carbon space available for the Global South. It also enables the North to reject any proposal for a small share of wealth to be redistributed to the South, labelling it unfair and unjust.  The irony is that redistribution of wealth would increase energy consumption and HDI in the Global South, a public good that will facilitate a reduction in migration—an outcome that the North will actually welcome.

Source: Energy-Statistical Review of World Energy 2024; HDI – UN Development Programme

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Lydia Powell is a Distinguished Fellow at the Observer Research Foundation.

Akhilesh Sati is a Program Manager at the Observer Research Foundation.

Vinod Kumar Tomar is a Assistant Manager at the Observer Research Foundation.

• Energy
• Energy Access
• India
• Climate Change
• Energy consumption
• Global South
• HDI
• human development
• India
• Net Zero
• urbanization

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