World Energy Outlook 2006

Demand-Side Investment
Additional demand-side investment in the Alternative Policy Scenario
amounts to $2.4 trillion (Table 8.2). 3 Of this, investment in transport increases
by $1.1 trillion, close to half of the total additional demand-side investments
for all sectors worldwide. Investment in the residential and services sectors
(including agriculture) is more than $920 billion higher than in the Reference
Scenario, while industry invests an extra $360 billion.
Table 8.2: Additional Demand-Side Investment in the Alternative Policy
Scenario*, 2005-2030 ($ billion in year-2005 dollars)
OECD Non-OECD World
Industry 210 152 362
of which electrical equipment 121 74 195
Transport 661 415 1 076
Residential and services 622 304 926
of which electrical equipment 546 212 758
Total 1 492 872 2 364
*Compared with the Reference Scenario.
Consumers in OECD countries, where the capital cost of more efficient and
cleaner technologies is high, need to invest $1.5 trillion, two-thirds of the
additional global investment in end-use equipment. The share of additional
demand-side investment that occurs in non-OECD countries ranges from
33% of the global total of $926 billion in the residential and services sectors to
42% of the total of $362 billion in the industrial sector. These smaller shares
are a result of the generally lower capital cost of the end-use technologies
applied in developing and transition countries (Box 8.2).
3. The estimates of capital costs for end-use technology used in this analysis are based on the
results of work carried out in co-operation with a number of organisations, including the UNEP
Risoe Centre on Energy, Climate and Sustainable Development, the European Environment
Agency (EEA, 2005), Centro Clima at COPPE/UFRJ, the Indian Institute of Management, and
the Energy Research Institute in China. We are particularly grateful to Argonne Laboratory in the
United States for its support to part of this analysis through the AMIGA model (Hanson and
Laitner, 2006). A number of independent sources were used for consistency-checking purposes,
e.g. ADB (2006), Chantanakome (2006) and Longhai (2006). Given the variability in the quality
of many of the specific regional and sectoral data used, there are many uncertainties surrounding
these estimates.
198 World Energy Outlook 2006 - THE ALTERNATIVE POLICY SCENARIO
© OECD/IEA, 2007