Semiconductor technologies: The potential to revolutionize U.S. energy productivity (Part III)

By the end of 2009, the United States will have expanded its economic output by nearly 62 percent since 1990. Likewise, per capita incomes will have grown by 35 percent. Notably, however, the demand for energy and power resources will have grown by less than 20 percent during the same period. This decoupling of economic growth and energy consumption is a function of increased energy productivity; in effect, we have increased our ability to generate more energy services from each unit of energy consumed. While the emergence and widespread adoption of advanced semiconductor devices and related technology systems have been identified as principal drivers of the growth in economic productivity, their effect on energy productivity has received much less attention. This lack of recognition is likely due to what we previously have called " the high tech energy paradox " whereby analysts tend to pay more attention to the energy-consuming characteristics of semiconductor devices than to their broader, economy-wide, energy-saving capacity. While it is easy to imagine that the proliferation of semiconductor technologies would lead to an increase in power demand across sectors, calculating their net effect on economy-wide energy usage requires a more comprehensive understanding of the ways in which new technologies have continued to displace and improve upon older processes and systems. As Laitner and his team present in this report, historical measures of energy efficiency provide clear evidence of the dramatic reductions in energy intensity (energy per constant dollar of GDP) during recent historical periods. While important advancements in efficiency were undoubtedly made between 1950 and 1995 (when energy intensity declined by an average of 1.2 percent annually), the most dramatic advancements occurred during the past 14 years when the level of U.S. energy intensity declined by 2.1 percent annually. More importantly, however, this path-breaking analysis argues that a significant proportion of these energy productivity gains—especially in recent years—appear to be the result of the explosive growth in technologies and the related shift in the predominant technological paradigm. The authors build their case for energy productivity on the pioneering work of Dale Jorgenson and his colleagues (2005) as well as drawing from a previous analytical study on the link between information and communication technologies and energy productivity gains (Laitner and Ehrhardt-Martinez 2008). Based on available data, the analytical team provides a reasoned assessment of the high-tech energy paradox, and they make a compelling case that much of …