Long Run Trends in the Price of Energy and Energy Services

The document analyzes historical energy price trends, specifically in the United Kingdom, to argue that while energy prices can be volatile, the long-term trend for energy services (such as heating and lighting) is downward due to efficiency gains. It posits that fossil fuel reserves remain abundant relative to current consumption, suggesting that future price trends may remain stable or decline despite short-term peaks. The author emphasizes that focusing on energy prices alone underestimates consumer welfare gains and misleads climate change and energy demand modeling.

• Historically, energy prices in Britain rose until the nineteenth century due to reliance on limited renewable resources but declined following the adoption of fossil fuels and the steam engine.
• There is a significant divergence between the price of energy resources and the price of energy services; efficiency improvements have caused the cost of services to fall much faster than the cost of the energy itself.
• Global fossil fuel reserves are vast compared to current usage, with total reserves estimated at 30 million mtoe against a 2010 annual consumption of 12,000 mtoe, meaning atmospheric greenhouse gas limits will likely be reached before resource limits.
• Past energy price peaks, such as those in the 1920s and 1970s, were temporary as markets adjusted through new reserves, infrastructure expansion, and consumer efficiency gains.
• Focusing exclusively on energy prices rather than energy services leads to an underestimation of consumer welfare gains and can result in misleading estimates for climate change and energy consumption models.

APA

Fouquet, R. (2011). Long Run Trends in the Price of Energy and Energy Services. Basque Centre for Climate Change. https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201111100925271096879584.pdf

Chicago

Fouquet, Roger. Long Run Trends in the Price of Energy and Energy Services. Basque Centre for Climate Change, 2011. https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201111100925271096879584.pdf.

Wikipedia

{{cite report |last1=Fouquet |first1=Roger |title=Long Run Trends in the Price of Energy and Energy Services |publisher=Basque Centre for Climate Change |date=September 2011 |url=https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201111100925271096879584.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fouquet2011long, author = {Fouquet, Roger}, title = {{Long Run Trends in the Price of Energy and Energy Services}}, institution = {Basque Centre for Climate Change}, year = {2011}, month = sep, url = {https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201111100925271096879584.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }