Hidden Energy Flow indicator to reflect the outsourced energy requirements of countries

Globalisation and the outsourcing of industrial manufacturing from developed to less developed countries has an increasing effect on the national energy balances of most developed economies. The current standard metric Total Primary Energy Supply of a country does not take into account the energy embodied in goods and services imported from other countries, leading to the perverse outcome of a country appearing to be more sustainable the more it outsources its energy-intensive industries. Academia has addressed this problem by suggesting the use of the Total Primary Energy Footprint as an additional metric, but there has not been a clear proposal put forward by academia to governments or international institutions about how to officially adopt Consumption-Based Accounting in the field of energy. This article states that acknowledging the existence of embodied energy flows is indispensable when formulating new national and international energy policies for the transition towards energy systems that are socially and environmentally more sustainable. In this study, the Hidden Energy Flow indicator of 44 countries has been quantified using, for the first time, five different Global Multi-Regional Input-Output databases for the latest available year, 2011. The proposed indicator provides a percentage to be added to or subtracted from the Total Primary Energy Used value of a country, provided by the International Energy Agency, to get its real consumption-based energy requirement. This study demonstrates that, from 44 countries analysed, the ten most developed countries demand on average 18.5% more energy than measured by the International Energy Agency; the medium developed 24 countries demand 12.4% more, and the ten least developed countries demand 1.6% less. This means that most developed and medium developed countries displace their indirect energy consumption towards less developed countries in a hidden way. Furthermore, this research supports evidence that direct energy consumption in households is less relevant than the energy embodied in goods and services purchased by households, reaching 59.1% in the case of Switzerland, used as a reference among developed countries. The proposed Hidden Energy Flow indicator supports scientists, policymakers and citizens in the effort to focus the energy transition actions towards conducting the necessary energy consumption and production changes in the most effective way, improving energy justice and energy democracy.