Energy Indicators for Sustainable Development: Guidelines and Methodologies International Atomic Energy Agency United Nations Department of Economic and Social Affairs International Energy Agency Eurostat European Environment Agency

3.2.2 Economic Dimension 
Modern economies depend on a reliable and adequate energy supply, and developing 
countries need to secure this as a prerequisite for industrialization. All sectors of the 
economy — residential, commercial, transport, service and agriculture — demand 
modern energy services. These services in turn foster economic and social 
development at the local level by raising productivity and enabling local income 
generation. Energy supply affects jobs, productivity and development. Electricity is 
the dominant form of energy for communications, information technology, 
manufacturing and services. 
The economic indicators have two themes: Use and Production Patterns, and Security. 
The first has the sub-themes of Overall Use, Overall Productivity, Supply Efficiency, 
Production, End Use, Diversification (Fuel Mix) and Prices. The second has the sub-
themes of Imports and Strategic Fuel Stocks. 
ECO2 (energy use per unit of GDP) is a marker of aggregate energy intensity. Much 
attention is paid to efficiencies and aggregated and disaggregated intensities in 
defining the sustainability of consumption trends. However, caution is warranted in 
the interpretation of these indicators. A country whose economy is based on banking 
and trading will use less energy per unit of GDP than one whose economy is based on 
steel making and ore processing. By taking the structure of the economy into account, 
these indicators can monitor changes in energy efficiency, which in turn may be 
linked to changes in technologies, fuel mix or consumer preferences or behaviour. 
ECO3 (efficiency of energy conversion and distribution) monitors energy efficiency 
in transformation processes such as power stations. Again, it is essential to allow for 
the nature of the economy. Neolithic communities would all have had a ratio of 1.0, 
since they had no transformation processes at all. The Production indicators look at 
the energy being used compared with the indigenous energy resources. 
There are indicators for energy intensity in individual sectors. Since they are sector 
specific, they can be good benchmarks of energy efficiency, economic structure and 
the vintage of plants and equipment. However, changes measured by value added are 
subject to world commodity prices and currency fluctuations in trade-dependent 
sectors that can change the indicators dramatically but have nothing to do with real 
changes in efficiency or practice. Therefore, such indicators must be interpreted 
cautiously. 
ECO11, which gives the proportions of energy from different energy fuels, provides a 
useful picture of the primary energy supply mix and shows the extent of energy 
diversification. 
The prices of end-use energy by fuel and sector (ECO14) have obvious economic 
importance. Efficient energy pricing is key to efficient energy supply and use, and 
socially efficient levels of pollution abatement. Energy prices and related subsidies 
and taxes can encourage efficiency of energy use or improve access levels, or they can 
generate inefficiencies in the supply, distribution and use of energy. While relatively 
high prices for commercial fuels can be seen as a barrier to access, prices that cover 

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the cost of delivery are necessary for attracting investment in a secure and reliable 
energy supply. 
Addressing energy security is one of the major objectives in the sustainable 
development criteria of many countries. Interruptions of energy supply can cause 
serious financial and economic losses. To support the goals of sustainable 
development, energy must be available at all times, in sufficient quantities and at 
affordable prices. Secure energy supplies are essential to maintaining economic 
activity and to providing reliable energy services to society. The monitoring of trends 
of net energy imports and the availability of appropriate stocks of critical fuels are 
important for assessing energy security. 
3.2.3 Environmental Dimension 
The production, distribution and use of energy create pressures on the environment in 
the household, workplace and city, and at the national, regional and global levels. The 
environmental impacts can depend greatly on how energy is produced and used, the 
fuel mix, the structure of the energy systems and related energy regulatory actions and 
pricing structures. Gaseous emissions from the burning of fossil fuels pollute the 
atmosphere. Large hydropower dams cause silting. Both the coal and nuclear fuel 
cycles emit some radiation and generate waste. Wind turbines can spoil pristine 
countryside. And gathering firewood can lead to deforestation and desertification. 
The Environmental indicators are divided into three themes: Atmosphere, Water and 
Land. 
The sub-themes on the Atmosphere are Climate Change and Air Quality. Priority 
issues include acidification, the formation of tropospheric ozone and emissions of 
other pollutants affecting urban air quality. Greenhouse gas (GHG) emissions are 
central to the debate on whether humankind is changing the climate for the worse. Air 
pollutants of major concern include sulphur oxides, nitrogen oxides, carbon monoxide 
and particulates (the last two being particularly important for indoor air pollution). 
These pollutants can damage human health, leading to respiratory problems, cancer, 
etc. 
Water and land quality are other important sub-themes of the environmental 
dimension. Land is more than just physical space and surface topography; it is in itself 
an important natural resource, consisting of soil and water, essential for growing food 
and providing habitat for diverse plant and animal communities. Energy activities 
may result in land degradation and acidification that affect the quality of water and 
agricultural productivity. The use of wood as (non-commercial) fuel may result in 
deforestation, which in some countries has led to erosion and soil loss. Some countries 
have long histories of steady deforestation. Although environmental legislation is now 
in place in many countries to avoid further land degradation, the damage still affects 
significant areas. 
Land is also affected by energy transformation processes that often produce solid 
wastes, including radioactive wastes, which require adequate disposal. Water quality 
is affected by the discharge of contaminants in liquid effluents from energy systems,