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

(b) Measuring Methods: This indicator is calculated as the ratio of energy use to 
economic output. 
Energy Use: TPES, TFC and final electricity consumption are obtained from national 
energy balances and international statistical sources. TPES and TFC are measured in 
toe; electricity use is measured in kWh. 
Output: GDP could be measured in US dollars, converted from the real national 
currency at purchasing power parity (PPP) for the base year to which the national 
currency was deflated. 
(c) Limitations of the Indicator: The ratio of aggregate energy use to GDP is not an 
ideal indicator of energy efficiency, sustainability of energy use or technological 
development, as it has been commonly used. The aggregate ratio depends on the 
energy intensities of sectors or activities, but also on factors such as climate, 

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geography and the structure of the economy. Consequently, changes in the ratio over 
time are influenced by factors that are not related to changes in energy efficiency 
(such as changes in economic structure). It is thus important to supplement the energy 
use per GDP indicator with energy intensities disaggregated by sector, since these 
disaggregated indicators are a better representation of energy efficiency 
developments. 
Comparisons among countries of the ratio of energy use to GDP are complicated by 
geographical factors. Large countries, for example, tend to have high levels of freight 
transportation, as many goods are distributed nationwide. Compared with countries 
with moderate climates, cold countries might consume considerably more energy per 
capita due to demand for space heating. Countries with hot climates might use more 
energy per capita as a result of demand for air conditioning. Countries with economies 
that depend mainly on raw-material industries might use larger quantities of energy 
per unit of manufacturing output compared with countries that import processed 
materials owing to the high energy intensity of raw-material processing. Canada, for 
example, has a high ratio of energy use to GDP, resulting in part from the fact that it 
is a large country with relatively cold weather and an economy that depends on a large 
raw-material processing sector. In Japan, the climate is milder, raw materials are 
limited, and the high population density results in smaller residential units and less 
distance travelled, contributing to a lower ratio of energy use to GDP. 
Interpreting the ratio of energy use to GDP in terms of environmental impact or 
sustainability is also complicated by differences in environmental impacts among 
energy options. Canada, for example, has substantial hydropower, nuclear power and 
natural gas, which are energy sources that have lower environmental impacts than 
coal or oil with respect to air pollution and climate change. 
Given the large number of factors that affect energy use, the ratio of total energy use 
to GDP should not be used alone as an indicator of energy efficiency or sustainability 
for policy-making purposes.