The “Great” Correlation

The global economy has consistently grown over the past 60 years, with an average annual increase of 3.5% measured as Gross World Product (GWP) in constant 2010 US dollars. This growth rate implies a doubling of the GWP every 20 years. The GWP started at around $11 trillion in 1960 and has risen significantly to nearly $90 trillion in 2022. Economic growth has gone hand in hand with growth in global primary energy consumption (fossil fuels, renewables, nuclear). The strong correlation coefficient (R=0.9) between GWP and energy consumption highlights a robust linear relationship, indicating a “great correlation” between economic fluctuations and energy usage. During economic upswings, energy consumption increases, while downturns, such as financial crises or pandemics, lead to reduced energy usage.