Program on Energy and Sustainable Development Working Paper #40
The Industrial Revolution accompanied a dramatic change in energy systems, away from locally gathered, traditional fuels such as biomass to commercially traded fossil fuels. For nearly 2 billion people in the world today, this commercial energy transition is yet to occur. We review the literature on the causes and consequences of this transition and the effectiveness of policy instruments aimed at accelerating or directing the transition. Income is the main driving force, but other factors-such as population density and the availability of rival fuels-affect energy choices. Although correlations between the energy transition and economic growth are high, cause and effect relationships have proved difficult to establish.