Proposal for a World Energy Stock Balance Sheet

Abstract

Considering the sharp increase in global energy demand, the question arises whether worldwide energy resources will be sufficient to cover humankind's future energy requirements (including energy for food requirements). In addition to the urgent built up of renewable energy systems, energy-intensive processes to prevent greenhouse gases from being released into the atmosphere (Carbon Capture and Storage, CCS) or removed from there (Carbon Dioxide Removal, CDR, in particular Direct Air Capture, DAC) are required to meet the climate targets. On the basis of a comprehensive analysis of existing Systems of Environmental Economic Accounting (SEEA) and the International Recommendations for Energy Statistics (IRES), a proposal for a World Energy Stock Balance Sheet (WESBS) consistent with these systems was developed. The principle of prudent valuation, borrowed from business accounting, was also applied, which requires the inclusion of energy consumption for CCS and DAC. The assets side of the WESBS shows all fossil and renewable primary, secondary and final energy sources at the balance sheet date prudently valued with the energy unit Peta Joule (PJ). Provisions for the energy losses in PJ that would arise when the capitalized primary, secondary and final energy stocks are converted into useful energy are shown on the liability side of the WESBS, as well as provisions for the energy consumption for CCS and DAC. The respective energy consumption is calculated by first applying Life Cycle Assessment (LCA) emission factors to calculate the greenhouse gas emissions and thereafter using LCA energy consumption factors of CCS or DAC. The difference between energy assets and energy liabilities results in the energy equity in PJ, which is available for the future useful energy demand of humankind under the precondition that the climate targets are met. This paper explains the items of the proposed WESBS and the developed valuation methods in appropriate detail.