The Urban Component of the Energy Crisis

Abstract

The spiral of higher oil prices that is occurring currently is mostly caused not by the lack of reserves, but by increasing demand on the existing supply. However, increase of supply would only temporarily attenuate the issue, as demand is expected to continue to soar and eventually outstrip the reserves of fossil fuels, which combined account of almost all our present energy sources. It is not that fossil fuels will disappear, but rather the certainty that they will become progressively scarcer and definitely more expensive as time goes by, has become an irreversible and well established trend.

The cost increase of a critical resource - energy - will force unforeseen changes in production and in distribution of goods, affecting the whole productive matrix - including employment. Not only new products and distribution systems based on higher energy costs will need to be conceived and implemented but especially the current reliance on fossil fuels - oil, gas and coal - will need to be replaced almost entirely by sustainable sources - an extraordinarily complex enterprise that should consume our efforts in the next 40 years.

Energy consumption will be further aggravated by the expected 2.3 billion population increase from now to 2050, which is expected to be almost entirely concentrated in the urban centres of Asia, Latin America and Africa. Since these additional urban spaces are still to be developed, urban development strategies that consider higher energy costs could effectively alleviate the transition period from fossil fuels to sustainable sources.

Rather than providing a recipe for urban planning, this paper stresses the need for further research to incorporate the energy cost component with the urban development context and the dissemination of information on this matter.

Keywords: Energy, Crisis, Urban Development, Developing Nations, Urban Planning, Renewable Energy, Rising Costs, Projection, Urban Growth, Demand for Energy, Supply of Energy, Demand and Supply

JEL Classification: H54, O10, O18, O20, Q21, Q31, Q32, Q41, Q42, R11, R41