The World Economic Forum (New York, U.S.) has released a new report stating that the energy sector has a major role to play in global economic growth and recovery, with its indirect contributions outweighing the already considerable direct effects. The report was launched at the CERAWeek energy conference in Houston, Texas.
The report, Energy for Economic Growth - Energy Vision Update 2012, provides a framework for understanding the larger economic role of the energy industry. The report examines the role of energy prices in the economy.
"We always suspected that energy had a vital role to play in the economic recovery," said Roberto Bocca, senior director, head of energy industries, World Economic Forum.
"But we were still surprised when the data uncovered the magnitude of the sector's multiplier effects."
Solar and wind energy contributions during the construction phase reached as high as 3.3 indirect jobs per energy job, according to the report.
As a result of higher wages in this sector, energy industry employees contribute more absolute spending per capita to the economy than the average worker and contribute a larger share of GDP per worker than most.
Many countries such as China, India and South Korea are increasingly focusing on renewable energy sources, including wind and solar, as potential growth sectors for their economies. However, the higher costs of these technologies create trade-offs that must be considered, the report states.
"Energy prices will always be volatile and thus represent a challenge for long-term economic planning," said Kenneth Rogoff who is currently the Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard University. "The interesting question is how to make this volatility less economically damaging."