The Decline of Global Energy Return on Energy Invested (EROI)  and Its Economic Consequences

As global energy demand continues to rise, evaluating the sustainability of energy production becomes increasingly important. This study investigates the impacts of rising energy consumption within the energy sector on the global economy. We use data from national input-output tables to calculate Energy Return on Investment (EROI) indicators for 76 countries using an expenditure - based approach, as well as for the world as a whole, covering the period from 1995 to 2020. Our findings reveal that EROI distribution follows a power law: while most countries exhibit low EROI values, only a small number of well - endowed countries exhibit a high EROI. The global EROI decreased at an annual rate of 1.6% over the period 1995 to 2020. If this trend continues, the energy sector would need to expand by nearly 24% by 2050 to satisfy the same final demand as in 2020, whereas global all-sector production would need to increase by 2.6%. This suggests that a declining EROI could be a considerable drag on global economic growth in the coming decades. On the other hand, global EROI actually increased in the period from 2012 to 2020 - likely due to the declining costs and expanding deployment of renewable energy - although it remains uncertain whether this marks a permanent reversal of the long-term downward trend.