Heard It Again: A Closer Look

Posted on Thu 16 December 2021 in Economics

Once again, I came across the statement: "The U.S. has 4% of the world’s population and consumes 25% of the world’s power." This time, it was on the NBC Evening news, and as usual, the reporter didn't delve into the reasoning behind this comparison. What could these two seemingly unrelated facts possibly have in common?


At first glance, this statement might appear to carry some weight. How could only 4% of the world's population be responsible for a quarter of global power consumption? To make sense of this, we should consider production as a crucial factor.


Gross Domestic Product (GDP) is one of the best measures for comparing countries or populations. According to the International Monetary Fund, the global GDP in 2006 amounted to $48,245,198,000,000, while the U.S. GDP was $13,194,700,000,000. Interestingly, the U.S. GDP represents approximately 27% of the world's GDP, closely aligning with the 25% figure for U.S. power consumption in relation to the world's total.


This coincidence suggests that the U.S. power consumption isn't necessarily disproportionate when considering its economic output in the global context. So, while the statistic may sound striking at first, a deeper examination reveals a more reasonable correlation between power consumption and economic activity on a global scale.