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The relationship between economic development and energy consumption has important policy and geopolitical implications intersecting with future energy demand, economic growth and climate change. All countries in the GCC share a common goal to transition to economies less reliant on oil and gas. As part of this transition diversification and energy efficiency strategies have become major strategic priorities. If successful, such policies are likely to significantly change the relationship between domestic energy consumption and GDP. To inform discussion on this topic, this paper assesses the relationship between energy consumption at a sector level and GDP in the GCC relative to a reference group of OECD countries. While there is variation within each grouping and across sectors, the clear result is that energy consumption and economic growth are strongly linked to all sectors in the GCC. This is in contrast to the OECD group where energy and GDP have decoupled. These results highlight both the scope for further improvement in energy efficiency and the need for deeper integration of energy-intensive industry and higher value-added activities and services. We suggest a greater focus on energy productivity-or how maximum value can be obtained from energy consumption-can help guide industrial policy and increase the profile of energy efficiency efforts across the GCC.

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Much academic attention has been directed at analysing energy efficiency investments through the lens of behavioural failure . These studies ha e halle ged the neoclassical framing regulation which emphasises the efficiency benefits of price-based policy, underpinned by the notion of rational individual self-mastery. The increasing use of a regulatory ban on electric lamps in many countries is one of the most recent and high p ofile flash poi ts i this diale ti of f eedo -versus-the-state i the public policy discourse. This paper interrogates this debate through a study of electric lamp diffusion in Germany. It is argued that neoclassical theory and equilibrium analysis is inadequate as a tool for policy analysis as it takes the formation of market institutions, such as existing regulations, for granted. Further still, it may be prone to encourage idealistic debates around such grand narratives which may in practice simply serve those who benefit most from the status quo. Instead we argue for an evolutionary approach which we suggest offers a more pragmatic framing tool which focuses on the formation of market institutions in light of shifting social norms and political goals -in our case, progress towards energy efficiency and environmental goals.