Plummeting fertility rates worldwide may cause the global population to fall dramatically short of current projections, potentially reshaping energy demand and economic growth for decades to come. A new analysis published by Wood Mackenzie warns that if current trends continue, the world could see hundreds of millions fewer people than expected by mid-century. The consultancy's economists and energy transition experts argue that declining birth rates represent a risk factor as significant as geopolitical conflicts for strategic planners mapping out future energy markets.
The global fertility rate has dropped from 2.6 births per woman in 2007 to 2.2 in 2025, dangerously close to the 2.1 replacement ratio needed to keep populations stable. The United Nations currently projects the global population will grow from 8.2 billion in 2025 to 10.0 billion in 2060, but Wood Mackenzie suggests that figure might be far too high. Under the UN's low birth rate scenario, the global population could peak at just 8.9 billion in 2053 before declining to 7.0 billion by century's end—returning to 2011 levels. China exemplifies the trend: its birth rate fell to 5.6 births per 1,000 people in 2025, the lowest ever recorded, landing between the UN's expected 6.2 and its pessimistic scenario of 4.7. China's population contracted by 3.4 million people last year and now stands at 1.40 billion, already 9.6 million below the UN's 2024 projection. Wood Mackenzie currently forecasts global primary energy consumption will increase by 8% from current levels, reaching a peak of 717 exajoules in 2035 before gradually declining to 672 exajoules by 2060, while electricity consumption doubles to 71 petawatt-hours.
The report finds that most drivers of energy demand remain robust through 2060 regardless of demographic downgrades, noting that even a pessimistic scenario would see an increase of around 700 million people by 2060 from current levels. According to Peter Martin, Wood Mackenzie's Head of Economics, and Prakash Sharma, Head of Energy Transition, the impact of lower population would "exacerbate existing trends and challenges for energy markets." The authors explain that shrinking workforces will increase incentives to invest heavily in AI-driven automation across all sectors, "embedding the upside for electrons and related critical minerals—and a downside for molecules." They warn, however, that automation could lead to social inequality with "wealth concentrated among capital owners at the expense of labour," eventually limiting upside in consumer demand as fewer workers have reduced purchasing power.
The report attributes fertility decline to complex socio-economic factors including rising educational attainment, female workforce participation, high housing costs, and even smartphone proliferation. These forces are driving women in many countries to have fewer children than previous generations or opt out of parenthood altogether. Wood Mackenzie expects vast unmet energy needs across emerging markets in Asia and Africa will still drive convergence toward developed economy usage patterns, with rising incomes and wealth fueling greater consumption of material goods. The rapid scale-up of electrification, renewables, and AI adoption will create unprecedented demand for critical minerals while reinforcing the decoupling of economic growth from hydrocarbons. A new UN World Population Prospects report expected in July 2026 may substantially revise global population projections downward, carrying significant economic consequences as ageing trends and shrinking working-age populations exert downward pressure on GDP forecasts.
The report concludes that governments need to act decisively to secure private and public capital to ensure the energy system adapts before demographic profiles change dramatically after 2060, including incentivizing sustainable energy systems and smart, clean grids while finance remains available. The authors argue that if done effectively, AI-driven productivity gains could offset demographic drags and boost economic growth, making public finances more resilient post-2060. An earlier and lower global population peak is now "viable and capable of making or breaking the next commodity super-cycle," with its ultimate impact on energy demand depending on how the world manages the intricacies of demographics, economic growth, and technology.