A rapid increase in energy demand in developing countries threatens to undermine their fragile economies and negate environmental gains in the industrialized nations, according to a new analysis by the congressional Office of Technology Assessment.

The report dramatizes the dilemma facing many of the world's poorest and most densely populated nations: the more their people gain access to motor vehicles, mechanized farm equipment and modern appliances, the more they have to spend on power plants and imported oil and the greater the risk of environmental degradation.

"Energy services are essential for economic growth {and} improved living standards," said the report, part of a study of Third World energy problems requested by several congressional committees.

But providing those services means buying oil and building power plants in countries already burdened by debt, damming rivers and inundating farmland for hydroelectric facilities and burning more coal.

Unrestrained use of coal, especially in China, along with increased urban bus fleets and the burning of wood for fuel in the poorest countries, contributes to the worldwide emissions of greenhouse gases believed to be responsible for global warming, according to the report.

The global warming debate has begun to focus international attention on energy and environmental problems in the developing countries. Delegates from more than 100 nations will gather in Chantilly, Va., on Feb. 4 to begin negotiations on an international agreement to limit greenhouse gas emissions.

"This will be one of the focuses of any global warming treaty," said Alden Meyer, director of the climate change and energy policy program at the Union of Concerned Scientists. "You can't ask these countries to forgo development, so you have to make it possible for them to develop in a more environmentally friendly way . . . . You don't want them to follow the fossil fuel model."

"Concern about this was deader than dead when we were formed in 1984," said Deborah Blevis, executive director of the Washington-based International Institute for Energy Conservation. "All the arguments we have been making since '84 are coming out now."

Blevis said most projected growth in energy consumption "is disproportionately going to occur in the developing countries or Eastern Europe. They can least afford an out-of-whack energy system."

Jessica Mathews, vice president of the World Resources Institute, said the problem of Third World energy demand is "a deeply neglected area" because the World Bank has not made energy efficiency part of its development loan policy and because "American energy policy analysts have a little bit of a credibility problem. We ought not to be offering energy policy thinking when we don't have an energy policy of our own."

According to the OTA report, however, the issue of energy use in the Third World and its effect on the global environment can no longer be ignored. The increasing consumption helps to drive up oil prices, adds to air pollution and undermines the international banking system through energy loans that cannot be repaid.

Developing countries accounted for 17 percent of world commercial energy consumption in 1973, the report said. That figure is now 23 percent and is expected to rise to 40 percent by 2020. But among the countries classified as developing by the World Bank, the rate of consumption growth is vastly uneven.

The 50 countries of Africa consume less than 3 percent of world commercial energy. China, India and Brazil account for 45 percent. China alone will account for more than one third of the expected increase in the next 30 years, according to the report.

Meeting projected growth in electricity demand will require investment of $125 billion a year, twice the current level, the report said, citing World Bank estimates. In countries that cannot provide enough electricity to meet demand for heat and light among their fast-growing populations, consumers will be forced to use more and more "biomass" -- wood, crop wastes and animal dung -- with potentially devastating environmental and social consequences, the report warned.

"Overuse of biomass already contributes to environmental degradation" through soil erosion and smoky emissions, the report said. "Moreover, gathering traditional supplies of fuel wood is time-consuming, exhausting work frequently undertaken by women and children, who are thus diverted from other activities (education and farming) that could eventually improve their productivity and living conditions."

A later OTA report will make recommendations about policy and technology for dealing with the Third World energy problem.