Kateri Callahan
President, and Karen Hughes, Senior Program Manager of International Policy, Alliance to Save Energy
Reducing greenhouse gas emissions enough to limit global temperature increases to well below 2 degrees Celsius is nothing short of a monumental challenge. But it can be accomplished, and the single most important element of any successful strategy will be to rapidly improve energy productivity. Energy productivity is a measure of how effectively we transform energy use into economic output. As the ratio of economic output to units of energy consumed, it effectively quantifies the benefits of efficient energy use. The Alliance to Save Energy and the Global Alliance for Energy Productivity support efforts to double energy productivity in the United States and the world to achieve widespread economic, social and environmental benefits.
Benefits of doubling energy productivity U.S. modeling shows that doubling energy productivity could save $327 billion annually in energy costs and add 1.3 million jobs to the American economy. Globally, energy productivity has the potential to create 6 million jobs and reduce the cost of fossil fuels by almost $2.2 trillion. These benefits aside, the most critical reason to prioritize energy productivity is to enable countries around the world to achieve the climate goals set in Paris last year. The International Energy Agency estimates that energy productivity makes up49 percent of the emissions reductions needed — beyond the measures planned in countries’ Intended Nationally Determined Commitments (INDCs) — to stabilize the climate.
In fact, according to an analysis by the Energy Transitions Commission, energy productivity will have to improve by 3 percent annually from now through 2050 to meet the goals set at COP21. Chart: IEA emissions from fossil fuel combustion, and emissions savings from energy efflciency investments, 1990-2014
The transition to a clean energy economy required by the Paris agreement will be a financial challenge. However, prioritizing energy productivity can significantly ease this burden, reducing by $2.8 trillion the financial investments required to keep global temperature rise to “well below” 2 degrees. Energy productivity provides a path forward In short: Rapid action is necessary. World leaders must enact policies that will accelerate deployment of the energy efficiency technologies and practices that we already know are effective. Within this framework, public and private sector institutions will be able to take actions to improve energy productivity and reduce emissions. These include unlocking finance at a scale necessary to retrofit buildings worldwide, adopting robust appliance standards and building energy codes to lockin long-term emissions reductions, and improving industrial energy management. These tried-and-true policies and practices are guaranteed to help break the link between economic growth and rising energy consumption. Key to this effort will be the Nationally Determined Commitments (NDCs) that countries have submitted and can continue to update with increased ambition. These NDCs present an opportunity for countries to make energy productivity the first priority – and thus to jump-start their transitions to a clean energy economy by limiting the long-term growth of energy demand, stabilizing national grids, and improving opportunities to expand energy access to all. No country should have to choose between opportunities for growth and combatting climate change. The good news is that,with rapid improvements in energy productivity, countries around the world will not have to make that choice.
Kateri Callahan, President, and Karen Hughes, Senior Program Manager of International Policy, Alliance to Save Energy
