The Economics of Efficiency: Tackling Climate Change by Improving Productivity
This article was originally written for the Business for the Environment (B4E) Climate Summit 2015, occuring on September 9 - 10, 2015 in London.
We can all agree that setting targets is a means to catalyzing action, but there are many metrics and targets to choose from. We believe that countries and their economies can be best-served by setting targets for improving energy productivity. By focusing on increasing GDP produced per unit of energy consumed through the deployment of energy efficiency technologies, countries and businesses alike can contribute to climate goals while enjoying significant economic benefits.
An analysis commissioned by the Alliance to Save Energy showed that doubling U.S. energy productivity by 2030 would reduce CO2 emissions to one-third below 2005 emission levels. At the same time, the United States would create 1.3 million new jobs, and see a windfall of $327 billion in savings on American consumer and business energy bills. It’s no wonder that President Obama has adopted the goal of doubling U.S. energy productivity on behalf of his country.
The U.S. economy is not unique in its potential to dramatically reduce CO2 emissions while strengthening its economy. Similar economic and environmental opportunities are being seized by others in the global community. Australia, for example, recently announced its intention to improve its energy productivity by 40 percent by 2030.
In a volatile global economy, improvements to energy productivity can provide reliable avenues to prosperity. Highly efficient and increasingly low-cost LED lighting systems, combined heat and power and building insulation are just a few examples of efficient, available and proven technologies. These tools are affordably effective at bringing down long term energy costs relative to economic growth.
Yet further action is critically necessary as the UNFCCC Paris talks approach in December. In order to achieve the climate goals they will set by the end of the year, countries must take real action to improve their energy productivity. The private sector, too, will play a decisive role in climate outcomes.
To this end, the Alliance to Save Energy has partnered with the ClimateWorks Foundation to establish the Global Alliance for Energy Productivity. The Global Alliance serves as a hub for organizations, businesses and governments seeking to improve their energy productivity. The Global Alliance and its partners are generating credible commitments from government and corporate leaders, taking the world closer to doubling global energy productivity. We encourage leaders around the world to commit to improving energy productivity by endorsing the goal at globalproductivity.org.
We stand at a crossroads in history. Governments and businesses face immediate choices that will determine the future of the planet. Energy productivity is the right path. Let’s follow it together.