01/04/16 : Karen Hughes

The World’s New Year's Resolution

Hard on the heels of a successful international negotiation in Paris, the start of 2016 marks an unprecedented opportunity for nations around the world to enact meaningful energy efficiency policies that will improve their national energy productivity while contributing to the international climate plan. Just like in the United States, where energy efficiency is a key part of states’ strategies to comply with new regulations capping CO2 emissions from fossil-fueled power plants, implementing energy efficiency policies and practices will be the fastest, easiest and most cost-effective way for political leaders the world over to meet the emissions-reduction targets agreed to at COP21.

Energy productivity is a metric policymakers can use to evaluate the economic outcomes of energy efficiency improvements. In the simplest terms, it is GDP divided by energy consumption, and it tells you what the payback is for every dollar we spend on energy. As we’ve seen in the United States, setting ambitious energy productivity goals can help ensure that the right investments are made to help companies and consumers get the maximum economic value out of every gigajoule of energy consumed.

The Paris Agreement sets the stage for a collaborative international effort to encourage, support and monitor nations around the world in their efforts to reduce greenhouse gas (GHG) emissions. The agreement aims to hold the increase in the global average temperature to “well below” 3.6 degrees Fahrenheit (2 degrees Celsius) above pre-industrial temperatures and to pursue efforts to limit the temperature increase to 2.7 degrees Fahrenheit (1.5 degrees Celsius). Even with the agreement in place, however, reaching this goal is far from certain. Implementation of the Nationally Determined Contributions (NDCs) that countries have submitted detailing their emissions reductions schemes is projected to result in up to 16.5 billion short tons (15 billion metric tons) more GHG emissions than the Paris agreement’s target of 44 billion short tons (40 billion metric tons) for 2030.

The message is clear: Starting in 2016, countries, companies and communities worldwide will have to ratchet up their climate ambitions if the agreement is to be successful.

The Technologies Are Here

As daunting as this sounds, the technologies to achieve these goals already exist. Furthermore, their affordability and effectiveness mean that reducing emissions does not have to come at the expense of economic growth, especially when it comes to the energy efficiency technologies and practices that help to improve energy productivity. Buildings alone account for more than 40 percent of global energy use and one-third of global GHG emissions, and with much of the developing world yet to be built, there is an enormous opportunity for new construction projects to deploy known, available and affordable technologies that provide proper insulation and efficient heating, ventilation and air conditioning (HVAC) systems, limiting the growth of electricity use in buildings worldwide. LED light bulbs alone offer a global opportunity to radically reduce household and business expenditures on electricity.

Similar opportunities exist in industrial operations, transportation and electric grid systems where existing efficiency technologies and practices can be employed to limit the growth of energy use and maximize economic flexibility and security.

Adaptation Opportunities in Efficiency Technologies

Of course, mitigation is only part of the challenge. Adapting to already-changing climate patterns is another key area of concern. From low-lying countries concerned about rising seas, to nations facing the prospect of more superstorms like Hurricane Sandy (2012) and Typhoon Haiyan (2013), resilience in the face of shifting weather patterns is a matter of national security. Here, too, energy efficiency has much to offer. When Sandy struck the U.S. East Coast, nearly eight million people were left without power after high winds and storm surges took out critical infrastructure. Facilities with onsite combined heat and power (CHP) systems, however, stayed warm and dry. Because they can continue to operate even when electricity grids are damaged, CHP systems are an example of the many resilience-building opportunities offered by energy efficient micro-grids and distributed generation that can be adopted globally to protect our electricity supplies.

Where Productivity and Decarbonization Meet

For the Paris Agreement to achieve its goals, energy efficiency must be paired with other decarbonization strategies, particularly renewable energy. By enhancing efficiency in energy demand, supply and distribution, decision makers will set the stage for a more financially secure future. There will be upfront costs, but in the long run we can ensure that the structural changes necessary to realize the goals of the Paris agreement are cost effective by prioritizing energy productive outcomes. In fact, a recent analysis by the Fraunhofer Institute for Systems and Innovation Research, entitled How Energy Efficiency Cuts Costs for a 2°C Future, reported that an energy productive approach to global decarbonization will reduce the global cost of the transition by $2.8 trillion.

Setting Ambitious Goals

How do we get there? Policy will play a critical role. It is imperative that nations around the world provide an effective regulatory foundation that both supports and incentivizes private actors to adopt energy-efficient technologies and practices. Businesses need clear signals, just like consumers need good labeling.

Setting a high-level national goal to double energy productivity can help provide such a signal. In the United States, we have adopted a goal of doubling energy productivity by 2030, and studies estimate that the policies that will get us there could create 1.3 million jobs, $327 billion in consumer savings and emissions reductions equal to one-third below 2005 levels. It is hard to argue with that kind of economic outcome; such goals should be a priority for all countries around the world. The Alliance to Save Energy and the Global Alliance for Energy Productivity urge policy leaders to set national energy productivity doubling targets for themselves.*

In this new year, let us resolve to make doubling energy productivity a global priority, and to ensure that, as we embark on the road from Paris, we build momentum toward this goal in our homes, communities and nations.

*Your organization can help! Endorse the goal of doubling global energy productivity here, or email me directly if you have questions.