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12/4/2014 Energy Efficiency May Be the Key to Saving Trillions NYTimes.com
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ENERGY & ENVIRONMENT | BUSINESS OF GREEN
Energy Efficiency May Be the Key to SavingTrillionsBy BETH GARDINER NOV. 30, 2014
Compared with eyecatching renewable power technologies like wind turbinesand solar panels, energy efficiency is nearly invisible. But advocates say doingmore with less power may be an even more critical weapon in the fight againstclimate change and offers big economic benefits, too.
Worldwide, governments, companies and families could be savingtrillions of dollars by improving efficiency with cars that go farther on less fueland improved appliances, light bulbs and factories, experts say.
“It’s logical, because we simply waste so much,” said Harry Verhaar, headof global and public affairs at Philips Lighting and chairman of the EuropeanAlliance to Save Energy. “Some people call energy efficiency lowhanging fruit.I would even say energy efficiency is fruit lying on the ground. We only need tobend over and pick it up.”
Realizing those energy savings would be a huge boon to the climate, easeillnesscausing air pollution, reduce many nations’ reliance on fuel importsand increase competitiveness by lowering costs, the advocates say. It createsjobs in fields like upgrading buildings, and is generally cheaper than thealternative of constructing new power plants and buying more energy, they
12/4/2014 Energy Efficiency May Be the Key to Saving Trillions NYTimes.com
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argue.But increasing efficiency is logistically complicated, requiring many
individuals and organizations to take a tremendous number of small steps, andmost nations have failed to aggressively pursue the potential savings.
Even Germany, which topped the American Council for an EnergyEfficient Economy’s rankings as the most efficient of the world’s 16 biggesteconomies, scored only 65 of a possible 100 points, noted Rachel Young, thelead author. Denmark and Switzerland, too small to be included in the survey,are doing more, she said.
“Energy efficiency is everywhere and nowhere at the same time,” saidJonathan Sinton, senior energy specialist at the World Bank. “Powergeneration happens in a place, in a piece of equipment that you can see andtouch. But energy efficiency happens everyplace energy is, and thatpervasiveness makes it really, really hard to deal with.”
Some also argue that making energy cheaper by reducing demand justleads consumers to use more, a phenomenon called the rebound effect. StevenNadel, executive director of the American Council for an EnergyEfficientEconomy, said the effect was real but relatively modest, with about 20 percentof saved energy in developed countries being used as a result.
The countries that have made the most progress on efficiency are thosewhose governments have prioritized it, Mr. Nadel said. Many are in Europe,where Germany, for example, requires regular efficiency audits ofmanufacturers and has stringent building codes, Ms. Young said.
Environmentalists, though, are disappointed with an October agreementby European Union leaders to set a nonbinding target of increasing the bloc’senergy efficiency by at least 27 percent by 2030, as part of a broader climatedeal.
Monica Frassoni, president of the European alliance, said that wouldhardly exceed the rate of efficiency improvements already happening, andstronger government action was needed. “These things do not fall from thesky,” she said. “You need political leadership and you need money.”
China has made major strides in recent years and ranks fourth on the
12/4/2014 Energy Efficiency May Be the Key to Saving Trillions NYTimes.com
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efficiency scorecard.When Deng Xiaoping set his sights in the early 1980s on quadrupling
economic output, China’s leaders realized that, without dramatic efficiencyimprovements, it would depend heavily on imported energy, Mr. Sinton said.
“It really takes persistence, and persistence is what has characterized theChinese effort,” he said. “They began to institutionalize energy efficiency, theyallocated money to research and development, they started to set targets.”
While China still has wasteful factories and buildings, it also boasts someof the world’s most efficient, he said.
Interest in efficiency spiked worldwide during the oil embargo of the1970s, but later waned, said Philippe Benoit, head of energy efficiency andenvironment at the International Energy Agency. Awareness has risen again inrecent years because of climbing energy prices, concerns about supply and thethreat of climate change, he said.
Efficiency will have to account for 40 percent of the emissions reductionsif warming is to be limited to 2 degrees Celsius, as world leaders have pledged,Mr. Benoit said. That will cost $14 trillion between now and 2035, more than$600 billion a year, doubling the current rate of spending on efficiency, theagency estimates.
Even during the 1970s crisis, the United States’ focus on efficiency wasless intent than many nations’, said Mr. Nadel of the American efficiencycouncil.
Even so, America uses half the energy per dollar of gross domesticproduct that it did in the 1970s and has saved more than $15 trillion since thenthrough rising efficiency, he said. Experts say that the use of more moderncars, appliances and equipment leads to efficiency improvements of more than1 percent a year in developed countries, even without concerted effort.
President Obama has sought to improve efficiency with measures likehigher mileage standards for cars and proposed emissions cuts for powerplants.
In Britain, the Carbon Trust has helped dozens of major companies,thousands of small ones and nearly all municipal governments to increase
12/4/2014 Energy Efficiency May Be the Key to Saving Trillions NYTimes.com
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efficiency, said James Wilde, the group’s managing director of policy andinnovation.
Most companies can cut energy costs by between 10 percent and 20percent with measures that pay for themselves within three years, he said.Some changes, like resetting heating systems and getting employees to turn offlights, bring big savings almost for free, he said. But, “It’s one of these funnythings: If it is so attractive financially, why aren’t people doing it?” he said.
Lack of awareness, inertia and the small percentage of overall costs thatenergy represents for some businesses are all obstacles, he said.
Commercial lending for building upgrades or appliance purchases isgrowing, Mr. Benoit said, often through programs that allow borrowers tomake repayments through deductions from their energy bills.
In poorer countries, increasing efficiency also makes it easier to providepower to those who lack it. When poor households switch to LED light bulbs,for example, “you’re getting a lot more light and leaving enough electricity todo something else, have a fan, a cell phone charger,” Mr. Sinton said.
Despite upfront costs, advocates say efficiency measures are a bargaincompared with other pieces of the puzzle. “Energy efficiency is the only energythat you could say is for free, where you get your money back,” Mr. Verhaarsaid. “Because it’s energy that you don’t use.”A version of this special report appears in print on December 1, 2014, in The International New YorkTimes.
© 2014 The New York Times Company
