Energy efficiency is the measure of how effectively energy is used to perform a specific task or function. In other words, energy efficiency refers to the ability to use less energy to achieve the same level of output or service. Energy efficiency measures can be applied to buildings, transportation, industry, and agriculture. Overall, this helps to reduce energy consumption and costs while improving environmental sustainability.
Importance
United Nations Development Programme (UNDP)
UNDP has recognized the importance of energy efficiency in achieving sustainable development. This is especially in areas of poverty reduction, economic growth, and environmental sustainability. Accordingly, the UN has launched various initiatives to promote energy efficiency. These include the Sustainable Energy for All and the Global Alliance for Buildings and Construction.
International Energy Agency (IEA)
The IEA estimates that energy efficiency measures could reduce global energy consumption by one-third by 2040. Thereby, this reduction will help reducing greenhouse gas emissions by up to 40%. The IEA has developed the Energy Efficiency Market Report and the Energy Efficiency Indicators database to promote energy efficiency.
World Bank Group
The World Bank Group has recognized the importance of energy efficiency in achieving sustainable development and promoting economic growth. Additionally, it contributes to job creation, poverty reduction, and climate change mitigation. The WB estimates that adopting energy efficiency measures can save up to 30% of global energy consumption.
European Commission
In 2008, the European Commission established the Global Energy Efficiency and Renewable Energy Fund (GEEREF). GEEREF is a public-private partnership (PPP) designed to maximize the private finance leveraged through public funds. Basically, the European Commission funded GEEREF while the European Investment Bank (EIB) managed it. GEEREF supports the deployment of renewable energy and energy efficiency projects in emerging markets and developing countries. It provides financing, technical assistance, and capacity building to renewable energy, energy efficiency, and energy storage projects.
International Renewable Energy Agency (IRENA)
IRENA has recognized the complementary nature of energy efficiency and renewable energy in achieving sustainable development. IRENA has developed various tools and guidelines to promote energy efficiency in the context of renewable energy deployment.
Energy Efficiency Global Alliance (EEGA)
EEGA is a global network of organizations which promote energy efficiency as a key tool for achieving sustainable development. EEGA aims to promote the adoption of energy efficiency policies and programs, share best practices, and facilitate collaboration among stakeholders.
Benefits of Energy Efficiency
A. Reduced Energy Consumption
Energy efficiency has been recognized as one of the most cost-effective and easily implementable strategies to reduce energy consumption. The UN has recognized that energy efficiency measures can reduce energy costs for households and businesses and improve energy security. It can also reduce global energy demand by up to 15% by 2040, resulting in significant cost savings.
According to the IEA, implementing energy efficiency measures can reduce global energy consumption by up to 12% by 2040. This will result in an annual reduction of 6.5 billion tons of CO2 emissions. The IEA also estimates that these measures can save households and businesses up to $2.6 trillion annually by 2040. According to IRENA, energy efficiency measures can help reduce the need for new power generation capacity. This will definitely lead to cost savings and reducing the carbon footprint of energy sector. IRENA estimates that energy efficiency can reduce the decarbonizing cost of global energy system by $2.3 trillion by 2050.
According to the American Council for an Energy-Efficient Economy (ACEEE), energy efficiency can save US households and businesses up to $730 billion by 2035. This would represent a household savings of nearly $2,500 per year. Additionally, the European Commission estimates that energy efficiency can save European households and businesses €200 billion by 2030. This represents a significant cost savings and would help to reduce the region’s carbon footprint.
B. Lower Carbon Emissions
Lowering CO2 emissions and improving air quality have become key goals for governments and international organizations worldwide. The effects of air pollution on human health are significant, including respiratory and cardiovascular diseases. The World Health Organization (WHO) stated that air pollution is responsible for nearly 7 million premature deaths worldwide every year. In addition, air pollution also contributes to climate change, which has significant impacts on the environment. According to the WHO, the urban populations exposed to air pollution levels exceeding WHO guidelines decreased from 57% in 2016 to 53% in 2018. This is largely due to efforts to reduce emissions from transportation, industry, and power generation.
One example of successful international cooperation is the European Union’s Air Quality Framework Directives. The directive sets air quality standards for the EU member states and requires their action to improve air quality. As a result, air pollution levels in Europe have decreased significantly in recent years. Furthermore, the IEA reports that the increased use of renewable energy sources has greatly helped to reduce carbon emissions.
C. Increased Energy Security
Energy security importance lies in reducing reliance on foreign sources of energy, like fossil fuels, ensuring a stable supply of energy, and reducing the risk of relevant geopolitical conflicts. According to the IEA, global energy demand is projected to grow by 25% by 2040, with developing countries accounting for the majority of this increase. This increase in energy demand highlights the importance of ensuring a secure and stable supply of energy. In addition to renewable energy, the development of natural gas resources can also increase energy security. An example of international cooperation is the European Union’s Energy Union initiative, which aims to ensure that European countries have access to secure, affordable, and sustainable energy sources. The initiative includes measures to increase the use of renewable energy, promote energy efficiency, and reduce reliance on imported energy sources.
The United States has also taken steps to increase energy security. The Energy Policy and Conservation Act (1975) established the Strategic Petroleum Reserve (SPR). SPR is a stockpile of crude oil maintained by the U.S. government to ensure a stable oil supply in case of a disruption in oil supply. Furthermore, the U.S. government has increased domestic production of oil and natural gas in recent years through the use of hydraulic fracturing, or fracking. This has led to a decrease in dependence on imported oil and increased energy security and independence.
D. Job Creation and Economic Growth.
The energy sector creates jobs and generates economic growth both directly, through employment in the industry, and indirectly, through the economic activity generated by energy use. According to the International Renewable Energy Agency (IRENA), the renewable energy sector employed eleven million people worldwide in 2018, an increase of 700,000 jobs from the previous year. Furthermore, IRENA reports that the renewable energy sector generated $1.6 trillion in global investment between 2010 and 2018, with $288 billion invested in 2018 alone. This investment not only creates jobs but also stimulates economic growth through increased economic activity. The IEA reports that investment in energy infrastructure has the potential to stimulate economic growth and create jobs. The IEA estimates that $3 in economic growth can be generated for every $1 invested in energy infrastructure,.
International cooperation can also play a significant role in creating jobs and stimulating economic growth in the energy sector. For example, the European Green Deal initiative aims to create new jobs and economic growth through the development of renewable energy and energy efficiency measures. The initiative includes plans to invest in clean energy technologies and to support the creation of new green jobs. Similarly, the US Clean Power Plan aims to create new jobs and stimulate economic growth through the deployment of clean energy technologies. The plan includes measures to increase the use of renewable energy, promote energy efficiency, and invest in energy infrastructure.
Key Messages
- Energy efficiency measures are crucial in achieving sustainable development, reducing energy consumption, promoting economic growth, alleviating energy poverty, and mitigating climate change.
- International cooperation and organizations recognize the importance of energy efficiency and have developed initiatives, programs, and financing mechanisms to support its adoption.
- Energy efficiency measures lead to significant cost savings, reduce greenhouse gas emissions, and promote sustainable development.
- Lowering carbon emissions and improving air quality are critical goals. More efforts need to be done to ensure a healthy and sustainable environment.
- Increased energy security is a crucial goals and progress has been made through the development and use of domestic energy sources and international cooperation.
- The energy sector can create jobs and stimulate economic growth through the deployment of renewable energy technologies, investment in energy infrastructure, and international cooperation.
