Energy efficiency is THE core climate solution. Part 1: The biggest low-carbon resource by far

Energy efficiency is the most important climate solution for several reasons:

  1. It is by far the biggest resource.
  2. It is by far the cheapest, far cheaper than the current cost of unsustainable energy, so cheap that it helps pay for the other solutions.
  3. It is by far the fastest to deploy, without the transmission and siting issues that plague most other strategies.
  4. It is “renewable” — the efficiency potential never runs out.

This post focuses on #1 — the tremendous size of the resource, especially here in the United States, the Saudi Arabia of wasted energy. Part 2 explains why it is The limitless resource, Part 3 explains why efficiency is The only cheap power left, and Part 4 explains How California does it so consistently and cost-effectively. Part 5 explains why efficiency has the highest documented rate of return of any federal program.

[This post is an update of an earlier series, and I will update the links as I post the new pieces.]

Of the 12 to 14 wedges we need to deploy globally over the next half decade (or, preferably, faster), I have argued that about two are electricity efficiency, one is recycled energy (cogeneration), and one is vehicle fuel efficiency (cars globally averaging 60 mpg).  For background on the wedges, see “Breaking: Socolow reaffirms 2004 ‘wedges’ paper, urges aggressive low-carbon deployment ASAP” and “The full global warming solution: How the world can stabilize at 350 to 450 ppm.”

The International Energy Agency also thinks about four wedges are efficiency, see “IEA report, Part 2: the 450-ppm solution.” And so does Price Waterhouse Coopers, see here.

[I would also add that since plug-in hybrids are another core solution — and since the electric motor is inherently more efficient than the gasoline engine — you could also consider part of the plug-in wedge to be an efficiency gain.]

I have already written about recycled energy (here) and high-efficiency plug-in hybrids (here), so what I will focus on over the next several days is end-use electricity efficiency.

In the past three decades, electricity per capita has stayed flat in Californian while it has risen 60% in the rest of the country. If all Americans had the same per capita electricity demand as Californians, we would cut electricity consumption 40%. And if all of America adopted the same energy efficiency policies that California is now putting in place, the country would never have to build another power plant.

How big is the efficiency potential in this country? More than perhaps any other company, McKinsey has documented how an aggressive energy efficiency strategy sharply lowers the cost of climate action (see “McKinsey 2008 Research in Review: Stabilizing at 450 ppm has a net cost near zero”).

In 2009 they released their most comprehensive analysis to date of this country’s energy efficiency opportunity, “Unlocking energy efficiency in the U.S. economy.” Bottom line: Whenever this country gets serious about energy efficiency, then we can sharply reduce existing emissions at a large net savings to the public and U.S. businesses. McKinsey has a new cost-curve just of efficiency measures (click to enlarge):

The width of each column on the chart represents the amount of efficiency potential (in trillion BTUs) found in that group of measures…. The height of each bar corresponds to the average annualized cost (in dollars per million BTU of potential).

For those expecting to seeing efficiency below the line (i.e. negative cost), McKinsey has added a dashed line that represents the average cost of a new power plant. McKinsey said at its press conference that all the measures above have a positive net present value.

McKinsey explained that these measures, if fully enacted over the next decade, would save a remarkable 1.2 billion tons of CO2 equivalent, which is 17% of U.S. CO2e emissions in 2005. In other words, the entire 2020 target in the original House climate bill (Waxman-Markey) could be met with energy efficiency at a net savings to U.S. consumers and businesses of $700 billion.

And what is even more stunning about this analysis is that it didn’t even look at the transportation sector, where we know huge savings opportunities are possible (see “U.S. can cut half its transportation emissions by 2050“).

McKinsey explains “The central conclusion of our work”:

Energy efficiency offers a vast, low-cost energy resource for the U.S. economy – but only if the nation can craft a comprehensive and innovative approach to unlock it. Significant and persistent barriers will need to be addressed at multiple levels to stimulate demand for energy efficiency and manage its delivery across more than 100 million buildings and literally billions of devices. If executed at scale, a holistic approach would yield gross energy savings worth more than $1.2 trillion, well above the $520 billion needed through 2020 for upfront investment in efficiency measures (not including program costs). Such a program is estimated to reduce end-use energy consumption in 2020 by 9.1 quadrillion BTUs, roughly 23 percent of projected demand, potentially abating up to 1.1 gigatons of greenhouse gases annually.

Whereas McKinsey thinks we could save 9.1 quads after a decade of serious investment, a 2009 analysis by the American Council for an Energy-Efficient Economy (ACEEE) found the Waxman-Markey bill would “only” achieve that some time in the mid-2020s (see “The triumph of energy efficiency: Waxman-Markey could save $3,900 per household and create 650,000 jobs by 2030“).

The new McKinsey report has an excellent discussion of the barriers to efficiency and how to address them, which they summarize in this figure:

The bad news is the nation’s not appear likely to address most of these barriers in a comprehensive fashion anytime soon. The good news is, as California has shown, it isn’t really that hard to do. So whenever we do get serious, the cost of carbon mitigation — integrating efficiency and low-carbon energy — won’t be high.

Energy efficiency is THE core climate solution.

Below are the comments from the Facebook commenting system:

TopTen USA

Thanks, Joe

June 1 at 11:43am

Lou Grinzo

Great post.

I’ve made the point many times: If Americans embraced even a mild form of hypermiling in their driving habits (avoiding hard acceleration, coasting to red lights, etc when traffic allows) we would easily reduce our oil consumption by 20% — overnight, with zero investment in anything. This would not only cut everyone’s gasoline bill by 20%, but such a drop would reduce the market price of oil sharply, which would generate further savings for drivers. It would also reduce our trade deficit and in particular stop sending money to places we’d rather not.

Our current situation is just lousy with low-hanging fruit. The only question is what will it take to get us to pick it?

June 1 at 11:44am

Leif Erik Knutsen

mankind can only maintain our present life style by committing crimes against the future. (our children!) Employing efficiency and saving money to boot to help mitigate our debauchery would appear to be a no-brainer. I guess that is why the GOBP fight it tooth and nail. It puts the money into the pockets of the wrong people.

June 1 at 11:57am

Daimon Sweeney

Elections are what can make this happen, then citizen pressure. Think of the economic stimulus a national, massive home energy retrofitting project would be, with jobs and materials purchased in every community, stimulating US manufacturing as well. Then the result saves money for homeowners to spend or save from then on. The only losers are energy companies unless they can be rewarded for energy savings. BTW, check the image links. They show as broken for me using chrome.

June 1 at 12:08pm

Jorge Lausell

Good point! This is the trick here… to imagine real solutions. We need to build a political party right now to coordinate this.

· June 1 at 12:13pm

Merry Teesdale

Why can’t we talk about reducing our population! That would solve everything!

· June 1 at 12:28pm

Abe Drayton

Do you have a feasible way to do that?

· June 1 at 1:37pm

Daimon Sweeney

We can talk about reducing population. The population will take care of itself if people have what they need to feel secure (many children can be a form of social security – if some survive they will help take care of the parents), if females (especially) receive education, and if family planning is made available.

Or we can do nothing and let famine, pestilence and war – the traditional means – take care of it. That’s the right wing approach.

Actually the number of people is not the main problem but our level of consumption/waste/pollutio​ n, especially in the US. With maximally efficient ways of living we might still be too many for the ideal, but we wouldn’t be destroying everything in sight.

All of the above would be best.

· June 1 at 2:03pm

Daniel Brady

Re: the links. I had the same problem but found the story on different sites and used different browsers helps with this kind of problem too. I have four or five different browsers – often that is a work around as well.

· June 2 at 2:44am

Naveen Bali

well population is one part but OECD has only5% population and they pollute more than 70% of world Co2, so its not population its abt all huge machines that we use and fossil fuel we burn.

June 3 at 6:11am

Mark David Oliver

Oliver tickell gives some good examples in his superb book, Kyoto2. Many had negative costs.

June 1 at 12:16pm


Experts believe 100 percent recycling possible.
a waste-free Germany is feasible

June 1 at 1:06pm

Mike twotwo

There is a psychological barrier to embracing energy efficiency. I don’t understand it, but have observed the phenomena countless times. For every Paul Macready or Amory Lovins there are it seems a thousand engineers hell bent on making the most inefficient loud energy-guzzling machines imaginable, and a hundred thousand Limbaughs lining up for the non-privilege of owning one. For every Ed Mazra, there are a thousand builders putting up stupid buildings.

I like be efficient, and I like to talk with people about it. Our dishwasher, when you run it on the quick wash cycle, uses just one quarter of a kwh. The new heat pump hot water heater in the basement works flawlessly, on a third the energy. The fridge does not use the case for heat rejection, has a coil and fan in the base, so I put it into an insulated (nonflammable) alcove and now it uses about three quarters of a kwh a day. The new Cold Cathode CFLs are as efficient as LEDs, last as long, and cost way less. Dryer, haven’t used it for five years, instead we repurposed a drywall lift into a mobile clothes rack, and point a floor fan at it. Keep the big freezer in an unheated pantry. And so on. It all adds up to about four kwh per person a day before heating/cooling. The house’s thermal efficiency is pretty good for a 1990s design, so that annually the whole house uses a little less than the RE systems produce.

The point is that with very few exceptions, eyes glaze over when the topic of energy efficiency comes up—I’m trying to have the conversation (since the mid 80s), and I’ve got the firsthand experience to make it interesting—but it seems to be the most boring topic on the earth.

June 1 at 1:49pm

Bill Walker

Joe, I and my friends are getting 404s on some of the links in the story (McKinsey ones on CP, so far for me).

June 1 at 2:53pm

Leif Erik Knutsen

Marry Teesdale suggests reducing population. We have in the past covered that subject often on CP. One thing to consider when making your recommendations is to look where most of the pollution is coming from, Merry. You will quickly realize that most of the carbon waste is produced by a very few people. The small number of “carbon stompers” that have a carbon footprint of a thousand or even 10,000 first world folks. Removing a million of them, you get to pick the means, is equivalent to a million to a few billion third world folks. Education of the presumably already educated would be my choice but the French had some success with the Guillotine during the French Revolution when a similar disruptive distribution of wealth appeared for different reasons. I await your suggestions.

June 1 at 7:09pm

Leif Erik Knutsen

I obviously still have trouble keeping my thoughts to FB acceptable lengths.

June 4 at 8:02am

Ian Orchard

The charts above have gone awol, at least when viewed from NZ.

June 1 at 7:45pm

Joseph Romm

Which charts? Which browser.

June 1 at 8:41pm

Joan Nielsen

Most people are informed by tv media and know little about alternatives. Working many hours, kids, etc, leaves little time except for the trip to walmart and costco (packaging nightmareville) or to do any research into what is best for the environment. If the only light bulbs available are low energy, if all houses had solar water systems the right choice would be the norm.( In Hawaii, new housing developments all have solar water systems).People will do what is convenient, and be proud if they know it is a good choice, but only a small portion of the populace will go out of their way to do what is right if it is not easy. We can be a very short sighted group. All industries need to have regulations that are not only guided by safety standards, but environmental impact standards to the same degree. I guess we just have to continue to have faith and be a squeeky wheel. On Maui plastic shopping bags were banned 1/11/11. It ‘s amazing how quickly and easily people adapted….A small idea, a big impact, and painless.

June 2 at 4:37am

Jenna Anderson

We are looking into solar panels—yay!!!

· June 2 at 11:33am

Leif Erik Knutsen

I made the leap earlier this year. I hope to be a summer time exporter of Power by mid July.

· June 2 at 1:57pm

Tim Volk

Solidly researched post. How do we bend the public will to embrace energy efficiency like California? Is it a push strategy (legislate) or a pull strategy (persuade) or a little of both? www.energyefficiencymarket​

June 2 at 9:26am

Kevin Matthews

Is there an appropriate place to comment on the site redesign? To an architect’s eye, at least, it’s pretty tough to look at, at the moment… fine-tuning planned?

June 2 at 11:46am

Kevin Matthews

The content here is fundamental and important, as usual for Climate Progress…

June 2 at 11:52am

David Moulton

I would add that Energy Efficiency has another highly desirable attribute that is often left out of the discussion — it saves land, preserving natural areas that would otherwise get paved, built, or sacrificed to new powerplants. The Appliance Efficiency act passed in 1987 has made the construction of an estimated 135 powerplants completely unnecessary. Instead of becoming the site of huge water polluters, these potential powerplant sites have been preserved as water filters. The land stays more resilient in the face of climate, critters have places to hide and survive, and people have places to picnic in the shade when summer temps go through the roof. So saving energy saves land, big time.

June 2 at 4:41pm

Howard Homonoff

Keep fighting the good fight David!

· June 3 at 10:49am

Filippo A Salustri

I would warn against wholesale adoption of efficiency as the ultimate goal. While there is certainly plenty of room for improved efficiency, it must be balanced with effectiveness. Hyper-efficient systems are brittle (not effective) and shatter when stressed. More effective systems are not as efficient, but they are more robust (able to handle variability). An example is the US financial meltdown. The ‘system’ was exquisitely efficient, but it ended up shattering like glass. Chernobyl was another example. The human body is an example of a highly effective organism (compared to most other animals) because it is so adaptable.

So, yes, let’s look for efficiencies. But let’s also make sure the efficiencies do not rob our systems of effectiveness.

· June 8 at 10:38pm

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