The total energy consumed by industrialized nations peaked in 2007, and has completely decoupled from their economic growth, the International Energy Agency (IEA) reported Monday.
The IEA’s Energy Efficiency Market Report 2016 details the stunning improvements in energy efficiency since 2000, which are now providing $540 billion a year in energy cost savings for IEA-tracked countries. The IEA countries roughly correspond to the 35 developed nations that make up the OECD.
Just as the United States has achieved more than 25 percent GDP growth since 2000, while energy consumption is roughly the same (see here), so have the EIA countries as a whole:
“Several signs suggest that TFC [Total final energy consumption] peaked in OECD countries in 2007,” the IEA says. Policy-driven investments in efficiency have kept demand flat recently. Going forward, all of the OECD countries committed in the Paris Climate Agreement to keep ratcheting up those policies so that CO2 would keep ratcheting down.
Significantly, China’s efficiency efforts have also accelerated. Policies adopted just since 2008 are now delivering China close to 1.5 billion tons of carbon dioxide (GtCO2) savings a year — nearly as much as the CO2 savings being achieved from the combined efficiency measures adopted by all the IEA countries since 2000.
Efficiency has become so central to China’s energy policy that its energy savings in 2014 were “as large as China’s renewable energy supply.”
The IEA makes clear that recent efficiency gains have come as a result of an expansion of national policies, such as energy efficiency standards for vehicles and appliances. That means there is a vast opportunity to achieve deeper savings, since efficiency standards currently cover only 30 percent of global energy use (up from 11 percent in 2000).
Energy efficiency remains the most important strategy for cutting carbon pollution while improving economic productivity. The IEA notes, “Over a third of all emissions reductions needed to reach climate goals by 2040 must come from energy efficiency policies.”
A 2014 IEA report concluded, “The uptake of economically viable energy efficiency investments has the potential to boost cumulative economic output through 2035 by $18 trillion,” which is larger than the current size of the U.S. economy. That report found that green building design can achieve health benefits — including reduced medical costs and higher worker productivity — up to three times the size of the energy savings.
No wonder energy efficiency has become the go-to strategy for countries and companies. And no wonder corporate investment in efficiency around the world is “at an all-time high,” as I reported in July.
Energy efficiency is the one energy resource that all countries possess in abundance,” said IEA executive director Dr. Fatih Birol. And thanks to emerging technologies like affordable long-range electric cars and LED lighting, that resource base will continue to expand.