NEWS

ENERGY EFFICIENCY: A climate solution ‘hidden in plain sight’

05/16/2008

Saqib Rahim, ClimateWire reporter

The race against climate change may be partly driven by a fuel so clean, you can’t even see it.

According to a new study by the American Council for an Energy-Efficient Economy, investments in energy efficiency—reducing energy use for any given application—were three times greater than conventional energy investment, totaling $300 billion in 2004.

That means private businesses and regular people are spending three times as much on things like double-paned windows, high-efficiency appliances and more efficient electric motors as on oil drilling, new power plants and standard low-efficiency household appliances.

"Energy efficiency is often hidden in plain sight," said Karen Ehrhardt-Martinez, a co-author of the report, in a conference call. It can include "anything from insulation to appliances that we use every day in our households," she said.

Rising energy prices have started to catch the public’s attention, bringing renewed attention to energy efficiency as a "fuel" in its own right, the study’s authors said.

The report says that if efficiency investment continues to grow, it could total $700 billion by 2030, potentially reducing American energy consumption by a quarter and creating 2 million jobs.

Energy waste is regarded as ‘normal’

Many technologies and practices in the economy waste energy even when functioning normally. For example, the standard combustion engine found in most cars loses 62 percent of the energy in gasoline to factors like friction and heat, according to the Department of Energy.

American power plants are even more wasteful, generating the energy equivalent of 3 kilowatt-hours to put out just 1 kWh of electricity.

But a common measure of efficiency, "energy intensity," or the amount of energy needed to add another dollar to the economy, has been cut in half since the early 1970s, when global oil price spikes spurred interest in getting more bang for the buck.

Another surge in efficiency occurred in the 1990s, when the cost of software, microprocessors and other information technology dropped, turning polluting activities—like flying, shipping and driving—into computing activities.

The study explained these improvements by "efficiency investments": any spending—on a new technology or method, for example—that eventually pays for itself by achieving the same goal at a lower energy cost.

Nearly 60 percent of this investment in 2004 went to improvements in commercial and residential buildings, including spending on efficient appliances and electronics. Another 25 percent went to improvements in the industrial sector.

Buildings also accounted for two-thirds of all efficiency-related jobs, which the authors estimated at 1.63 million jobs in 2004.

Continuing improvements may be hard and growth may outrace savings

The study didn’t require, however, that such investments be made on purpose. Families or businesses that spent money for another reason, such as speed or effectiveness, were still credited with an investment as long as the technology was considered more efficient. For example, all spending on Energy Star appliances was included as investment.

The authors cautioned, however, that further improvements in efficiency would not occur on their own.

"The innovations have been driven by normal market structure, but they’ve also been driven by policy structure," said John Laitner, a co-author of the study. He cited federal legislation, such as the Energy Policy acts of 1992 and 2005, as supplying the regulation and funding necessary to spur change. 

In that sense, energy efficiency may have improved, but America’s overall carbon footprint is still getting bigger.

"What efficiency has done is rein it in, constrain it, or keep it from growing as much as it would have," Udall said.