Huge returns for energy efficiency investment
Global investment of US$700 billion into energy efficiency over the next 25 years could reap returns in excess of US$1.4 trillion, according to top energy economists.This is the prediction of the International Energy Agency which points to savings from reduced carbon emissions as well as lower operating costs linked directly to fuel consumption.
Last week 70 top level thinkers from governments, development banks, NGOs and the private sector gathered at Wilton Park in Sussex to discuss the G8 Plan of Action for Energy Security.
The role of renewables, clean coal and carbon sequestration in driving down carbon emissions were all considered but it was energy efficiency that topped the agenda, with delegates dubbing it 'the biggest fuel' in the fight against climate change.
There was across-the-board recognition of its importance, from big business and banks to environmental campaigners.
"Focusing on both the demand and supply side of energy is the only path to more sustainable, productive and competitive economies. It is no surprise that energy efficiency has now been recognized as the other side of the renewables coin," said Marianne Osterkorn, international director of Renewable Energy and Energy Efficiency Partnership, one of the sponsors of the meeting.
A number of delegates spelled out plans to improve efficiency or described how it was already making impressive financial and carbon savings.
Wang Wanxing from the China Energy Foundation said setting energy efficiency standards for appliances could cut energy consumption in the emerging economy by 12% by 2020 while Thailand reported success for voluntary standards already introduced and Ghana outlined progress made from setting standards for air conditioning systems.
Sauel Tumiwa, senior investment officer at the Asian Development Bank said the institution would be using US$1 billion per year in its Energy Efficiency Initiative.
"Part of the initiative will be to develop an innovative Asia-Pacific Fund for Energy Efficiency that will provide loan guarantees through local financial institutions in developing countries to provide loans for smaller energy efficiency investments, that are numerous but in the past have not been financed by the bank," he said.
While the conference accepted there was some urgency in dealing with the problems of energy security and emissions, the overall feeling was that with a concentrated effort economic growth and reductions in CO2 levels could go hand in hand and that well-chosen energy efficiency and renewables projects are good business.
Elliot Morley, former Environment Minister and now the UK Government's special representative for the Gleneagles Dialogue, said:"Energy efficiency and diversity of supply, including renewable energy and the cleaner use of fossil fuels are all within our grasp and all can help us to meet both our climate security and energy security objectives".
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