Energy efficiency key for economic and social development, says IEA
Energy efficiency has become the world's 'hidden fuel' and has the potential to stimulate massive economic growth, according to a new report from the International Energy Agency (IEA).
Entitled 'Capturing the multiple benefits of efficient energy', the report ramps up the pressure on the European Council of Ministers, which will decide upon its 2030 energy saving target in the next few weeks. (Scroll down for Executive Summary)
The European Commission's original proposal of a 30% reduction faced criticism for a lack of ambition, with energy rights campaigners instead proposing a 40% reduction target.
Susanne Dyrbøl, energy efficiency strategist at ROCKWOOL International, and one of the experts contributing to the study, said: "This report is welcome and overdue. It comes at a critical moment for our energy future and we must ensure that any economically viable energy efficiency measures are not left unrealised."
"So far the true potential and multiple benefits from energy efficiency to the public purse and health and well-being have rarely been estimated and have often been overlooked in policy making."
The study challenges the assumption that the broader benefits of energy efficiency cannot be quantified. One example of this comes when the report analyses the true value of energy efficiency measures for businesses. When productivity and operational benefits for industrial companies are integrated into the traditional internal rate of return calculations, the payback period for energy efficiency measures dropped from 4.2 to 1.9 years.
Presenting the findings at the International Energy Policy Evaluation Conference in Berlin, the IEA's executive director Maria van der Hoeven said: "This report lays out the case for governments to invest more time in measuring the impacts of energy efficiency policies, to improve understanding of their role in boosting economic and social development and to facilitate policy design that maximises the benefits prioritised by each country
"By adopting the multiple benefits approach advocated by the IEA in this study, governments can help unlock the potential of energy efficiency."
The IEA estimates that the uptake of economically viable energy efficiency investments has the potential to boost global economic output through 2035 by $18trn - larger than the current size of the economies of the US, Canada and Mexico combined.
Dyrbøl added: "If the EU ignores the evidence in favour of a higher and binding energy savings target, Europe will miss a critical opportunity to drive energy savings in the coming decade.
"If, on the other hand, the evidence is properly taken into account, we will see that huge energy and cost savings can be made, which support economic growth and new jobs. Furthermore, and perhaps most crucially, it is vital that the EU reduces its dependency on fossil fuels and energy imports as much as possible, to ensure long term energy security."
Previous IEA studies have suggested that two-thirds of the economically viable energy efficiency potential available between now and 2035 could remain unrealised because energy efficiency is 'routinely and significantly undervalued'.
REPORT: Capturing the multiple benefits of efficient energy (Exec. Summary)