Leaders gather in Paris to accelerate wringing more out of every ounce of fuel

As 30 energy environment and trade ministers plus 50 CEOs assemble in Paris for the 8th international conference on energy efficiency, the International Energy Agency is urgently calling for greater investment in energy efficiency for factories, cars and appliances to meet international climate goals.

The agency touted recent global progress: A report released Wednesday says that demand for energy is growing, yet emissions are not growing as fast. Efficiency is increasing every year as technology improves, and last year that increase was twice the average of the previous five years.

“We’re at a real juncture where more efficient, more clean, more affordable technology is starting to dominate,” said Brian Motherway, chief of energy efficiency at the IEA, during a press conference Tuesday.

Eliminating wasted energy is the most affordable way to bring goods and services to the people who need them — while slowing greenhouse gas emissions — the main driver of global warming, energy experts say.

Government policies that encourage energy efficiency are driving the trend. Japan has strengthened laws that favor energy efficient buildings. The European Union agreed this year to reduce its total energy consumption by some 12% compared to its 2020 forecast, by improving buildings, heavy industry and private transportation. The United States allocated a record 95 billion dollars over ten years through the Inflation Reduction Act to increase energy efficiency in power generation, buildings and cars. And India passed important legislation to decrease the amount of energy used by homes.

“Government initiatives are critical because they get big buildings, they get big housing projects, they get industry (and) they have to take it seriously,” said Daniel Kammen, a professor of energy at the University of California, Berkeley who was not involved in the IEA report.

According to the report, total public and private investment in energy efficiency increased by 15% in 2022 to $600 billion from the previous year. This year, investment is expected to grow by only 4%, which Motherway called concerning.

To limit global warming to just 1.5 degrees Celsius (2.7 degrees Fahrenheit) and avoid severe climate disruption, the world needs to double energy efficiency for the rest of the decade. Annual investment of $1.8 trillion is needed to make that happen, the report says.

The technology exists, we just need to prioritizing spending, Philippe Delorme, executive vice president of Europe operations for Schneider Electric said in a press conference.

Experts not involved in the report agreed. “Governments should be doing more, whether that relates to appliance efficiency, cars or buildings,” said Steven Nadel, executive director of the American Council for an Energy-Efficient Economy.

As far as growth in demand, electricity saw the most growth, with oil and coal just behind. Demand for natural gas saw an overall decline.

Electric vehicles and heat pumps grew in popularity last year, adding to the demand for electricity. Heat pumps efficiently wring energy out of the air, or more occasionally, the ground, and they pump heat either into or out of a building depending whether they are heating or air conditioning. Their sales increased ten percent globally and nearly 40 percent in Europe last year. Electric vehicles sales also grew, now making up 14 percent of all new car sales, and are on track for 18 percent of the new car market this year.

In many places, electricity to heat homes and power vehicles still relies on fossil fuel energy that burns carbon. But as utilities build out more renewable energy, emissions decline. That same progress is not built into gasoline-burning cars or homes that burn natural gas for cooking and heating. They will continue to combust hydrocarbons and release carbon dioxide.

Some of the recent interest in energy efficiency worldwide has been influenced by fears of a global energy shortage caused by Russia's invasion of Ukraine.

Philippe Benoit, a researcher at the Center on Global Energy Policy at Columbia University, said that in order to meet climate goals, money needs to go into better energy efficiency even when there is no fear of energy scarcity.

“The greatest interest in energy efficiency is often triggered by an energy supply concern,” he said. “We need to get to the point where without even a potential energy supply crisis, that governments, households and businesses are increasing their investment in energy efficiency. That’s what our climate goal requires.”

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Peterson reported from Denver. Costley reported from Washington, DC.

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