Lighting the Way: Toward a Sustainable Energy Future

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  • 2.6 Summary points

    The energy intensity of the world’s industrialized and developing economies—in terms of total energy consumed per unit of economic output—has been declining steadily over the last several decades as technology has improved and as a greater share of wealth is derived from less energy-intensive activities. Taken together, however, these intensity declines have not been sufficient to offset population increases and economic growth; overall energy consumption has steadily increased—in nearly all nations and for the world as a whole. Moreover, despite evidence that the technical potential for further energy-intensity reductions is enormous, there is evidence that country-level intensities are converging over time and may not, absent further policy intervention, continue to decline at the same rate as in recent decades. Some experts warn that rising material standards of living could, at some point and in some cases, begin to reverse past declines with potentially sobering implications for the prospect of achieving long-term, global sustainability goals.

    Given the significant technical potential that exists to achieve further, cost-effective intensity reductions and given the critical importance of relieving current and projected stresses on the world’s energy systems, concerted policy action to maximize the contribution of demand-side options along with supply-side solutions is justified.

      Governments should aggressively pursue cost-effective opportunities to improve energy efficiency and reduce energy intensity throughout their economies. Policies that have proved highly effective in different contexts and should be considered include appliance and equipment efficiency standards, including vehicle fuel-economy standards; building codes; financial mechanisms (for example, fuel taxes, tax incentives for efficiency investments, and feebates); information and technical assistance programs, including labeling for consumer products and energy audit programs; procurement policies; support for utility programs, including enabling regulatory reforms, where applicable; and support for efficiency-related research and development. The availability of low-cost capital and other financial incentives to promote deployment and innovation in energy efficiency improvements is essential.
      Facilitating technology transfer from industrialized to developing countries is particularly important. The importance of the technology transfer is so that countries with rapidly expanding infrastructure, building stock, manufacturing capacity, and penetration of energy-using devices can ‘leapfrog’ to more efficient technologies. Opportunities for efficiency improvement tend to be largest and most cost-effective when they are incorporated from the ground up rather than in later retrofit applications. Ensuring that developing countries modernize their economies as efficiently as possible is crucial to manage the considerable sustainability challenges that will otherwise accompany continued global economic growth.
      Applied social science combined with explicit policy experimentation could plausibly deliver dramatic improvement in our understanding of (a) the determinants of energy demand, (b) the effectiveness of policies designed to facilitate the adoption of energy efficient technologies, and (c) the role of efficiency improvements in moderating demand. Governments should actively support such research both through funding and, perhaps more importantly, by enabling policy experiments to measure the effectiveness of energy-efficiency programs.
      Barriers to the adoption of potentially cost-effective energy technologies often arise from the difficulty of effectively quantifying and aggregating myriad small opportunities for improvement and, particularly in buildings, on the need for performance monitoring, intelligent management, and integration of diverse systems. Information technologies combined with inexpensive monitoring systems might overcome some of these barriers delivering consistent energy savings to users that would otherwise have been unattainable without expert intervention. Such options should be aggressively pursued. In addition, it will be important to develop business models for identifying and implementing cost-effective energy efficiency improvements, perhaps building on experience to date with energy service companies.
      While a R&D push must be balanced with market pull, there should be an accelerated focus on the development of energy-efficient technologies in the following areas: Batteries that can make plug-in hybrids widely commercial (more robust to abuse), and can take many thousands of deep discharges without loss of storage capacity; Low-cost LED (light-emitting diode) lighting with a color-rendering index that is appealing to consumers; Tools for designing energy-efficient residential and commercial buildings; and Low-cost, efficient fuel cells that can run on natural gas for dispersed applications (home, industrial, and commercial).



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