Bulletin

Efficiency is the energy of the present and the future

19 Dec 2018

 

Benoit Lebot, Executive Director, IPEEC 

The world needs energy efficiency, now more than ever. Energy efficiency has a critical role to play for the climate, sustainable development and human prosperity.

The Low Energy Demand Scenario of the IPCC report released in 2018 (referred as P1), is the most plausible and affordable scenario to achieve the Paris Agreement. According to this scenario, managing and reducing energy demand on the global scene through energy efficiency is vital as it generates multiple benefits, beyond the much needed greenhouse gases reductions.

Over the past 20 years, the IEA World Energy Outlook (WEO) has steadily recognised that energy efficiency alone could have the potential to help countries achieve nearly 40% of the required energy-related greenhouse gas (GHG) emissions reductions by 2040 to be in line with the Paris Agreement. With its ability to support energy security, environmental protection and economic productivity, energy efficiency has gained visibility and has gradually appeared on agendas, including the sustainable energy agenda.

“Energy efficiency first” has become a well-known slogan but lacks adequate support

There is a growing common awareness that energy efficiency should be our priority as it is the cleanest, most cost effective, most productive energy resource we have, and we need to use more of it. However, energy efficiency -the first fuel - remains on the wish list despite its known huge savings potential that is currently being untapped in all countries. Fortunately on the supply side, renewable energy, especially wind, solar and biomass, are becoming mainstream. Under the previous climate regime, one of the Kyoto Protocol’s financial mechanism, the Clean Development Mechanism (CDM), was put in place to support greenhouse gas mitigation. CDM has incentivised nearly USD 304 billion worth of investment in climate action with 7803 projects registered to date. Almost 72% of these projects are in the renewable energy sector followed by landfill and waste management, and afforestation and reforestation, among others. Despite contributing to the largest GHG reduction potential, energy efficiency was marginally addressed in climate change mitigation efforts under the Kyoto Protocol. Now the time has come to change this under the new international climate change regime, the Paris Agreement.

The lesson I draw from the Kyoto Protocol experience is the following: energy efficiency rarely happens spontaneously, even when its significant contribution to climate change mitigation is recognised. Energy efficiency is complex and granular, invisible and small-scale. Energy efficiency delivers best only when a specific set of knowledge and capacities are in place. Building these capacities takes time and resources.  For instance, collecting end-use data and transforming such data into knowledge is indispensable to set the baseline upon which energy efficiency programmes and policies can be designed and introduced. This requires special tools and instruments, such as monitoring, reporting, metrics, ratings, codes, standards and labelling. The energy efficiency policies to transform markets are well known, but defining, implementing and monitoring such policies requires a long-time horizon. In addition, energy efficiency is inherently domestic and local resulting in granular decisions and investments. However, there are many good practices developing in many countries across the world and at all levels of government that can be shared to accelerate progress.

International collaboration can unleash energy efficiency development

What can international cooperation achieve? Firstly, it can support the exchange of best practices and solutions that allow policy makers to create an enabling policy environment. Secondly, international cooperation can help energy efficiency to be present on the national agenda and to possibly receive the support it rightly deserves. Thirdly, international cooperation allows joint-activities on a selection of energy efficiency programmes and policies, like setting common metrics or technical or financial standards. A real game-changer under the Paris Agreement, would be to see a portion of climate finance being channelled towards energy efficiency for technical assistance. This can help build the very unique human, institutional, technical, legal and financial capacities that energy efficiency needs. International cooperation can also maximise the impact of climate finance on energy efficiency activities.

In sum, international cooperation on energy efficiency under a long-term framework can support national governments and their domestic actions. As a result, the financial flows going towards energy efficiency will be enhanced. In 2016, the G20 adopted the G20 Energy Efficiency Leading Programme (EELP), which gives energy efficiency long-term perspectives and pathways for collaboration up to 2030 and possibly beyond, to deliver even greater benefits for each member. The International Partnership for Energy Efficiency Cooperation (IPEEC) was appointed the lead coordinating organisation of the EELP and supports G20 economies in implementing their collaborative energy efficiency activities.

Call to take action for an energy efficient future

Supporting energy efficiency policies, programmes and projects is an imperative in today’s world. It is not too late to draw lessons from the disconnect between the desire to promote energy efficiency and the lack of its implementation, almost in all countries.

We need to recognise first that energy efficiency requires significant financial investments to build up very specific capacities to be delivered and implemented, and to further achieve behaviour change.

Energy efficiency is for everyone, and we must act in concert to realise its full potential in contributing to our sustainable future.