America’s Anemic 13% Energy (in) Efficiency

Blog | August 20, 2010 - 10:40 pm

Congress and the news media continue to focus almost completely on the question of where we will find new sources of conventional but clean energy. Yet, the surprising insight is that the robustness of our economy squarely depends on more productive investments in energy efficiency. Indeed, the overwhelming emphasis today on new energy supplies is “crowding out” a meaningful national dialogue and progress on achieving greater efficiency in an economy that today wastes 87% of the energy we use.

The United States economy has tripled in size since 1970 and three-quarters of the energy needed to fuel that growth came from an amazing variety of efficiency advances—not new energy supplies. Going forward, the current economic recovery, and our future economic prosperity, will depend more on new energy efficiency behaviors and investments than we’ve seen in the last 40 years.

Americans may have an overly optimistic impression of how energy-efficient the United States is. Despite the enormous strides achieved in the last four decades, research by colleagues Bob Ayres and Benjamin Warr suggests that the United States economy remains about 13 percent energy-efficient. If that corresponding unacceptably high level of inefficiency is allowed to remain, the United States. will be mired in lackluster economic activity for the foreseeable future. By way of comparison, Ayres and Warr note Japan and several European countries are about 20% efficient, a factor of 1.5 higher than the United States. Even so, all economies are underperforming in this regard.

How big might the next round of potential efficiency improvements be? If we invested in more energy productive technologies, such investments can provide one-half or more of the needed greenhouses gas emissions reductions most scientists agree are needed between now and the year 2050. And that gain in energy efficiency would not only mean reduced greenhouse gas emissions, it would result in lower energy bills for businesses and consumers. Cost-effective investments that reduce the amount of energy necessary to support a dollar of economic activity are the single most important driver of economic productivity within the United States and around the world. The evidence suggests we ignore this  at our considerable peril.