Information and Communications Technologies: Creating Smarter Ways to Save Energy

February 6, 2008

Media Contact(s):

Wendy Koch, 202-507-4753, Senior Director, Marketing & Communications

Washington, D.C. — A new study released today shows that the innovative effects of information and communications technologies (ICT) have contributed to the economy-wide reduction of U.S. energy intensity and the recent stabilization of overall levels of energy consumption. The analysis by the American Council for an Energy-Efficient Economy (ACEEE) found that huge cost reductions and important new ICT innovations have worked together to drive the expansion and diffusion of new information and communications technologies without increasing overall energy consumption in the U.S. economy.

The path-breaking study, Information and Communication Technologies: The Power of Productivity, provides an innovative assessment of the relationship between ICT and energy productivity as well as working estimates of the net energy impact of ICT technologies. According to Dr. Karen Ehrhardt-Martinez, ACEEE Research Associate and co-author, “ICT investments provide our society with critical tools for cost-effective energy savings. If we use these tools to maximum advantage, we can increase energy productivity, reduce energy waste, maintain a robust economy, and lower carbon emissions.”

John “Skip” Laitner, ACEEE Director of Economic Policy Analysis and study co-author, concurred. “Achieving greater levels of energy productivity requires that we start asking the right set of questions about the relationship between ICT systems and total energy use. Rather than focusing only on the direct energy consumed by ICT, we should instead recognize the ways in which these technologies have helped our economy become dramatically more efficient.”

The ACEEE study emphasizes the growing role of ICT applications in enabling new high-tech products and services, as well as spurring new investment and new ways of delivering energy services. Moreover, Laitner added, “The continued diffusion of ICT throughout all sectors of the economy has generated a positive economic feedback that has stimulated higher levels of economic productivity throughout the U.S. economy.”

The assessment indicates that for every extra kilowatt-hour of electricity demanded by ICT, the U.S. economy increased its overall energy savings by a factor of about 10.

Data for the past 37 years indicate that the pace of energy efficiency gains has increased significantly since 1996, which was a watershed year in the expansion of ICT in Internet-based and other electronic applications. While U.S. energy intensity declined 1.8 percent per year between 1970 and 1995, it declined at a much more rapid rate of 2.4 percent between 1996 and 2006 as a result of the expansion and diffusion of ICT innovations as well as other ICT-related changes in the economy.

Two other key findings of the study include:

  • It takes less than half the energy to produce a dollar of economic output today as it did in 1970. By the end of 2008, U.S. energy consumption per dollar of economic output will have declined from 18,000 Btus in 1970 to less than 9,000 Btus. These gains in energy efficiency have allowed the U.S. to meet approximately 75 percent of new demand for energy services via efficiency as opposed to new energy supplies.
  • While U.S. economic output has expanded by nearly 65 percent since 1990, and per capita incomes have grown by 35 percent, the demand for energy and power resources grew by only 23 percent. This decoupling of economic growth and energy consumption is a function of increased energy productivity—in effect, the ability to generate more energy services from each unit of energy consumed.

Laitner emphasized that “while dramatic changes have taken place in the past 35 years, we have yet to realize the full potential of the productivity and efficiency gains that are the promise of this new technological era.” Similarly, Ehrhardt-Martinez points out that even though ICT has proven useful in increasing energy productivity, the pace of progress is dependent on our institutional and cultural capacity to direct these technologies toward addressing our energy and climate problems. Whether at the national, state, or local level, smart energy policies should maximize energy efficiency and promote the adoption of ICT applications that can reduce energy consumption and increase energy productivity in households, businesses, and industry around the country.

Information and Communication Technologies: The Power of Productivity can be downloaded for free at http://www.aceee.org/research-report/e081 or purchased for $25 plus $5 postage and handling from ACEEE Publications, 529 14th St, N.W., Suite 600, Washington, D.C. 20045, phone: 202-507-4000, fax: 202-429-2248, e-mail: aceee_publications@aceee.org.

The American Council for an Energy-Efficient Economy is an independent, nonprofit organization dedicated to advancing energy efficiency as a means of promoting economic prosperity, energy security, and environmental protection. For information about ACEEE and its programs, publications, and conferences, contact ACEEE, 529 14th Street N.W., Suite 600, Washington, D.C. 20045 or visit aceee.org.