Why ‘energy productivity’ is making a comeback

It presents a positive message and appeals to business, but technological progress is no substitute for climate regulations

LED world map (Flickr/Chris Dlugosz)

LED world map (Flickr/Chris Dlugosz)

By Megan Darby

The term “energy productivity” was coined by British economist William Jevons in 1865.

Long before coal’s impact on the climate was known, Jevons was concerned about the UK’s reliance on a finite resource.

The country’s prosperity and global dominance was based on this miracle fuel, he argued – but constraints on its supply threatened that happy position. Curbing demand was desirable.

Today, climate analysts and campaigners are trying to revive the concept, with different constraints in mind.

It is the amount of fossil fuel that can be safely burned for energy production that is limited. Greenhouse gas emissions risk heating the planet beyond people’s capacity to adapt.

But no country is prepared to sacrifice its economic growth for the common good of a less hostile climate. Severing the link between wealth and high carbon energy use is essential.

Repackaging efficiency

At a conference in London on Wednesday, speakers made the case for putting energy productivity at the heart of that effort.

Essentially, it is about repackaging energy efficiency – the unsung hero of decarbonisation – in a way that appeals to business and across the political spectrum.

For the Washington DC-based Alliance for Saving Energy, the poser was how to stay relevant as the US entered an era of abundant shale gas.

In strategic consultations, it proposed a 25% national energy saving target – a number analysts had found this to be feasible and cost-effective.

That didn’t go down well with Republicans, the NGO’s president Kateri Callahan revealed. After all, a surefire way to cut consumption is an economic downturn – not what they wanted to see.

Energy productivity – the GDP generated for each unit of energy consumed – presented a more positive story.

Data showed the US wrung twice as much wealth out of each joule of energy in 2010 as 1980. That was partly down to a shift away from heavy industry in the economy, but efficient technology played a bigger part.

“This notion of doing more with less and doubling energy productivity really caught the attention of the American government,” said Callahan.

Repeating the trick by 2030 is projected to create 1.3 million jobs, save US$327 billion a year in energy costs and slash greenhouse gases by a third.

“These are things, if you are only talking about energy efficiency, you are not able to get a handle on.”

President Barack Obama agreed, endorsing the target in his 2013 state of the union address.

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It is an approach that can work for corporations and city authorities, according to speakers at the B4E London conference.

Eric Rondolat, chief executive of Philips Lighting, made a passionate case for solar lamps to bring light to Indian villages.

“If we lift out of darkness these people, we will also boost economic growth,” he said.

Mark Watts, executive director of C40, a network of 80 megacities for climate action, hailed Shenzhen’s electric bus fleet.

Amid the enthusiasm for efficiency, there was less talk of how relative improvements could lead to the absolute emission cuts needed to tackle climate change.

That is not a given.

As Jevons observed, technical progress on efficiency can actually increase demand for a resource – the Jevons Paradox.

He was talking about the coal-fired steam engine, a case in which the spike in train travel completely cancelled out the efficiency benefits.

For most advances, the rebound effect is more subtle. A household might spend cash saved on energy bills from a new boiler on a short-haul flight, say.

This can be avoided if the cost of fuel rises ahead of or in line with efficiency gains, perhaps driven by a carbon price.

That takes us back to the political problem “energy productivity” advocates are trying to sidestep.

Dan Hamza-Goodacre, director of energy efficiency at ClimateWorks Foundation, said: “We have purposefully gone for productivity rather than absolute energy reduction because it is just a very difficult conversation to have politically.

“The trick is to make sure you have a sufficiently ambitious energy productivity target.”

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