Energy environment and trade ministers, along with 50 CEOs, have gathered in Paris for the 8th international conference on energy efficiency. As they convene, the International Energy Agency (IEA) is calling for greater investment in energy efficiency in factories, cars, and appliances to help meet international climate goals. The IEA has released a report affirming that with the advent of new technology, a real juncture has been reached, with more efficient, clean, and affordable technology starting to dominate. This progress has come about because of government policies that encourage energy efficiency. Last year, total public and private investment in energy efficiency increased by 15% to $600 billion, a 100% increase over the previous five years.
To limit global warming to 1.5°C and avoid severe climate disruption, the world needs to double energy efficiency for the rest of this decade. Yet, the report states that investment in this area is expected to grow by just 4% this year. Annual investment of $1.8 trillion is needed to double energy efficiency. The technology is at hand, but greater investment is required, insisted Philippe Delorme, Executive Vice President of Europe Operations for Schneider Electric. There is agreement among experts that governments should be doing more, and that energy efficiency should be prioritized.
As far as growth in demand is concerned, electricity has seen the biggest growth, with oil and coal just behind. Demand for natural gas has declined overall. Electric vehicles and heat pumps grew in popularity last year, adding to the demand for electricity. The sales of heat pumps, which wring energy out of the air or ground and pump heat either into or out of a building for heating or air conditioning, increased ten percent globally and almost 40% in Europe last year. Electric vehicles sales also grew and are predicted to make up 18% of the new car market this year.
However, in many places, electricity used for heating homes and powering cars still relies on fossil fuel energy combustion. If utilities build more renewable energy, emissions decline. However, that same progress is not built into cars that burn gasoline nor homes that burn natural gas for cooking and heating.
The recent interest in energy efficiency worldwide has been partly influenced by fears of a global energy shortage due to Russia’s invasion of Ukraine. Philippe Benoit, a researcher at Columbia University’s Center on Global Energy Policy, says that for climate goals to be met, money needs to be invested in better energy efficiency, even when there is no fear of energy scarcity. Benoit says, “The greatest interest in energy efficiency is often triggered by an energy supply concern. We need to get to the point where, without even a potential energy supply crisis, governments, households, and businesses prioritize their investment in energy efficiency. This is what our climate goals demand.”
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