Dozens of ministers and CEOs from around the world gathered in France for the Global Conference on Energy Efficiency of the International Energy Agency (IEA), whose new analysis shows that the world needs to double progress on efficiency between now and 2030 as part of efforts to improve energy security and affordability while keeping the goal of limiting global warming to 1.5 °C within reach.
The special briefing report Energy Efficiency: The Decade for Action highlights that ramping up annual energy efficiency progress from 2.2 per cent today to over 4 per cent annually by 2030 would deliver vital reductions in greenhouse gas (GHG) emissions and at the same time create jobs, expand energy access, reduce energy bills, decrease air pollution and diminish countries’ reliance on fossil fuel imports – among other social and economic benefits.
Energy efficiency investment in 2023 is expected to reach record levels, despite a slowdown in year-on-year growth as the high cost of capital weighs heavily on potential new projects. Under current expected and announced policies, efficiency-related investment is projected to rise by a further 50 per cent. However, to see annual progress double, investments in the sector must increase from 600 billion US dollars today to over 1.8 trillion US dollars by 2030.
“Today, we are seeing strong momentum behind energy efficiency,” said IEA Executive Director Fatih Birol. “Countries representing over 70 per cent of the world’s energy consumption have introduced new or improved efficiency policies since the global energy crisis began over a year ago. We now need to push into a higher gear and double energy efficiency progress by the end of this decade.”
Policy will have a critical role to play in whether the world delivers on energy efficiency in the short, medium and long term. The RePowerEU plan in Europe, the Inflation Reduction Act in the United States and Japan’s Green Transformation (GX) initiative are a few examples of policy makers making renewed efforts to deliver on the energy efficiency agenda.
The new IEA report shows how doubling energy efficiency efforts can also deliver positive knock-on effects for society. Today, the sector employs tens of millions of people worldwide. With increased ambition, energy efficiency activities could lead to another 12 million jobs globally by 2030. Importantly, more efficient and lower energy demand supports faster progress towards universal access to modern and affordable energy in emerging and developing economies. The shift toward efficient electrification through the phasing out of the traditional burning of biomass such as charcoal and wood for heating and cooking also brings multiple benefits in terms of improved air quality and health.
To continue its support for stronger action on efficiency, the IEA has developed and updated its policy toolkit for governments. The toolkit comprises two parts: the first is 10 strategic principles, based on the recommendations of the Global Commission for Urgent Action on Energy Efficiency, that bring together key learnings from global experience on how to maximise the impact of all energy efficiency policies and programmes. The second is a set of sectoral policy packages that highlight key policies available to governments, and how they can be integrated into an effective coherent suite of policies and actions to deliver faster and stronger efficiency gains. The 2023 policy toolkit includes two new policy packages on clean cooking and finance as well as updates to the existing packages.