The watchword for the week at the Clinton Global Initiative‘s (CGI) annual summit in Manhattan this week has been “efficiency.” (It narrowly beats out “traffic,” which is what you’ll be caught in trying to get anywhere in the city for the next few days.) I wrote about an industry consortium led by the Carbon War Room that will channel hundreds of millions of dollars towards retrofitting existing buildings, and today the Natural Resources Defense Council (NRDC), Goldman Sachs and several real estate companies announced a three-year project under CGI that will hep tenants thorough the country identify the savings of energy efficiency improvements and implement them. Peter Malik, NRDC’s Director of Market Innovation, explained the benefits of the deal:
By participating in a portfolio of high-profile efficient build-out projects and by approaching the savings in a quantitative manner we are developing an open-source, best-in-kind blueprint for both implementation and financial measurement of the benefits of high performance build-outs. And we don’t stop there. By adopting a true life-cycle metric we go beyond a snapshot of performance. We measure the performance of the tenant spaces and / or the building across 10, even 15 years. In short, the goal is a long-term market shift.
Energy efficiency should be a no brainer—after all, who wants to waste? The savings help the environment and the bottom line as well. You can have political quibbles with renewables or natural gas or imported oil. But who would be against getting lean and mean?
No one—but that doesn’t mean we’re following through with the drive for greater efficiency. A new analysis by the Worldwatch Institute shows that global energy intensity—the amount of energy needed to produce a given unit of economic output—actually increased by 1.35% in 2010. That reverses a broad trend of decline energy intensity—meaning improved energy efficiency—over the past 30 years in the global economy. From the Worldwatch post:
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Between 1981 and 2010, global energy intensity decreased by about 20.5 percent, or 0.8 percent annually. “During this period of decline, most developed countries restructured their economies and energy-intensive heavy industries accounted for a shrinking share of production,” said Haibing Ma, Manager of Worldwatch’s China Program, who conducted the research. “New technologies applied to energy production and consumption significantly improved efficiency in almost every aspect of the economy,” says Ma. Particularly during the surge of the knowledge-based economy (a term describing the rise of computer and digital technology and a shift away from producing items like cars and furniture to “knowledge” in the form of software and design innovations) from 1991 to 2000, global economic productivity increased without parallel increases in energy use.
The report notes that worldwide energy efficiency had been increasing steadily until recently. Between 2004 and 2008, global energy intensity experienced its sharpest decline in 30 years, with an average annual rate of decrease of 1.87 percent. Starting in 2008–09, however, energy intensity rose again, experiencing the first rise in three decades. “Increases in economic energy intensity are especially discouraging, even when temporary,” said Worldwatch Executive Director Robert Engelman. “With both population and consumption growing worldwide, the capacity of the world’s economy to require less energy for each unit of output has been a rare positive trend for the environment. We need to find less energy-intensive ways to put people back to work and improve economic conditions.”
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This may just be a short-term bump in the road to a more efficient economy, due to the drop in energy and other commodity prices in the immediate wake of the 2008-09 global downturn. (Higher energy prices, unsurprisingly, tend to promote more efficient uses—which is why you can usually predict SUV sales by the cost of gasoline.) In the U.S. and other developed countries, energy intensity has kept declining, in part because more mature economies have shifted from high-energy manufacturing to less energy-intensive service and digital industries. You get a lot more economic bang for your energy buck producing iPhones—or better yet, iPhone apps—than you do building a car or a home. And even major developing countries have seen a sharp decline in energy intensity, at least over the long-term. China’s energy intensity fell by 4.52% annually between 1981 and 2002, and fell even more steeply between 2005 and 2010—in part thanks to government determination to cut energy waste.
Still, Worldwatch believes that energy intensity on a global scale is likely to continue rising over the next few years, if only because of the amount of post-recession infrastructure development underway. (In the U.S., we called it the stimulus.) Building roads and bridges and airports is very energy-intensive in the short run, though it pays off later. But we have no alternative—we need to get more energy-efficient and we need to do it soon. The price of oil and other forms of energy will rise and fall in the years to come, but over the long-term they will almost certainly become more expensive—perhaps significantly more expensive. If we want to grow economically—and the 9.1% of Americans currently unemployed would dearly like to see that happen—much of that growth is going to have to come through greater efficiency. There’s simply nothing left to waste.
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