Multiple Benefits

The multiple benefits of energy efficiency

The multiple benefits of energy efficiency capture and communicate the broader value energy efficiency measures can deliver. Revealing the potential of energy efficiency to support economic growth, enhance social development, advance environmental sustainability, ensure energy-system security and help build prosperity, repositions energy efficiency as an effective tool for economic and social development.

Environmental sustainability

Lowered energy demand reduces pressure on scarce natural resources, reducing the need to explore increasingly challenging locations for extraction. GHG emissions reduced through energy efficiency include both direct emissions reductions from fossil fuel savings and indirect emissions reductions in the power sector from the electricity savings. Reducing energy consumption and emissions through energy efficiency also plays a role in reducing air pollution, which leads to health improvements as well as reduced waste and the associated pollution of land and water, thereby contributing to efforts to combat ocean acidification and limit negative impacts on biodiversity.

Resource management and efficiency

One way to mitigate the impact of the growth in the demand for materials on energy demand is to improve material efficiency – delivering the same material service with less overall production of materials. Promoting a higher degree of efficiency in the value chain of production and in the use phase, while making sure that the same service is delivered to the consumer, can take several different forms: reducing the weight of products while delivering the same service (light-weighting); reducing yield losses in the manufacturing process; finding alternative uses for scrap without re-melting; re-using and recycling components; creating longer-lasting product components; and using products more intensely or at a higher capacity (Cullen et al, 2012).

Reducing the demand for energy-intensive materials and product recycling lowers energy demand. Typical final energy savings from recycling are up to 90% for aluminium, around 75% for steel and around 80% for plastics. Improving the efficiency of materials use is not new: fabrication yields are continuously improving, global recycling rates are increasing and products are consistently being light-weighted.

Promoting higher degrees of energy efficiency and material efficiency are related, as both promote a higher degree of efficiency along the value chain of production. The difference between energy efficiency and material efficiency is the production input. Material efficiency, in most cases, is complementary to energy efficiency, but the two reinforce each other. A car that contains less steel not only avoids the energy associated with excess steel production but also weighs less, leading to increased fuel efficiency during use. On the other hand, trade-offs also exist between energy and material efficiency: for example, extending the lifetime of steel-containing appliances means that the adoption of more efficient devices by consumers will occur later.

Energy intensity gains are holding down greenhouse gas emissions

After decades of consecutive increases, GHG emissions from fossil fuel combustion have been steady at around 32 billion tonnes of carbon-dioxide equivalent (GtCO2­­-eq) since 2014. This is due to a combination of the decline in energy intensity and the change in the energy mix towards natural gas and renewable energy. The changing fuel mix offset 23% of the impact on global emissions from GDP growth since 2014, while falling energy intensity offset 77%, affirming the vital role of energy efficiency in steadying and reducing emissions.

Figure 1. Global fuel-combustion related GHGs since 1990 (left) and an analysis of the factors that influence GHGs, 2014-16 (right)

Source: IEA, Energy Efficiency 2017
Note: Energy intensity is calculated as Total Primary Energy Supply per thousand USD of GDP in 2016 prices at PPP.

Greenhouse gas emissions savings from energy efficiency improvements

Global energy savings from energy efficiency improvements since 2000 led to a reduction in GHG emissions of just over 4 billion tonnes of carbon dioxide equivalent (GtCO2-eq) in 2016. Without these energy efficiency improvements, emissions in 2016 would have been 12.5% higher. Of these emissions reductions, 45% came from IEA member countries, while major emerging economies accounted for 47%. The avoidance of fuel combustion that results from energy efficiency improvements also reduces local air pollutants, benefiting air quality and public health.

Figure 2. Avoided global GHG emissions from energy efficiency improvements, 2000-16


Source: IEA, Energy Efficiency 2017
Note: Energy savings for countries other than IEA members and the major emerging economies are estimated by applying the ratio of efficiency improvements to intensity gains observed in emerging economies to the gains in intensity observed in these other countries.

Local air pollution

Energy efficiency can reduce both indoor and outdoor concentrations of air pollutants. By doing so, energy efficiency drives a range of economic, environmental and health benefits associated with local air quality.

Energy production and use is the largest anthropogenic source of air pollution in the world

The energy system contributes vitally to economic and social progress around the world, but the associated emissions and negative side effects are costly. Air pollution is one of the world’s single biggest environmental risks to human health, with one in nine deaths linked to poor indoor or outdoor air quality. The World Health Organization (WHO) estimates that 92% of the world’s population lives in locations where local air pollution exceeds WHO limits.

Energy efficiency plays an important mitigation role across sectors

Transport was responsible for 28% of total final consumption of energy globally in 2016, and more than 90% of transport energy use depends on oil products (Energy Efficiency 2017). Since the majority of transport emissions are discharged at street level often within densely populated cities, improvements in transport efficiency can, therefore, have a significant impact on air pollution and on human health. In 2016, mandatory vehicle fuel efficiency standards covered nearly 30% of all energy use within transport. In 2015, the total energy savings from these standards was 2.4 million barrels of oil per day, however, there is still significant room for improvement (Energy Efficiency 2017).

In China, air pollution has been a particularly serious issue, due to the rapid increase in the number of motor vehicles and the large share of coal-based electricity generation. More than two million premature deaths annually are attributed to outdoor and indoor air pollution in China. For the average Chinese citizen, air pollution shortens life expectancy by approximately 2 years. In France, air pollution costs the country nearly USD 110 billion per year according to a 2015 French Senate inquiry, with transport, heating, and agriculture being the largest contributing factors. The French public health agency estimates that 48 000 deaths per year in France are due to fine particle pollution, mainly from vehicle exhausts (Pascal et al., 2016).

Energy efficiency has played a huge role in China’s improvements in energy intensity, leading to savings of 11% of total primary energy supply between 2000 and 2014, and an avoided 1.2 gigatonnes of CO2 emissions in 2014. These gains in efficiency, and subsequent reductions in air pollution from energy generation and transport, have been made through mandatory energy savings programmes in industry, a building retrofit, and heat-metering reform programme, and the use of standards for personal vehicles (Energy Efficiency 2016).

Vehicle efficiency standards play an important role on a global level

Introducing or increasing mandatory vehicle efficiency standards is an effective way to reduce pollution within cities. Despite representing 43% of total oil consumption for road transport, only four countries currently regulate the energy efficiency of heavy-duty vehicles (Energy Efficiency 2017) The US Clean Air Act from 1970 continues to deliver reductions in air pollution through stringent vehicle emission standards and for every USD 1 spent on reducing emissions, the return on investment is calculated to be USD 9 in benefits to public health, environmental improvements, productivity and consumer savings (US EPA).

There has been a rapid uptake of electric vehicles, with 2 million vehicles worldwide in 2016, which may further accelerate with recent policy announcements to phase out the sale of gasoline or diesel vehicles, however, at present these vehicles represent just 0.2% of the light duty vehicles currently on the road worldwide (Energy Efficiency 2017).  The replacement of conventional vehicles with electric ones can reduce local urban air pollution and electric two-wheelers and vehicles are more efficient than their conventional counterparts, however, the source of electricity must be taken into account in an overall assessment of the impact on air pollution.

Building and appliance standards are key to reducing consumption

Mandatory building standards and retrofits that reduce the energy consumption within buildings can greatly improve the efficiency of heating and cooling systems within a home, commercial or public building. It is important for energy efficiency retrofits that reduce heat loss through increasing the air-tightness of a building to address the need for properly designed and adequate ventilation to protect the health of building occupant (Hamilton et al., 2015).

Scaling up the use of energy efficient appliances and lighting reduces the demand for electricity generation, and therefore reduces air pollution. Reducing the cost of operating cooking, lighting and heating appliances and equipment within the home can help facilitate the switch from less efficient, high polluting fuels, such as biomass or kerosene, still used by 2.7 billion people around the world for cooking and/or lighting, and greatly reduce both indoor and outdoor air pollution.