IEA: Energy Efficiency Could Deliver 35% of Needed Emissions Reductions
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The IEA report titled, 'Perspectives for the Energy Transition: The Role of Energy Efficiency,' compares the role of energy efficiency in different energy policy scenarios.

Energy efficiency is fundamental to achieve universal energy access, reduce air pollution and other SDG targets.

Realizing this potential requires a substantial shift in energy sector investment from the supply side to the demand side.

17 April 2018: According to a report released by the International Energy Agency (IEA), energy efficiency measures could deliver more than a third of the cumulative reductions of GHG emissions necessary to meet the objectives of the Paris Agreement on climate change. Achieving these savings requires new policies and investments of US$1.7 trillion in energy efficiency and electrification of transport, the authors find.

Energy efficiency is a key component of the energy transition necessary to reduce energy-related emissions while responding to rising global energy demand due to economic growth and a growing global population. To increase understanding of the policies and investments required to achieve necessary improvements, the IEA’s report titled, ‘Perspectives for the Energy Transition: The Role of Energy Efficiency,’ analyzes the role of energy efficiency measures in three of IEA’s standard policy scenarios.

These scenarios include: the New Policies Scenario, which analyzes the impacts of existing policies and announced commitments; the Sustainable Development Scenario, which shows how the energy sector needs to change to meet energy-related goals under the SDGs; and the 66% 2°C scenario, which focuses on the objective of the Paris Agreement to limit temperature increases to below 2°C relative to pre-industrial levels. The latter scenario shows that energy efficiency in areas such as space heating and cooling, increased use of electric heat pumps, and measures to electrify transport could almost completely offset the expected increase in energy-related emissions until 2050.

Based on a comparison of the three scenarios, the report shows that energy efficiency is a fundamental component of any strategy to jointly achieve climate objectives and other SDGs, including universal energy access (part of SDG 7: Ensure access to affordable, reliable, sustainable and modern energy for all) and reducing air pollution (part of SDG 3: Ensure healthy lives and promote wellbeing for all at all ages).

Achieving the multiple benefits of energy efficiency requires a substantive shift in energy sector investment from the supply side to the demand side.

The publication cautions that the global rate in energy efficiency increase has slowed to 1.7% in 2017, down from an average 2.3% in previous years. Achieving the benefits of energy efficiency therefore requires accelerating this rate through a fundamental shift in the balance of energy sector investment from the supply side to the demand side. To realize the 66% 2°C Scenario, such investments would have to reach US$1.7 trillion per year. A large part of these financing needs would be offset by savings in fuel cost and the economic value of other benefits, the report notes.

The study concludes that ramping up energy efficiency will require a strategic approach including clear long-term government commitment, well-designed packages of energy efficiency policies, and capacity building for implementation and enforcement. [IEA Press Release] [Publication: Perspectives for the Energy Transition: The Role of Energy Efficiency]

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