Energy Efficiency 2018

Energy Efficiency 2018 looks at why efficiency’s massive potential remains untapped, and through the new Efficient World Scenario explores what would happen if countries maximized all available cost-effective efficiency potential between now and 2040, highlighting what policy makers can do to realise this opportunity.

So what will the world look like if between now and 2040 countries implemented all the economically viable energy efficiency potential that is available? The potential is demonstrated by the Efficient World Scenario developed by the IEA World Energy Outlook. 

The Efficient World Scenario (EWS) shows a world with 20% more people, 60% more building space and double the GDP, all for a marginal energy demand rise. The EWS also fully delivers the energy efficiency target of UN Sustainable Development Goal 7. All of the measures implemented in this scenario are cost-effective, based on energy savings alone, and use technologies that are readily available today.

The EWS would result in a peak in energy-related greenhouse gas emissions before 2020, followed by a fall by 12% in 2040 compared with today - equal to over 40% of the abatement required to be in line with Paris targets. The EWS would also cut key air pollutants such as sulphur dioxide, nitrogen oxides and particulate matter by one third compared to today. In particular, more efficient cooking could help reduce premature deaths from household air pollution by almost 1 million per year in 2040 in comparison with the IEA New Policies Scenario (NPS).

Emerging economies could become 50% less energy intensive under the EWS, with China and India accounting for one third of total energy demand in 2040. These two countries would also account for over one third of the total energy demand savings, which would translate into savings of nearly $500 billion in fossil fuel imports.

The EWS shows that energy efficiency could deliver significant economic, social and environmental benefits, but only if governments take greater policy action. However, the scale up in policy action must start immediately and there are good examples of policies in all end-use sectors that can form the basis for greater action.

Making this happen will require stronger and broader fuel economy standards for both cars and trucks, as well as policies for non-road transport. Incentives can support adoption of more efficient vehicles and electrification of various modes of transport, with information and capacity building to support more efficient transport choices.

This would require comprehensive efficiency policies, targeting new and existing buildings as well as appliances. Incentives could drive consumers to adopt high efficiency appliances and undertake deep energy retrofits, with market-based instruments encouraging innovative business models. Decision making can be supported by improved quality and availability of energy performance information.

The majority of energy savings could come from less energy-intensive sectors like food, beverage and textile manufacturing. To realise these savings, performance standards for key industrial equipment, including electric heat pumps and motors, can be complemented by incentives to increase the adoption of energy management systems and improved information.