Basics of energy efficiency – a basic need?

There is quite widespread acknowledgement of the importance of improved energy efficiency; but when the economy wobbles, energy efficiency assumes secondary importance, at best.

Europe is making the transition to a low carbon economy. Council has agreed to an 80-95 % reduction in GHG emissions by 2050 if certain international conditions are met, and energy efficiency is often considered the most cost effective way to make those reductions in greenhouse gas emissions. Obviously that 2050 target implies that governments must move now to take action, and there is no option to wait till 2045 to start.

The wheels are in motion. An Energy Efficiency Plan was published by the EC in March 2011, followed up by a draft Energy Efficiency Directive in June 2011.  That draft Directive is going through the approval process now, as several EiD posts have described. Compared to other Directives on energy efficiency in recent years, this Directive is particularly important, symbolically as well for the actual content.  This Directive is designed to add enough new measures to ensure that the EU can achieve its non-binding 2020 objective of an energy savings of 20%.  By most analyses, the measures come up short.

But many member states are reluctant to push through a more ambitious Directive in view of the current financial crisis, with the budgetary restrictions and high levels of unemployment that it brings.  On the other hand, there is a school of thought that more ambitious energy efficiency improvements would, in fact, help make economies stronger, bringing significant benefits, including local jobs.

There is a risk that the proponents of both positions will draw a line in the sand, stop listening or compromising.  Or perhaps they simply don’t understand each other.  Do the same words have different meanings to different people?

Part of the divergence stems from the motivation for improving energy efficiency.  It is not an end in itself.  Rather, it is a means to help achieve other societal goals.  First and foremost, for OECD countries, energy efficiency has been a means to provide economies more resilient energy security.  Simply, improved energy efficiency will reduce our needs or our expected needs.  For years, that was the sole driver. The cold hovering over Europe for much of February has been a frosty reminder of the importance of energy security.  From an energy policy perspective, improved energy efficiency makes our economies more sustainable, and that cannot be lost on decision-makers.

Beyond energy security, energy efficiency can deliver on other societal goals, including – minimising environmental degradation, improving competitiveness, creating jobs, stimulating innovation, and ensuring the health and well-being of members of society.  Every sector in the economy should contribute to society’s goals, but policies to develop many sectors can actually cause more harm than good, when all factors are taken into consideration.  Improved energy efficiency is one of those curious policy areas that really create a win-win situation if done correctly.

Societies are complex, and the priority that social, economic, and political interests put on each of these societal goals will affect the approach they take to energy efficiency. Sometimes positions become entrenched, or there is blindness, smugness or simple misunderstanding that make dialogue difficult.

An energy workshop at the International Energy Agency in the early 1980s concluded that policy making should not be made during a crisis, that it requires calmness and a dispassionate, analytical rigour.  It is unfortunate timing that this draft Energy Efficiency Directive is being discussed in the midst of a major crisis in Europe.  Calmer times might foster calmer approaches that would encourage the promoters and detractors of ambitious energy efficiency goals to learn from each other. That, in the end, is what makes the best policy.