A recent report by the International Energy Agency (IEA) has shown that the global energy efficiency progress is recovering but not quickly enough to meet international climate goals.
The report, which was released on Thursday, noted that energy efficiency trends are expected to return to their 10-year average after the worst year in a decade.
Global progress on energy efficiency has recovered this year to its pre-pandemic pace, but that was already well short of what would be needed to help put the world on track to reach net zero emissions by mid-century, according to Energy Efficiency 2021, the IEA’s annual market report on the topic.
Experts believe that total annual investment in energy efficiency worldwide needs to triple by 2030 to be consistent with a path towards reaching net zero emissions by 2050, as set out in the IEA’s roadmap.
The IEA’s latest global assessment of market and policy trends in energy efficiency highlights the urgent need for stronger implementation of clean energy policies – with energy efficiency at their core – in order to reach international climate goals.
This is the first update of the IEA’s energy efficiency market report since a raft of new spending commitments, which were aimed at supporting the economic recovery, were announced by governments over the course of 2021.
The report comes shortly after the end of the COP26 Climate Change Conference in Glasgow, whose final statement specifically called for the rapid scaling up of energy efficiency measures, recognising their key role in decarbonising energy systems.
“We consider energy efficiency to be the ‘first fuel’ as it still represents the cleanest and, in most cases, the cheapest way to meet our energy needs. There is no plausible pathway to net zero emissions without using our energy resources much more efficiently,” said IEA Executive Director, Fatih Birol.
“A step change in energy efficiency will give us a fighting chance of staving off the worst effects of climate change while creating millions of decent jobs and driving down energy bills,” the executive director added.
The report further notes that governments have scaled up existing, employment-intensive efficiency programmes, but it also highlights that substantial potential for job creation remains untapped.
For example, it noted that investments in the energy efficiency of buildings – a well-established driver of construction jobs – are expected to rise by 20 per cent in 2021 compared with pre-pandemic levels.
It added that even with the record level of spending, the report details how four million more jobs could be added by 2030 by further increasing spending on efficient buildings, appliances and other measures in line with the IEA’s Net Zero Emissions by 2050 scenario.
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After its worst year in a decade in 2020, when the coronavirus pandemic shifted the centre of economic activity away from services and towards industry, the rate of improvement in global energy intensity – a key indicator of how efficiently the world’s economic activity uses energy – is expected to recover in 2021 to 1.9 per cent.
This is in line with the average annual rate of improvement over the past 10 years but well below the 4 per cent needed between 2020 and 2030 in the IEA’s pathway to net zero emissions by 2050.
Experts say as energy efficiency offers some of the fastest and most cost-effective actions to reduce CO2 emissions, front-loading efficiency measures into net zero strategies will be crucial for closing the gap between climate ambitions and current trends.
This year’s report examines over 40 energy efficiency milestones mapped out in the IEA Roadmap to Net Zero by 2050 that can enhance efficiency and help get emission reductions on track.
In addition to well-developed energy efficiency policies such as appliance standards – which in some countries have avoided electricity usage equivalent to their total wind and solar power generation – the report also underlines the increasingly important role for digital technologies in energy efficiency’s future.
Rapid uptake of digitally connected devices is helping to expand the scale and scope of benefits from energy efficiency, and can deliver a cheaper, easier and more cost effective clean energy transition.
About the report
Energy Efficiency 2021 is the IEA’s annual update on global developments in energy efficiency.
This year’s edition explores recent trends in energy efficiency markets at the economy-wide and sectoral levels, including developments in policy and investment. The report also focuses on the role of energy efficiency in achieving net zero emissions in the energy sector by 2050, including an examination of the crucial role of efficient appliances and equipment, as well as all major energy efficiency net zero milestones in buildings, transport and industry.
You can download the latest report here