The potential for enhancing energy efficiency is clearly demonstrated by the Efficient World Scenario (EWS) developed by the IEA World Energy Outlook. This scenario shows what would result if all available energy efficiency measures were implemented between now and 2040. All these measures are cost-effective, based on energy saving alone, and use technologies that are readily available today. The EWS could result in lower emissions in 2040 compared with today, despite a doubling in the size of global economy. Energy efficiency could provide more than 40% of the abatement required by 2040 to be in line with the Paris Agreement. The EWS would also help to achieve the UN Sustainable Development Goals (SDGs) and create multiple benefits for economies, households and the environment.
Enabling energy efficiency investment at scale is critical and achieving the EWS would also require an increase in the strength of mandatory energy efficiency policies, which increased only marginally in 2017. This brief considers the trends in building, transport, industrial and financial sectors, and concludes that especially in the six largest emerging economies, government policy is central to driving new investments and to engage a large number of energy users across a range of sectors. Policies that encourage the adoption of energy management systems and other incentive- and information-based measures will be essential, along with innovative financing mechanisms and business models, such as ESCOs.
The IEA Efficient World Strategy identifies the policies and actions required to deliver available energy efficiency gains, but how policies are designed and implemented is crucial. Policy needs to be tailored, dynamic and supported. Governments can maximise the effectiveness of energy efficiency policy by enacting ambitious measures, with appropriate follow-up and enforcement. Governments also have a role in ensuring market readiness to deliver efficiency improvements, and in evolving measures.