Energy efficiency is the no-brainer solution to climate change. In many cases, savings are relatively cheap to achieve. Everyone benefits (aside from, perhaps, utilities who depend on selling more units). And it’s non-controversial. While debates about the future of energy tend to get ideological, most people can see the logic of doing more with less.
It’s also a huge opportunity. According to a new report from the International Energy Agency, investments could reap total returns of $18 trillion worldwide–or the equivalent of all of North America’s economies combined.
The IEA reaches such a high number by reconceptualizing what energy efficiency means. Instead of treating it simply as energy not used, it calls energy efficiency a “first fuel” with many social and environmental benefits.
“This publication demonstrates how often overlooked, and even intangible, outcomes can be captured, offering the possibility to send better socio-economic signals to complement market signals,” the report says.
These include the impact on employment and energy prices, on public budgets (jobs in energy efficiency could reduce the need for government benefits, for example), health and wellbeing (weatherization improves conditions for building occupants and cuts health care costs), and industrial productivity. Research shows that every dollar invested in efficiency can bring 2.5 times as much in productivity gains.
“Applying a multiple benefits approach to energy-efficiency policy should enable a fuller understanding of the potential of energy efficiency,” the report says.
The IEA isn’t the first come up with big numbers for efficiency’s potential. McKinsey identified $1.2 trillion in possible savings across the U.S economy. There’s plenty of low hanging fruit. In a recent ranking, we were far behind other countries, leaving plenty more to be done.