If we work harder at gains in efficiency, can’t we outpace the rate of economic growth and finally decouple the economy from consuming ever-more energy?
As it stands, economic growth continues to outpace energy efficiency improvements, and energy use continues to grow overall. The global economy has been growing at the rate of roughly 3 percent per year. Historically, there has been roughly 1 to 1.5 percent improvement in energy use per unit of economic output (energy intensity or productivity) each year. For energy efficiency gains to outstrip the increase in energy demand driven by the growing economy, the economy must improve energy intensity/productivity by at least 3 percent per year, roughly doubling or tripling the historic rate of improvement. Efficiency advocates argue that if we work harder at capturing energy efficiency opportunities, we can more than double or triple this rate of efficiency improvement and bend global energy use downwards. That’s a big task, and there at least two factors make this challenge even harder: 1) a large portion of changes in energy intensity over time can be attributed to structural changes in the economy, as economies shift from agricultural to industrial to services-oriented.37 These aren’t the technical improvements energy efficiency policies are concerned with, and these trends are hard to accelerate or affect through policy; 2) rebound makes the doubling/tripling goal even more challenging, as it means efficiency feeds back into energy consumption and economic growth (increasing both) and makes the horizon we’re reaching toward recede even further.