IEA urges governments for energy efficiency


The International Energy Agency released this week an interesting paper on energy efficiency and its importance.

According to an IEA executive :“Improving energy efficiency is the most cost-effective concrete action governments can take in the short term to address climate change and energy security concerns”

I propose in this article the main statements and findings this paper brings.

The executive summary provides a very interesting fact on the importance energy efficiency had, have and will have :

Since 1973, if energy efficiency policies had not been put in place, worldwide energy consumption would be 50% higher. It is estimated that by 2030 up to 83 EJ more energy could be saved if a range of cost-effective energy efficiency measures were implemented (International Energy Agency, 2007).

Yet, there is an energy efficiency gap. A significant proportion of the energy efficiency improvement potential is not realised – a result of barriers in the energy market. These market barriers inhibit energy efficiency improvements.

The file released this week concentrates its efforts on the Principal-Agent relation.

“Principal-Agent problems refer to the potential difficulties that arise when two parties engaged in a contract have different goals and different levels of information. A common example is referred to as the landlord-tenant problem. This problem occurs when the landlord provides energy-using appliances (such as a refrigerator or lighting systems), but the tenant pays the electricity bill. In this situation, there is little incentive for the landlord to choose the most energy-efficient appliance. “

The IEA work provides not one or two findings to explain such a situation, but four. The first one being very ecological : Small things add up, indeed :

While PA problems affect little amounts of energy use at the individual level, whether landlord- tenants or in vending machines, when aggregated, the problem is significant.

Here are the three others :

Second, PA problems are pervasive, disbursed and complex. As such, no single policy instrument is sufficient to overcome PA problems. Neither regulatory mechanisms, (e.g.minimum energy performance standards, or regulated contract design), nor information-based instruments (i.e. awareness campaigns) alone will resolve them.

Instead, governments should help design well-targeted policy packages to address PA problems in their specific national contexts, and within the particular constraints of a given sector.

(…)

Third, the national context plays a key role in the potential success or failure of energy efficiency policy. Important contextual factors include institutional support for energy efficiency, the price of energy and public awareness of the importance of energy efficiency.

(…)

Finally, evidence presented in this study is only the tip of the iceberg. With only a few case studies, this book has highlighted significant energy savings potential. Further savings are all the more likely given that this study makes a range of conservative assumptions.

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