Introduction

Why is energy efficiency important?

Four issues will be crucial in determining the amount of energy needed in the future, and hence the amount of carbon-free energy to meet climate targets:

1. growth or how many people will be using energy,

2. growth or how rich these people will be,

3. fuel mix and the potential emissions, and

4. efficiency or how well the fuels are used.

This chapter examines the role energy efficiency can play. We will argue that energy efficiency alone can not provide the solution to meet targets for abatement of greenhouse gas (GHG) emissions. This is because the simultaneous and interacting effects of changes in global population, growth or shrinkage in the world economy, and the proportions of various fuels employed to meet energy needs, have a much greater potential to raise or lower GHG emissions. However, we will also argue that energy efficiency is an essential part of the solution to abating GHG emissions to meet global energy demands at a realistic cost.

Changes in energy efficiency are affected by a host of technological, social, economic, and political factors. This necessitates that the processes of technological, social, economic, and political change be made an endogenous feature of any model of energy use, whether for specific activities or aggregated for the whole economy.