Energy Efficiency Policies around the World: Review and Evaluation

4.1 Energy Efficiency and CO2 Trends

Energy consumption is growing less rapidly than the economic activity in all world regions, except the Middle East: this corresponds to an improvement in the energy productivity.

On average at world level, the reduction was much faster before 2000 (1.8% p.a.) than after (1.4% p.a.), mainly because of the changes taking place in China. Indeed, China experienced a very rapid improvement in its energy productivity between 1990 and 2000, at around 7.5% p.a., as a result of various factors: more efficient use of coal, switch from coal to oil, industry restructuring and higher energy prices. After 2000 this trend has however slowed down significantly, to slightly less than 1% p.a.

If we exclude China, there is an acceleration of the energy productivity improvement at world level since 2000 because of the higher oil price in 2005 and 2006 (1.5% p.a. compared to an average trend of 1.3% before).

Large differences exist between world regions in their energy intensity level: the energy intensity of the CIS is three times higher than in Europe, the region with the lowest value; it is respectively 40% and 30% higher in China and in North America compared to Europe. Similar differences across regions can be seen in their energy intensity trends (very rapid reduction in China, increase in the Middle East and in the most developed regions of Asia).

Energy intensities are in general decreasing in energy importing countries, due to the pressure of high energy prices, as well as in most OECD countries. Even those with significant energy resources (e.g. USA, Canada, Australia), because of saturation in some end-uses and in some countries as a result of energy efficiency and climate change policies.  Energy intensities are however increasing in non-OECD oil producing countries and, to a lesser extent, in some countries with significant energy resources.

As a very long-term trend, energy intensities follow a "bell curve", generally with developing countries to the left, with increasing intensities, and developed countries on the right side, with decreasing and converging values.

The reduction in the energy intensity between 1990 and 2006 in most world regions resulted in large energy and CO2 savings, estimated at 4.4 Gtoe in 2006 (50% in China, 20% in North America and 10% in Europe) and 10 Gt of CO2. In other words, had technologies and economic structures of the main world regions remained at their 1990 level (i.e. at 1990 intensities), the world would have consumed 4.4 Gtoe more in 2006.

Energy productivity gains are greater at the level of final consumers (industry, transport, households and services) than at the overall level (i.e. including the energy transformation sector): increasing losses in energy conversion have offset about 20% of the gains achieved by final consumers. The increasing use of electricity by final consumers has resulted in greater losses in power generation, as most of the electricity is produced from thermal or nuclear power plants .

Energy efficiency of thermal power generation only improved moderately, by 2 points since 1990 at world level, the average efficiency at world level is presently 34%, which is far from the EU average (40%) or the EU best practice (Spain with 46%  ).  If all world regions had the same performance as the EU average, 420 Mtoe of fuel would have been saved in 2006, avoiding 1.3 Gt of CO2 emissions. The amount of savings would even reach 770 Mtoe or 2.4 Gt CO2 if all thermal power plants followed the Spanish performance.

Industry is the main sector driving energy intensity reduction in industrialised countries. In emerging countries and regions, households is the main sector driving the reduction in energy intensity, because of the substitution by modern, more efficient fuels (e.g. LPG) by traditional fuels (i.e. fuel wood and wastes). In China and the CIS, energy productivity progress was almost equally driven by industry, transformation and domestically.

In OECD countries, China and India, the general trend in industry is towards a decrease in the energy required per unit of value added. This reduction in industrial energy intensity slowed down since 2000 in Europe, North America and China, and had even reversed in OECD Asia & Pacific, because of the recession in Japan. The CIS and the Middle East experienced an increase in the energy intensity of their industry until 2000. In the other regions, the energy intensity remained almost stable, implying an energy consumption growth in industry in line with the level of activity. The energy efficiency of energy intensive industries (e.g. steel, cement, paper) is converging and improving rapidly because of the globalisation of these industries. The best world practices are no longer found only in the most developed countries.

In transport, part of the energy efficiency gains with vehicles have been offset by non technical factors 

North America and CIS are among the few regions where the energy consumption of transport is growing much slower than the GDP. In North America, the dramatic improvement in the efficiency of cars in the 80's, following the implementation of the CAFE standards for the fuel economy of new cars, and the initial high-energy intensity of transport in these countries explain this situation.

In Europe, the energy consumption of transport is growing slightly slower than the economic activity since 1990. In OECD Asia & Pacific, there was hardly any reduction. This is not in line with the improvement of the energy efficiency of vehicles as non-technical factors (e.g. congestion, larger and more powerful cars) had contrasting influences.  In recent years (since 2000), the energy consumption of transport has remained relatively stable, or its growth has significantly slowed down in several European countries and Japan, because of higher prices and, also, as a result of the policies implemented .

In non-OECD Asian countries, the per capita electricity consumption of households is increasing rapidly (above 10% p.a. in China and around 4% p.a. in India and other Asia). In OECD countries, the progress is slower and, (between 1 and 2% p.a.) and has slowed down over the 90's as the result of a certain saturation in appliance ownership and the effect of the policies implemented to improve the energy efficiency performance of electrical appliances (labelling, efficiency standards). In Europe and North America however, the electricity consumption of households is increasing slightly faster since 2000. This situation is due to the rapid spread of new appliances (e.g. ICT appliances ) and new devices (e.g. stand by modes for an increasing number of applications), as well as a spread of new end-uses, such as air conditioning in Europe.  In addition, the policy measures have been focusing only on part of the household electric appliances . In emerging regions, this slow down is probably partially explained by efficiency policies.

CO2 emissions from energy use have increased for all regions since 1990 (they were 34% higher in 2006 than in 1990 at world level), except in the CIS and in Europe. The progression has been more than twice faster since 2000 than between 1990 and 2000 (3% p.a. compared to 1.2 p.a.), with China accounting for about half of the increase. In Europe, climate change policies have helped to keep CO2 emissions from energy use to only 2% above their 1990 level in 2006.

Because of the growing role of emerging countries with lower levels of CO2 emissions per capita, world CO2 emissions per capita are now only slightly higher: they stand at 4.2 t CO2/capita in 2006 compared to 3.9 t in 1990  (+8%).

CO2 emissions generally grew much less rapidly than the economic activity (except in the Middle East, OECD Asia and other Asia). At world level, CO2 emissions per unit of GDP (the CO2 intensity) decreased by 1.4% p.a. between 1990 and 2006, with all the reduction due to energy productivity improvements.

Main world regions grouped indicators presented in this study. These indicators are mainly aggregated, as the data available for world regions are limited. Some additional indicators have been produced at the level of selected countries and made available on the WEC web site (www.worldenergy.org). More detailed indicators exits for EU countries and Norway in the ODYSSEE database .