Energy efficiency can reduce cost of economy-wide decarbonization by $250 billion a year

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30 November 2015

PARIS: Increasing energy efficiency is one of the most cost-effective ways to achieve a safe climate future, according to a report from ClimateWorks and Fraunhofer ISI.

The report, How Energy Efficiency Cuts Costs for a 2°C Future, collates efficiency policies from across the world, and analyzes how they can help reduce costs of decarbonization in the economy. Authors project that policies across Brazil, China, Europe, India, Mexico and the US can reduce costs by up to US$250 billion per year.

Decarbonization within businesses is a focus of The Climate Group’s initiative in partnership with CDP, RE100. Many of the world’s most influential companies such as Starbucks, Mars Incorporated, Nestle and IKEA have signed up to RE100 and committed to switching to 100% renewable power. Many companies are reporting big cost savings from increasing their energy efficiency levels.

Bryan Jacob, Campaign Director at The Climate Group agrees with the findings of the report. “This new body of work reinforces that ‘energy productivity’ represents the least-cost decarbonization pathway.

"We're not just talking about environmental benefits with acceptable economics -- we're talking about favorable economic investments that have substantial co-benefits.”  

The report found that policy pathways that focus on efficiency provide cost savings that are double what the World Bank had previously estimated will be needed to provide electricity across the globe. It also found that existing programs and initiatives have already reduced the future costs of decarbonization, showing that it is worth investing in energy efficiency policies now.

With the ability to reduce annual emissions by 11 billion metric tons of CO2 in 2030 globally, energy efficiency proves the environmental and economic impact innovative and ambitious climate policy can have on a global scale – something The Climate Group’s States & Regions Alliance has long demonstrated.

During the global COP21 climate talks which began in Paris today, The Climate Group will publish the first-ever Compact of States and Regions disclosure report.

Climate data submitted through the Compact by these sub-national governments includes a combination of measures including renewables and energy efficiency targets and covers millions of citizens from some of the world's biggest economies.

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By Gabriella Romano

 

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