Energy productivity catching on worldwide

Dec. 2, 2008
Energy Expert Peter Garforth asks, "Are we finally getting it?"

An unrecognized paradox that applies as much to energy productivity as anything else is that the last thing an evangelist might want is a convert. If we all understand, do we need the evangelist?

It has taken a roller coaster ride of oil prices, increases in gas and electricity costs, hurricanes, wars, major blackouts and an economic meltdown to get there, but it seems that the requirement for sound energy management is becoming a given. With nearly 7 billion people on the planet, we are going to have to be a lot smarter about energy.

As the world’s economic system struggles to regain its footing, political leaders, business managers and average people are struggling to contain the damage and restart viable economic activity. Massive infusions of public funds into the banking system are underway in the United States, Europe and Asia. This will be followed by massive public investments to stimulate employment. What is interesting is the awareness that one of the most effective areas to create new jobs will be in energy efficiency, clean energy supplies and climate change mitigation.

President-Elect Obama’s economic team has “green collar” employment as a high-priority route to 2.5 million new jobs. The stated focus is on efficiency, renewable energy, so-called “clean coal” and upgrading the electricity distribution system. Closely related are the efforts that the new U.S. regime is willing to make to become a world leader in mitigating global climate change. Clearly, the evangelistic phase is coming to an end, and the implementation phase might just be gathering steam.

China has announced a stimulus package that similarly will focus on long-term infrastructure investments in a classic example of Keynesian economics. Like the United States, China is setting a high priority on major investments in energy efficiency and efficient energy sources. I was recently in China working on energy strategy for a major city. The newspapers were full of articles on the economic stimulus program and the role of energy for a competitive sustainable economy and in reducing climate change.

Europe is in the midst of an interesting debate. As an early leader in adopting a more rigorous approach to minimizing the effects of energy waste, the EU was lining up to accept another aggressive set of climate change targets. The economic tsunami has definitely produced two camps. On one side there’s strong support from many members to stay the aggressive course; others are concerned this will add costs to economies at a time of high fragility. European companies stand to benefit from the focus in Asia and America given its strong green technologies. Time will tell if a dilution of local energy productivity goals will put the EU energy technology leadership at risk.

With this political backdrop, the conclusions for business are becoming obvious to a rapidly growing group of industry leaders. First, energy prices will start to rise again as soon as the immediate economic storm is over, making investment in energy productivity a nonnegotiable priority. Second, with so much public investment channeled into energy infrastructure, these will be major opportunities in what could be a pretty bleak market scene for some time.

In my own work, I find less time is devoted to justifying why we need energy productivity. Political and business leaders are making it clear to their constituents and employees that the energy equation will change. The key questions today are around how to execute effective energy plans, not whether they are needed in the first place.

For example, while developing targets for a Community Energy Plan in Ontario, a greenhouse gas per capita of about Sweden’s level today was proposed as a reasonable 25-year target. This is no small goal because it means building a city two to three times as energy efficient as today’s average. As recently as three years ago, there would almost certainly have been strong resistance to such a dramatic change. Instead, the proposed target was set 1 metric ton lower than Sweden today on the basis that just being the same was unacceptable.

The need for energy efficiency evangelists might finally be stabilizing. The next challenge will be filling the growing need for energy practitioners to fan out across the globe to help us meet the business, social and environmental energy imperatives. As U.S. and Chinese policy on employment suggests, we’ll need a lot more practitioners than evangelists. To paraphrase Churchill, this is not the end, nor even the beginning of the end, but it might just be the end of the beginning of a completely new energy scenario for all of us.

Peter Garforth is principal of Garforth International LLC, Toledo, Ohio. E-mail him at [email protected].

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