There are quick and local opportunities for energy efficiency, from household appliances to large-scale urban or industrial projects. Exploiting the potential for energy efficiency can deliver over 40% of the emission reductions needed to be in line with the Paris Agreement. Since 2015, Sustainable Development Goal (SDG) target 7.3 has called for global progress on energy efficiency as part of the 2030 Sustainable Development Agenda. However, energy efficiency progress is falling short of global goals, leaving large opportunities untapped. The energy intensity of the global economy only reduced by an average 1.8 percent per year between 2010 and 2020. To make up for lost ground and put the world on a pathway to achieve SDG 7.3 by 2030 and net-zero emission by 2050, this rate must double during this decade.
As Energy Ministers from G20 countries gather in Goa to discuss energy transition priorities, a global and concerted effort is necessary to accelerate energy efficiency actions during this crucial decade. The good news is that track records show that it is both attainable and highly beneficial.
Advancing energy efficiency globally
Energy efficiency has been a long-term priority for many G20 countries, as shown through actions on a large basket of notable legislation, regulations, and policies to advance energy efficiency in buildings, industry, and transport sectors. Policies such as the REPowerEU Plan, the US Inflation Reduction Act, and Japan’s Green Transformation Initiative, have demonstrated that ambitious energy efficiency progress is possible.
Notable G20 initiatives have also sought to drive coordinated action, such as the G20 Energy Efficiency Leading Programme (2016) and the G20 Energy Efficiency Investment Toolkit (2017). In 2022, the Bali Energy Transitions Roadmap called for ambitious and collaborative G20 action on energy efficiency, and more recently, the G20 Indian Presidency unveiled the Strategic Plan for Advancing Energy Efficiency Across Demand Sectors by 2030. The Plan lays out recommended energy efficiency action priorities for this decade that can keep the G20 and countries in the world on track with SDG 7.3 and decarbonization commitments, including through the diffusion of knowledge and best practices.
Global investments in energy efficiency – such as building renovations, public transport, and efficient equipment – reached $560 billion in 2022. This is a new record, yet it falls short of the $1.5 trillion in yearly average efficiency investments that are needed to shift from less efficient investments between 2026 and 2030 to achieve projected net zero emissions by 2050 scenarios. Moreover, there exists a regional imbalance in government-approved energy efficiency spending, with the majority of spending delivered in developed economies.
The number of people without reliable access to heating, cooling, clean cooking, and other energy services has risen to around 2.5 billion worldwide, with an extra 160 million households pushed into energy poverty since 2019. Efficiency improvements, together with wind and solar power, can bridge energy access gaps and meet the world’s commitments towards net zero emissions. At the same time, the largest energy efficiency investment opportunities will increasingly be found in emerging countries that are accounting for an ever-greater share of energy demand.
The slow pace of improvement in energy efficiency is a major missed opportunity for the global community. Notably, energy efficiency has a high job creation potential, where data suggests that each US dollar invested in energy efficiency has the potential to create up to 15 green jobs. The global community must come together to elevate energy efficiency as a policy priority and mobilize coordinated support and low-cost financing towards energy efficiency and clean technologies, particularly in emerging and developing economies. Investment needs to be mobilized quickly by making strategic use of public funding to catalyze private investment in energy efficiency and by unlocking investments through innovative de-risking and financing models, including supporting energy service companies (ESCOs). To underpin these efforts, strengthening collaboration between governments to transfer key policy learnings across countries is of utmost importance.
Leveraging on G20 processes and India’s Presidency
India, as the current G20 Presidency, offers a unique opportunity to draw on rich experience in energy efficiency policies and strategies. Between 2010 and 2020, India has managed to reduce energy intensity faster than the global average, by over 2% per year. This progress is a result of several regulatory initiatives launched by the Bureau of Energy Efficiency in sectors such as appliances, buildings, and industry. Additionally, India’s public sector super ESCO – Energy Efficiency Services Limited (EESL) – has led the world-renowned energy efficient lighting replacement programme, UJALA, where more than 365 million LED bulbs have been distributed at affordable prices, reducing households’ electricity bills while also increasing jobs in domestic manufacturing of LED bulbs.
During India’s Presidency, the G20 is ideally positioned to leverage global momentum and chart the path for scaling energy efficiency investment. This can be done by leveraging the renewed global momentum for energy efficiency and existing global initiatives like Mission Efficiency, the Energy Efficiency Hub, and the IEA Technology Collaboration Programmes.
The newly launched Lifestyle for Environment (LiFE) movement by Prime Minister Modi is a testament to India’s envisioned reform through community lifestyles, and a global blueprint to promote energy-efficient lifestyles and decision-making. It is estimated that 2 billion tonnes of CO2 emissions reduction can be realized by 2030 if the LiFE mindset and policy focus towards behavioural interventions are widely implemented.
No one can deliver on our energy and climate goals alone. Let us take this historic opportunity and make energy efficiency a common mission and global movement of governments, businesses, and citizens.
Damilola Ogunbiyi is CEO and Special Representative of the UN Secretary-General (UN SRSG) for Sustainable Energy for All, and Co-Chair of UN-Energy.
